Yesterday I was on KNX radio, on Bob McCormick’s “Money 101″ show, and Bob asked me about a medical bill for $2.50 that a debt collector was trying to collect. Bob asked whether they could credit-report that small of a debt.
The answer, unfortunately, is yes. In theory, a creditor or a debt collector could credit-report a debt of $.01 (one cent). There’s nothing in the law preventing them from doing so.
What many consumers don’t understand is that debt collectors buy debt in bulk. They don’t buy individual debts; rather, they buy large portfolios of debt from creditors, and the large bulk of debts they buy can include very small debts.
Many debt collectors do not bother to try to collect very small debts, but some do. Hey, it’s desperate out there for some of these bottom-feeding debt collectors!
If the debt collector credit-reports the debt, dispute it just as you would a larger debt. The credit bureaus are supposed to mark it as “disputed” if you send in a dispute. Also, in Bob McCormick’s case, he believed that his insurance company should have paid it. If you have that situation, don’t forget to notify medical provider, debt collector and insurance company of your dispute. If your credit is damaged after you’ve given them a chance to do the right thing, then you may have a lawsuit against them!
Hope this helps & hope your new year is going well.