I just had a question regarding collections agencies (this does not apply to student loans though)  My problem is that I had car insurance issued under State Farm and my policy was cancelled (about 3-4 years ago) for non-payment.  About a month ago I received a letter from a collections agency (D&B Collections)  requesting payment (which I determined by calling was for the car insurance premium).  The amount owing is only $200 but it is the principle, that 1. The cancelled my policy so I was not driving so I don't owe them anything.. and 2. This was at LEAST 3 years ago.

So I wanted to know if there is any kind of limitations on how long they can try to come after me for?  Or If they would even consider taking a $200 debt to court.  I want to know all my options availble and paying the debt is not one.  It is simply a matter of principle not finance. 

Thanks for the help.

s_gunners,

Your principles are pretty screwed up!  For one, just because you were not driving does not mean you do not owe the money....for the time that your car was insured-you owe the money.  State Farm would not be asking for money owed after the cancelled policy period.  Point two--it doesn't matter how long ago it was--you still owe the money.  State Farm may have written it off to a collection agency...that doesn't change the fact of money oweing.

How can you say that paying the debt is not an option?  It is simply a matter of principle...that's right...it's a matter of principle so there is no other option or principle but to pay the money.

Just take what collywobbles and I have advised you to do and run...run as fast as you can to D&B collections with your money.

Hmmm...  not the answers I wanted to hear...  I know that being involved with collection agencies lowers your credit rating.  But I do have a line of credit and mastercard which are paid off..  Does that cancel the negative effect that the collections agency may have on my rating??  In other words would I be able to get a mortgage if my credit was excellent (aside from the 1 collections issue)?

Thx.

gunner,  your credit rating would have been affected once the item went to collections.  Sorry, I don't think there is such a thing as accounts in good standing cancelling the negative effect.  That's a good thought though.

Some mortgage brokers will consider you with an item in collections...others will not.  There are definite stipulations when it comes to these matters!

I wish I had a better answer for you.

So from what I understand the "damage" would have been done as soon as it was sent to collections.  Perfect... Thanks for your help.

For a small debt like $200, I imagine state farms will simply have a staffer send the claim forms to the courts in a year or so if they have not received payment. Whether you show up or not, they will get a judgement against you and the damage to your credit rating will be far worse than if you had declared bankruptcy. These small debts do not require lawyers and do not cost the company money to follow through on. They just charge you the costs.

 Islander,

A "consumer declaration" with the words "oversight" will simply add insult to injury. If a person submits a consumer declaration stating anything that suggests "oh no, it was their fault, not mine" or "It was an oversight on my part and the account went into collections before I could attend to the matter..." etc.etc., it may cause further disruption from the credit seeking and ajudication side.

 Consumer declarations should be installed in a credit report ONLY if there is specific issues that must be addressed.

 Exxample:

 A credit report that is cross-refering with another.. a consumer declaration can be installed for identification purposes.

 If the content of the consumer declaration suggests that the fault of any derrogatory comments are the result of the "lender's" fault, then the common sense thing to do would be to prove the error and get it removed from the file completely rather than to file a consumer declaration with no note of inquiry or investigation into who is at fault. Otherwise, they are simply ignored and have no impact on the bottom line.

 Johnny

You're right, Johnny.

It's just hard to get worked up over a $200 debt that was incurred fairly, ought to be paid and can be easily dealt with.

Yes, it will stay on the bureau report and I withdraw my earlier suggestion as having been tossed out without thinking. No serious lender is going to sweat over a $200 oversight, assuming it's rectified when brought to the consumer's attention. I believe that falls under the technical category of "s hit happens".

But the money is owed; the coverage was contracted and, whatever I think of insurance companies, and whatever the likelihood of having had a claim approved during the period the coverage was in place but the payment hadn't been made, the dam n thing should be paid and life should then go on.

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