Is the debt valid & do I need to dispute it?

[ecmst12]

It's unclear whether the car was TOTALLY uninsured or if it just didn't have collision coverage. If it was totally uninsured, I think OP will need to hire a lawyer to handle this for him.

 

[gkisystems]

To clarify, I have liability insurance, but not full coverage insurance. I did not turn anything over to my insurance company because I do not believe I have any legal liability for the home owners damage. Considering the other driver is completely uninsured, but I'm not - I'm the party with the "deep pockets" for the home owner to go after. I don't think anybody can disagree that It's not the homeowner's fault... So if he comes after me, my insurance company might pay just to settle. However, that might count against me as a claim on my policy and my insurance rates might go up.

 

[justalayman]

The homeowner's attorney demanded reimbursement from me to cover his home insurance deductible ($500). The homeowner's insurance company sent a letter stating they intend to seek reimbursement from me for the claim, but never sent a bill. I do not believe I am liable, so I did not respond to either letter.

WHY????? Had you disputed the claim, it might have ended right there but we'll never know.

The homeowner's insurance company hired a debt collection law firm to collect over $6k from me. According to the debt collector, I owe this debt and it's long past due. Unless I notify the debt collector within 30 days of receipt of the notice that I dispute the validity of the debt, the debt will be assumed valid. If I dispute it, the debt collector will obtain verification of the debt or a copy of the judgment and mail it to me. Keep in mind that I have not been sued for this debt, therefore no judgement has been entered against me. If I am sued, I believe I would prevail - the other driver would not, however (but she has no money...presumably).

You can dispute it, ignore it, pay it, or whatever. Short of acknowledging it is yours, it doesn't change the legal status of the debt.


Questions:

1. Given the above facts of this scenario, I am not actually legally liable for anything, right?

that appears to be correct

2. Is it better to immediately dispute the debt or ignore the collection notice? I believe if I dispute the debt, I might be more likely to be sued - if for no other reason than simply acknowledging receipt of the allegation with a response. Since I think the statute of limitations is 2 years, I could give it another 6 months or so and be home free - right?

I would dispute it, you know, kind of like you should have years before. Take action to prevent it from going to the next step. Dealing proactively is so much easier than dealing retroactively with a situation.

3. If I do not dispute the debt within 30 days, is it automatically a valid debt? The letter only says they will "assume" it is valid.

No, it does not validate the debt. If you do not dispute it, it simply means the CA can treat it as a valid debt for purposes of the FDCPA.

4. What is the impact on my FICO credit score of not disputing the debt within the 30 day time window? I do not believe the debt collector has my SSN (so I do not know if information will be reported to credit bureaus), but I'm not 100% positive of this.

impossible to guess but in the end, this should not be your concern at any level.

5. Any other relevant tips or bits of advice?

do not ignore this

 

[LdiJ]

I read the OP's post as him not having insurance on his vehicle at all. He is learning a valuable lesson about driving without insurance. Can they (the insurance company) suspend his license in Ill. for that? In some states they can.


DC

In IL they can suspend for no insurance. However, the OP was not cited, the other driver was cited.

 

[justalayman]

To clarify, I have liability insurance, but not full coverage insurance. I did not turn anything over to my insurance company because I do not believe I have any legal liability for the home owners damage. Considering the other driver is completely uninsured, but I'm not - I'm the party with the "deep pockets" for the home owner to go after. I don't think anybody can disagree that It's not the homeowner's fault... So if he comes after me, my insurance company might pay just to settle. However, that might count against me as a claim on my policy and my insurance rates might go up.

so, contact your, at the time, insurance company and speak with them about it.

or not and deal with it on your own.

 

[ecmst12]

Report the claim to your insurance company and let them defend you. This is what you pay them for. If the accident was not your fault, your rates will not be affected, but they are obligated to defend you.