[Car accident claim exceeds coverage, send to collection agency?]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Rupert
Posts: 3444
Joined: Fri Aug 17, 2012 12:01 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Tue May 08, 2018 10:19 am

Earl Lemongrab wrote:
Tue May 08, 2018 10:00 am
Rupert wrote:
Tue May 08, 2018 6:43 am
Creditors (e.g., credit card companies, utilities) send accounts to collections without court judgments all the time. That's why you can dispute a collections account when it pops up on your credit report.
But you have a contractual relationship with them. You don't with some other insurance company.
True. I just wanted to clarify that a judgment is not always necessary to open a collections account because I thought some posts in this thread suggested otherwise. I actually think OP has abandoned this thread so I'm not really talking to him/her anymore.

User avatar
Earl Lemongrab
Posts: 4948
Joined: Tue Jun 10, 2014 1:14 am

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Tue May 08, 2018 11:19 am

Rupert wrote:
Tue May 08, 2018 10:19 am
True. I just wanted to clarify that a judgment is not always necessary to open a collections account because I thought some posts in this thread suggested otherwise. I actually think OP has abandoned this thread so I'm not really talking to him/her anymore.
I don't doubt that you could send something to collections easily. The problem comes when a request to validate the debt is returned. There are laws concerning this to prevent abuse.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

User avatar
dm200
Posts: 17206
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by dm200 » Tue May 08, 2018 12:23 pm

I am (or have been) in the consumer (not real estate) lending field. It is the norm that, at some point in a loan being past due, these accounts are sent to a collection agency - such accounts almost never have any court of legal action taken. it is very, very easy for such lenders to send accounts to a collection agency.

I don't know where folks here think it is either difficult or complex.

User avatar
Earl Lemongrab
Posts: 4948
Joined: Tue Jun 10, 2014 1:14 am

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Tue May 08, 2018 12:27 pm

dm200 wrote:
Tue May 08, 2018 12:23 pm
I am (or have been) in the consumer (not real estate) lending field. It is the norm that, at some point in a loan being past due, these accounts are sent to a collection agency - such accounts almost never have any court of legal action taken. it is very, very easy for such lenders to send accounts to a collection agency.

I don't know where folks here think it is either difficult or complex.
You keep missing the point. That's an organization that you have contractual relationship with. You signed up to have a debt with them and to have it handled in various ways when you don't pay.

You don't have any such relationship with plantiff's insurance company. What is THEIR authority (not some other company that have an established relationship with) to send a supposed debt to collections?

Suppose your neighbor backs into your mailbox. Can you send him to collections?
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

Jags4186
Posts: 2257
Joined: Wed Jun 18, 2014 7:12 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jags4186 » Tue May 08, 2018 12:51 pm

Earl Lemongrab wrote:
Tue May 08, 2018 12:27 pm
dm200 wrote:
Tue May 08, 2018 12:23 pm
I am (or have been) in the consumer (not real estate) lending field. It is the norm that, at some point in a loan being past due, these accounts are sent to a collection agency - such accounts almost never have any court of legal action taken. it is very, very easy for such lenders to send accounts to a collection agency.

I don't know where folks here think it is either difficult or complex.
You keep missing the point. That's an organization that you have contractual relationship with. You signed up to have a debt with them and to have it handled in various ways when you don't pay.

You don't have any such relationship with plantiff's insurance company. What is THEIR authority (not some other company that have an established relationship with) to send a supposed debt to collections?

Suppose your neighbor backs into your mailbox. Can you send him to collections?
I follow what you are saying. But lets add a twist. What if both parties have the same insurance company?

