Refusing to pay part of a installment plan
<p>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.</p>

<p>What about installment plans? Where no agreement is signed and no money is actually borrowed?</p>

<p>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.</p>

<p>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:</p>

<ul>
<li>Do I have a legal obligation to pay them?</li>
<li>Can the collection agent use the unpaid installment to affect my credit score?</li>
</ul>

<p>Most Likely <strong>Yes to both</strong>.</p>

<p>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.</p>

<p>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?</p>

<p>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:</p>

<ul>
<li><p>You pay to be allowed to attend, whether you actually attend or not isn't important.</p></li>
<li><p>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.</p></li>
</ul>

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

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

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