Bill to collections?
Had a bill go to collections for under 200. Long story.i remember reading somewhere once a bill does, it gets written off on the companies taxes and not obligated to pay. Is this true? My state is Michigan if that helps
- 6 months ago
You still owe the money. You now owe it to the collector who bought it.
- StephenWeinsteinLv 76 months ago
No, that is not true.
- JayLv 66 months ago
Yes, yes they did...and you are totally screwed because of it.
- JudyLv 76 months ago
no not true - yo still owe it and can be sued.
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- Elaine MLv 76 months ago
It's YOUR responsibility, a sending to collections doesn't mean you don't pay it. You still owe money. This also goes on your credit report for 7 years if you let it get this far without handling things.
- curtisports2Lv 76 months ago
False. Companies are allowed to write off bad debts, but that does not mean they can't still attempt to collect them. Should they be successful in collecting something after taking a write-off, they must report what they collect as income and possibly pay tax on it.
It has NOTHING to do with the fact that you still owe the money.
Companies almost never see income after writing off a bad debt. What actually happens is that a company will sell the debt to a collection agency for whatever they can get. They subtract what they get from what they are owed and then write off the difference.
Then the collection agency goes after you for the full amount of the debt plus interest and fees. Your obligation does not go away unless no one pursues you for it, or until the damaging mark on your credit goes away after 7 or more years.
- MaxiLv 76 months ago
No its not true, you still owe the money and it will increase daily because of the costs and interest rates they charge and it will soon be double, treble what you originally owed nd you are still in debt and they will chase you and likely you now have a CCJ against you which will stop you getting any credit for years
- Steve DLv 76 months ago
You are confusing an accounting entry with a legal obligation. The obligation to pay the bill never goes away. The original company makes an accounting journal entry that says "we no longer believe we can collect this debt from this deadbeat, so we are taking the loss on our books now" (this does not relieve the debtor for his obligation - in fact it has nothing to do with the debtor). The original lender then sells the debt to the collection agency for say 10 cents on the dollar (in your case, they probably recouped $20). The collection agency now owns the debt with all the legal ramification associated with that debt. That includes the statute of limitations which means, basically that after a certain amount of time (say 3 or 4 years), thee gancy can no longer use the court system to collect - that, however does not mean the debt goes away, you still owe it. Then, assuming the debt got sold to a normal collection agency, the next time fame isi 7 years after default - which is when the collection account will fall off your credit report (again, the debt does not go away, it just can't be reported).
You have three options - 1) pay the $200 and get the account marked closed/paid in full; 2) settle with the agency for an amount less than the $200 in exchange for the account account being closed (it will be marked payed/settled). 3) Ignore it until the 7 years runs out (which means you will have trouble opening new accounts for the next 7 years until the account drops off your credit report.
- SuccessLv 66 months ago
No ( and yes)
Once the company gives up on trying to collect, at the end of the fiscal year they 'contract' all of their uncollected debt to a third party collector.
The initial company signs an agreement that if the collector gets anything...the collector keeps 40% and the company gets 60%.
The initial company writes the amounts off as bad debt on their taxes. They are no longer trying to collect from you.
The THIRD PARTY collector is still working to collect, though. Your debt still exists, but it has been given to a soulless company who will add fees to the original amount and interest at the highest rate legal...and continue to try to collect.
After a few years...they will bundle all of the debts they are unable to collect and 'sell ' to another collection agency that consists of servants of the devil. These people will break the law to call you at bad times, put stuff on your credit report...and be total and absolutely rotten.....
and then it gets worse....
Do a search of the term 'ZOMBIE DEBT COLLECTION'.
If you are lucky the original company went out of business BEFORE they sold your debt to collections.
You should probably pull your credit report to be certain.
- No MercyLv 76 months ago
the company sells it to collection agency for very little money and the collection agency is making a living from getting money from u and if u do not pay suing u. u may not pay - see where is it going. but as lots of collection agencies still exist i guess somehow they do make a living with collecting