Wednesday, January 25, 2012

But I PAID That Debt OFF Already! *^&$%#&&!@

I took the advice of people I trust and spent a good part of 2010 working double hours in order to pay off debt. I paid off nearly $40,000 in a little over a year. I rarely got to hang out with my beloved family but in the long run, this act benefited all of us.

I'll share with you what I did wrong in hopes to help you avoid similar problems. You see, the creditors are beginning to call full year later. I get the joy now of trying to figure out if the debt they are calling about is legitimate or is it a debt I paid off and some smarmy collector sold the debt to make more money, conveniently forgetting to mention it had been paid in full to the new collector. Let's face it, collectors aren't known for scruples.

Mistake #1- I use an online money management program to keep track of all my financial transactions. Much like the old Quicken, the program neatly organizes transactions into chosen categories which makes quick work of very helpful trending charts. Using this software isn't the mistake, after is free.

I used and overall, after three years of using them, have only a few complaints. It is a free service so I can't complain much but...when you lose financial data...well, it sucks. (Side note: always have a backup of your financial data.)

Through one small mouse click of a button, I accidentally wiped out all my data for about one solid year. I was no longer using a local credit union and decided it was time to delete their account from my Mint program. Little did I know that by deleting the credit union as an "account", it would also delete every transaction associated with that account. Ouch.

Therein lies my main complaint with Mint AND the main issue I'm having in trying to prove I have already paid these debts. With no backup data from Mint, I'm left with browsing each bank's website and looking for payments.

Mistake #2- I didn't know until this point in the prove-your-debt game that banks now only keep the last 1-2 years worth of data online. If you want to see your transactions from more than two years ago, you can't do it from the comfort of your own home. I'm guessing I'll have to call the bank and either sit down with them at a desk terminal OR order up some annual paperwork package which they'll no doubt charge me for.

I supposed there might still be people out there who haven't opted for electronic everything. If you still get monthly bank statements in the mail then you would get the joy of digging it all out and sifting through it. I attempted to cut down on paper clutter and opted for electronic billing many years ago. Either way, I feel like I'm having to prove my innocence all over again with these collectors.

Mistake #3- Once credit cards were paid off, I happily cut them into little tiny pieces and discarded them.  I won't describe the dancing part.  What I should have done was use a black sharpie pen to mark the date paid off on the card, who i paid it to, etc and filed the card.  With the debt being sold mutliple times, or if you have mulitiple cards with the same credit card company, it becomes even more difficult to figure out what the original debt actually is from when you are talking to the collector. Save your paid off debts in a file with extensive notes.

Mistake #4- ignore the little debts. Yup, I did it. Slap me. I am now the proud owner of one little credit DING on my credit report from my local phone company because I didn't pay $53 in past fees.  Oh they called me alright.  I told them it was a three year old debt, I have no proof I owe it, and I AIN'T PAYING IT. Of course, they didn't argue on the phone. They don't really care.  I bet it took that collector all of five minutes to sling that rediculous little debt ding on my credit report.  Now I'm tarnished with a negative mark for what...five years? My point? Pay the little debts, even if you might not agree.  $53 is NOT worth a credit ding.

So, for the rest of this week, I'll be dealing with a photo radar ticket from three years ago that just raised its ugly head yesterday.  I also have a medical bill that popped up out of nowhere for the birth of my 5th daughter...born in 2008.  I'm hoping that at some point, wayyyy in the distant future, I won't have to deal with creditors anymore.  That is possible...right?



  1. Anything is possible, I hope the mess gets straightened out easier than you think. Debt is a two-edged sword ...on the one side, you have to worry about finding the money to pay it and on the other side, you have to worry about keeping track of proof that you paid ...forever. I haven't done it myself yet, but I've been thinking about getting one of those online backup subscriptions like Carbonite. I know it's a monthly cost, but it might be helpful in a situation like this.

    I hope things are resolved as quickly and painlessly as possible for you.

