Legal Question in Credit and Debt Law in Georgia

You failed to tell us the terms of your initial agreement (or the "arrangement"), which obviously should have been in writing. Of course it is legal for a creditor or collector to charge interest and fees and most likely your account agreements expressly provide for that. What do you have that says they agreed to settle for a lower amount?

You say you have an arrangement. As I am sure you already know from reading your original credit crd agreement, any and all changes to that contract have to be in writing. So if you fell for a con job and trusted the oral statement from a collector, yes you owe those fees and you have learned a costly lesson.

However, if you did things right and got, in writing that they would waive late fees and interest and have you pay principal only, then you can hold them to that agreement. It is possible, although unusual, to negotiate such a deal, and if you did and have it written down, you are protected.

You have also learned a lesson to look at your statements. I find it hard to believe that anyone would go a whole year before they even looked at their online statement or checked the paper one. You need to adjust your behavior so you check all your accounts frequently, both for accuracy and for identity theft. This should be done online daily, or at least every weekly.

You do not tell us the relevant details. Did you have a written agreement? Did the collection agency./creditor agree to waive interest and late fees and such? What was the original balance?

Typically, interest does not stop accruing once an account goes into default. You could have settled for less than the full amount had you gotten legal advice before you made the arrangements.

Without looking at what you have, my guess is that you will have to pay the entire balance plus accrued interest until the account is paid in full.