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> Just let it go to collections. You'll get harassed for a little over a year. Debt older than a year is almost never pursued by collections agencies. I don't
by defen 8y ago
> Just let it go to collections. You'll get harassed for a little over a year. Debt older than a year is almost never pursued by collections agencies.
I don't understand. Is there no penalty to not paying other than a hit on your credit score? Can't you end up with wage garnishments or liens or something like that?
- UncleEntity 8y agoWhere I live (Arizona) there's a statute of limitations on consumer debt, think it's 2 years for random bills and 3 years for recurring payments...or something similar.
- gowld 8y agoThat sounds like legalized theft. Why pay any non recurring bills ever?
- dawnerd 8y agoIt'll definitely show up on your credit report. The key is a lot of lenders supposedly will just look past it. Ultimately it's up to them if you get a loan or not, not just based on the number alone.
- observer12 8y agoOne caveat, you definitely want to contest the debt in writing regularly. If it goes away because the collector failed to respond you are fine. If it goes away because they "forgive" the debt, its seen as income by the IRS and you will pay taxes on it. So imagine the tax bill if 200K of "income" is added to your taxes one year.
- Sohcahtoa82 8y agoNope. Wage garnishments and liens only happen with debts to the government such as unpaid taxes, child support, or fines.
- defen 8y agoOk but can't the hospital (or the collections agency) take you to court? Let's say you have 100k bill from the hospital that you just ignore. They sell it to a collections agency for 60k. You refuse to pay the collections agency. Now what happens?
- Sohcahtoa82 8y agoDid some more research on this... Yes, the hospital or collections agency can sue you to try to garnish your wages. If they win, you're boned. If they lose, or they never sue for garnishment, it's unclear what happens if you refuse to pay. From what I can tell, the debt disappears from your credit report after seven years, but the debt is still valid and they can still try to recover the money from you, but they won't be able to use the courts to do it. However, there's always the option of declaring bankruptcy. Even if they garnish wages, declaring bankruptcy will wipe it away. Obviously, that's the nuclear option and will destroy your credit rating for seven years.