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I know very well that not paying a loan of any sort can traumatize your credit score, and depending on the loan agreement could also impact you legally.

What about installment plans? Where no agreement is signed and no money is actually borrowed?

The context is, I went to a US/MO college and each semester was paid by an installment plan of 2 payments. I've never taken any loans out, I always pay the installments in full and in cash. Halfway through one semester I stopped attending. I had already payed the first installment. However the second installment I have yet to pay because I never attend the second half of the semester.

They're now threatening me. If I do not pay this installment they will contact a collection agency. I don't care about the loss of academic credits nor do I care about the transcript. I'm only wondering:

  • Do I have a legal obligation to pay them?
  • Can the collection agent use the unpaid installment to affect my credit score?
  • Define 'stopped attending' – Singulaere Entitaet Mar 17 '17 at 15:16
  • Even if you "stop attending" that does not mean anything economically; for the college the costs are fixed (they pay teachers each month, keep the installations), the savings of you dropping mid-course are non-existent, and they cannot enroll anyone in your place to attend only the last half of the course. – SJuan76 Mar 18 '17 at 10:59
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Most Likely Yes to both.

It really depends on the nature of your agreement, oral agreements are as legally binding as written ones, but as a matter of evidence in court written contracts are of course better.

So looking at your agreement: did you agree to pay the full amount, in return for a place to study? Or did you specifically agree to pay on a rolling basis, where you pay for however long you actually study?

I would believe that you had agreed to the first type of agreement, since that is what most study contracts are. And if that's the case:

  • You pay to be allowed to attend, whether you actually attend or not isn't important.

  • And even if you pay on a rolling basis, I would think in a lawsuit the court would find that - judging on previous payments - you'd have agreed to pay on a per semester basis, meaning that the incomplete semester would round up and you would still have to pay for it.

I would lean yes to the 2nd question (but im not sure so anyone with more info please chime in).

This answer can be more useful if you be specific about the terms and conditions of your study

  • I've specifically asked the college to what agreement I am under, they have not provided it to me. They've only said "it's the students responsibility to pay". So assuming there is no written, or oral agreement dictating what type of agreement it is, does the decision go directly to the court? Or is there a law about this circumstance? – Sanchke Dellowar Mar 17 '17 at 18:25
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    There should have been at least an oral agreement ("Can I study at your place? Sure, it'll cost x per year, you can pay in installments"). Or something like that. Either way, if there is no oral or written contract, then it is possible that you are free, since the requirement of certainty of terms within offer and acceptance might not be fulfilled. Though I highly doubt that would be the case – Shazamo Morebucks Mar 17 '17 at 18:49
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    Speculation--there was probably an agreement signed when you originally applied or enrolled. – mkennedy Mar 17 '17 at 20:09

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