British Man Breaks Crowdfunding Site Trying to Bail Out Greece

People waving flags at Syntagma square.  Greeks demonstrate
Pacific Press—LightRocket via Getty Images People waving flags at Syntagma square. (George Panagakis--Pacific Press/LightRocket via Getty Images)

But don't hold your breath

A British man has started a crowdfunding site to raise funds for a bailout for Greece, and he’s already raised over $230,000– about 0.01% of what Greece needs.

Thom Feeney, a marketing manager who lives in the U.K., decided he would do his part to solve the Greek financial crisis one Internet user at a time, by asking for donations via crowdfunding site Indiegogo:

The IndieGogo page has since crashed, but Feeney has promised it will be back up and running shortly.

Unfortunately, the campaign ends in a week, and under Indiegogo rules if a fixed-funding project like this one is not fully funded by the deadline, the campaign doesn’t get the money.

And Greece is so deep in the hole that even if the site kept raising over $230,000 per day, CBC reports, it would take 24 years to reach the $2.1 billion goal.


MONEY consumer psychology

5 Foolish Money Myths You Can Stop Believing Right Now

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Drink your latte.

Whether you think of yourself as money-savvy or you’re acutely aware of where your personal-finance knowledge is lacking, it’s always good to make sure you aren’t managing your money on assumptions that are faulty to begin with.

Here are a few common money myths to kick to the curb.

Myth No. 1: Credit cards are evil

With the average credit card debt sitting at just over $15,000 per household, it’s easy to think that plastic is the irresponsible way to pay. Not so fast.

It’s not the method of payment that’s the problem; in fact, having credit cards can actually help your credit score. A full 10% of your credit score depends upon having a mix of credit types — installment credit, like a car loan, and revolving credit, like credit cards.

In addition, credit cards offer more security than any other form of payment, allowing you to dispute fraudulent activity without footing the bill.

Myth No. 2: Skipping your morning coffee will make you rich

Cutting back on small expenses might offer some breathing room in your budget over the long term, but money not spent doesn’t necessarily equal money saved. To grow that money, it would need to be put into a place where growth can occur — like an investment account or, at the bare minimum, a savings account.

You may think cutting out a daily expenditure is putting you on a path to financial independence, but that’s only step one.

Myth No. 3: It’s too risky to invest your money

The truth opposing this myth is simple — it’s too risky to not invest your money.

If you’re already diligent about socking away money each month, that’s a great start. But with interest rates sitting so low, money put into a savings account will likely lose more to inflation than it can make up in growth. That’s where investing comes in.

Through the power of compounding, a single $500 investment made at the age of 20 earning a conservative 5% return would be $4,492.50 at the age of 65. Imagine that scenario with ongoing contributions and larger returns. It would put any savings account to shame.

Myth No. 4: All debt should be paid before saving

Unfortunately, emergencies and unexpected expenses occur at all stages of life — even when you’re working to pay off student loans or crawl out from underneath credit card debt.

A study recently released by Bankrate found that 60% of Americans wouldn’t have the funds available to cover even small hiccups — like a $500 medical bill or car repair. Think about how many of those expenses you’ve run into in the last six to 12 months; probably at least one.

If you want to avoid incurring more debt as a result of life’s curveballs, work to save while paying off debt. This will give you a better chance of smooth sailing to the finish line.

Myth No. 5: You should borrow the most money offered to you

Wondering how much house you can afford? Don’t let the loan amount offered by the bank be your guiding light.

Those in the business of making loans are incentivized to offer the biggest loan possible that you’ll be approved for. So while they may be checking out your debt-to-income ratio, this simple equation doesn’t always offer an accurate snapshot of what you can actually manage to pay each month.

The same goes for credit card limits — having a $20,000 limit doesn’t mean your finances can easily handle paying back $20,000 worth of purchases.

More From Trulia:

MONEY The Economy

Puerto Rico’s Debt Is Worse Than Detroit’s Debt Was

Puerto Rico's governor said the island cannot pay its $72 billion debt. Add high unemployment to the equation, and that's a bleak economic picture

Things aren’t looking good for the Isle of Enchantment. Puerto Rico is in 3½ times as much debt as Detroit was in when it filed Chapter 9 bankruptcy in 2013. The island’s $72 billion debt is larger per capita than any state, but the island’s government can’t file bankruptcy like Detroit did because only cities are allowed to file Chapter 9. Puerto Rico’s governor, Alejandro Garcia Padilla, said the island’s debts are not payable, and that he needs to pull it out of a “death spiral.” This is bad news for mainland consumers as 70% of American mutual funds have Puerto Rico bonds.


