Some people may think that only poor people get hounded by debt collectors but this isn’t true! Debt collectors can come after anyone. This is especially true because debt collectors don’t always work off of correct information, particularly if the debt collector is a junk debt buyer, rather than the original creditor (a junk debtor buyer is someone who purchases debt for pennies on the dollar, hoping to collect on the debt and make more money than they paid for the debt).
In my case, I recently had a debt collector hound me about a debt that I didn’t even know I had. The debt collector made some false statements to me. Luckily for me, I’ve worked in the debt collection industry long enough to know how to respond. Now I’m going to teach you what I did so you will know what to do when this happens to you.
I recently tore my meniscus playing basketball with my kids in the driveway (hence the picture at the top of this post!). I had to have surgery to repair the meniscus. Like so many others, I had medical bills pouring in after my surgery. I received so many bills I had a hard time keeping track of them all. I had enough money to pay all the bills but it was difficult to determine if I had paid everything, especially since the different medical providers would send duplicates of the same bill. But ultimately I tracked everything and determined I had paid every bill I had received.
After a few months I received a letter from a junk debt collector. They claimed that I had not paid a bill from my anesthesiologist. I looked through my records and determined I had paid every bill I had received so I ignored the first letter. But the letters kept coming. Finally I reached out to them to figure out why they thought I owed money when my records showed I didn’t. In preparation for my phone call I went through every bill I had received, and my records showed I had never received a bill from my anesthesiologist.
When I reached a representative with the debt collector, I asked what the bill was for. She said I had a bill from my anesthesiologist that I had not paid. I said I had paid every bill I had received. She insisted that I had not paid this one. I said again that I had paid everything I had received. She then told me that I had to prove to her that I had paid the bill.
This is the point in the story where most people will not know how to respond. Most people at this stage will accept what she told me was true – that it was my responsibility to prove to her that I had paid the bill. But I knew that what she had just told me was a lie. I informed her that I was a debt collection attorney and that what she had just told me was a lie. I knew that she had the responsibility to prove to me, by validating the debt, that I had not paid the bill. Once I requested that she validate the debt, she could not take any further action to collect on the debt until she sent me proof that I owed the bill.
So this is takeaway number 1. Do not just accept everything a debt collector says as true. They will lie and misrepresent in order to get you to pay. You should know that if a debt collector ever calls or sends a letter about a debt, the first thing you should do is request that they validate the debt. This will put their collection efforts on hold until they can validate the debt. If they validate the debt by sending you proof that you owe, then you have a decision to make on whether you need to pay the debt. But if the debt collector can’t prove that you owe, you just beat your debt collector! Without proof, the debt collector can’t collect and won’t be able to win a lawsuit against you!
As it turns out, the debt collector did send me a copy of the original bill from the anesthesiologist within the next few weeks. As I reviewed the bill, I verified that the anesthesiologist had never actually sent me the bill. Who knows why this is the case. Had his office just sent me the bill in the first place this would have been completely avoided. But it’s not uncommon for someone to end up with an account in debt collection because of lazy billing practices on the part of the creditor rather than any fault of the debtor. This is why even people who pay their bills regularly and on time can still end up in disputes with debt collectors.
At this point, I knew that I owed the debt. Even though the anesthesiologist hadn’t sent me the bill before, I had it now and I knew that I had received the services as outlined in the bill. There was no point in me fighting the debt collector anymore. So this is takeaway number 2. If the debt collector has a good case against you and has validated the debt, don’t keep fighting. Now is the time to pay the bill. If you can’t pay the bill, try and negotiate a settlement or payment plan. If you can start negotiating at this stage you’ll have a much higher likelihood of negotiating a favorable settlement deal or payment plan. If you wait until the debt collector files a lawsuit, the chances of settlement go down. Once suit is filed, the debt collector will have had to pay an attorney and will want reimbursement for those fees and costs. So earlier negotiation is better if you determine that you know you owe the money.
Once I decided to pay the bill, I went to the debt collector’s website to pay. After inputting the information, the site required that I pay not only the original debt, but also a processing fee. This is an easy way for the debt collector to make even more money off of unsuspecting people. I knew I had no obligation to pay any processing fee to them. At this point I decided to call them and provide them with a credit card number over the phone and refuse to pay the processing fee.
A debt collector has a few choices at this point. They can refuse to take payment at all. This seems unlikely. They are in the business of getting whatever money they can whenever they can get it. They will take partial payments. They can decide to take the payment you are offering and just forget the processing fee. Or they can take the payment and file a lawsuit against you to collect the processing fee.
And this is takeaway number three. If you are in this situation, pay the amount of the original debt and don’t pay the processing fee. If the debt collector refuses to take any payment at all, document this. If the case goes to court, you can tell the judge that you tried to pay but the debt collector refused payment. You can argue to the judge that the debt collector waived their claim. If the debt collector takes the payment and forgoes the processing fee, then you got the exact result you wanted. If the debt collector takes the payment and decides to pursue you for the processing fee, you’ll have a great defense. First, it seems unlikely that a debt collector will file suit over the processing fee. It would likely cost the debt collector far more money in fees and costs to file suit than the amount of the processing fee. It is highly likely that they would lose money by pursuing the claim. But second, they won’t be able to prove they have a claim against you for the processing fee! In my case, I knew that the anesthesiologist had provided services and that I had signed an agreement to pay prior to my surgery. I knew I would lose any battle over that, so I paid the debt. But I had never made any agreement with the anesthesiologist or the debt collector to pay the processing fee. So even if the debt collector took me to court they would not be able to prove that I had a contractual duty to pay any processing fee when paying the amount owed. In other words, since I knew I would lose any case on the original debt owed to the anesthesiologist, I paid that amount. But since I knew I would win any case on the processing fee, I refused to pay that.
This process and analysis is exactly what you should be doing when you have debt collectors hounding you. Do not ignore letters or phone calls. Instead, request debt verification. Once the debt collector verifies the debt, evaluate the claim and determine if you think you can win in court. If not, pay the debt or negotiate. If you think you can win, then let them decide whether they want to file suit against you.
If you need any other help with your debt collection lawsuit, send me an email at contact@debtbrief.com or comment below. I do coaching sessions for people being sued by debt collectors so they know all the court rules and procedures in order to defend themselves. And if you are located in Utah, I can provide specific legal advice or representation on your case.
If you need a cheaper alternative, check out my e-book that comes with 10 necessary court forms you can use to defend your case. Check it out at this link here.
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