User avatar
Earl Lemongrab
Posts: 4948
Joined: Tue Jun 10, 2014 1:14 am

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Earl Lemongrab » Tue May 08, 2018 12:56 pm

Jags4186 wrote:
Tue May 08, 2018 12:51 pm
Earl Lemongrab wrote:
Tue May 08, 2018 12:27 pm
You don't have any such relationship with plantiff's insurance company. What is THEIR authority (not some other company that have an established relationship with) to send a supposed debt to collections?
I follow what you are saying. But lets add a twist. What if both parties have the same insurance company?
A good question. I don't know what the fine print of the insurance agreement says. I think I should, but I don't.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

Rupert
Posts: 3444
Joined: Fri Aug 17, 2012 12:01 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Tue May 08, 2018 1:02 pm

Jags4186 wrote:
Tue May 08, 2018 12:51 pm
Earl Lemongrab wrote:
Tue May 08, 2018 12:27 pm
dm200 wrote:
Tue May 08, 2018 12:23 pm
I am (or have been) in the consumer (not real estate) lending field. It is the norm that, at some point in a loan being past due, these accounts are sent to a collection agency - such accounts almost never have any court of legal action taken. it is very, very easy for such lenders to send accounts to a collection agency.

I don't know where folks here think it is either difficult or complex.
You keep missing the point. That's an organization that you have contractual relationship with. You signed up to have a debt with them and to have it handled in various ways when you don't pay.

You don't have any such relationship with plantiff's insurance company. What is THEIR authority (not some other company that have an established relationship with) to send a supposed debt to collections?

Suppose your neighbor backs into your mailbox. Can you send him to collections?
I follow what you are saying. But lets add a twist. What if both parties have the same insurance company?
Earl is correct that an insurance company cannot obligate their insured to pay anything. They can't spend your money. What would happen in the above scenario where both parties are insured by the same company? It depends on what state law and your insurance contract says they can do. An insurance company can settle a claim for more than the policy limits. They might do that. If the other party has under-insured motorist coverage, that might kick in. Can they sue their own insured on behalf of their other insured? That's a conflict of interest, I think, and I don't know the answer. Perhaps an insurance lawyer will read this and tell us.

junior
Posts: 749
Joined: Wed Sep 10, 2008 6:14 pm
Contact:

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by junior » Tue May 08, 2018 9:40 pm

Jags4186 wrote:
Tue May 08, 2018 9:39 am
No job, $100 in the bank? I'd simply tell them the situation, you can't pay, you have no ability to pay, and they can send it to collections. I would even tell them if you get the ability to pay you'll reach back out to them but for now there is no money to give them.
I think this is the most logical option. Think of it this way: What's the downside of OP ignoring the problem entirely? It seems to me there's very little.

It would seem that given the low amount of money at stake, ($2000) hiring an attorney wouldn't make sense. If OP is able to find one who would work for free (pro bono), great, but I have no idea what the odds of that are for a situation like this.

But the people in this thread saying OP should actively address this problem have not demonstrated to me "downside risk" of OP ignoring the issue and hoping it goes away. If there's little downside risk of ignoring the problem then that might be the best option.

Rupert
Posts: 3444
Joined: Fri Aug 17, 2012 12:01 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Wed May 09, 2018 8:41 am

junior wrote:
Tue May 08, 2018 9:40 pm
Jags4186 wrote:
Tue May 08, 2018 9:39 am
No job, $100 in the bank? I'd simply tell them the situation, you can't pay, you have no ability to pay, and they can send it to collections. I would even tell them if you get the ability to pay you'll reach back out to them but for now there is no money to give them.
I think this is the most logical option. Think of it this way: What's the downside of OP ignoring the problem entirely? It seems to me there's very little.

It would seem that given the low amount of money at stake, ($2000) hiring an attorney wouldn't make sense. If OP is able to find one who would work for free (pro bono), great, but I have no idea what the odds of that are for a situation like this.

But the people in this thread saying OP should actively address this problem have not demonstrated to me "downside risk" of OP ignoring the issue and hoping it goes away. If there's little downside risk of ignoring the problem then that might be the best option.
The downside risk is that they sue him, get a judgment, and garnish his wages. That's not a good way to start a new job (OP said he recently lost his job, so I'm assuming OP will be looking for a new one).

