Legal Question in Credit and Debt Law in Michigan
Collection Costs
I received a notice of collection. The principal amount is $132.00, which isn't a problem, but they are claiming $500 owed, stating the rest is attorney fees and collection costs. I requested validation and a copy of the contract authorizing these costs, they sent me the ''contract'' which is nothing more than the document a hospital has you sign at admission requesting permission to bill insurance, nothing mentioned about collection costs. I refused to pay the additional amounts and told them to send me a corrected invoice that reflects ONLY the principal amount and any interest owed by law. They instead sent me yet another letter demanding $370+ or I would be sued in 20 days.
I dont' want to pay anything on this until the discrepancy is cleared, in writing, so they can't come back at me for the remaining amount and they can't begin the date of the debt again for SOL purposes. Am I handling this correct. Isn't it a FDCPA violation to charge me for fees that are not legally allowed and are not agreed to in writing?
2 Answers from Attorneys
Re: Collection Costs
There is no basis for a collection company to charge you collection costs unless it was in your contract. You say it wasn't, so they can't do it if you are right.
Further, I doubt you will get sued over such a small amount of money. I would try to negotiate it down to the original balance or less.
Re: Collection Costs
once the matter has gone to collection, they are allowed to ask for reasaonable attorney fees or other costs associated with attempting to collect a debt. so technically they have not done anything wrong.
i would recommend calling the hospital or creditor directly, telling them you are willing to pay the $132 if they will their request with the collection agency. if they agree to this, get something in writing and/or pay it off in person. the hospital/creditor will then have to notify the collection agency that the bill has been paid in full and they will stop harassing you.
if they sue you, they will request more attorney fees and costs and it will get bigger. unfortunately.
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