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Advice needed - dealing with collections for the first time

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middlefield
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Advice needed - dealing with collections for the first time  Reply with quote  

Hello All,

I fully realize this was my own fault for ignoring this for so long, but need advice on what to do next. Over a year ago I moved out of my apartment and into a house. When I moved out, I didn't realize I had to let my renters insurance know I moved. I kept getting bills and called them and told them I had moved and to stop billing me (six months after the fact). They informed me I needed to prove I moved and they would maybe prorate it. I am in school and working so although I knew this was important, I put it on the back burner. In the summer I started recieving warnings that it may go to collections.

Fast forward to today.. I decided to get to the items on my to-do list that have been on the back burner. I called travelers to put the balance on the credit card (PS - it is only 72 dollars). They informed me it was in collections. I don't know what to do next. I have extremely good credit (750+). How will this effect it? Is it best to just settle it with the collections agency ASAP? What options do I have? I tried to get travelers to help me and they wouldn't. THank you for your input - I realize that I made huge errors here in negligence but I want to handle it correctly now at least.
Post Thu Jan 24, 2013 3:11 pm
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oldguy
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quote:
They informed me it was in collections. I don't know what to do next. I have extremely good credit (750+). How will this effect it? Is it best to just settle it with the collections agency ASAP? What options do I have? I tried to get travelers to help me and they wouldn't.


You could get a credit report, that will tell you who now owns your debt, and then pay them. Or you could wait until you get a bill from the collector and pay it. As for your 750 score - you'll probably take at least a 50 point hit for the 'derogatory'. And it will take a year or two of 'good' history for it to build back up.

As for help from travelers - what would you like them to do? It is you who didn't pay them - not the reverse - lol. BTW, do you need renter's insurance? Ie, do you have expensive possessions that need to pay someone to replace for you?
Post Thu Jan 24, 2013 3:41 pm
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middlefield
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Ok great thank you! I was able to find a bill mixed in with the notices so I would assume I'll call them and pay them. That stinks it is going to effect it so much, but it is good to know I can bring it back. Is it true I am able to write a letter to try to get it erased? Who would I write it to - travelers, the credit company, or the collections agency?

Oh I knew they couldn't do anything - I just wasn't sure what the next step was or what my options were. My parents made me get renters insurance "just in case" - It wasn't too expensive so I went with it but didn't want to pay for the time I wasn't even living there.
Post Fri Jan 25, 2013 12:09 am
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oldguy
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Is it true I am able to write a letter to try to get it erased?


No, not true. The scoring companies are in business to keep an accurate history of your credit dealings - if it happened it stays on your report. The purpose is to notify lenders of your history, good or bad. So they have to keep the true history and report it. But if a bill was mistakenly sent to collections or there is a mistaken identity, etc, that can be corrected with a letter.
Post Fri Jan 25, 2013 12:49 am
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coaster
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middlefield, I think that this is just one of those: "OK, I screwed up, I take the consequences, I learned my lesson, now I move on from here" - type things.

I think you're an OK person; don't spend a lot of your time and energy on this; just do what needs to be done to put it away and behind you, and in a few years it'll be ancient history, and you'll always be glad to have learned such an important lesson for such a small price.

~Tim~
Post Sat Jan 26, 2013 6:59 am
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middlefield
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ok great thank you both! I figured that is what I should do, but just wanted to make sure before I did something I couldn't reverse that I was going about it the right way. I have learned my lesson on this one and will have to just move forward from here. About to call the collections agency now and get it squared away!
Post Sun Jan 27, 2013 7:25 pm
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middlefield
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Update: I just got off the phone with the agency. They offered to let me pay in full for a reduced rate. It is completely settled, and they said no negative things have been reported to my credit. Sounds too good to be true but I'll take it! I still have learned my lesson though, this time it seems I just got lucky!
Post Sun Jan 27, 2013 7:55 pm
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Wino
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Get it in writing BEFORE you send them any money. Have them send you an email stating that "x amount paid by y date will settle (account identification) IN FULL."

Collection agencies are scum who will lie to get some money out of you. If they didn't write it down, it didn't happen.
Post Mon Jan 28, 2013 1:59 am
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coaster
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There are legitimate collections agencies that follow the rules and operate in a reputable and businesslike manner ..... but ..... please DO follow the advice posted above. All official agreements with collection agencies must be in writing and sent via certified mail. What they said on the phone means nothing until you see it in black and white.

~Tim~
Post Mon Jan 28, 2013 7:50 am
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middlefield
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oh no! Is there anything I can do after the fact? I would assume not. I've already paid them over the phone. That is really good advice, I didn't consider they could be lying because I was so relived to hear what they were saying! I'm sure that is what the dishonest ones count on.
Post Mon Jan 28, 2013 1:33 pm
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oldguy
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Middle - keep in mind, when you talk to a collector, s/he is assuming that they are talking to a dead-beat who has been trying to stiff someone out of $72 for over a year. So s/he is going to try to recover some part of the bill from you (some money is better than none for them). At least enough to cover their cost of collection.

But your idea of ""pay in full for a reduced rate"" doesn't happen. If you owe $72 the only way to pay in full is - wait for it - pay in full. If you paid half of the bill, your credit report will show that you stiffed a creditor, ie refused to pay the other half.

And that is really the whole point of a credit report. If a future lender is considering loaning money to you (a car loan, eg) they pay the credit company for a credit report. If the report says that you stiffed on a bill a year ago and then only paid half of it, that is the information that the lender is paying the credit reporting company for. IMO, you might want to fix this - you can't take away the history that you neglected to pay for a year - but you can pay in full and clear that outstanding balance.
Post Mon Jan 28, 2013 3:47 pm
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middlefield
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Ok.. called them back and paid the remaining 13 dollars even though they said I didn't have to. They will be mailing a paid in full letter to me in 8 days. They said their office doesn't report anything to the credit bureaus on travelers accounts. They said that travelers could but they doubt they will because it is paid in full, and because it is under $100. They also said they don't purchase the debt from travelers, travelers just has them collect it for them. I guess that is the best I can do at this point except just be more careful in the future. Thank you again everyone! I learned a lot about the process.
Post Mon Jan 28, 2013 10:15 pm
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Wino
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Sorry to comment again after you've "closed" the discussion, but you need to think a little more before you act. You just risked a seven year negative impact on your credit rating for $13.

Let's put that into perspective:

Your automobile insurance company has about a 90% chance of using your credit score to determine your rates. That's probably up to $800 per year you would be paying for the next 7 years, to save $13.

When you buy a car, they base your rate on your credit score. For $13, you just risked paying 6.9% instead of 2.9% (imaginary figures) for your car loan. Over the life of the loan, that's probably $100 per $1000 borrowed.

I could go on, but you see the point. There are positive and negative effects for everything you do. Your "positive" was $13 in your pocket. Your "negative" was the dollars above, plus your knowledge that you did not live up to your agreements.
Post Tue Jan 29, 2013 2:44 am
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coaster
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hey, middle, just remember you're talking with a bunch of tough old birds that I would guess have made more dumb mistakes in their own lives than they can even begin to remember, so don't get too put out about yours. Best wishes and have a great life!! Very Happy

~Tim~
Post Tue Jan 29, 2013 8:17 am
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Wino
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quote:
you're talking with a bunch of tough old birds that I would guess have made more dumb mistakes in their own lives than they can even begin to remember


I remember all of my dumb mistakes. Smile

Sorry if I sound gruff in my responses. I just want to be certain I am understood, so I don't couch my answers in feel-good euphemisms.
Post Wed Jan 30, 2013 1:09 am
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