Something is moot if it no longer matters. The fact that a company refuses a small payment that they previously accepted may be an indication that the bookkeeping costs them more than your payment amount. They may chose to write off the debt, sell it to a debt collector, or pursue other collection options, such as a lawsuit.
You not being able to afford to pay is not a defense to a lawsuit.
Hope this perspective helps!
I agree with the first answer. The debt can still pursue the debt against you even if they don't accept your smaller payments. As the first poster mentioned, it may be possible that it is costing them more than what they are getting in order to accept the $5. And they may still pursue collection of the debt.
This correspondence does not create an attorney-client relationship. It is not meant to provide legal advice in that capacity. You may wish to consult an attorney in your area.
The other posters are quite correct. It's unfortunate that you are in a situation in which you can't pay even though you're in a funded program; many people are in the same situation. You don't list the size of the debt, but if the size of the debt is larger than the amount it would cost to collect it, this well may go into collection. (On the other hand, I've had a client whose old phone bill debt of over $700.00 has just had an offer from the collection agency to settle the entire matter for $25.00, so going into collection is not always something to fear. If you're not working on credit repair at the moment, you might eventually come out ahead.)