Try This Totally Doable 7-Day Plan to Improve Your Credit

Bernard Van Berg / EyeEm—Getty Images/EyeEm

Fixing your credit doesn't need to be a Herculean task.

There are 168 hours in a week. By allocating a tiny fraction of them to improving your credit, you could potentially save hundreds or thousands in interest on future loans, get the best insurance rates and avoid utility deposits.

Here’s a Monday through Sunday credit-building schedule, but feel free to get started any day of the week. Check out the Nerds’ seven actionable steps you can take this week to improve your credit.

Monday: Pull and read your credit reports

You can do everything right credit-wise, but errors on your credit reports can unfairly hurt your score. In fact, according to a 2012 study by the Federal Trade Commission, more than a quarter of the participants discovered at least one potentially material error on one or more of their credit reports. As such, it’s important to pull your credit reports to check for discrepancies.

You can request your credit reports for free once a year. Go to annualcreditreport.com and read your credit reports to ensure they don’t contain errors.

Tuesday: Dispute any credit report errors

If you found any errors on your credit reports, now is the time to get them fixed. The Consumer Financial Protection Bureau last year added new rules to make reporting errors easier. Gather any evidence you have that your reports contain erroneous information and dispute them for a possible boost to your credit.

Wednesday: Create a debt payoff plan

If you’re carrying a lot of unsecured debt, your score may be suffering due to high credit utilization. Credit utilization is the amount of debt you have in relation to your credit limits. Experts recommend that this percentage doesn’t exceed 30% at any time to maintain a good credit score.

Create a debt payoff plan to get your utilization down as soon as possible. If you don’t have enough in your budget to make progress on your existing balances, check out our ideas on how to increase your income and decrease your expenses. And if high-interest debt is slicing into your budget each month, check out our favorite balance transfer credit cards.

Thursday: Consider increasing your credit card limit(s)

To further improve your credit utilization ratio, consider increasing your card limits. This may result in a small hit to your credit via a “hard” credit pull — although sometimes you can get a small limit increase without a credit pull. But credit utilization has more impact on your score than credit inquiries.

Friday: Set up a payment plan on large debts

If you have outstanding debts you can’t pay off, call your furnishers and set up payment plans. Whether it’s a medical bill, overdue taxes or an account in collections, communication with your creditor is key to keep a past due bill from further damaging your credit.

Your creditors will want to collect the entire balance you owe, but many will gladly take partial payments over nothing at all, so call them up and ask. Also, make sure the monthly amount realistically fits into your budget before agreeing to a payment plan.

Saturday: Set up automatic payments for other bills

Consider setting up automatic bill payments. Payment history is the No. 1 factor in your credit score, and it’s important to make all of your payments on time, 100% of the time. Missed payments can be reported to the credit bureaus and linger seven years on your credit reports.

Avoid late payments — and their corresponding fees — by setting up automatic payments for every account you can. If you have irregular income and can’t be certain that you’ll have the cash in place when your bills come due, set up email or text reminders to pay every bill before its due date.

Sunday: Take a break!

Whew! It’s been quite a week. Take Sunday to rest — after practicing good credit habits, the best thing you can do for your credit is be patient. Time lengthens your average age of accounts and allows negative items to eventually fall off your credit report. Kick back and relax knowing that you’ve spent the week improving your credit and enjoy reaping the rewards of your hard work.

Read next: How to Raise Your Credit Score by Labor Day

More From NerdWallet:

MONEY credit cards

Why Did My Credit Score Drop After I Paid My Credit Card Bill?

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Credit scores are complicated algorithms that weigh hundreds of pieces of information.

For years, the standard advice by many experts is that you don’t have to carry a balance on your credit cards (and pay interest) to get a good credit score. (I’ve certainly said that more than once.) But a flurry of readers on the Credit.com blog say their experiences show otherwise:

  • I just paid the $39 balance on a credit card, with a limit of $2K. Score dropped 10 points..
  • When I paid off the small balance it dropped to 627, 18 points. It told me “Your credit report shows no recent balances on your revolving account. Your FICO Score was hurt because you are not currently demonstrating active revolving credit management.”
  • I’ve been repairing my credit and finally thought that I would have the score to purchase a home! I recently paid a credit card balance in full before the reporting date and my score dropped!

