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Proof that debts were paid before going to collections

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Anonymous
Not applicable

Proof that debts were paid before going to collections

After burying our heads in the sand for the longest time, my husband and I are now tackling our credit issues hard-core in the hopes of possibly purchasing a home by the end of next year. 

 

In reviewing his reports, we noticed two issues that we have questions about:

 


 

 

  1. There is a medical bill from 2008 that we never knew went to collections.  We have proof that we paid the original creditor well before the debt was apparently sent to collections (we still have the money order receipt - thank goodness I'm a packrat Smiley Tongue). 

What is the first step we should take in disputing this debt?  Should we send a DV letter to the collection agency first?  And should that letter contain proof that the debt was paid (copy of the money order)?  Should we not mention that yet and wait to see how the collection agency responds and then submit a copy of the money order? Should we dispute immediately with the CRAs, and in doing so, do we provide a copy of the money order to the CRAs?

 


 

 

2.   There's also a medical debt from November, 2010 that was supposed to be paid through our insurance company (result of a car accident and personal injury claim in which my husband was hit from behind).  When we received notification in July that this debt was sent to a collection agency, we immediately contacted the original creditor, the insurance company, and the collection agency (with instructions to contact the insurance company rep for verification that they were to be paid through them), and were contacted the very next day by the original creditor, who apologized profusely for sending the account to collections and advised that it was their mistake and they would take care of it.  We didn't hear anything more until we pulled our reports today and noticed that the collection agency reported this debt in August. 

 

What should our first step be in dealing with this mess?  Should we ask our attorney for proof that the insurance company paid this (since this is a personal injury claim and the attorney has proof of the paid debts) and forward it to the collection agency?  Should we contact the original creditor again, in writing this time, with the above proof?

 


 

 

Sorry for all of the questions.  Smiley Indifferent  Since beginning our credit repair journey, we've become obsessed with every detail (I think I log onto myfico at least 10 times per day!) and want to make sure we tackle these issues appropriately.  It's going to be a long and difficult road, but we're determined to do our best to fix our past mistakes.

 

Thank you in advance for any input you can give.

 

Message 1 of 4
3 REPLIES 3
RobertEG
Legendary Contributor

Re: Proof that debts were paid before going to collections

If there was no debt at the time the OC assigned the account for collection, then yes, you are correct, the collection can be deleted.

 

You can DV the debt collector, but in my opinion, that is not the most effective way to address the issue.  The debt collector does not know your internal dealings with the OC, and is not the party in a position to determine the status of the debt at the time they were assigned collection authority.  When the debt collector "validates" a debt through the DV process, they are effectively just validating that the OC has notified them that you owe them (the OC) a debt, and the amount of the debt.  The debt collector does not have the records to determine matters as to the accuracy of the debt itself.

 

I would try to use the dispute process, with the disputable issue being the inaccurate reporting of a collection when there was no delinquent debt.  I would, if possible, seek to dispute this with the OC, since they are the party in a position to verify whether or not the debt was paid prior to their collection assignment.  However, that might be a problem.  Has the OC ever reported their account to a CRA, and if so, did they report a collection referral?  If the OC has never reported their account to the CRA, then you cant dispute the accuracy of any reporting done by them to a CRA.  That would leave you as a first line of dispute having to send your dispute to the debt collector, and put you at the mercy of their "verification" process.

 

I hope the OC has previously reported.  If so, file a direct dispute with them for the accuracy of their credit reporting of a collection referral at a time when you had no delinquent debt upon which to base a collection.

Message 2 of 4
Anonymous
Not applicable

Re: Proof that debts were paid before going to collections


@RobertEG wrote:

Has the OC ever reported their account to a CRA, and if so, did they report a collection referral?  If the OC has never reported their account to the CRA, then you cant dispute the accuracy of any reporting done by them to a CRA.  That would leave you as a first line of dispute having to send your dispute to the debt collector, and put you at the mercy of their "verification" process.

 


Thanks for the response, RobertEG.  The original creditor does not appear on any of the credit reports.  The correspondence from the collection agency indicates that they are collecting "for" the OC, so I don't think the debts were sold. 

 

If I understood you correctly, my only option now is to contact the CA regarding my dispute.  Should this letter be in the same vein as a traditional DV letter?  Or should I lay out specifically that I have proof that the debt was paid and provide a copy of the money order receipt? 

 

Since it's the OC's error, it's frustrating that I can't provide proof to them and have them "fix" this issue with the CA. Smiley Mad

Message 3 of 4
Anonymous
Not applicable

Re: Proof that debts were paid before going to collections

And!  Both errors on both disputed accounts involve the same OC and CA.   Grr!

Message 4 of 4
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