Jags4186
Posts: 2257
Joined: Wed Jun 18, 2014 7:12 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jags4186 » Wed May 09, 2018 9:58 am

Rupert wrote:
Wed May 09, 2018 8:41 am
junior wrote:
Tue May 08, 2018 9:40 pm
Jags4186 wrote:
Tue May 08, 2018 9:39 am
No job, $100 in the bank? I'd simply tell them the situation, you can't pay, you have no ability to pay, and they can send it to collections. I would even tell them if you get the ability to pay you'll reach back out to them but for now there is no money to give them.
I think this is the most logical option. Think of it this way: What's the downside of OP ignoring the problem entirely? It seems to me there's very little.

It would seem that given the low amount of money at stake, ($2000) hiring an attorney wouldn't make sense. If OP is able to find one who would work for free (pro bono), great, but I have no idea what the odds of that are for a situation like this.

But the people in this thread saying OP should actively address this problem have not demonstrated to me "downside risk" of OP ignoring the issue and hoping it goes away. If there's little downside risk of ignoring the problem then that might be the best option.
The downside risk is that they sue him, get a judgment, and garnish his wages. That's not a good way to start a new job (OP said he recently lost his job, so I'm assuming OP will be looking for a new one).
What is the alternative? He has $100 to his name. He should be more worried about what he’s eating next week than some insurance claim.

Rupert
Posts: 3444
Joined: Fri Aug 17, 2012 12:01 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Wed May 09, 2018 10:04 am

Jags4186 wrote:
Wed May 09, 2018 9:58 am
Rupert wrote:
Wed May 09, 2018 8:41 am
junior wrote:
Tue May 08, 2018 9:40 pm
Jags4186 wrote:
Tue May 08, 2018 9:39 am
No job, $100 in the bank? I'd simply tell them the situation, you can't pay, you have no ability to pay, and they can send it to collections. I would even tell them if you get the ability to pay you'll reach back out to them but for now there is no money to give them.
I think this is the most logical option. Think of it this way: What's the downside of OP ignoring the problem entirely? It seems to me there's very little.

It would seem that given the low amount of money at stake, ($2000) hiring an attorney wouldn't make sense. If OP is able to find one who would work for free (pro bono), great, but I have no idea what the odds of that are for a situation like this.

But the people in this thread saying OP should actively address this problem have not demonstrated to me "downside risk" of OP ignoring the issue and hoping it goes away. If there's little downside risk of ignoring the problem then that might be the best option.
The downside risk is that they sue him, get a judgment, and garnish his wages. That's not a good way to start a new job (OP said he recently lost his job, so I'm assuming OP will be looking for a new one).
What is the alternative? He has $100 to his name. He should be more worried about what he’s eating next week than some insurance claim.
Well, he could work with the insurance company or the not-at-fault party to pay the $2000 over time, when he has money. He could charge the $2000 to his credit card. He could borrow the money from friends or family. He could sell other assets to get the money. I'm not saying he should do any of those things, but they are options.

Jags4186
Posts: 2257
Joined: Wed Jun 18, 2014 7:12 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jags4186 » Wed May 09, 2018 11:00 am

I think sometimes people who have truly don’t understand the dilemma of the have nots.

Personally, if I were the OP I would not waste a second with this until my 4 walls were set and stable.

User avatar
Epsilon Delta
Posts: 7430
Joined: Thu Apr 28, 2011 7:00 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Epsilon Delta » Wed May 09, 2018 11:45 am

Jags4186 wrote:
Wed May 09, 2018 11:00 am
I think sometimes people who have truly don’t understand the dilemma of the have nots.

Personally, if I were the OP I would not waste a second with this until my 4 walls were set and stable.
One of the problems of the have nots is that if they do get ahead this type of problem comes out of the woodwork and knocks them back down.

If the OP improves his circumstances in the future it would be better to owe $2000 rather than $2000 plus court fees and collections fees and interest. That is why it is worth his time dealing with this now, and why it would be good to take specific advice from a pro-bono lawyer or citizens advice bureau rather than simply ignore it.