  2. Install an inexpensive removable back up hard drive.
    Back up ALL your transactions, every day!
    Remove the device after backup.
    Store it in an EMP proof canister.
    If TSHTF, you will always have a whole set of your files and critical information...forever.
    Cheap insurance!


  3. Hb - debt is so frustrating but...I caused it. So, I'll deal with it. Thanks for the kind words.

    Notutopia- I actually DO have a backup system. I have paid for server space for about ten years now. I used to build websites and sell them so I was constantly using servers. I have kept a personal hosted server with and keep my irreplaceables (is that a word?) there. Mostly my family photos. I would be devistated if I lost those. It costs $9.95 a month.

    I've just never gotten OUT of debt before and didn't think the whole process through. I thought once you paid off the debt, the worry was over. I never dreamed of them coming back for seconds. Lesson learned.

  4. i do not owe anyone, and it feels great. My philosophy is to not purchase any thing I couldn't afford. 100% down and zero monthly payments is what I like and I don't care if that ruins my credit score.

  5. I've already pulled out a number of loans that I know will come back and bite me before long, but I know it's for a good cause. However, I try very hard to learn from the "mistakes" of others when it comes to the tedious-ness of credit.. I appreciate the post.

  6. Been where you are, been through the same thing. Make them send you IN WRITING the details about the dept they "claim" you owe. It's not up to you to prove it until they tell you what it is for. AND if it is legitimate. Contact the original company and demand that you pay it off with THEM!!

    I owe one bill, it came in today for the phone. Going to pay it online as soon as I hit PUBLISH.

  7. One of the greatest joys of life is being owned by credit card companies and creditors. It's the American to speak.
    Although online transactions are the norm, you can't depend on them to be accurate by any means. Yours is a sad story, that simply by a click of the button, all data and transactions were lost. This leaves you with "chasing the paper trail". Good luck.

  8. Even though I get some of my accounts online only, I always save them and usually print them out. At the very least, save them to CD's or thumb drives, etc. When I close an account, I take its file folder out of the file cabinet and write on the outside the date closed etc and it is then saved in a water resistant tote. A fire, then it is gone, but then they would be the least of my worries.
    We have never been in arrears on any account although we were falsely accused of it when our timeshare (stupid tax, but that is another story) payment was lost either by USPS or the handling company. No late letter, nothing, 10 days late and a collection agency calls. I gave them sheol, sent them the proof of my payment, and then paid it off immediately (keeping the docs of course).
    Good luck with all of this. As Ben in Texas says, make THEM prove you owe it and keep looking for your documentation. The collection agencies are mostly inept, money grubbing scum and they hire idiots to work for them.

  9. Just found your website last week. I have been enjoying reading it.

    I just wanted to mention a few things to you in regards to debt collectors.

    NEVER do business over the phone. Demand that they send the alleged proof of debt to you in writing in the mail. If it is a third party debt collector, send them a letter demanding the proof of claim. This is usually a contract with your signature on it. If they cannot provide that contract, then they are a third party debt collector and you do not have a debt with them. Do not agree to anything over the phone. The calls are recorded and are admissible in a court. They can be construed to be a contract and your agreement can be taken as a signature.

    Check your credit report yearly. ANYTHING that is negative, even if it is true, should be challenged in writing. The reason you challenge the true things is to make sure the credit reporting agencies have the proper documentation for the credit ding. If the third party debt collectors do take a pot shot at your credit, challenging it and demanding proof of claim with the three agencies will clear it. Keep doing this until all problems are taken care of.

    If the bill is an old bill from a legitimate organization, still demand the contract with your signature through the mail. Tell them that you would be happy to pay what is owed if they submit the proof of claim to you in writing.

    Lastly, ALWAYS do return receipt requested and certified mail when dealing with these people. They are shady and will try to state that they never received your correspondence to try to get you to give up and just pay them. Never just pay them. There is a notorious debt collector located in Virginia called RCS. It is rumored that the two owners take home over a MILLION dollars a month each from this 'business'. It the real world it would be called extortion and theft, in the fictional world we inhabit is is just smart business.


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