WCCO EYE4 LOGO WCCO Radio wcco-eye-red01, ww color red

Local

Good Question: When Does A Bill Go Into Collection?

View Comments
(credit: CBS) John Lauritsen
John Lauritsen is a reporter from Montevideo, Minn. He joined WCCO-...
Read More

Get Breaking News First

Receive News, Politics, and Entertainment Headlines Each Morning.
Sign Up
Today's Most Popular Video
  1. It’s Nat’l Cheeseburger Day, So Here Are Our Favorites
  2. Lawyer: Peterson Case Would've Been More Difficult To Defend In MN
  3. Finding Minnesota: The Feline Fun House
  4. Good Question: What's The Best Way To Discipline Kids?
  5. Mpls. Pop Up Parks Taking Part In Nat’l Recycling Campaign

MINNEAPOLIS (WCCO) – A new study out Tuesday showed that more than 35 percent of Americans owe money to collections agencies.

In most cases, it’s from falling behind on credit cards, medical bills, or student loans.

But even past due gym membership fees can lead to collections.

If you get behind, you’ll eventually hear about it.

“Three months to six months you start seeing collections, especially on medical bills. You start seeing that happen right away,” said John Hoffman, a state senator (D-District 36) and a credit counselor with Consumer Credit of Minnesota.

He said a simple phone bill, possibly even forgotten about, can turn around and haunt you.

“An old bill sitting out there from their old cell phone company that they forgot to pay. It was $50, well now you can start charging some simple interest and the next thing you know it’s up to $100,” Hoffman said.

Hoffman said after 6 months of the bill going unpaid, the debt is bought and sold on the open market like a commodity.

Thirty-five percent of Americans are dealing with collections right now. But in Minneapolis, that number is only 20 percent — one of the lowest percentages in the nation.

“A couple of things contribute to that,” Hoffman said. “We have one of the lowest unemployment rates and people are paying their debts.”

That is key, because Hoffman says if you don’t pay your bills bad credit will cost you.

“Insurance companies look at credit-worthiness, some companies look at future employee’s credit worthiness, especially a job that requires credit worthiness,” Hoffman said.

He says the best way to get back on track is to prioritize your bills and set up payment plans.

But definitely don’t ignore your debt.

According to the Urban Institute study, Texas has some of the worst debt.

Forty-four percent of people in Dallas and San Antonio are being pursued by collections.

View Comments
blog comments powered by Disqus
Follow

Get every new post delivered to your Inbox.

Join 1,860 other followers