Legal Question in Credit and Debt Law in Virginia

Re: How much interest is enough?

>>The account is now in collections but they are still charging me interest. How long can they keep charging interest?

Answer: until the loan is fully paid.

>>Also, I am trying to pay this off by making a standard payment every month but they keep telling me this is not acceptable and they are going to take further legal action?

Answer: If they're accepting your money, but not stating that they're doing so under a reservation of right (that means with the understanding that it's not a waiver of the condition of default), then they've waived the default, and you're in good standing again as long as you keep up the payments. If they're reserving their rights, then you're not getting yourself out of hot water by making the payments.

>> What should I do?

If it's a collections agency that's hounding you, hire an attorney to make sure that they've complied with the Fair Debt Collections Practices Act, and to tell you whether you've still got any rights under the Act. Hurry, though, there are time limits. You can tell them that you have no intention of communicating with them further, or hire an attorney and tell them they have to communicate with you only through your attorney, and they have to comply with your request.

You can try to negotiate some deal, like, pay them fifty cents on the dollar in a lump sum; you can do nothing and compel them to sue you and to force them to take further legal action to collect; you can file suit against them for an accounting and start making your payments to the court; you can discuss the matter with a bankruptcy attorney to determine whether that'd solve anything (I don't know what effect the new rules have on credit cards); or you can pay off the loan before the interest accumulation makes it cheaper to commit suicide. Borrow the money from friends and family if you have to, but pay off that loan. You might also check in with a credit counseling service in your area (make sure it's either a free or nonprofit service - paid credit counseling is often a rip-off by selling you a debt consolidation loan at higher interest).