My wife checked her credit report last month and noticed that a Collections Agency has been marking key derogatory every month. The debt is from September 2007, it is uncollected and the Experian report states: "This account is scheduled to continue on record until Oct 2011." The original creditor is a Wisconsin-based hospital.
She was unaware of the debt until we checked her credit in response to an offer for a free credit report. The claim may be legitimate, she had sought hospital treatment in WI when she lived there. However, she has not once been contacted regarding the debt.
How do we proceed in this instance? 623 letter to CA and original creditor at the same time? Or wait until Oct 2011 when the account is no longer on record? Something else? Is one method better than the other in terms of improving her credit long-term?
I do believe this item is currently affecting her credit score negatively (it is only "Fair" rather than "Good" or "Excellent"). I would like to pursue whatever method best improves her credit score. The debt they are trying to collect is not very large (less than $200).
Thanks in advance for your help.
Is the original creditor listed on your report? it seems like this is collection account.
I would get hard copies of both you and your wife's credit reports
Go to https://www.annualcreditreport.com/cra/index.jsp and get hard copies of all your reports. it is important to get hard copies of all your reports so you have an accurate picture. You have the right to get at least one free copy of all three reports each year.
I guess you are talking about sending a 623 to a CA because you assume that the 30 day DV period has expired. I would start with a DV to unk debt first and then 623 if they don't respond.
the SOL in WI is 6 years. where do you live now?
old debt
Hi creditq_wi,
Welcome to this community :)
You should first send a debt validation letter to the collection agency through certified mail, requesting a return receipt. This collection item is affecting her score negatively. So, it is better to solve this debt.
If the debt comes back validated, you should try to pay this off. Then check your credit report within 45 days of the payment. The collection agency is supposed to remove the negatives from your credit report within 30-45 days of your payment.
However, if the debt cannot be validated, you can dispute it with the credit bureaus. Refer the sample dispute letter available with this community.
Thanks,
Aaron
RE: Question re: old debt where they never contacted us but
Thanks both for the quick responses.
Cinnamngrl: I will get hard copies from the two other bureaus. To answer your questions:
1) The credit item is from State Collection Service in Madison WI but below that they list "Waukesha Memorial Hospital Inc." as the Original creditor. There is an address for State Collection Service but not for Waukesha Memorial Hospital.
2) We now live in California
3) I think there was a mistyping in your response. I know what a DV is, but what did you mean by "DV to unk debt first"?
Aaron: I am happy to pay off the debt if it is valid however my understanding is that I should not pay off debt without first receiving a written commitment from the collections agency that they will delete the record from my wife's credit report.
old debt
Hi creditq_wi,
"DV to unk debt first"
I think this is a typing mistake. It must be junk debt buyer :)
I should not pay off debt without first receiving a written commitment from the collections agency that they will delete the record from my wife's credit report.
No creditor or collection agency is obligated in any way to delete the negative item from your credit report. There is no law that requires them to remove the negatives. Only if it is a medical bill in collections, it is supposed to be removed after payment (within 30-45 days).
Thanks,
Aaron
it was more of cryptic shortcut not typing error.
I meant to send the CA a DV letter stating that the debt is unknown to you and you have never received a dunning letter.
However I would first go over your credit report and remove obsolete addresses. Then dispute this account and see if it falls off.
You guys are great with the quick responses. I appreciate it.
So here is what I will do:
1) Remove obsolete addresses from my wife's credit record
2) Send a DV letter to the CA stating I never received a dunning letter and asking them to validate the debt and provide a breakdown of charges
3) If no response, will send 623 to CA
4) If they do respond, then I'll review what they sent and go from there, but likely ask for written commitment for pay for delete prior to paying the debt
Aaron: I have read several articles that reference a "pay for delete" letter. While the CA is not required to remove the item by law, my understanding is that I can use a pay for delete letter signed by a senior person with the CA to have the CRA remove the item.
Also, this is a medical bill in collections. Can you please point me to the law that requires removal of the item after payment? I'd love to find that as it is relevant here.
I think that law might be the ARRA from 2/17/09. on credit boards there is a forum that specializes in medical collections here is a link
http://creditboards.com/forums/index.php?showforum=39
the link may not be active but you can still cut and paste.
old debt
Hi creditq,
I have read several articles that reference a "pay for delete" letter. While the CA is not required to remove the item by law, my understanding is that I can use a pay for delete letter signed by a senior person with the CA to have the CRA remove the item.
Yes, you can do that. It is always worth a try.
As for the 623 letter, it is generally sent to the creditor. However, I think you can send one to the CA.
Coming to the medical bills in collections you can refer http://www.creditmagic.org/blog/2010/07/31/medicaldebt-reliefact/ .
Hope this helps.
Thanks,
Aaron
the more you rush the more you pay. make sure you get some proof of this debt before you settle.
Thanks to both of you for all the feedback. I will not rush to pay. I will start by opting out and removing old addresses, then waiting a couple of weeks before starting my process.
To be honest, I am a bit torn on what path to proceed. It will be one of these two:
1) Whychat's HIPAA letter process, which avoids the CA and goes to the CRA and the OC and relies on intimation of HIPAA violations. It seems a bit combative, which is my main hesitation with it. It is outlined on Creditboards.com and here: http://whychat.5u.com/hipltr.html ). It is specific to medical bills and relies on payment to the OC without specific agreement to pay for delete. The "teeth" of it are relying on HIPAA provisions that require deletion of personal health information once an account is paid. People seem to have had success with it on most bureaus except Experian.
2) Send a DV to the CA. The reason not to do this is that the Whychat process is adamant in not engaging the CA. What I like about engaging the CA is that there is a chance I can get a pay for delete agreement, although obviously that is not a guarantee.
I'll let you know where I end up. If you have any thoughts on either process, would love to hear them.
why chat is the expert but I think it can't hurt to DV the CA AND 623 the OC. then decide after you get responses