A couple years ago, I took a college course at a community college that would transfer to my University. After a week, I simply stopped attending, and didn't return the book I had rented from them.

At the end of the semester, if I remember correctly, I received notice that I had an outstanding balance at the community college, due to not officially dropping the course and getting a refund, as well as not returning the book. They said if I did not pay, I would not be able to request a transcript from their school (which did not matter to me, as I had already graduated from my university at that point).

Fast forward to this week, I receive a letter from a debt collection agency, saying my outstanding debt from this college has been referred to "Key 2 Recovery", as a just and binding debt. They say I may dispute within 30 days if I do not feel like the debt is valid, otherwise the debt collection agency will assume it's a valid debt.

Another thing to add, is that they never stated what the debt was for; the letter simply states the amount. So I don't even know if its for the class, for the book, or both. On top of that, the amount that they claim I owe is much more than the class and textbook, so I'm not sure if they have added 'late fees' or interest to the amount. The letter does state that, within 30 days, I can 'dispute the validity' of the debt, in which case they will 'obtain verification of the debt or obtain a copy of a judgement' and mail it to me.

My question, is the debt indeed valid?

  • How long, exactly, is "a couple of years ago"? Where is this? Statutes of limitation vary wildly from state to state. What sort of agreement did you have regarding the course and the book? – Acccumulation Sep 15 '17 at 1:21
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    Why would you think the debt isn't valid? – Loren Pechtel Sep 15 '17 at 2:05
  • @Acccumulation Kansas, it was two years ago. As far as I knew, the agreement was that if I did not pay within the first 4 or 8 weeks, something like that, then I would be dropped from the class. – user62743 Sep 15 '17 at 2:39
  • @LorenPechtel Unless it was in the fine print when I signed up for the class, I wasn't aware that I would need to pay. As far as I knew, if I didn't pay after a certain point, I would be dropped, and unable to request a transcript from this college. – user62743 Sep 15 '17 at 2:41
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    You owe them money. The fact that they say that if you don't pay they will withhold your transcripts doesn't change that. Pay it. – Pete Becker Sep 15 '17 at 11:57

I would dispute the validity of the debt so that they will send you verification, which hopefully will account for the original debt and any fees/interest on top.

All colleges are different, but when I went to school, if I dropped a class more than 2 weeks after it started, I still had to pay the full tuition amount, so you might be on the hook for all of the tuition, plus the books you borrowed, etc. Just because you stopped going to class doesn't mean that you don't have to pay for the spot you took.

If you have the money to clear the debt, I would start with something like 50% of the original amount (less the interest and fees) and start negotiating. The collection agency likely bought the debt for pennies on the dollar, so as long as they make a decent return they will settle for less.

But, debt collectors are brutal negotiators. They will threaten lawsuits, wage garnishment, etc., most of which is smoke and mirrors. They make money by scaring people into paying ridiculous amounts of fees and interest on old debts. If you have the stamina to deal with them, you can hopefully get this resolved quickly.

When you DO settle, get the settlement in writing stating that you are settling the account in full. Pay everything by check (personal or cashier's) so that you have a trail of the payment. Do NOT give them a credit/debit card number or your account/routing numbers. They can use that to extract the FULL amount, forcing you to sue them and prove that you had a settlement agreement.

  • Keep in mind, though, that acknowledging the debt can reset the statute of limitations. So be careful of your wording in the negotiations. – Acccumulation Sep 15 '17 at 14:10
  • @Acccumulation That's why I said to dispute it first - but you are right, there are many nuances to debt negotiation - too many for this Q&A format. – D Stanley Sep 15 '17 at 14:20
  • Thanks for the response. Considering the debt is only around $600, would it even be worth it to dispute in your opinion? Or just pay in full and leave it in the past? – user62743 Sep 15 '17 at 17:26
  • @sme Well, that's up to you. If you have $600 and want to be done with this, then sure. Or you can dispute and try to settle for a lower amount. – D Stanley Sep 15 '17 at 18:04

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