What’s going on? Is that advice wrong?

“Having a zero balance does not cause any negative impact to your score,” says Sarah Davies, senior vice president, Analytics, Product Management and Research with VantageScore.

In fact, when it comes to the VantageScore credit scoring model, “you get the maximum value for having your utilization at zero — for having all that credit available to you,” Davies says.

And while it’s possible that paying off a credit card will result in a lower FICO score, says Barry Paperno, a credit scoring expert who worked at FICO for many years and now writes for SpeakingofCredit.com, it’s unlikely. There’s only one scenario he can think of where this may occur. And that’s where someone goes from low utilization to no utilization.

In case you’re unfamiliar with the term “utilization,” credit scoring models will compare the balances reported by your card issuers on your revolving accounts with their credit limits. Consumers with the best credit scores tend to use 10% or less of their available credit. (Another term for this is the “debt usage ratio” and you can see yours with Credit.com’s free credit report summary.)

Dropping to zero utilization could cause a small drop, he says, because utilization “serves as a proxy for activity,” Paperno says “If you didn’t have any balance on any card, then the model just assumes you haven’t used credit recently.” But it won’t likely be a significant drop, he says.

Tom Quinn, vice president of myFICO.com observes that while consumers who carry higher levels of debt are generally riskier than those who don’t, “research findings show that people who have a small or low amount of revolving debt being reported relative to their available revolving credit are generally less risky compared to people with no revolving debt being reported. In essence, showing a responsible use of that revolving credit demonstrates a lower credit risk versus not showing any revolving debt use.”

So depending on which credit scoring model is being used, showing some kind of revolving balance may be helpful, but that still doesn’t mean you have to pay interest. More on that in a moment.

Cause … or Coincidence?

The expert consensus is that paying off a credit card shouldn’t tank a consumer’s credit scores. But the consumers sharing their stories are adamant. So what gives?

First, there is the tricky issue of credit score updates. If you subscribe to a credit monitoring service, you may receive a message alerting you that your balance has gone down, and you may at the same time receive a notice that your credit score has dropped. But even if they are delivered together, it doesn’t always mean the former caused the latter, or that the reason stated accounted entirely for the change. Paperno gives this example:

You deposited $500 yesterday, then wrote $600 worth of checks and your balance went down by $100. “It’s like saying I deposited $500 and my balance went down by $100. Your net deposit is the balance of several different things,” he says.

The fact is there are numerous factors that go into credit scores and it’s difficult to pinpoint a single one that fully explains why a score has changed. In fact, when you get into the category of consumers with high credit scores, it can be even more difficult to nail down specific reasons why their scores aren’t higher; after all, they are doing most things right.

In addition, some changes may not be apparent to the consumer. One commenter who saw his scores drop after he paid off a balance noted that he monitors his credit reports on a monthly basis and insisted “nothing else has changed, nothing added, nothing removed, only a zero balance.” But information may be changing behind the scenes.

Accounts age, and while that’s usually a good thing, it can sometimes result in a lower score. Balances change. And things you don’t even realize matter may impact your scores. For example: a negative item may become older, and reach a threshold where it has less impact on the score. An inquiry (for a mortgage or car loan, for example) that was previously ignored because it occurred in the past 30 days may now count because it is beyond that window.

Credit scores are complicated algorithms that weigh hundreds of pieces of information, and while consumers want to know exactly how much a particular action will affect their scores, a definitive answer isn’t always possible.

Going back to the issue of balances, it can be even more confusing. That’s because the balance reported isn’t necessarily your balance at that moment. Most card issuers report account information once a month, usually shortly after the statement closing date. (And it’s often the balance on the statement closing date that appears on your credit reports. )

Even if you pay your balance in full around the due date, your credit report won’t likely list a zero balance unless you time it like our reader did, above, so her payment was received before the balance was reported. And even then, to have an overall debt usage ratio of zero you would have to have a zero balance on all of your cards, which is certainly possible if you avoid using credit cards, but unlikely to happen if you have at least one credit card you use on a regular basis.

