If a Debt is Disputed, Can It Still Be Turned Over to Collections Immediately

My question involves collection proceedings in the State of: California

I paid a $300 scholarship deposit. Less than 24 hours later, I received acceptance to a much nicer college, with an even better scholarship offer. As the $300 was not yet removed from my bank account, I placed a stop payment and e-mailed the school to notify them that I had decided to go with another college.

About a day later, I received an e-mail saying that I still owed the $300 and that the debt would go to collections. I immediately wrote back to dispute the debt.

Is the college under any obligation to reasonably let this dispute play out, or can they just wash their hands of it and sell the debt to collections immediately?

Also...if it goes to collections, I know there is no chance to really argue with them, so I'm just going to pay the $300 and go to small claims. Will I then be taking the collection agency or the college to court? Or should I just name both?

Thanks!

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I paid a $300 scholarship deposit.

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what is a scholarship deposit?



and what did you sign that might have committed you to paying something to the school?

and what do you mean you disputed the debt? You gave them $300 and then stopped payment on the funds. What are you disputing?

A scholarship deposit reserves scholarship funds the same way a seat deposit reserves a seat. Although, of the 8 schools that I applied to, this is the only school that had a scholarship deposit separate from a seat deposit, and the only school that required a deposit so early in the decision process.

I didn't sign anything, but when I submitted the deposit it said something like "if the charge doesn't go through or you place a stop payment, you will owe $300 plus a $25 fee". I stupidly read this as owing an additional $25 should I decide to submit a deposit a second time. What it apparently meant was that I had locked myself into owing $300, and that I would then be locked into an additional $25 as well.

I'm disputing it because they're saying they're going to send the debt to collections now. They keep saying it's because the deposit is non-refundable. My argument is that first of all, they never received my money, so there is nothing to be refunded. Also it seems unreasonable that they demanded this deposit by April 1st, when most students don't receive a majority of their decision letters until May 1st. It just seems like a revenue source for the school rather than a real security deposit. It is for this last reason that I plan to take them to small claims out of principle, even if by some chance I'm legally held accountable for the $300.

So my question remains...is there some wait period where they have to allow me to dispute this with the college, or can they just send this to collections at any time? I wrote the dean already, and I don't want my next letter to be from a collection agency while I'm waiting to hear back from him.

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I'm disputing it because they're saying they're going to send the debt to collections now

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. that's not what disputing a debt is. You dispute a debt when you believe it is invalid for some reason. Yours isn't invalid.

They keep saying it's because the deposit is non-refundable.

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My argument is that first of all, they never received my money, so there is nothing to be refunded.

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poor argument, especially given this:

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"if the charge doesn't go through or you place a stop payment, you will owe $300 plus a $25 fee"

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Also it seems unreasonable that they demanded this deposit by April 1st, when most students don't receive a majority of their decision letters until May 1st

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.then you shouldn't have paid the money or did whatever it took to incur the debt. That was your choice. You could have said no.

It just seems like a revenue source for the school rather than a real security deposit. It is for this last reason that I plan to take them to small claims out of principle, even if by some chance I'm legally held accountable for the $300.

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So my question remains...is there some wait period where they have to allow me to dispute this with the college, or can they just send this to collections at any time?

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no, there is no time they have to wait.

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Quoting jk

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. no, there is no time they have to wait.

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Thanks much, this is really the only answer that I needed. No offense, but I didn't want an opinion on the strength of my case. The last time I came here for that, I was told my argument held no water and I went on to win $15K. But thanks again!

Yet you keep coming back.

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Quoting Disagreeable

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Yet you keep coming back.

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Thanks, I hadn't yet noticed I was here =P

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Quoting CollegeGuy0

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Thanks, I hadn't yet noticed I was here =P

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so this was what then:

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The last time I came here for that, I was told my argument held no water and I went on to win $15K. But thanks again!

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apparently you have been here before although under a different username. That is what disagreeable was referring to when he said yet you keep coming back.

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Quoting CollegeGuy0

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Thanks much, this is really the only answer that I needed. No offense, but I didn't want an opinion on the strength of my case. The last time I came here for that, I was told my argument held no water and I went on to win $15K. But thanks again!

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You may now do us the favor of identifying the thread so we can see for ourselves what it is that you asked, and you can share who you supposedly recovered that $15K from and on what basis. I won't hold my breath.

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Quoting CollegeGuy0

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Thanks much, this is really the only answer that I needed. No offense, but I didn't want an opinion on the strength of my case. The last time I came here for that, I was told my argument held no water and I went on to win $15K. But thanks again!

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This thread?