Legal Question in Credit and Debt Law in North Carolina

You did not follow your contract. Just because you "feel" it is invalid does not give you the right to unilaterally decide you can stop paying. And sending an email is not how you cancel a contract. Cancellations have to be in writing and sent to the address specified in your contract.

Debt collectors and creditors are two different entities. Debt collectors are governed by the FDCPA (Fair Debt Collections Practices Act). Within 5 business days under the act, the debt collector is required to send you a letter regarding the debt and when you get that, you can dispute this in writing by a real letter not another useless email. And you can cite law pertaining to these kinds of contracts:

� 66-120. Buyer's rights.

Every seller of a prepaid entertainment contract must:

(1) Deliver to the buyer all information of a personal or private nature, including but not limited to answers to tests or questionnaires, photographs, evaluations, and background information, within 30 days after request therefor;

(2) Refund to the buyer at least ninety percent (90%) of the pro rata cost of any unused services, within 30 days after request therefor, if:

a. The buyer is unable to receive benefits from the seller's services by reason of death or disability; or

b. The buyer relocates more than eight miles from his present location, and more than 30 miles from the seller's facility and any substantially similar facility that will accept the seller's obligation under the contract and this Article; or

c. The seller relocates his facility more than eight miles from its present location, or the services provided by the seller are materially impaired.

(3) Refund to the buyer the pro rata cost of any unused services under all contracts between the parties, within 30 days after request therefor, if the aggregate price of all contracts in force between the parties exceeds one thousand five hundred dollars ($1,500). Provided, if the contract so provides, the seller may retain a cancellation fee of not more than 25 percent (25%) of the pro rata cost of unused services on all contracts, not to exceed five hundred dollars ($500.00).

and try and explain why/how you cancelled and don't owe the debt.

Once you dispute the debt in writing, the collector is not supposed to call you further until they validate the debt. Of course, that does not stop the gym from pulling your account and sending it to another debt collection agency.

Your debt is delinquent and the gym (or more probably, the gym uses a third-party factoring company) and they have probably reported your debt as delinquent to the credit bureaus. Collectors may or may not report this. And yes, they can report you without sending a debt collection letter because your debt is delinquent.

I would pull your credit report - you are entitled to one free report per year. If you have not obtained your credit report, then get your annual free report at www.annualcreditreport.com. There are links there to each of the credit bureaus. If you do not want to pay and are not entitled to another annual report, you can get a trans union report from credit karma and an experian report from credit sesame.

If after your review of the above law and your contract it turns out that your cancellation was a nullity and that you owe the money, you might try to ask for a "pay for a delete." Usually, this is only done where you pay the full balance in a lump sum. You can justify the request for a delete by attempting to argue that you tried to cancel and that the gym did not provide the services you paid for (but I bet there is something in your contract that allows the gym to do this). Anyway, if the collector will not do a pay for delete and if this is on your credit, then settle the account - try to get them as low as you can, but with a small debt like this, they will probably want at least $250. I would start at $150 and negotiate up. Pay in a lump sum, not payments. Get a settlement letter before you pay a dime.

And word to the wise - gym contracts are a RIPOFF. Never enter into a gym membership with any place that requires you to pay exorbitant fees like this. Find a gym that has no contract and allows a pay as you go.