Another thing to consider is the differences among bureaus, which each collect their own information and may use one of dozens of different credit scoring models. “A credit score can also be different based on which CRC (credit reporting company) is used to provide the score and when. This happens because the information reported by the lenders to the CRCs may occur at different times each month,” said VantageScore President and CEO Barrett Burns in a Credit.com article describing why credit scores change.

Pay Off & Close?

Of course, if you pay off and close a credit card account (or close and then pay off a card), that’s another matter. Closing an account removes the credit limit on that card from the utilization calculation, which can potentially affect your scores by raising your overall debt usage ratio on your remaining open revolving accounts.

In a sense, monitoring your credit score can be a lot like monitoring your blood pressure. If it’s higher than usual, is that because of the last meal you ate, or the argument you had with your spouse, or because you took your last dose of blood pressure medicine earlier than usual? It may be a combination of all three, or maybe it’s something else you not on your radar. It’s the overall trend that’s important. Are you bringing it down overall?

The bottom line? Paying your credit cards in full can help you save money in interest and should not hurt your credit scores. But keeping accounts open and active can help your scores. As is often the case, you’ll get the best scores by using credit — as long as you use it wisely.

More From Credit.com:


4 Times You Can Sue a Debt Collector

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Yes, you can fight back.

It’s every consumer’s worst nightmare: You’re busy at work, mired in debt, and your cellphone keeps ringing. You’re doing your best to pay off that bill, but the unknown number flashing on your phone’s screen is a dismal reminder you haven’t.

“Most people want to pay their debt, they just run into bad situations where they can’t,” Gerri Detweiler, director of consumer education for Credit.com, says. “If a debt collector will work with them, a lot of times, they’ll resolve the debt.”

But not every debt collector plays by the rules, and luckily there are protections in place that allow consumers to fight back if a debt collector has run afoul of the law. Here are four times when consumers can sue.

1. Calling Early & Calling Late

A debt collector may not call you before 8 a.m. or after 9 p.m. The time frame may sound arbitrary, but think about it: This is when you’re away from work, at home with family, or resting in bed. When a debt collector calls at a time that is known to be inconvenient, David Menditto, director of litigation for Lifetime Debt Solutions, a law firm in Chicago, says, that’s a violation of the federal Fair Debt Collection Practices Act (FDCPA).

2. Calling at Other Inconvenient Times

If you’ve told the collector not to call at a certain time, even if it’s when you take a nap, Detweiler says, that’s another violation of the FDCPA. “If you were to tell the collector, I work nights, so don’t call me then, they can’t,” she says. Consumers can set the parameters.

3. Discussing Debt With Third Parties

“If a debt collector calls your mother and says, ‘Hi, we’re looking for John, he owes us money. How do we get in touch?’” that’s yet another violation of the FDCPA, Menditto tells Credit.com. “They can call, ask to speak with John, and ask whether this is a good number to reach him at, but they can’t be discussing the debt,” he says. Collectors are allowed to contact a debtor’s spouse, however.

If people you know are getting calls about a debt you may owe, it’s a good time to check your credit reports to see if there are delinquent accounts or collection accounts listed. You can get your credit reports for free once a year from each of the three major credit reporting agencies, and you can get a free credit report summary every month on Credit.com, to look for any issues. There are debt collection scammers out there, so checking your credit is a way of verifying that the call is legitimate.

4. When a Lawyer’s Involved

If a collector calls even though he or she knows that you’ve hired an attorney, that’s a violation of the FDCPA, Menditto says. The reason: The consumer may intend to file for bankruptcy and they’ve probably told the collector to stop contacting them. “We’ve had clients who claimed they told the debt collector to stop calling, and they didn’t,” Menditto says. “Then they got an attorney and said, ‘Talk to him,’ and the collector kept calling and the collection got violated there.”

Want to understand more about what debt collectors can and can’t do? Check out “12 Times You Can Sue a Debt Collector” for the full list.

More From Credit.com:

MONEY Student Loans

How a Student Loan Bill Can Go From $97K to $236K

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A tale of loan consolidation gone bad.

There’s been a lot of discussion lately about Americans deciding to not pay back their student loans. While the reasons for purposely defaulting on education debt vary, the consequences are invariably unpleasant: debt collection, wage garnishment, growing loan balances, even lawsuits.

