I am in Collection! What would you do?

[CyclingInvestor]

I found this now 5 year old article on debt collection to be fascinating. The NYTimes firewall does not seem to extend to this article.


https://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html

 

[latexman]

A 24 point hit would put my credit score at about 820. No problem.

No bill. No problem.

Next!

 

[sengsational]

Demand source documentation, call and make sure you got the service, and if so, ask for a letter stating the complete balance with assurance that paying that amount will be considered payment in full. This last part is important because debit collectors bill an amount they figure you'll "just pay". If you do, you've admitted owing whatever they say you owe.


I did get a bill from an out of network guy and he wouldn't negotiate, so he got zip. Later, I had to get a loan on for a house so got the kind of letter I mentioned above, paid it, and the credit report was clean, like nothing happened. So the point is, ignoring it is an option which doesn't preclude later fixing it.


And you can ignore it and not be pestered. Just write a drop dead letter, signature receipt, stating that you will sue them in your local court, a right provided by the act referenced in an earlier post. This saber rattling is often enough for them to find an easier target.

 

[pb4uski]

It doesn't seem right that ARS can report a late payment to Experian without having first contacted you to try to collect it. That alone should be sufficient cause for Experian to remove it from the record

 

[CardsFan]

Thanks all. Experian has replied that the dispute would be completed by April 4. I guess I will wait to see what happens there, and see if I ever get a bill from ARS.

 

[CoolRich59]

I wouldn't give it a second thought.

A couple of years ago, I had an MRI and there was some mix up between the MRI place and my insurance. Long story short, insurance refused to pay the bill and the MRI place came after me.

I told them to go pound sand, I wasn't paying. They referred it to a collection agency and I told them to go pound sand too.

I bought a car a couple of months later and, even though the matter was on my credit report, it had no impact on financing. Last time I checked, my score was back over 800.

 

[Dash man]

Back in 1993 I received a call from a collection agency saying I owed about $16,000. I nearly hit the floor, as that was before financial lightbulb turned on and I had just bought a home after a divorce. Money was tight. He was telling me I had to make the payment before I could learn the reason for the debate. Well, I wasn’t stupid. After 30 minutes that I’ll never get back, I finally got him to give me a telephone number to call to verify the debt. I called and the California Franchise Tax Board answered. It turned out the tax bill was for a capital gain on the sale of my mother’s condo after she passed. The probate court had set a low value to the condo, and when we sold it we got a sale price that was higher than the new cost basis. I reported the sale on my federal return for that year, but didn’t even think about California taxes since we didn’t profit from the sale after expenses and I hadn’t been a California resident for several years. I paid the collection agency the tax and filed a return for that tax year. No tax was owed, but they kept $400 from my refund for penalties.
PS to add: The collection was on my credit report for seven years. If it had shown up prior to buying my home, I may not have qualified for the mortgage. I never received a bill from the state of California.

 

[Rianne]

This brings up questions. How does a vendor prove an unpaid bill? I understand liens can be put on a house without your knowledge until it's time to sell. A contractor dispute occurs because of work complete/not complete in the eyes of the home owner. I'm thinking an invoice has to be provided and proven it was sent.

This is a weird predicament we got into last year. DH got a speeding ticket in FL between Miami and Ft Lauderdale @ 2006. We recall the incident. Twelve years went by and we get an invoice that ticket was never paid. We moved once in that time period. So at address when ticket occurred for 6 years. Then at current address for 6 years. The dispute began last year. The Illinois Attorney General, Lisa Madigan's office got involved (DH was pissed so he brought in IL AG). He recalls paying the ticket at the time of said ticket but could not prove it as check stub long gone.
FL AG got involved. I have to say the state AG follow up was impressive. Phone calls returned, letters verifying incident...more phone calls. We finally paid the original ticket and all said and done, just to end the PITA.

But who decides the statute of limitations? Apparently, the state gov. has no limitation. And how does a vendor show lack of payment. I've always wondered about this. CFPB says 3-6 years, but that can be extended. Our credit score NEVER in all those years showed we owed the state of FL anything.

 

[scrabbler1]

I had one small experience with a debt collector.


Back in 2015, the year I was in the hospital for 12 days, it took several months before the hospital and my insurance company worked out the amount the latter would pay the former. Two months after I was discharged from the hospital, they send me a letter with an estimate of how much I would have to pay even though I hadn't seen a revised EOB.


The estimate turned out to be correct. I received the EOB a month later although they and the hospital were still in some conflict over some minor charges the hospital wanted reimbursement for.


A month later, I finally received a bill from the hospital stating how much I owed them. I checked it against the EOB and while the figured were close, it looked like the hospital was trying to balance-bill me for that relatively small difference (several hundred dollars).


I spoke to hospital's billing department and soon met with a woman there. I got all my ducks in a row, from the letter with the earlier estimate to the revised EOB to the hospital bill, and showed them to the billing lady. She agreed that the bill was incorrect and I would pay the lower amount shown in the EOB and the estimate letter (subject to their early payment discount). I wrote them a check and everyone was happy.


Fast forward about 14 months into early 2017. I get a letter from a debt collector trying to collect some money on behalf of the hospital stemming from my 2015 stay. The first thing I do is get my records out. My first suspicion was that they were trying to get that previously disputed amount from me, perhaps thinking the check I gave them was a large but partial payment. Those amounts didn't match although they weren't too far apart.


I called the hospital (not the debt collector) to ask them why they sent my file to a debt collector. They called up my account and agreed that they made a mistake and I didn't owe them anything. They also told me they would let the debt collector know so they wouldn't bother me.


A day or two later, now armed with this welcome news, I called the debt collector. They told me my account was closed after the hospital told them I owed nothing. I took careful notes from all conversations. Never heard from anyone again.


Sometimes, the system works properly after an honest(?) mistake is made.

 

[Rianne]

A day or two later, now armed with this welcome news, I called the debt collector. They told me my account was closed after the hospital told them I owed nothing. I took careful notes from all conversations. Never heard from anyone again.

Did it affect your credit score?

 

[scrabbler1]

Did it affect your credit score?

Nah. It has been in the 820s nearly every month, with only small spikes in my CC use sending it down 10 or 15 points temporarily.