If I am making payments, can the balance on an old debt continue to increase due to interest?

I am making payments on a $10,000 debt at $200 a month. After receiving the statements, I’ve noticed the balance continues to rise. I talked to the law firm handling the claim (which holds the account now) and they said there is nothing that they can do about it. Apparently they can only settle the account.

Asked on December 17, 2010 under Bankruptcy Law, Arizona


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately the answer here may hinge on the agreement that you made.  And let me tell you that I think that that law firm is selling you a load of junk in telling you that there is nothing that they can do.  Listen, I think that you need to ask for a validation of the debt form the attorneys: that they have purchased or have been assigned the right to settle the matter from the original creditor, a copy of the entire history of the debt and a copy of the original contract for the debt (credit card, etc.).  The familiarize yourself with the fair debt collection practices act and look at the section that deals with attorney debt collectors.  Time to take action here and well versed is well armed.  Good luck.

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