For example: A Connecticut attorney’s student loan debt from law school has more than doubled since he stopped making payments in 2001, and a federal judge has ordered him to repay the higher amount, reports the Connecticut Law Tribune. According to the article and court papers, the lawyer owed $97,658.55 when he consolidated his loans in August 1999, which he intended to tackle through income-contingent repayment. However, he and the government disagreed on what the adjusted payment amount should be. More than a decade later, his balance has ballooned to $236,535, which a U.S. District Court judge recently ordered the lawyer to repay.

That’s just one story of how student loan debt can grow rapidly, but it’s not the only one. Education debt can quickly make a mess of any borrower’s finances. Student loans are rarely discharged in bankruptcy, meaning if you get into financial trouble and can’t make the payments, there’s not much you can do but try to catch up on the debt later. Forbearance and deferment can temporarily alleviate the pressure, but interest continues to accrue on the balance, potentially leaving you with more debt than you had in the first place. Once a borrower defaults on student loans, the lender may pursue the individual through debt collection or a lawsuit. Any income the borrower has may be subject to debt collection, and those who default on federal loans may lose out on future tax refunds and access to government programs like FHA loans.

On top of all that, if you fall behind on student loan payments, you’ll see your credit score suffer, potentially making it difficult for you to get a home or apartment, access affordable pricing on loan and credit products or set up services like utilities or a cellphone plan without having to pay a hefty deposit upfront. In some states, your credit history has an impact on how much you pay in car insurance premiums, too.

There are many reasons to make repaying your student loans a priority, and there are a few ways you can try to make your federal student loan payments more manageable. Before deciding not to pay, it’s important to research your repayment options and consider the long-term financial consequences of student loan default.

More From Credit.com:

MONEY Health Care

When Your Health Plan’s Deductible Is So High That You Can’t Afford to See a Doctor

empty pill container
Luis Pedrosa—iStock

23% of respondents to a new survey were underinsured, in part due to rising deductibles.

The Affordable Care Act (aka Obamacare) was designed to help provide health insurance for those who could not previously afford insurance, and it appears to have succeeded in that goal. (Given that insurance coverage is becoming a mandate punishable by fines, how could it not?)

However, the underpinning of Obamacare is to spread costs out through subsidies toward a greater use of higher deductible health plans (HDHPs) to control costs. Higher deductibles tend to contribute to a different problem — underinsurance. You may have insurance now, but is your deductible so high relative to your income that you tend not to use it? The latest findings from the Commonwealth Fund Biennial Health Insurance survey suggest that was the case for many people in 2014.

According to the survey report, approximately 23% of the respondents between 19 and 64 years of age who had continuous insurance over a twelve-month period were underinsured. That means that approximately 31 million insured people have insufficient coverage. Unfortunately, the 23% value shows no statistical difference since the report became biennial in 2010, but it does show a doubling in the underinsured rate since the first study in 2003 — as well as a tripling of those with HDHPs.

The consequences of underinsurance are significant. According to the report, just over half (51%) of the underinsured had problems with medical bills and corresponding debts. Debt loads of at least $4,000 were noted by half of the underinsured and another 41% of the privately insured with HDHPs. Worse, 44% of the underinsured avoided some form of medical care because of the cost.

To be underinsured for study purposes, you had to meet one of these criteria:

    • High Medical Costs – Out-of-pocket costs (premiums excluded) over the previous twelve-month period were at least 10% of household income. If you were below the poverty line (under 200% of the federal poverty level (FPL)), the threshold percentage was 5% of household income.
    • High Deductibles – Your deductible was at least 5% of your household income, regardless of that income level.

By that definition, we would expect lower income families to make up most of the underinsured — and they do, at more than twice the rate of higher income families. At least the numbers have improved slightly. The 2014 survey shows 42% of those below the poverty line on the survey were underinsured, down from 44% in 2012 and 49% in 2010.

Meanwhile, the number of the insured with deductibles that are more than 5% of income has steadily risen from 3% in 2005 to 11% today. Those with employer-provided coverage were more likely to have HDHPs if they were employed at a smaller firm with less than one hundred employees (20% compared to 8% at larger firms). For those with individual coverage through any source including the exchanges, the HDHP share was 24%.

