HELP! my debt was sent to a collections agency and I cannot pay it off, what happens?!?

Question

Urgh, worst mistake of my life. I signed up at a Gym last December (contract for 1 year), and I lost my job in January and couldn't pay for the Gym membership and I couldn't cancel it either. The bank has been charging me for NFS fees since then (Which I put a stop to now) and my balance is -$655 which is now sent to a Collections agency. I spoke to the agency, and they said it's too late to pay monthly installments....my bank wants the whole amount in ONE immediate payment, which I simply cannot do. I'm only 17 years old, and I don't even have a job. My parents cannot help out either, as they are paying their own bills and such.

A man from the Collections agency expained to me that I have 38 days to pay them in full, if not that results in bad credit.

So..does this mean that after the 38 days, I don't have to pay the $655, and all that will happen is bad credit?

Also, can I get a new savings account at another bank branch?

I appreciate ALL who help me out....thanks!!!

Answer 1

There were some good stabs at answering this question but let me give you the truth, from a real legal perspective.  Whether or not a 17 year old can get out of a contract or not is dependent upon how the contract came about, the type of contract and what state you live in.

Let's assume that in your state, the contracts of minors are voidable, meaning that the minor can get out of the contract if s/he chooses to do so. The only exceptions to this would be contracts they make for necessities, such as food, clothing, medical attention, housing. and educational loans. Minors married to a legal adult (18 years or older) are also considered adults.

Your gym membership does not fall into any of the above categories so you could have the conract voided if your state allows you to, unless you told the gym that you were 18 or over when you signed the contract:

If a minor misrepresents his or her age, s/he is bound by contracts s/he makes and is not entitled to get out them. If you were 17 but told the salesperson that you were 18 and they can prove it, you are stick with the bill.  However, if you just looked 18 or over and were not asked, it can be voided if your state allows it.

Assuming that you are in a state where your contract can be voided, you need to straighten this out with the gym so that they can straighten this out with the collections agency.  Depending on the relationship between the gym and the collections agency, they may have purchased your debt from the gym and the gym may not listen to what you say and you will have to plead your case with the collections agency.

In the worst case scenario, if your state allows contracts to minors, you are stuck with this bill.  If the membership has been sent to a collections agency, their goal is to get as much of the debt from you as they can, and they will harrass you to do this.  They will normally settle for less if that is all that they can get but the odds are that if its already gone to a collection agency, your credit has already been adversely affected.  You can get a free credit report from https://www.annualcreditreport.com/cra/i... to look and see what is there.  Its a good idea to do this now and once every year because it is possible that even if you can't enter into a contract as a minor in your state, the collection can be put on your credit report in error, meaning that you can challenge it off to remove it.

Regarding getting another bank account, you should be able to do so but if not, try a credit union which has more relaxed rules.  A bank will pull a credit report in some but not all cases.   They are more likely to pull another type of report from a company such as Telecheck, that looks for people that have bounce checks.

Answer 2

well they have to accept whatever you can afford even if its $10 a week. they are just trying to bully and threten you which is against the law but all of them do. if they refuse your offer just tell them that that it is all you can offer at the moment. and if they take it to court then they will be told by the court the same and your offer will have to be taken. but it wont go that far as they are just harassing you. offer them a set amount and stick with that.

Answer 3

People under 18 are not allowed to sign up for any contracts, it's the law! Tell the Agency how old you are and make sure you have proof of the date the membership started. They are NOT allowed to hold you accountable for it.

Answer 4

Actually, you DO have a way out.

You said you're 17 years old. You are therefore, a minor. Minors are NOT allowed to enter a legally enforceable contract. Therefore, your contract with the gym was null and void from the beginning. Notify the gym AND the collection company that you are aware of this and they are to cease any collection attempts immediately.

I'm not saying you shouldn't pay your bills.... however, this is a contract they were not allowed to sign you into. The only way they could have been able to do this is if you had a cosigner of age 18 or higher. If so, they should be going after that person and not you.

As to your bank.... there's not much help there. You will likely have to try to open a bank account at another bank, but chances are, if they find out about this one, you will be denied that for a while.

Please let us know how it turns out after you inform them you are a MINOR and therefore wasn't allowed to enter ino that contract. Theoretically, they should refund ALL monies you ever paid.