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It is hard to know whether this is permissible without knowing the specifics. However, generally a debt collection agency is allowed to collect the original debt, any financing charges and/or late fees, any interest due on the debt, and reasonable fees associated with the collection of the debt. Depending on the amount of the debt, in some instances this can triple the amount owed. What the debt collection agency is entitled to collect, should be laid out in the contract.
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Generally a company cannot randomly triple the amount you owe. However, with the other fees associated, the amount that the company is trying to collect can increase VERY quickly.
On some credit cards, interest can jump up to past 30% on delinquent amounts, so again, this adds up quickly. Then add collection fees or attorney fees to this, which can be upwards of hundreds of dollars an hour.. I am sure you see what I am saying.
At this point, the company may settle for payment on the original debt, however they may have no obligation to. However, that does not mean that you cannot approach them about trying to settle this matter without having to go to court.