Overall, deductibles of at least $3,000 are paid by 11% of the fully insured, up from 4% in 2010 and a paltry 1% in 2003. One-quarter of the respondents have no deductible, 37% have deductibles below $1,000, and the remaining 27% have deductibles between $1,000 and $3,000.

Download the full report here

In fairness to ObamaCare, since the survey was conducted between July and December 2014, the effect of the ACA cannot possibly be measured in this survey (since most coverage through the exchanges could not cover the entire twelve-month period). However, the effect should be measurable in the next biennial survey.

Will Obamacare and the upcoming employer mandates truly provide affordable insurance for all, or will there primarily be a shift from the uninsured to underinsured who do not use their benefits? By the time the next survey comes out in 2016, we will know the answer. The only sure thing is that both friends and foes of Obamacare will be spinning the results to meet their preferred view of health care.

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What Happens to My Debt If I Get a Divorce?

stack of bills sliced in half
John Kuczala—Getty Images

Just like your marital assets, debt gets divvied up too.

While you might have known that marital assets are separated during divorce, did you know that debts are as well? Yes, debt, just like any other possession, has to be divvied up and re-distributed during divorce. Unfortunately, this can make an already difficult process even more stressful. However, understanding how your debts might be split before entering your proceedings could help you better plan for your new life and give you peace of mind. Here is an easy-to-understand breakdown of what happens to your debt during a divorce.

Credit Card Debt

The responsibility of credit card debt during divorce tends to be decided by whether or not the credit card was under a joint or single account. While the rules on joint accounts vary from state to state, most cases consider marital debt to be any debt accumulated during the partnership, regardless of whose name appears on the account. This means you’ll most likely be considered partially responsible for debt on the account, whether or not you were the one to make the payment. Separate accounts, however, are just that — separate. Whomever’s name appears on the account will, more often than not, be awarded full responsibility.


Here’s where things get a little complicated. The division of a mortgage isn’t as straightforward as credit card debt during divorce. Because a mortgage is typically such a monumental expense, most states offer a variety of options for dealing with the situation. Ownership of the mortgage will typically be awarded to someone who makes significantly more than their former spouse or has been awarded full custody of the former couple’s children. In either of these situations, one party will be required to buy out the other’s equity in the house. Of course, the couple can decide to bypass all of these decisions and simply sell the home if they so choose.

Medical Expenses

Depending upon where you live, your state might have a different view on whether or not you and your former spouse share medical debts. “Community Property” states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin) all debt will typically be divided amongst all parties. While this might greatly simplify the process, it leaves you open to taking on debt that you had no part in acquiring. In “equal division property” states however, the court will take a variety of factors into consideration when determining the responsibility of medical debt. This will usually include whether or not you and your spouse were living together at the time the debt was acquired, whether or not you were legally separated at the time, whether or not the debt falls under the umbrella of “necessary care,” and what impact that debt might have on any children you and your former spouse might have had.

While divorce is far from an easy process, knowing how it might affect your financial situation can really help you reduce the stress and handle other expenses it brings. Take the time to sit down and look through all your financial documents: bills, credit statements, loan papers, etc. Pull your free annual credit reports to see what accounts are reported in your name, and periodically revisit them to watch for important changes. Creating a financial snapshot can help your and your attorneys determine the best course of action for you and your family.

Read next: Can a Debt Collector Come After Me If I Never Got a Bill?

More From Credit.com:


Can a Debt Collector Come After Me If I Never Got a Bill?

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“Parking” debt is a common practice.

It’s bad enough to get a call from a debt collector or find a collection account on your credit reports. But it’s even worse when you didn’t even know you owed a bill in the first place. Here are just a few comments we have received on the Credit.com blog:

  • I was never sent a bill because of the hospital was sending the bill to an address in which I never lived at. I happened to check my credit report and I had (2) two $2,500 bills sitting in collections for my daughter(s) bill
  • So what if a collection agency reported a debt to Credit Bureau without even sending me a notice. How can I proceed then ?
  • I received a bill from a collection agency that is over 5 years old and I was never sent a regular bill. What’s going on with this?
  • More than 3 years after getting rid of my cellphone, I all of a sudden got a call from a collections agency stating that I owe money to the cellphone company – no idea why they’d wait 3 years if I was truly delinquent. The cellphone company hasn’t been in touch with me in more than 3 years, and never sent any notices of outstanding debt.

