Everything is negotiable. The collection agency is doing its job--trying to get as much money as quickly as possible. I wonder if the bank was dealing with your son for those many months. Or sending notices to an old address.
If you have money in a bank account that the payee was aware of, then you should consider moving the funds to an entirely different bank, and the same goes for your son.
Take a look at the promissory note(s). What is written as to your entitlement to be given notice? Is notice even required.
Confer with a local attorney to be fully informed as to your rights, and obligations.
A Chapter 13 bankruptcy would force the creditor to deal on your terms based on what you can afford. If you do not go that route, then consider the following:
The federal Fair Debt Collection Practices Act (FDCPA) sets the national standard for collection agencies. The FDCPA, enforced by the Federal Trade Commission (FTC), prohibits abusive collection tactics that harass you or invade your privacy. (15 USC §§1692-1695) The full text of the FDCPA is found at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf
Generally, the FDCPA only applies to agencies that collect debts for others. However, other federal or state laws may apply to in-house debt collections. For more on debt collections not covered by the federal law, as well as collection laws in California and other states, see Parts 4 and 5 and Attachment A of this guide.
Can a debt collector contact me by phone?
Yes, but within limits. A debt collector cannot:
Call you before 8 a.m. and after 9 p.m. unless you agree.Call you repeatedly or use the phone to harass you.Trick you into accepting collect calls or paying for telegrams. Use obscene language, make negative comments about your character, or make religious or ethnic slurs.
Call you at work if the collector knows your boss does not allow such calls.
If you have an attorney, the collector should call that person, not you.
Fair play under the FDCPA also means a debt collector owes you the truth about who it is and what it intends to do. False statements and deceptive practices like the following are not allowed. A collector cannot:
•Claim to be an attorney or government employee when it is not.
•Send you documents that look like legal papers when they are not.
•State that forms sent to you are not legal documents when they are.
•Say that you committed a crime.
A debt collector threatened to sue me. Can it do that?
A collection agency can file a lawsuit to collect a debt. However, among the many things a collector is not allowed to do is threaten you with a lawsuit just to get you to pay the debt. Examples of threats and deceptive practices prohibited by the FDCPA are when the collector:
•Says it will garnish your wages or sell your property if it is not legal to do that.
•Says it will sue you, if the collector doesn't intend to sue.
•Is not truthful about the amount of money you owe.
•Says you will be arrested if you don't pay the debt.
•Threatens you with violence.
Does a creditor have to tell me before it sends my account to a collection agency? What about credit bureaus?
You have no right to be notified under the FDCPA that an account will be referred to a collection agency. However, your state may have a law that requires notice in some cases. In California, for example, you must be notified before a health or fitness club refers a debt to a collection agency. If you are threatened with such a referral with no sign of your creditor carrying through on the threat, the creditor may have violated the law.