1/3 of Americans Pursed By Collection Agencies

http://www.dailymail.co.uk/news/article-2709216/Study-35-percent-US-facing-debt-collectors.html

More than one third of Americans are being chased by debt collectors over unpaid bills, a new study by the Urban Institute has revealed.

These consumers fall behind on credit cards or hospital bills. Their mortgages, auto loans or student debt pile up, unpaid. Even past-due gym membership fees or cellphone contracts can end up with a collection agency, potentially hurting credit scores and job prospects, said Caroline Ratcliffe, a senior fellow at the Washington-based think tank

Most creditors will work with you, if you contact them,and tell them you're having trouble, and are sincere in your efforts or desire to pay the bill off. If, however, you simply decide not to pay a bill (because you don't want to, or can't), but you never make an effort to contact the creditor in good faith, then, yeah, they're going to turn it over to collections.

There are also non-profit organizations that will help you, will even contact the creditors for you. All you have to do is pay your newly (often radically discounted) bill every month.

There's help out there, if you need it.

oh-gal is right. I would try doing it on your own first before using another company. Just say "Hey, this is all I have to give you. If you can't take it, then I'm gonna hang up now. If you DO want this amount and are willing to settle, send me proof in writing and I will send you the money."

NEVER EVER give them direct access to your checking or savings account.

Just to add to the above...

Many businesses or collection agencies will even accept reasonable reduced offers to pay off the debt. For example, a client of mine had a phone bill of over $500 (ouch!) so in an effort to help her get it paid so that her future rental applications weren't negatively impacted, as she was going to begin looking for a new apartment, I suggested she offer them $300. to be paid immediately - they accepted it. While even the $300. was difficult for her to come up with, it was certainly easier than coming up with $500. So don't be afraid to make a reduced offer and make sure they send you a follow-up letter documenting your conversation and your agreement.

Sorry laughin, see you beat me to it. Thank you for making the point about not giving access to banking accounts!

Wow, 1/3 is really high.

I would bet that these are medical costs that have gone into collections. My husband had a medical procedure where we paid deductible and 20%. Then we received a bill for an additional $1450. Husband is on disability and I make very little money. Asked hospital if amount could be reduced. They said no. I said fine, I will give you $15 a month. That's all I can do. They still said no, it will have to be in four payments only. I said I can't do that. They are sending it to collections. We had to file chapter 13 bankruptcy just to save our house, so it's not like our credit isn't already wrecked. This just goes to show how people are barely making ends meet now days.

TexanMom said:

I would bet that these are medical costs that have gone into collections. My husband had a medical procedure where we paid deductible and 20%. Then we received a bill for an additional $1450. Husband is on disability and I make very little money. Asked hospital if amount could be reduced. They said no. I said fine, I will give you $15 a month. That's all I can do. They still said no, it will have to be in four payments only. I said I can't do that. They are sending it to collections. We had to file chapter 13 bankruptcy just to save our house, so it's not like our credit isn't already wrecked. This just goes to show how people are barely making ends meet now days.

Click to expand...

You're probably right. Out of pocket costs for health care have skyrocketed in recent years. The health care providers turn the bills over to collection agencies very quickly, often in 30 - 60 days. They only get about 15c on the dollar, from what one doctor told me. I suppose they make up for it by charging patients more. When I had simple gall bladder surgery a few years ago, the out of pocket costs were over $4000 and that was with excellent insurance coverage.

I always thought if you send them something every month, they can't send you to collections?

Hopefully some one will correct me if I'm wrong.

A couple of medical bills I had - had to be worked out that way. Of course I never spoke to them, I just would send what I could.

Each statement said they were going to send me to collections - but never received anything from collections agency.

At the end of the month I had a total of $20 extra - so that had to be divided amongst 4 different bills. Eventually they all got paid. Never did get anything from collections. One place even stopped sending me a bill - I just continued paying with a few dollars a month until paid off.
Maybe they were in the process of collections??? who knows, I figure I would spread my wealth around :happydance:
Seriously - do I go without food or meds and send them more?
I live a simple enough life - no cable, no cell phone, only extra is the internet which I need for my phone (magic jack).

Oh well, not complaining - If you can't enjoy the small and mundane, you'll never appreciate the specialties in life. :loveyou:

I suspect the majority of it is consumer debt. I know predatory lending is an issue but people also have to get into the mindset of not screwing over their future selves for something their "today" self wants.


Sent from my iPhone using Tapatalk

nrdsb4 said:

Wow, 1/3 is really high.

Click to expand...

High, however not surprising. I would suspect in addition to out-of-pocket medical costs, unpaid student loans and credit card bills contribute largely toward this. Unpaid mortgages will only result in phone calls and "collection notices" for a very short time until the house goes into foreclosure and eviction. Unpaid auto loans will soon result in repossession. Unpaid utilities, phone companies, Internet, cable, etc will shortly result in the services being terminated. Sadly there are many honest, hard-working people who have had pay cuts, job hours shortened, or lost their job altogether and just cannot pay off the bills they have accumulated.