They are all asking essentially the same question: “Can I be sent to collections if I never got a bill or a notice?”

Some creditors “aren’t required by law to send you a statement before they send you to collections,” says consumer protection attorney Jeremy S. Golden. He’s received similar complaints, especially when medical bills are involved.

In fact, there’s a name for this practice. It’s called “parking” the debt. Here’s how it is described in a report by the National Consumer Law Center about medical debt collection:

Many times a debt collector will furnish information about a medical debt on a credit report without actually engaging in any proactive steps to collect it, such as telephone calls or written communications. Instead, the collector will wait to collect the debt until the point in time when the consumer needs to get a mortgage or other credit. This practice is sometimes referred to as “parking” a debt. “Parking” benefits the debt collector because the collector never needs to expend the effort, time, and resources to dun the consumer, especially if the debt is a small one

The problem is that even if you pay one of these accounts as soon as you learn of it, the damage is probably already done. Paying a collection account that has already appeared on your credit reports as in collections typically doesn’t result in its removal, and under most credit-scoring models used today, and resolving it doesn’t often help boost your credit scores either.

Isn’t There a Law Against That?

The answer often is, unfortunately, no. The Fair Credit Reporting Act requires certain lenders to send a notice before reporting negative information to credit reporting agencies. Specifically, it says:

In general, if any financial institution that extends credit and regularly and in the ordinary course of business furnishes information to a consumer reporting agency…furnishes negative information to such an agency regarding credit extended to a customer, the financial institution shall provide a notice of such furnishing of negative information, in writing, to the customer.

However, the FCRA goes on to say that this notice “may be included on or with any notice of default, any billing statement, or any other materials provided to the customer,” though it “must be clear and conspicuous.”

Note that this requirement only applies to financial institutions that regularly extend credit, so presumably in the case of a delinquent cellphone or hospital bill that winds up in collection, it wouldn’t even apply. When it is required, a notice on a prior billing statement may suffice.

And there’s one more thing. The FCRA says this notice “shall be provided to the customer prior to, or no later than 30 days after, furnishing the negative information to a consumer reporting agency.” So it’s possible the notice could come after the damage has been done.

It’s Not Your Fault

But not so fast, says attorney Richard Alderman, director of the Center for Consumer Law, University of Houston Law Center. The credit report reflects your payment history, and “If you never received a bill, you haven’t defaulted or paid late.” A creditor isn’t generally required to send you a bill right away, though, he explains. They can delay billing, as long as doing so doesn’t violate any law or your agreement.

His view is this: “If they delay sending you a bill and you get the bill and you pay it immediately,” you are not in default and did not pay late. Nothing negative should appear on your credit report. He adds, however, that if you don’t receive a bill in a timely manner you always should contact the creditor to prevent any problems in the future. Avoiding negative information on your report is always easier than correcting it.

What Can You Do?

NCLC has recommended that the CFPB “prevent parking by requiring that debt collectors provide consumers with notice before a negative item is placed on a credit report.” In the meantime, here are steps you can take if you find yourself in this position.

The first, of course, is to review your credit reports on a regular basis. If you find a collection account that you don’t recognize listed, you can dispute it with the credit bureau(s) reporting it, preferably in writing. If the credit reporting agency cannot confirm it with the source (the company reporting it), within 30 days, in most cases, it must be removed.

“Disputing a debt directly with the debt collector does not trigger a consumer’s rights under the FCRA — only a direct dispute to the credit bureaus will do that,” says Southern California consumer law attorney Robert Brennan.

If it’s not removed, you can dispute it directly with the collection company that is reporting it. They too, have 30 days to respond. You can also request verification of the debt and if you determine the debt is valid, you can try to negotiate with them to remove it if you pay it. It is not an unreasonable request if you were never notified of the debt in the first place. (If they agree, get it in writing before you pay.) If they refuse, you may need to talk with a consumer law attorney with experience in credit reporting cases. Either way, it may be a good idea to share your experience with the Consumer Financial Protection Bureau, which discussed parked debts in a December 2014 report on debt collection, noting that it “could also harm the consumer if the tradeline is reported without his/her knowledge, and/or if the consumer did not have prior knowledge of the debt.”

Read next: Can Debt Collectors Go After My Retirement Savings in Court?

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