Personal Finance

Credit history: How to negotiate past unpaid balances?

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  • Jun 27th, 2017 10:46 pm
Sr. Member
Jun 27, 2012
913 posts
100 upvotes
Winnipeg, MB

Credit history: How to negotiate past unpaid balances?

My credit history was flawless until I was billed in an unjust manner. This was for a medical service that is funded by the provincial government (I heard provinces never negotiate debts). I haven't paid it out of principle. But now I realize it may be costing me financially as credit cards I applied to and were declined for might have been acquired had I not had this on my record. Credit cards that could prove financially very beneficial. The amount owed is about $500 and its been about 2 years (it went to a collection agency after a few months but they claim they did not buy the debt, rather they are just acting on behalf of the provincial government) so I'm wondering if its a good idea to attempt to negotiate with them to release me saying its 100% paid if i pay a percentage that is owed. You would think some money is better than no money. I've heard of people doing this with credit card debt and paying less than 50% on the amount owed. But is your tardiness of payment fully erased from your history? And how to know it is? And what is the best way of approaching the collection agency or the original biller?
Last edited by redflagguy2u on Jun 26th, 2017 2:40 pm, edited 1 time in total.
11 replies
Deal Fanatic
Nov 22, 2015
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redflagguy2u wrote: My credit history was flawless until I was billed in an unjust manner. I haven't paid it out of principle. But now I realize it may be costing me financially as credit cards I applied to and were declined for might have been acquired had I not had this on my record. Credit cards that could prove financially very beneficial. The amount owed is about $500 and its only been about 2 years (it went to a collection agency after a few months) so I'm wondering if its a good idea to attempt to negotiate with them to release me saying its 100% paid if i pay a percentage that is owed. You would think some money is better than no money. I've heard of people doing this with credit card debt and paying less than 50% on the amount owed. But is your tardiness of payment fully erased from your history? And how to know it is? And what is the best way of approaching the collection agency?
You won't qualify for any unsecured credit at all with an active collections on your CB. It will also make qualifying for a mortgage or even a car loan quite difficult. Even after you pay it, the R9 on the trade line will remain, and the paid collections will show on your CB for another 7 years.

You should have dealt with the issue 2 years ago when you felt that you were incorrectly charged. If you don't think you should have been charged for something, you could have escalated the issue to a manager/ombudsman/FCAC at that time.

By ignoring the issue instead of challenging it, you've basically acknowledged that you owe the money, and both your credit card issuer and collection agency think so as well. At this point, I would just pay the amount and be done with it. Negotiating might work... ymmv though.
Sr. Member
Jun 27, 2012
913 posts
100 upvotes
Winnipeg, MB
superfresh89, you make some great points. Thank you.
The reason I didn't approach them in the beginning is they misspelled my name. So I thought it might fly under the radar. And it didn't show up on my credit history for over a year. They probably crosschecked names and dates and realized their mistake after a while. It was a good plan...LOL. until it fell through. Now that everything is out in the open I guess I can't lose by approaching the original biller and plead my case.

Bottom line: Never use an ambulance if you can use a taxi! They basically coralled me into the ambulance not giving me any options at all. It seemed very deceptive. I walked to the ambulance. I could have just as easily walked to a taxi. I could have walked to the hospital as I was only 2 blocks a way! What a mess.
Deal Guru
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Mar 23, 2008
13006 posts
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Edmonton
As mentioned above, just because you pay now doesn't mean it will magically disappear. It will be on your credit report for a long time.

C
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Nov 22, 2015
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redflagguy2u wrote: superfresh89, you make some great points. Thank you.
The reason I didn't approach them in the beginning is they misspelled my name. So I thought it might fly under the radar. And it didn't show up on my credit history for over a year. They probably crosschecked names and dates and realized their mistake after a while. It was a good plan...LOL. until it fell through. Now that everything is out in the open I guess I can't lose by approaching the original biller and plead my case.

Bottom line: Never use an ambulance if you can use a taxi! They basically coralled me into the ambulance not giving me any options at all. It seemed very deceptive. I walked to the ambulance. I could have just as easily walked to a taxi. I could have walked to the hospital as I was only 2 blocks a way! What a mess.
That sucks... you must be in AB? Ambulance rides in ON are $45, and I even find that to be expensive.... should be covered by universal health insurance IMO.

