Dealing With Collection Agencies

Collection agencies are a pain to work with. Essentially they make money by buying your debt from different places, like doctors, credit cards, or other similar places. They make it their full time job to get you to pay. There are a few tricks to saving as much as you can with these clowns though. My wife and I recently went through this. Here is what happened.

When my wife was 18 she had kidney stones, and a tonsil surgery. There was also an emergency room trip in there. She keeps the doctors busy. Needless to say, these sorts of trips are expensive. Fast forward a few years. A couple months after we got married, we went to go get a credit card together. I was going on a trip and wanted to have another line of security or funding in case I got stranded in Europe. When we were at the bank, they ran our credit. I had nothing on my credit history. Literally, nothing. I was pretty proud of that. I worked my butt off to not have student loans, bought my vehicles with cash, and hadn't had a credit card up until that point. There was nothing. Quick note, when you don't have a credit history, they use your bank statements, bill paying history, and income to make credit decisions. I was approved.

When they checked Michelle's credit, they discovered a few of these medical bills that had gone to collection, adding up to about $2,000. It was the first we had seen of it. We didn't like it. We started working on trying to figure out who we owed money to, and that was a pain just trying to figure out who wanted money from us. We hadn't been called, received no letters, nothing. We finally tracked down the collection agency and we were trying to figure out what these bills were all about.

Things to know about collection agencies:

These guys want to get you bank or credit card information and want to get you set up on a payment plan. If you are just trying to get information out of them, do not give them this information yet. We made this mistake, and had to keep calling them and telling them to push the payment date back because we were trying to figure out what was going on with all this stuff.

Work with the people who you owed money to origionally. This was the bigest advantage to us. Once we figured out which hospitals had our bills, we called them up and we were asking for a detailed copy of the billing statement, and we asked if they would cut a deal with us. They mentioned a financial aid program that we could submit paperwork for and see if we qualify. They sent us the forms, we filled it out, and they cut a $1900 bill down to $300. Halelujah!

Haggle with the collection agency. Lots of people hate haggling. My wife is one of these people. She was ready to pay the whole bill and just be done with them. The stress is high.  They want as much money as they can get from you. They don't usually care about what that will do to you. But, they want a profit. Michelle started playing the collection agency off the hospital, and the collection agency offered to knock $500 off the bill. We probably could have worked them down even lower, but a $300 bill ($1580 knocked off) was probably the lowest it was going to go, so we paid it. Side bar: My wife was a trooper, and worked hard on this. She's the best. She has now paid off all her personal debt (I've recently picked up student loans, so WE have some, but she got all hers taken care of). Be like Michelle.

Lastly, get a receipt or some form of confirmation that it is paid, right when you pay things. These people don't keep the best records, otherwise it wouldn't have taken 3 years for us to find out we had a bill! They sent me the confirmation number, and we have all the paperwork. We plan on holding on to this for quite a while, until long after we know everything is done. It's hard to dispute a receipt.