What to do with my debt with the Collection Agency?

Question

My hospital bill was sent to a collection agency about 3 1/2 yrs ago and I have made arrangements with the collection agency on monthly payments in return of not reporting me with the credit bureaus. Of course, they did not live to their promises and reported me anyways even though I've been consistent on my payments. Now I still owe about $2500 and $1500 on interest, I've already paid about $3000 (original debt was $6000). Is it on my best interest to continue paying them even if they've already destroyed my credit? And I keep hearing about 'statute of limitation' does this apply in this case? Will they file a lawsuit against me if I stop paying? (Middle income but no property) And if so, whats the worst case scenario? I didn't mind making payments at first but now they are just being jerks on insisting for me to fully pay this, I cannot afford it right now due to other bills that I'm trying to payoff. Please help. -Uncertain?

Answer 1

There is no statute of limitation, regardless of what myths keep circulating, it is a valid debt and will be forever--unless you file bankruptcy.

Offer to settle. The collection agency probably bought the debt for $1,000 or less so they have already made a profit if you paid $3,000. Interest is another way they make a profit--don't pay it. They have no legal basis to charge interest. Often the collection agency will settle for 50% of the original debt.

Here's what I'd do: tell them you are working with a bankruptcy attorney and are filing Chapter 7. Ask them if they'll take $500 to clear the debt, otherwise you'll include them on the list of debtors for bankruptcy. When they agree, get the agreement in writing before you send the money.

Worst case scenario? They'll continue to report the collection as current and it will continue to damage your credit rating. Also, you'll never get a conventional A-paper mortgage loan (low rates) without paying off that debt. I did a mortgage loan once for a couple with perfect credit--except for one old collection that they refused to pay for principle reasons. They were not able to get the going rate of 5.5% because of it.

Good luck.

Rick
http://www.fairwaymortgagelending.com

Answer 2

screw the collection agency!!!! ( the creditor already marked it off as a loss and sold it the collection agency for cents on the dollar). pay the original creditor. contact the hospitals billing dept. and calmly discuss the situation with them tell them what you've already paid, find out what is owed, if they will take your payments, and if their is a pay off. check your credit report and if your debt has scarred it report the payment(s) to trans union, equifax, experian,etc.
when you get bothered by the collection agency, inform them the debts been paid(or being paid), be prepared to fax or send them a copy of the receipt(s).
trust me they wont be happy, they're losing money on it.
the creditors happy their getting their money
you've covered your butt with the credit bureaus, learned your rights, and your restoring your credit.
yes there are statue of limitations. you can call TRANS UNION @1-800-916-8800 and go through an automated system, leave a message(your name and contact phone number), a live person will call you back and they will inform you of your credit rights, statutes of limitations and what needs to be done to fully restore your credit and how long it will take. unfotunately they wont tell you your credit score

Answer 3

Of course you have to pay it. The reason your medical bills are so high is because people don't pay their bills. And there are so many ways they can ruin your credit for non-payment. An outstanding bill has no expiration date. Even if you died, they have every right to take the monies owed from your estate. I would suggest that you contact the collection agency and work out a payment agreement that will fit your funding situation.

Answer 4

For starters, rlanicek needs to do his research. I'm guessing from his message, and the link he posted, he's in the lending business and is so used to telling this lie that he does it naturally.

Sorry dude, there really is a Statute of Limitations. Please do your research.

To answer your question....you messed up. I've posted over and over about this subject. You did great by getting them to agree to remove this from your credit history, but you MUST get it in writing. Collection agents will lie to their mothers if they can get their money. So your lack of anything in writing just killed your chances of fighting back.

The statute of limitations will not help you in this case. SOL's begin from the date of the last transaction. Once you made a payment to the collection agent, you restarted the SOL time period. This is another warning I tell people about. That $5 "good faith" payment you made actually opens the door for the CA to sue you if your SOL has already run out.

So for now, you are back to square one. Negotiate with the debt collector again...get the agreement IN WRITING, then continue to pay. If they won't agree, then stop paying. They may sue you, but that's the risk you will have to take to fix your credit.

If you have ANYTHING in writing from them agreeing to removing this from your records, then stop paying and demand that the listing be removed. If they sue you, then counter sue them.

Answer 5

Tell them your dead...pretend to be a family member if the collection agency calls, and them them you died.