Been sent to collections... now what?

In My Humble Opinion
1

My dad taught me to always pay my bills, and I’ve done a stellar job of it. But I just moved, and I canceled my phone service at my old house. They sent me my last bill to my old house, where it sat unpaid until I was sent to collections. Whoops… there goes my otherwise spotless credit.

The bill is for $152, and I’m no longer dealing with the phone company. My conscience tells me to just write a check for the total and send it, but I do have a little bargaining power at this point, right?

I mean, these collection agencies negotiate all the time, right? Isn’t that part of what’s happening here?

And what can I do to make sure this has as little effect on my credit as possible?

2

Pay the bill in full with no argument. Then ask them to consider your entire credit history and ask them if they will go easy on the black mark.

You owe them the money. Pay it.

3

Offer to pay in full if they will take it off your credit report. Explain the circumstances and get it in writing.

4

I had the exact same thing happen with a cable bill when I moved out of a place. I paid it in full (it was not as much as yours). Now, five years later, I just got the record dropped from my credit report. So, all I can say in this matter is that paying it will not make it go away in any faster than five years. If not paying the bill ends up in the same result, I say screw them, they should have asked for a forwarding address or something.

ETA - Well, apparenty you can argue your case - I didn’t know that.

5

Whatever you do, get it in writing. If you owe the bill, and you know the exact amount you owe, then pay it. If you have any question as to how the amount was figured (fees, penalities, etc.), then ask (in writing) for a detailed explaination, although it has been my experience, they don’t usually provide it (however, in the US, they are required to provide it, I believe).

6

I don’t mind paying the entire $152… I know I owe the company. I’m a little upset it went to collections so quickly (isn’t it usually 90 days?), and I’m certainly pissed that it’s a blemish on my credit.

So you’re saying if I call them, explain the situation and offer to pay in full, they can remove the blemish from my credit history? That would be ideal.

7

Is it 100% certain that this will show up on your credit report? I don’t think it’s automatic.

We had a medical bill go to collection a couple of years ago, while we were waiting for the insurance to pay. After the second collection notice, we paid it. There’s nothing on our credit report about this bill.

I’m not saying don’t pay it; of course you should pay it, and soon. But it might not end up on your credit report.

8

[QUOTE=wasson]
I don’t mind paying the entire $152… I know I owe the company. I’m a little upset it went to collections so quickly (isn’t it usually 90 days?), and I’m certainly pissed that it’s a blemish on my credit.

So you’re saying if I call them, explain the situation and offer to pay in full, they can remove the blemish from my credit history? That would be ideal.
[/QUOTE]

It shouldn’t be a problem. Just remember to get it in writing. Enclose a note with your check that they are to take the blemish off your credit report.

9

I had the same problem with the electric company when I moved (which I totally don’t understand as I had a new account with the same company, why didn’t I get notification?). Anyway, I just paid it and then I contested the black mark on my credit report (all three companies - Experian, Equifax, and Transunion). Since it was already paid, the electric company didn’t bother to verify it and it dropped off. My score went up quite a bit.

10

[QUOTE=wasson]
They sent me my last bill to my old house, where it sat unpaid until I was sent to collections.
[/QUOTE]

The same thing happened to me about 6 years ago. The frustrating thing was that the phone company knew I was moving. They shut off the phone at the old address and turned it on at the new one on the same day. I assumed it was the same account and starting paying the bills at the new address, while they sent bills to the old address. I too didn’t find out about it until it went to collections. They should have known how to find me. Why didn’t they send a letter? I paid the bill immediately and tried to get it removed from my record, but it seemed the only choices available are 1)this is your bill or 2)this is not your bill. Giving an explanation was never an option.

11

[QUOTE=wasson]
I’m a little upset it went to collections so quickly (isn’t it usually 90 days?)
[/QUOTE]

The age of the debt sometimes affects what percentage the original creditor gets. In my business, we have determined that most bounced checks that will ever be made good, are made good within 72 hours. When we find out a check bounced, we notify the client that we would like cash within 72 hours. On day number four, the account gets sent to collection.

12

[QUOTE=wasson]
<snip> My conscience tells me to just write a check for the total and send it, <snip>
[/QUOTE]

Your conscience and, you know, the law. I would say pay it and make sure you get some kind of official notification that it is paid in full, then politely ask to have it removed from your credit record. They may or may not; the error was yours, and you might get to suck it up.

Doesn’t the U.S. Postal Service offer a mail forwarding service for when you move?

13

Is it Verizon?

Did you move out of state?

When I moved from California to Utah, one of the first pieces of mail I got was from a collection agency. Apparently Verizon sells all bills of people who move out of state to a collection agency immediately.

They don’t even give you a chance to pay it.

14

[QUOTE=featherlou]
the error was yours, and you might get to suck it up.

Doesn’t the U.S. Postal Service offer a mail forwarding service for when you move?
[/QUOTE]

Listen, this has obviously never happened to me. I’m a single dude who was all wrapped up in a move, forwarding addresses, 2 mortgages and 2 sets of bills every month. 1 of these bills slipped through the cracks, which I think is a pretty good track record.

