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collection agencies

Q&A: For estate executors, unpaid medical bills can be daunting

October 28, 2024 By Liz Weston

Dear Liz: My wife is in the process of being named executor for her late sister’s estate. There are several medical bills, including some that have been sold to collection agencies. Our understanding is that any negotiations or settlements should be done with those agencies as opposed to the original medical organization. Is this correct in general as well as in probate situations?

Answer: If a bill has been sold to a collection agency, that’s the entity your wife will have to contact. However, not all medical bills are sold. Sometimes collection agencies work on behalf of healthcare providers. When that’s the case, your wife may want to contact the original provider.

As executor, your wife can and should hire an attorney to advise her on administering her sister’s estate. The estate will pay the cost for this advice and your wife will receive helpful, personalized counsel on dealing with every aspect of being an executor, including this one, which is particularly fraught.

The Consumer Financial Protection Bureau recently warned that some medical debt collectors are violating federal law by inflating bills, trying to collect on debts that aren’t owed, demanding payment for services insurance has already covered and lying about consumers’ rights to contest bills. The attorney can help your wife verify the bills are accurate and negotiate settlements.

Filed Under: Medical Debt, Q&A Tagged With: collection agencies, debt collection, debt collection scams, Estate Planning, medical bills, medical debt

Thursday’s need-to-know money news

April 6, 2017 By Liz Weston

Today’s top story: 6 late-filing tax mistakes you need to avoid. Also in the news: Why paying taxes by credit card probably isn’t a good idea, collection agencies are getting another shot at your back taxes, and filing a tax extension to buy more time.

6 Late-Filing Tax Mistakes You Need to Avoid
Common mistakes to watch out for.

Paying Taxes by Credit Card Probably Isn’t a Good Idea
You’ll pay for the convenience.

Collection Agencies Get Another Shot at Your Back Taxes

Don’t Panic, File a Tax Extension to Buy More Time
Take a deep breath.

Filed Under: Liz's Blog Tagged With: back taxes, collection agencies, Credit Cards, tax extension, tax filling fees, tax filling mistakes, Taxes

Dealing with collectors? Here’s a free ebook to help

August 5, 2015 By Liz Weston

dca-new-ebook-free-3DsmGetting calls from collection agencies, or spotting collection accounts on your credit reports, can be scary. You can deal with this, but not alone. Check out  “Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights,” which is now a free ebook on Smashwords. You can get it here: https://www.smashwords.com/books/view/520261.

Written by long-time consumer educators and advocates Gerri Detweiler and Mary Reed, this book will tell you what you need to know to deal with collection accounts and fight unethical collection agencies. Longtime readers of the column will recognize Gerri’s name, because she’s the person I turn to when I have questions about debt and debt collections.

Get the book and get started!

UPDATE: Gerri tells me some people have trouble downloading from Smashwords, so here’s another link:

http://www.debtcollectionanswers.com/buy-now.html

 

 

Filed Under: Liz's Blog Tagged With: collection agencies, collections, debt collectors, Debts, Gerri Detweiler, Mary Reed

My book is out! Get it for free.

March 7, 2013 By Liz Weston

DWYD cover2013“Deal with Your Debt” is now available, and I’m giving away five copies this week.

To enter to win, leave a comment here on my blog (not my Facebook page).

Click on the tab above the post that says “comments.” Make sure to include your email address, which won’t show up with your comment, but I’ll be able to see it.

If you haven’t commented before, it may take a little while for your comment to show up since comments are moderated.

The winners will be chosen at random Friday night. Over the weekend, please check your email (including your spam filter). If I don’t hear from a winner by noon Pacific time on Monday, his or her prize will be forfeited and I’ll pick another winner.

Also, check back here often for other giveaways.

The deadline to enter is midnight Pacific time on Friday. So–comment away!

