Read the terms of your debt/loan, credit card or whatever. ou'll likely find that it even states that, as has been held by virtually all courts...You will be entirely responsible for any costs they incur to enforce and collect the full amount of the debt, interest, penalties, legal fees, etc. too. So a small debt for something you bought can grow very large, very quickly. Of course, they may just sell the right to collect to a third party, but the result is basically the same, the costs of collection are borne by you.
The original creditor can charge the debtor for all fees associated with collection as well as interest. Credit card companies will usually negotiate with you for lowered debt.
A collection agency can charge you fees on top of your original debt. They can charge you a fee for their collection.
Original creditors sale their accounts to collection agencies when the account has been past due and they have not effectively collected. At that time, the original creditor will charge off the balance from their accounts receivable and turn the account over to a collection agency. When the collection agency collects the debt, a portion of the amount received is paid the the collection agency and the remainder is returned to the original creditor as profit.
yes
Charge offs are accounts that have been written off by the creditor as uncollectable. The debt owed is still valid and can be collected on either by the original creditor or by a collection agency. You can only erase charge offs by disputing them to the credit bureaus or negotiating the removal by the original creditor.
Yes, the charge off is entered by the original creditor, and the collection fee is a separate debt.
No ... you have the proof that the debt was settled.
If the original creditor charged interest then the collection agency will continue to accrue interest at either your states legal rate or whatever you agreed to in the original contract until the debt is either paid or sold to another collection agency or placed with an attorneys firm for legal litigation.
Yes, reporting to your credit by a collections agency does not effect the reporting originally made by your creditor. It most normal cases you would see the original creditor having reporting the account as a "charge off" regardless of any reporting made by a collections agency afterwords.
It is unlikely that the account was "sold" to a collection agency. Rather, the agency was contracted to recover the debt. The "charge off" of the account only affects the original creditor, and represents a loss reported against the company's taxes. If the collection agency has attempted to recover the debt and has been unable to, the original creditor will likely pull back the account and refer it to another agency in hopes of greater success.
No they can't it's against the law. However the original creditor is allowed to add collection fees as long as the underlying contract allows for it. For example medical intake forms often allow for interest and collection fees.
They (collection agency) would first have to buy the mortgage rights from the original creditor (usually for just pennies on the dollar), before they could take action. Normally speaking though, once a charge off has occured, the chances are slim that a 2nd party would buy those rights due to high risk/low chance of recovery of assets and/or cash as the original creditor has probably already tried applying the max legal pressure (hiring a collection agency) to collect the debt.
Typically it is NOT the collection agency that adds "extra fees". When the original creditor has exhausted all of it's internal collection efforts, it sends the debt to a collection agency. The agency is typically paid on a contingency basis (meaning they only get paid if they collect) so the original creditor will add collection costs to the original debt. Collection costs can be whatever the creditor deems appropriate, though it's usually in the 30% range. If you don't like the fees, be careful about the contracts you sign. We all sign the same contracts. The lenders cover themselves ahead of time because they know a percentage of their loans will go into default. If your account is in default, you will pay for it one way or the other. That's how it works.
More than likely. Three years is not long enough for an SOL to expire. What probably happened was, the account was bought from the creditor, which is common practice. The BK of the original creditor, has no relevancy if the debt was sold.