Legal Question in Credit and Debt Law in Pennsylvania
paying back old debt
i had a 2000 loan when i was a teenager and then went through an accident that lead me to fall behind for a few years. About 9 years later I got a letter from a collection agent claiming I now owed over 5000 towards this loan. I wanted to take care of this so I made payments arrangements. Its now been about 3 years making steady payments totaling well over the amount of the original amount. They are now saying I owe another 2000 but will settle for 1200 to close this debt. Does the collection agent have the right to include fees totaling well over the original amount and hold me to paying all this money back.
1 Answer from Attorneys
Re: paying back old debt
You should almost never pay a collection agency anything. If this happens again, consult a consumer attorney first.
To answer your question, it depends upon what you agreed to. If the original amount was going to continue to accrue interest, which I would guess it was, you could owe more than the original amount. If the interest was accruing at the default rate, that could be as high as 29%, which obviously accumulates pretty quickly.
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