If I am in the process of making payment arrangements with a collection agency for a bad debt, can hey demand that I send them my tax return for last year?

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If I am in the process of making payment arrangements with a collection agency for a bad debt, can hey demand that I send them my tax return for last year?

Is that normal?

Asked on January 13, 2012 under Bankruptcy Law, South Dakota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

It is voluntary for a collections agency to enter into payment arrangments--they are entitled to seek full payment of everything owed immediately. Since it's voluntary, they can ask for anything they like to agree to it; if you are unwilling to give them what they want, you don't have to, but they also don't have to work out arrangments with you--they can just go ahead and sue.

It's not necessarily uncommon for them to want this if they suspect that you have more money or ability to pay than you are admitting to; the tax return is the best way to verify your income.


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