Filed Under: Liz's Blog Tagged With: Bankruptcy, book giveaway, books, Budgeting, collection agencies, collections, Credit Bureaus, Credit Cards, Credit Reports, Credit Scores, credit scoring, Deal with Your Debt, debt, debt collection, debt settlement, Debts, mortgages, Retirement, retirement savings, Student Loans

Be careful when settling old debts

January 28, 2013 By Liz Weston

Dear Liz: I paid all of my old collection accounts except for two, which now are beyond the statute of limitations. I would like to find the best way to negotiate with the collection agencies without getting sued. Even though the original delinquency was over four years ago, the agencies are reporting these every month as current debt, which is really hurting my credit score. My intent is to offer a lump-sum settlement amount if they will remove the report from my credit file with the bureaus, or alternately in return for a “paid” notation on my report file. However, I cannot afford to pay the amount they say I owe.

Answer: If the collection agencies are simply reporting your debts each month with a correct “date of last activity” — usually the date you stopped paying the original creditor — your credit scores aren’t being hurt anew each month. If the agencies are reporting a new date of last activity each month, however, they are illegally re-aging your debts. You can dispute this illegal reporting with the credit bureaus and directly with the collection agencies. If the errors aren’t corrected, you can file a complaint with the Consumer Financial Protection Bureau, which took over regulation of the major credit bureaus last year.

Filing disputes is not something you’d want to do if the debts are still within the statute of limitations, said Michael Bovee, president of Consumers Recovery Network, which specializes in debt settlement. You wouldn’t want to draw attention to yourself or your debts. But you run little risk in filing a dispute now since the debts are too old for the collectors to file a legitimate lawsuit.

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Bovee said that simply contacting the agencies about the debts shouldn’t restart the statute of limitations, but debt expert Gerri Detweiler of Credit.com advised caution.

“It may be well worth it to consult a consumer law attorney,” Detweiler said. “Otherwise [you] may reset the clock on these debts and owe the entire amount plus interest.”

You can get referrals to consumer law attorneys at the National Assn. of Consumer Advocates, http://www.naca.net.

You don’t have to pay the reported debts in full to reach a settlement, Bovee and Detweiler agreed. Often the totals reported are inflated by interest and fees, and the collection agencies probably paid only pennies on the dollar to buy this debt.

Start by saying you have only so much money to work with and offer 20% to 30% of what the agency says you owe.

“A realistic expectation for negotiating a debt this old would be to settle the account for 50% or less than the current balance owed,” Bovee said. “If they raise objections, there is no problem in mentioning that you are aware that the debt is past the statute of limitations for you to be sued, but that you are just trying to do the right thing.”

Don’t say you’re trying to improve your credit, since that gives the collector leverage over you, Bovee said.

You can negotiate to have the collections deleted from your credit reports, but the original delinquencies and charge-offs will remain and will continue to affect your credit scores until they pass the seven-year mark.

Filed Under: Credit & Debt, Q&A Tagged With: collection agencies, collections, debt collection, debt settlement, debtcollection, Debts, Fair Debt Collection Practices Act, statute of limitations

Government recoups defaulted student loan debt

November 26, 2012 By Liz Weston

Dear Liz: I read your response to the person questioning the rationale behind taxpayer-supported federal student loans. Your response was well written, but do you have any information about how much money is owed to the government for student loans and what percentage of all the loans are actually paid back in full? You mentioned that the government can garnish wages and Social Security checks and seize tax refunds, but does the government follow through and hold these people accountable? Does the government have personnel to do this or is this just a threat?

Answer: Millions of unhappy student loan borrowers can assure you the government’s considerable powers to collect defaulted student loans are much more than a threat. In addition to its own collection activities, the U.S. Department of Education also hires a number of private collection agencies to help recoup what’s owed.

As a result, the government collects more than 100 cents on every defaulted dollar once accumulated interest and penalties are included, according to the Education Department’s most recent report. On a net present value basis — when future collections are discounted back to today’s dollars — the government recovers about 80% of the defaulted debt.

Decades ago, it was possible to skip out on federal student loan debt without serious consequences. Public outrage over that fact led to much stronger collection efforts. That has resulted in the federal government recovering about $10 billion in defaulted student loan debt every year, said Mark Kantrowitz, publisher of the FinAid.org and FastWeb financial aid sites.

Filed Under: College, College Savings, Credit & Debt, Q&A, Student Loans Tagged With: collection agencies, collections, debt collection, federal student loans, Student Loan, student loan debt, Student Loans

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