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How soon can you be sent to collections

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Anonymous
Not applicable

How soon can you be sent to collections

My previous apt complex sent my debit to collections. The charge was for carpet replacement, my first payment was due in Nov 2012....I missed it and they wrote it off in Dec 2012.

 

I have no clue what to do next. it's not on my credit report (yet)I obviously have to pay it....but I don't want to pay the collection agency and they report it on my credit report.

I have not received any notices via phone or mail about the collection acount.

 

I am just shocked that they reported it to collections so fast.....**bleep**?

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1 REPLY 1
RobertEG
Legendary Contributor

Re: How soon can you be sent to collections

The day that a debt becomes delinquent, the creditor can choose to exercise legitimate means to further their collection on the debt.

They can refer for collection.  They could even begin legal action as soon as a debt is in default, which legally gives rise to a "cause of action."

They rarely go to the time or expense of doing either until the delinquency extends to a major level, usually at least 90 days late.

 

A charge-off is a separate issue, as it involves accounting practices and the additional requirement that they have basis for concluding that the debt has become "uncollectible."   IRS does not permit tax writeoff of debt that is minor in delinquency, as it cannot reasonably be assumed to have become "uncollectible."  When the debt has become uncollectible, they can move it from their receivable assets to unreceivable bad debt, and take a tax writeoff on the loss. A creditor can do both a charge-off and continue collection on the full debt, as the accounting measure does not excuse a penny of the debt.

 

Most practices and tax code assume reasonable basis for concluding a debt has become uncollectible after reaching approx 150-180 days late.

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