Expert: Creditwrench - 4/21/2010

Question
We received a summons 2 days ago for medical bills plus interest totaling $1980.51. We had been in contact with this collection agency and tried to make payment arrangements for the past 3 months. they told us it was "out of their hands" and we needed to "discuss it with the attorneys" but wouldn't tell us who the attorneys were. Now we have 30 days (28 now) to "dispute", "appear", file a "motion" or "answer". We went through this last year with this same collection agency over a smaller bill and had the money to pay it in full as we had tried to tell them we wanted to do before they served us. We are finally cleaning up our credit and trying to get back on our feet but this is going to knock us back down again. We do not have $1900. Any suggestions would be great? I do not deny owing and want to pay this off, we just need at LEAST 90 days to do it.

Answer
I am wondering what you might have done that helped clean up your credit. As you said, the judgment you got last time knocked your score down badly and you correctly anticipate that this suit will do the same. Paying the resulting judgment isn't going to alter the fact that you got a judgment so that will just stay there for the next 7 years. Judgments are a matter of public record so disputing them usually don't work. I can well understand your wanting to pay it off but that isn't really the way to keep it off your credit reports. The way to keep it off your credit reports is to fight them and their judgment to the greatest extent possible. Doing so also keeps most of your money in your pocket. So the way I look at such matters is that I would want to keep that judgment off my credit reports and my money in my pocket instead of paying and getting a judgment against me as well. Then if I could force them to pay me instead of the other way around that would interest me much more. Fortunately there is a way to do all of that but it does take a bit of learning. The way it can be done is by catching them violating your rights under the law and that is never very hard to do. They want to enforce their right to collect what is owed to them but never want to consider that you have rights too. One of those rights is the right to a full and complete accounting of how the amount claimed due and owing was arrived at. That right is exercised by demanding that they validate the debt. Validate means to provide you with a full and complete accounting of the debt. In order to avail yourself of this right you must assert it within the first 30 days after your receipt of their initial contact with you. Attorneys are debt collectors too and must abide by the law which means they have to notify you that you have the right to dispute the debt or any portion thereof. The only way that you can know for sure whether you actually have a right to dispute is to have a full and complete accounting of the debt. If they fail to give you a full and complete accounting of the debt they violate the law and can be sued. There are dozens of ways that they can and do violate the law. Another way is in the event they provide you with any false or misleading information.