Can collection companies rack up thousands of dollars in fees, if you are already paying down the debt?

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Can collection companies rack up thousands of dollars in fees, if you are already paying down the debt?

I was garnished to pay off debt when I got behind on my homeowners association fees. The collection attorneys have charged me the entire time that I was being garnished and have racked up thousands in what they are calling collection costs. Is this legal if I was already making payment arrangements?

Asked on March 6, 2012 under Bankruptcy Law, Oregon

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Unfortunately most homeowner's associations with respect to unpaid dues seek attorney's fees for collection purposes under presumed recorded covenants, conditions, & restrictions on the complex and the individual unit. The problem that you have is that you need to constest the amount of the attorney's fees being sought against you in that the amount of reasonable attorney's fees should be proportional to the return of the judgment. It makes no sense to seek $5,000 in attorney's fees for a $1,200 judgment.

The way to contest the fees is to file a motion with the court when the memorandum of costs is served upon you. If there is a legal aid program in your community, I suggest that you contact it for help or an attorney that does debt collection defense work.


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