Like I said, I have no problem paying this bill. I know it’s due, but I’m a little miffed they couldn’t have called (I left them my cell number), or sent me a letter (to the forwarding address they gave).

No, it wasn’t Verizon and I didn’t move out of state. Just an unfortunate circumstance I guess.

I’ll call the agency and see if they can be kind with my credit.

15

I called the agency. I’m in something called “pre-collections”, where I sit for like 3 months of non-payment before I get sent to “real” collections and it effects my credit.

The conversation with the agent went something like this:

Me - “Okay, well, I don’t want this to effect my credit, so can I just pay this with a check-by-phone or something?”
Him - “Sure, how much would you like to pay?”
Me- “The entire amount I guess.”
Him- “Really? Um… the whole $152.77?”
Me - “Yeah…”
Him- “Oh… Um… okay. Not used to that. What’s your routing number?”

I got the distinct impression these guys are used to negotiating.

16

[QUOTE=wasson]
Listen, this has obviously never happened to me. I’m a single dude who was all wrapped up in a move, forwarding addresses, 2 mortgages and 2 sets of bills every month. 1 of these bills slipped through the cracks, which I think is a pretty good track record.<snip>
[/QUOTE]

Sorry if I seemed harsh - this is one of those things that really pushes my buttons (people letting bills get to collections, then complaining about the mean ol’ collections people). Not saying that this was you. This sounds like very much not you, so my criticism really isn’t aimed at you at all. Which means it probably shouldn’t have been in this thread. Can I have a do-over?

17

It may have gone to collections but collections may not have reported it to a credit bureau yet. Take care of it early and in writing… make an offer that you will pay in full and it will not be reported.

If it is already reported, then offer a deal where collections will retract the reporting and that collections will provide you written confirmation that the reporting has been retracted.

If they will not agree to reverse reporting, then suck it up for 7 years. The damage shouldn’t be too bad if that’s your only ding… but I don’t know that for sure. Your credit report should reflect a collection and a resolution of the collection, so how bad could it be?

Did you fail to submit your new address to the phone company or a change of address form to the post office?

18

[QUOTE=featherlou]
<snip>
Doesn’t the U.S. Postal Service offer a mail forwarding service for when you move?
[/QUOTE]

Yep, and you can do it online for a dollar (they just run the card for a buck to verify your identity), or in the post office for free.

19

[QUOTE=wasson]
I called the agency. I’m in something called “pre-collections”, where I sit for like 3 months of non-payment before I get sent to “real” collections and it effects my credit.

The conversation with the agent went something like this:

Me - “Okay, well, I don’t want this to effect my credit, so can I just pay this with a check-by-phone or something?”
Him - “Sure, how much would you like to pay?”
Me- “The entire amount I guess.”
Him- “Really? Um… the whole $152.77?”
Me - “Yeah…”
Him- “Oh… Um… okay. Not used to that. What’s your routing number?”

I got the distinct impression these guys are used to negotiating.
[/QUOTE]

Well, IIRC, if the debt is in pre-collections, it’s not yet at the point of being reported to the Big Three, in which case (especially) you should pay it. Like, NOW. (Which you’ve indicated that you want to do, I know–I just added that for emphasis.) Taking care of the bill while you’re in pre-collections, ISTM, should more-or-less ensure that your credit file isn’t dinged.

I had a similar issue with Cablevision (New Jersey)–which I use not for cable TV, but for internet access–where the account number didn’t transfer to the new address (even in the same state). Imagine my surprise when I set up online bill payment through my bank (with what I believed was the current and correct account number), only to discover (when the payment wasn’t posted) that no, Li’l Pluck, when you move, even if it’s in the same state and county, we assign you an entirely different account number. Oh, and we expect you to read our minds in that regard. Oh, and if you do remit payment to the wrong account number (unintentionally, 'cause you can’t read our minds), and if there’s NO PAYMENT DUE ON THE OLD ACCOUNT NUMBER, we’ll credit it to the WRONG ACCOUNT NUMBER ANYWAY. Dumbasses.

The upside of this situation is that, now, you (and all of us) know that, when dealing with utilities like cable, phone, and electric, you need to find out exactly what the deal will be WRT account numbers, bills, etc.

So, yeah, pay the bill, and hopefully this is the absolute last that you’ll hear about it.

20

[QUOTE=featherlou]
Sorry if I seemed harsh - this is one of those things that really pushes my buttons (people letting bills get to collections, then complaining about the mean ol’ collections people)…
[/QUOTE]

There have been 5 people in 13 posts who were willing and able to pay the utility, but were unable to simply because they didn’t get the bill. Methinks that the utilities are doing something wrong. How hard would it be for these numbskulls to ask you where you want your future bills sent, since you just told them you are moving and want the utility cut off?

*Also, you don’t owe the collections agency anything in terms of payment for a service or product. The utility will sell your debt to an agency for a reduced cost. This is the amount of money they are willing to receive on your dilenquent bill. They are not willing to fight it and so sell it to an agency who is willing to for a reduced cost. The collections agency is basically just buying these debts and gambling with them that they can get you to pay it. If you do pay, they have won the gamble, if you don’t they have lost the gamble.

*Well, this is the way I think it works at least.