Can a collection agency continue to charge interest after sending a final demand with a stated amount?

Get Legal Help Today

 Secured with SHA-256 Encryption

Can a collection agency continue to charge interest after sending a final demand with a stated amount?

Debt incurred 3 years ago. I received final demand letter for $580.34. No further correspondence; pulled credit report and saw an amount within a few dollars of the demand. Honestly forgot about through divorce, etc. Called them as I wanted to see if we can negotiate settlement. They say I owe $730.51 as interest charged 10% daily on unpaid. Will “allow” me to pay $650 to avoid further action from them now that “we know where you work”. I need this off my credit report as I’m trying to buy a house (I’m between a between rock and hard place). To me, final means final, so why do they keep charging.

Asked on July 5, 2011 under Bankruptcy Law, California

Answers:

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

Answered 10 years ago | Contributor

One would have to review the letters sent and the law in California but I am guessing here that the amount was computed within the time frame that the letter was recieved.  The fact that you have delayed caused the interest to accrue.  Now, if the interest is above the legal amount computed (and it certainly seems unreasonable her) then you have some wiggle room here.  But really you need to play hard ball.  Let them know that you qualify under Federal guidelines for a reduction of all debt (just bluff) and you are considering bankruptcy (I know, but bluff) to discharge the debt but you want to do the right thing.  You can pay off that amount in full and expect a satisfaction letter now.  Otherwise, who knows,  And if they continue to threaten you you will call the state attorney general and file a complaint.  Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption