Expert: Chris Ebert - 9/15/2010

Question
Hello Chris; 1st question, My wife has agreed to pay a collections agent $25.00 a month and they are adding 14.55%each month so the balance keeps going up! I feel this is not legal. The account has been charged off!
2nd question I have a sears account that I was not able to min amount but paid what I could as I could. The account was charged off and statements I received did not so the payments. Leading edge recovery called me ,the account has been sold to midland funding llc.I tried to reach some arrangement, he wanted access to my bank account which I wouldn't give,He then said I was refusing to pay and this is how he would report it. I explained to him we have limited income and I could pay a small amount while trying to secure funds to make a settlement. He refused this without access to my bank accounts. Do you have any info that may help? Thank you

Answer
Curtis,

1) Depending upon the original contract or agreement that you are operating under it maybe legal for them to add the interest. I do not have enough details to say.

2) He can not mark as a refusal to pay on your credit report. The entry on the credit report will show up the exact same whether you refuse to pay or can not pay.

*** This is not legal advice *** Personally, I have always found that it is better to not pay a debt and wait until you have 20-30% of the alleged balance to negotiate the debt in one lumpsum. You can see how to do this at http://www.henleycreditlaw.com/diy-credit-repair/

Chris Ebert
http://www.henleycreditlaw.com