I don't know if the credit card company will be able to help you... usually, when a debt is sold to a collection agency, it's out of their hands and you'll have to deal with the collection agency.
Sr. Member
Jun 27, 2012
913 posts
100 upvotes
Winnipeg, MB
CNeufeld wrote: As mentioned above, just because you pay now doesn't mean it will magically disappear. It will be on your credit report for a long time.

C
Duly noted. Its certainly not much of an incentive to pay it off. Especially when it shouldn't have occurred in the first place. Sometimes I think my life would be much better if I just didn't rely on any credit at all. Certainly we'd all be way more self reliant if that was the case. LOL...maybe this could be a blessing after all. I can view it me saving the most expensive taxi fare every conceived!
Sr. Member
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Jul 9, 2016
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Toronto
redflagguy2u wrote: Duly noted. Its certainly not much of an incentive to pay it off. Especially when it shouldn't have occurred in the first place. Sometimes I think my life would be much better if I just didn't rely on any credit at all. Certainly we'd all be way more self reliant if that was the case. LOL...maybe this could be a blessing after all. I can view it me saving the most expensive taxi fare every conceived!
technically, while you SHOULD pay all your financial obligations, from a credit score standpoint you might be better at this point just waiting it out. both the original debt and the collection will fall off after 6 years from last activity (or date of first delinquency for TU), so thats 4 years from now. but if you pay it, while that will show the collection as being paid and could help you qualify for credit in a couple years, it would also restart the 6 year timer (for EQ, since the DOFD will have remained the same for TU).

if you paid it immediately, a paid collection has no different weight on your credit score as an unpaid collection, so you wouldnt even see any improvement in your credit score.

so depending on the dates, and your patience, it might be better to wait for it to purge
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Aug 3, 2014
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redflagguy2u wrote: Bottom line: Never use an ambulance if you can use a taxi! They basically coralled me into the ambulance not giving me any options at all. It seemed very deceptive. I walked to the ambulance. I could have just as easily walked to a taxi. I could have walked to the hospital as I was only 2 blocks a way! What a mess.
superfresh89 wrote: That sucks... you must be in AB? Ambulance rides in ON are $45, and I even find that to be expensive.... should be covered by universal health insurance IMO.

I don't know if the credit card company will be able to help you... usually, when a debt is sold to a collection agency, it's out of their hands and you'll have to deal with the collection agency.
Ambulance charges are the worst. You are having a heart attack so you call 911, and then another heart attack when you get the bill.
Deal Fanatic
Jan 15, 2017
5750 posts
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Ottawa
SuperSauvage wrote: technically, while you SHOULD pay all your financial obligations, from a credit score standpoint you might be better at this point just waiting it out. both the original debt and the collection will fall off after 6 years from last activity (or date of first delinquency for TU), so thats 4 years from now. but if you pay it, while that will show the collection as being paid and could help you qualify for credit in a couple years, it would also restart the 6 year timer (for EQ, since the DOFD will have remained the same for TU).

if you paid it immediately, a paid collection has no different weight on your credit score as an unpaid collection, so you wouldnt even see any improvement in your credit score.

so depending on the dates, and your patience, it might be better to wait for it to purge
I so agree. I believe in understanding and working within the credit reporting system and the fact is that the damage is done. Why pay the collections item now to just reset the reporting clock and keep the collections item longer on your credit report?

FWIW: OP, one of the 5 C's of credit is character which includes a person's willingness and trustworthiness to pay. When you demonstrate to a lender that you will not pay something over principal, rather than pay it and then dispute the charge, the lender will consider that you haven't demonstrated the character required to borrow. The frustrating thing is that this issue usually arises with relatively small balances.
Newbie
May 1, 2016
32 posts
5 upvotes
Quebec city
superfresh89 wrote: That sucks... you must be in AB? Ambulance rides in ON are $45, and I even find that to be expensive.... should be covered by universal health insurance IMO.
Here in Quebec, last trip in ambulance with my pregnant wife, 145$ for 5 km ride. But it's covered by my personal insurance. I didn't had to pay a penny.
It's covered for the 65 years old and more by government.
Deal Addict
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Dec 17, 2008
2781 posts
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Winnipeg
$500 in Manitoba minimum. It's awful that people die because they are too scared to call an ambulance.
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Deal Addict
May 15, 2013
2048 posts
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Alberta
Who told you Ambulance service is covered by your Province?

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