January 20, 2009
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News: Dealing with Collections: the Dregs.
Stack the deck: It's common enough to have a single collection agency to handle several of your debts, all from different business entities. Not that you're the ‘repeat offender' type or anything like that. Consider a case where you may get hurt in a car wreck. Even though you have no health insurance (like the 45.7 million other Americans), liability laws dictate that the ambulance deliver you to the nearest medical facility that can handle your needs. Most people, at this point, just ‘go along for the ride'. Upon arriving at the trauma center, you are swamped with attention from everyone who wants to ‘help you'. Dozens of scans, x-rays, assessments, bells, whistles and tubes are everywhere. But the real trauma is not yet. That will arrive over the next few weeks in the mail. You will find out who all these people were one-by-one as each one bills you separately. Each one may even send you separate bills for each procedure. They each expect you to go squirrelly with your credit card. With over $14,000 due between them all, what's a person to do? (Resist the credit cards, now.) The kicker is that, a collection agency will split all the bills apart and report each one to the credit bureau separately so you end up with 15 hits covering only three billing companies (ouch). Credit card ratings rarely take this into account.
When you call up the collection agency, they only want to discuss the bills as one single huge bill, even though several of the single claims on the credit report are for amounts of less than $50 and their from different business entities. Often, you can negotiate with the agency to separate many of those smaller bills into a separate sum to be paid in full on your credit card. The agency will offer to remove all these smaller bills from your credit report as a package deal, which will, at least, remove large the number of hits against you. Of course they will tack on a single ‘processing fee' to do this but, it may be well worth it to keep a good credit card score.