Legal Question in Credit and Debt Law in Virginia

Re: Collection Fees

The only way you can be required to pay fees for a collection agency or attorney is if you AGREED to pay them in the contract. Therefore, this depends on what the contract actually says. I know that collection agencies often try to pull this trick, including sometimes building their fees into the "principal" where they are hidden.

If the contract says that you agree to pay attorneys fees, but does not say anything about "costs of collection" or collection fees, then you have NOT agreed to pay a collection agency any fees, even though if it goes to court you would have to pay up to 25% for attorney's fees.

It also sounds like there is a question as to whether or not it was NECESSARY to send the case to collection. Most contracts that would call for paying the costs of attorneys fees or collection agencies would use language suggesting that it must be necessary to collect the debt. Although I have never seen this challenged, a creditor would have to show that you were not responding and were not paying and that collection was necessary.

Same is true, obviously, with a payment plan. Tell them what payment plan you can pay, and if they don't like it they can sue you. The most that will happen if they refer it to an an attorney is that you will have to pay the balance due. So you won't be paying any more than what you are paying anyway (unless the contract provides for attorneys fees but not collection fees).