Hope everyone is having a good summer.
I took out a small payday loan in December of 2008 ($260). I paid on it for awhile, then fell behind. I communicated with the lender, who set up a plan for me to pay $25 every two weeks without further interest being added. Then I began having difficulty reaching the lender. I emailed and called, but received no response over a period of a few months. I presumed the company had gone out of business.
Yesterday a collection agency called me. They had bought the debt. I called the original lender, and this time was able to get through. They confirmed that I had made payments totalling $325.
My question is … what “rights” does the collection agency have at this point? I am probably going to have to pay them something, but they are asking for $425. I was able to get the original lender to send me an email confirming that I’d paid $325 on this debt.
I know the collections company will probably play hard ball, threaten to sue, etc.
What are my rights at this time? What can I do to ensure I don’t have to pay this collections company a large amount of money?