Re: Collection Agency Fee?
OK, me again. I did some more searching and learned that the debtor is liable for collection costs, and that these costs may be up to 25% of the total debt. The math works out perfectly -- they are demanding the full 25%.
I also learned that due to "Defense of Laches" (whatever those are), even though nobody contacted my wife for many years about this debt, nothing changes and the collection agency can still ask for the maximum collection fee.
It sounds like we're probably stuck paying not only the principal and interest, but also the $2000 collection fee, which rankles a bit since it doesn't seem like the collection agency did much to earn it.
Still, if I've misunderstood something or if anyone here has any insight into this issue, please do leave a response.
Once again, many thanks.
-Fjfjdv
Re: Collection Agency Fee?
It is very common for fees to be tacked on and for interest to continue to accumulate. Generally these fees should be only 25% of the debt, but some abusive collectors charge (and get) 30-40% of the debt and go unchecked for a long time (Padilla vs. Payco). In the past a lot of the "uncollectable" collections went straight to the large collection agencies after the default period. The government has since changed that and tries various tactics in order to collect.
You can complain to the Department of Education regarding the lack of contact. That will not (unfortunately) change a thing.
The fun thing about the government is that it follows the golden rule; the one with the gold makes the rules. That having been said, they will get your money one way or another.
You are going to have to pay the bill which means that the collection agency gets paid for what they did; track you down and contact you. You *may* be able to negotiate the fees with the agency, but the money due to the government has to be a "PIF", or paid/payment in full.
Good luck,
UBF
Re: Collection Agency Fee?
UsedBranFlakes:
Thanks for your reply. Got no issues with paying the principal and interest, but hoped I might find some way to decrease the collection fee. I will do some reading and see if I can develop some negotiation skills in order to talk them down on the collection fee, but I fear I'll be negotiating from a position of weakness, since as you mentioned the law allows them to charge the full 25% even if they just had to mail a single reminder.
Again, thanks for your response -- I was starting to come to the conclusion that we'll be stuck paying the 25%, but I don't know much about debt and worried I might be missing some angle. Reading your message helps me come to terms with it.