Michigan Debt Collection - What To Do?

[quincy]

What is more likely is that, once the debt appears on the credit reports, the debt will simply be reported as “paid as agreed.” Any settlement agreed to is unlikely to include removal of the debt.

I agree it is better to settle and/or pay before the debt is reported.

 

[Taxing Matters]

Okay but since I requested in writing to them that they verify the debt, does that mean they have to wait to post it on my credit report until they send me "verification" and a certain number of days pass after that? I am wondering specifically about the TIMEFRAME that must happen now BEFORE they can report it to my credit...

The request for verification does not stop the creditor or collection agency from reporting the debt as delinquent to credit bureaus.

 

[quincy]

Here is a link to Michigan’s laws on what debt collectors are prohibited from doing:
http://legislature.mi.gov/doc.aspx?mcl-445-252

And here is additional information from Michigan’s Attorney General Dana Nessel on debt collection:
https://www.michigan.gov/ag/0,4534,7-359-81903_20942-238041--,00.html

 

[mangosalsa]

Thanks for all the information! Regarding negotiation of debt, should I simply call the debt agency and tell them that I want to negotiate the debt? Is there something specific I should say if I call them? Or should I instead call the veterinary instead to negotiate?

 

[quincy]

Thanks for all the information! Regarding negotiation of debt, should I simply call the debt agency and tell them that I want to negotiate the debt? Is there something specific I should say if I call them? Or should I instead call the veterinary instead to negotiate?

You will first want a copy of the veterinarian bill with a list of all charges and what each charge is for.

You will need to initiate the calls to both the veterinarian and to the debt collector. You might have more success with the veterinarian if you make an in-person visit to the vet’s office.

Please do NOT accuse the veterinarian of malpractice. If you do not think you can handle this on your own, you should have an attorney assist you with the contacts and the negotiation.

 

[Zigner]

Why would you accuse them of being the cause of the death of your dog, but then offer to negotiate?

 

[mangosalsa]

The request for verification does not stop the creditor or collection agency from reporting the debt as delinquent to credit bureaus.

You are incorrect about this...
http://www.legislature.mi.gov/(S(3uur54h03m35urg4kyred314))/mileg.aspx?page=GetObject&objectname=mcl-339-918

(2)If the consumer notifies the collection agency in writing, within 30 days after receiving the written notice, that the debt, or any portion of the debt, is disputed, collection of the debt or any disputed portion of the debt shall cease until the collection agency obtains verification of the debt and a copy of the verification or judgment is mailed to the consumer by the collection agency. Verification of the debt or any disputed portion of the debt shall include the number and amount of previously made payments and the name and address of the orginal creditor, if different from the current creditor, or a copy of the judgment against the debtor.

 

[quincy]

mangosalsa, what is your major concern? Keeping the debt from showing up on your credit reports? If so, you will need to pay what is owed or negotiate a lower amount to settle the debt and you probably will not want to spend time investigating veterinarian malpractice.

You are incorrect about this...
http://www.legislature.mi.gov/(S(3uur54h03m35urg4kyred314))/mileg.aspx?page=GetObject&objectname=mcl-339-918

That does not prevent the creditor from reporting the past due amount to the credit agencies. You will have to let the credit agencies know that the collection account is being disputed.

 

[mangosalsa]

mangosalsa, what is your major concern? Keeping the debt from showing up on your credit reports? If so, you will need to pay what is owed or negotiate a lower amount to settle the debt and you probably will not want to spend time investigating veterinarian malpractice.

That does not prevent the creditor from reporting the past due amount to the credit agencies. You will have to let the credit agencies know that the collection account is being disputed.

Yes that is my one and only concern - my credit score which is currently over 800. Yes I am wanting to negotiate the debt but not sure exactly who to negotiate with or if I should literally ask them to negotiate...?

 

[Zigner]

That does not prevent the creditor from reporting the past due amount to the credit agencies.

I disagree (and agree with mangosalsa): The section quoted prevents any collection activity, and reporting the alleged debt is a collection activity. If the item was already reported prior to receipt of the request for verification, then it would stay there, of course.

The bigger problem is that the OP sent a list of demands that aren't part of verification of a debt and never actually asked for "verification". Because of this, her letter may not be considered a request for verification. It is my belief that courts tend to be pretty debtor-friendly, so the court may recognize the intent of the letter as a request for verification (if it should come to that).

EDIT: Upon further reading, the OP's statement "I categorically reject the liability of this debt..." may suffice to trigger the verification requirement.

