Legal Question in Credit and Debt Law in California

1) The additional interest may be valid; that looks like an annual interest rate of somewhere between 20% and 30%.

2) No, a collection agency or credit card company does not have a legal obligation to settle

3) If the settlement offer was in writing, you can file a Small Claims Court action for breach of the settlement agreement. The statute of limitations for breach of a written agreement is 4 years.

If the settlement agreement was oral, you could file a Small Claims Court action for breach of oral agreement, but only if it was made within the last 2 years since that is the statute of limitations for an oral agreement.

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If you have not made a payment in more than 4 years and the credit card company or debt collection company did not sue you, the debt is uncollectible because the statute of limitations passed.

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The debt collector is obligated to comply with the Fair Debt Collections Act (FDCPA) which hs here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf. California has special debt collection regulations, which are here: http://www.dca.ca.gov/publications/legal_guides/dc_2.pdf. If the debt collector is violating those rules, you can file a complaint with the California Attorney General