Im looking for some info on dealing with a collection agency...?

Question

Last November I signed my child up for a martial arts class. I filled out the sign-up form and spoke with the owner who never mentioned anything about financing. Nevertheless, I paid the 1st month along with the uniform fee thinking Im paying month to month and to the school. I eventually had to pull him out early. This last month I have rec'd phone calls and I just got a bill from a collection agency to find out the school gets the money right away from the finance co. and my pymts go to the fiance co. I called and was advised that if I had not replied in 7 days they would have my checks garnished etc... Can they do this or rather do this anytme soon? Or is this a typical scare tactic. I cant pay the amount they want even broken down in 6 months...but the interest! Can they garnish my wages just like that? Should I just send in what I can? Never been in this situation. I gave them my banking info and set up a pymt plan out of fear, i cant afford the pmt plan they offered. Help!

Answer 1

That is c**p!!!!  They CAN NOT just garnish your wages without first getting a judgment against you...and even after they get a judgment it still needs to get approved by the court...And they dont just get a judgment without your knowlege... They have to have an attorney involved and you would get a summons first (Order to come to court)...  I would first contact the collection agency and see what else you can work out and if they dont cooperate contact your bank and see what you options are..... If you have to - You can close the account.

Definiltly read the contract you signed with the school to see if you are even liable for the debt - But regardless....even if you are...you can try to work out a payment plan with the collector and dont make him any promises you cant keep and dont put anything in writting... If that collector refuses to work with you then tell him to sue you....Seriously!!!  It would mean they turn the account over to an attorney who will contact you and attempt to work something out with you  before filing a complaint with the court....and just so you know.....it costs at least $300 to file suit against you and even if they get a judgment they will still attempt to work with you before spending any more money on post judgment collections (garnishing wages) so depending on what your balance is... it might not even be something worth their time to pursue legally....and unless they get that judgment they can not garnish your wages.  

This is what I do for a living....

Answer 2

First question - do you still have a copy of the contract you signed?  If so read it carefully!!!!

But I agree with the poster above send the demand for violation and make them prove the amount and their right to collect.

Answer 3

Ouch....you made a big mistake. Never, ever give a debt collector your banking account info....This almost always leads to disaster...such as their taking out way more than you authorized them to do. You might want to consider calling your bank to see if they can temporarily freeze your account....if not, you might be better off having your checking account canceled to prevent them from looting it.  I'd be willing to bet that they've already taking money out of your account.

It is impossible for debt collectors to garnish wages at the drop of a hat. To do this, they would have to officially serve you a court summons.....which is traditionally done by a local sheriff....This summons would give a court date....On the appointed court date they'd have to win a judgement against you....Only then could they garnish wages....This process usually takes several months.

Send the collection agency a letter via Certified Mail + Return Receipt stating:

Per the Fair Debt Collection Practices Act, I am requesting written validation of this debt

Answer 4

First off, this collection agency violated the FDCPA by stating they will garnish your wages. Wage garnishment can ONLY be done with a court order!

As far as the billing goes, did the sign up form explain how the billing would be done? If so, you might have trouble fighting this.

Personally, I'd send this collection agency a demand to validate letter stating that you paid month to month and never had an agreement with any finance company. If they want to demand payment from you, they will have to prove you signed some kind of agreement with them.