Rupert
Posts: 3444
Joined: Fri Aug 17, 2012 12:01 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Wed May 09, 2018 11:53 am

Epsilon Delta wrote:
Wed May 09, 2018 11:45 am
Jags4186 wrote:
Wed May 09, 2018 11:00 am
I think sometimes people who have truly don’t understand the dilemma of the have nots.

Personally, if I were the OP I would not waste a second with this until my 4 walls were set and stable.
One of the problems of the have nots is that if they do get ahead this type of problem comes out of the woodwork and knocks them back down.

If the OP improves his circumstances in the future it would be better to owe $2000 rather than $2000 plus court fees and collections fees and interest. That is why it is worth his time dealing with this now, and why it would be good to take specific advice from a pro-bono lawyer or citizens advice bureau rather than simply ignore it.
+1. Ignoring these sorts of relatively minor problems is exactly how the "have nots" (not my term) get into major financial and legal trouble that is harder to recover from. I've worked in public interest law almost my entire professional career, and, Jags, while your intentions may be good, your advice is awful.

RAchip
Posts: 256
Joined: Sat May 07, 2016 7:31 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by RAchip » Wed May 09, 2018 11:55 am

There is no "debt" that can be collected from a negligence liability claim until there is a judgment from a court finding liability and damage.

Did the at-fault insurance policy pay the other side an amount in excess of the policy and is trying to collect the difference from its insured? That makes no sense. Wouldnt this be covered by the non-at-fault underinsured motorist coverage?

Rupert
Posts: 3444
Joined: Fri Aug 17, 2012 12:01 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Rupert » Wed May 09, 2018 11:59 am

RAchip wrote:
Wed May 09, 2018 11:55 am
There is no "debt" that can be collected from a negligence liability claim until there is a judgment from a court finding liability and damage.

Did the at-fault insurance policy pay the other side an amount in excess of the policy and is trying to collect the difference from its insured? That makes no sense. Wouldnt this be covered by the non-at-fault underinsured motorist coverage?
OP never came back and told us what really happened. So we don't know the answers to your questions. We're just arguing with each other at this point. But, yes, if the other driver had UIM coverage, it may have kicked in. The insurance company may have settled for more than policy limits. The other party may be threatening to sue OP for the difference. We just don't know. We don't even know what state OP is in so don't know what law governs the situation.

Jags4186
Posts: 2257
Joined: Wed Jun 18, 2014 7:12 pm

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by Jags4186 » Wed May 09, 2018 12:40 pm

Rupert wrote:
Wed May 09, 2018 11:53 am
Epsilon Delta wrote:
Wed May 09, 2018 11:45 am
Jags4186 wrote:
Wed May 09, 2018 11:00 am
I think sometimes people who have truly don’t understand the dilemma of the have nots.

Personally, if I were the OP I would not waste a second with this until my 4 walls were set and stable.
One of the problems of the have nots is that if they do get ahead this type of problem comes out of the woodwork and knocks them back down.

If the OP improves his circumstances in the future it would be better to owe $2000 rather than $2000 plus court fees and collections fees and interest. That is why it is worth his time dealing with this now, and why it would be good to take specific advice from a pro-bono lawyer or citizens advice bureau rather than simply ignore it.
+1. Ignoring these sorts of relatively minor problems is exactly how the "have nots" (not my term) get into major financial and legal trouble that is harder to recover from. I've worked in public interest law almost my entire professional career, and, Jags, while your intentions may be good, your advice is awful.
I didn’t say ignore it, I said he should let them know the situation and then move forward. Suggesting “borrowing money from a family” member only to likely stiff them does not sound like good advice to me. You may have worked in this field but doesn’t mean you’ve done good work.

Cheers.

User avatar
LadyGeek
Site Admin
Posts: 46769
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: [Car accident claim exceeds coverage, send to collection agency?]

Post by LadyGeek » Wed May 09, 2018 3:22 pm

This thread has run its course and is locked (topic exhausted). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Locked