 

[quincy]

I disagree (and agree with mangosalsa): The section quoted prevents any collection activity, and reporting the alleged debt is a collection activity. If the item was already reported prior to receipt of the request for verification, then it would stay there, of course.

The bigger problem is that the OP sent a list of demands that aren't part of verification of a debt and never actually asked for "verification". Because of this, her letter may not be considered a request for verification. It is my belief that courts tend to be pretty debtor-friendly, so the court may recognize the intent of the letter as a request for verification (if it should come to that).

EDIT: Upon further reading, the OP's statement "I categorically reject the liability of this debt..." may suffice to trigger the verification requirement.

Reporting a debt to the credit reporting agencies is not debt collection. What a debt collector cannot do is call or contact the debtor until the debt is verified in writing, after request for verification.

From the FDIC: “If a debt collector knows that a debt is disputed by the consumer, either from receipt of written notice or other means, and [the debt collector] reports the debt to a credit bureau, he must report it as disputed.”

If the disputed debt was already reported to the credit agencies before the debt was disputed, on the other hand, the debt collector does not have to report that the debt is disputed. The debtor should do this.

Yes that is my one and only concern - my credit score which is currently over 800. Yes I am wanting to negotiate the debt but not sure exactly who to negotiate with or if I should literally ask them to negotiate...?

Please read through the information by TigerD on negotiation, from the earlier link I provided.

You will want to negotiate with the one who is holding the debt - which appears to be the debt collection agency. The veterinarian is not in the debt collection business so, like many other businesses, the veterinarian has apparently turned the account over to a debt collection agency.

 

[Taxing Matters]

I disagree (and agree with mangosalsa): The section quoted prevents any collection activity, and reporting the alleged debt is a collection activity.

(Bolding added.) But that part I bolded is an assumption on your part as the text of the statute does not expressly state that. And the Michigan case law on that section is extremely sparse (I found 2 cases, neither of which address this issue).

Under the FDCPA (the federal debt collection law) the trial court decisions on it are mixed, and there is no significant appellate decisions on this particular point either.

As a result, as it stands now, there is no clear consensus under the federal or state law that reporting the debt to a CRA amounts to a prohibited collection activity when done after a request for verification but before that verification is provided.

 

[quincy]

The FDIC states, in fact, that the debt can be reported to the credit bureaus.

https://www.fdic.gov/regulations/laws/rules/6000-1325.html

Following is a link to a case from Michigan and, although it is a foreclosure case, it discusses what is a “collection activity.”

https://www.govinfo.gov/content/pkg/USCOURTS-mied-2_16-cv-14341/pdf/USCOURTS-mied-2_16-cv-14341-0.pdf

 

[mangosalsa]

Strange update.... After reading the TigerD tips for negotiation, I called the Debt Collector company. They DID acknowledge that the debt was now in disputed status because they received my letter a couple weeks ago. BUT they said that they are "no longer representing the debt and it was returned back to the hospital". They stated that I must now instead just contact the hospital which is so confusing. They also said that they did not report this debt to any of the credit agencies. So now I am very confused about WHY the debt collector would no longer represent the debt? I tried to get it out of them the reason for this, but the only "possible" explanation was that it was returned because of being in disputed status BUT that was not a solid answer and there was clearly more to it that they would not say...

FOR ALL OF YOU WONDERING THE AFOREMENTIONED STATUTE: The debt collection company made it clear that once the debt was disputed by me, that they cannot legally proceed with reporting the debt to any CRA.

 

[PayrollHRGuy]

Strange update.... After reading the TigerD tips for negotiation, I called the Debt Collector company. They DID acknowledge that the debt was now in disputed status because they received my letter a couple weeks ago. BUT they said that they are "no longer representing the debt and it was returned back to the hospital". They stated that I must now instead just contact the hospital which is so confusing. They also said that they did not report this debt to any of the credit agencies. So now I am very confused about WHY the debt collector would no longer represent the debt? I tried to get it out of them the reason for this, but the only "possible" explanation was that it was returned because of being in disputed status BUT that was not a solid answer and there was clearly more to it that they would not say...

FOR ALL OF YOU WONDERING THE AFOREMENTIONED STATUTE: The debt collection company made it clear that once the debt was disputed by me, that they cannot legally proceed with reporting the debt to any CRA.

They really don't have to tell you why they sent the debt back to the hospital and it really doesn't matter. The fact that that is the collection company's policy doesn't mean it is the law. They may just be a play it safe sort of place. And the fact that they returned the debt at the first sign of resistance sort of bears that out.