Long story, and the details don’t particularly matter.
I had a debt go to collections, which was reported to the credit bureaus.
After a lot of back and forth between me, and the collection agency, I finally paid the debt in full.
However, the collection agency has never reported my debt as paid. Is there some law that requires them to report a debt as paid? What if they never report it as paid? What if they try to collect again, or take me to court for it?
https://www.credit.com/credit-reports/removing-collection-accounts-from-your-credit-reports/
That is a helpful cite.
Thanks for the link, but it doesn’t really answer my question.
My paid collection debt has never been reported as paid after several months.
My worry is, this collection agency is going to try to come back around and collect on my already paid debt.
Oh, probably not them. They might just go ahead and sell it again.
Others may do so.
Write them a letter, send certified mail. Sometimes that helps. If you know a lawyer, any lawyer, ask them if you can add "cc: Max Cheatum of DC&H. "
Since this involves legal advice, it’s best suited to IMHO rather than GQ.
Around here, which is no doubt totally different to around there, collection agencies don’t have to ‘report’ debts are cleared. But it is very illegal for collection agencies to try to collect debts that have been paid, which would include reporting that debts are still open.
When it happened I wrote a letter to the first debt agency, and I said “I made a payment arrangement finalizing the debt just to make you go away. If I hear from another agency again, I’m going to make an official complaint, and I’m going to include your company name in the complaint.”
My theory was that the new agency chasing the debt hears from people saying “it’s already paid” all the time, but the old agency would be afraid of loosing their debt collection licence if they didn’t sort it out.
Which, as it turned out, was good enough.
If you have any negotiating leverage I would try to get it deleted, since a paid collection reporting on your credit reports is a negative item that lowers your score. you don’t want it reporting as paid; you don’t want it reporting at all. You just want it gone and proof it was resolved. Perhaps, you could contact them offering proof that it is paid and asking them to delete the item in exchange for you not pursuing them for violations of applicable credit reporting laws.
My understanding is that they are legally required to send you a letter in the mail that the debt was paid and cleared, and report it to the credit agencies that they filed the collection with. I recently had to deal with this with a hospital bill that the hospital has apparently been holding onto for almost 7 years. They said that it could take up to 45 days for the collection to fall off my credit report.
One thing that annoys me - the collection did fall off my credit report, I no longer have any delinquent marks of any sort on my credit report… and yet… my FICO score fell 134 points when they put the collection on my report… but only regained 98 points when they took it out. I just lost 36 points even though I paid the debt immediately. They told me that once it rolled off after I paid it it would be as though it was never there. Did they lie to me, and there’s a FICO penalty even after it’s removed from your report, or is something else going on?
If they haven’t reported it within 60 days, file a dispute with the 3 credit reporting companies. Send a copy of the credit demand and check or settlement letter and check. Experian has a page on this topic here:
Keep a copy of your records for a least until the statute of limitations passes on the date to collect the debt, usually 6 years. If any collection activity ever happens on the debt, contact a lawyer who handles Fair Debt Collection Practices Act violations. There are penalties involved for violations, which can get payment for the attorney and you for each violation. Some lawyers base their entire practice only on FDCPA violations.
Hey fellow SDMBers, if this happens to you, often the Collection agency will agree to remove the item completely in exchange for a payment in full.
You can also negotiate for a deal- pay just the original amount due.
Finally if the original debt is very old, nearing seven years, I suggest telling them that you will not pay it. If over seven years, dont pay it. YMMV, ianal.
Seven years is the time for which a bad debt can remain on your credit report. However, the actual time for how long the debt can remain collectible varies depending on state and type of debt, and can be as short as two or as long as 15 years. If the creditor succeeds in obtaining a civil judgment, that may remain collectible for 20 years or more.
Is it from the date the bill was generated, or the date the debt went to collections?
I recently had to face a situation where I went to a hospital in 2014. Hospitals often bill you separately for the doctor, the hosptial facilities, the labs, etc. I think they screwed up because the bill for the hospital/lab/whatever else was taken care of, but apparently the doctor himself was unpaid for, and I wasn’t aware. So 6 years later, the hospital is feeling financial strain due to covid, and they sell that debt, which they’ve sat on for 6 years and not tried to contact me about, which I didn’t know existed, to a collection agency who then put it in my credit report a couple of months ago.
It wasn’t that big and I just decided to pay it to make it go away, but should I have just waited a few months until it was 7 years from the original bill and it would’ve rolled off? Or did it become “new” when they added it to my credit report as a collection a couple of months ago, and would take 7 years from now to roll off?
Edit: and no, I’m not worried about the moral implications of paying what I owed in this instance. Given that my insurance covered the other bills, this was either a billing error, or one of those garbage “oh sure the hospital and lab are in network, but the doctor is not” bullshit arrangements of the US health care system. And I don’t know that people have a moral obligation to pay off debt collectors, who buy up the debt for pennies on the dollar.
It starts the day you default on the debt.
When does the default start? The day of service? The day the bill was sent? Some period after the bill was sent?
In some cases. But I have seen debts get refreshed by a late 6 year payoff and thus stay for another 7 years. It is not supposed to happen, but neither is the OP.