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Can a debt be legally put in and taken out of collections?

Chicago, IL |
Filed under: Sued for debt

I have a debt with a state university I have been trying to dispute or compromise on for years. It was placed into collections. I was going to work out a settlement with the collection agency, when suddenly the school took it out of collections, changed the amount, and stated I need to pay in full or they will bring a lawsuit against me next month. I have no money to my name. I just want to know if it is legal to take it out of collections, or if I offer to pay anything (i.e. ten dollars) if they have to accept. They said nothing under $300.00 a month would do. I want this settled.

Attorney Answers 3


Consult with a bankruptcy attorney and discuss your options to resolve or discharge your debts.

Madhu Kalra Kalra Law Firm 23720 Arlington Avenue, Ste 5 Torrance, Ca 90501 (310) 325-9012

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Yes, its legal.

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1 lawyer agrees


This sounds like a private student loan (vs. Sallie Mae, etc) . Yes, they can pull it out of collection. No doubt the entire amount is due now (and earlier). They do not have to accept payments that are not acceptable to them. You might consider Chapter 13 because you can then force them to accept smaller payments. Talk to a bankruptcy attorney.

My response is general information not intended as legal advice or to create an attorney-client relationship. Seek advice from a qualified attorney to see how the law fits your specific facts. I am licensed to practice law in Washington and Oregon.

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1 comment

Robert Charles Russell

Robert Charles Russell


If it is a Sallie Mae loan, you might look here. Many loan programs have income contingent loan repayment programs.

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