Paying interest on a collection

[Irving]

I recently found an old medical bill, called on it, and found it was sent to collections. I called the collection place to settle the account and they are advising me that they've added interest, which is on-going. Am I subject to third party interest? I/we have no agreement with the collection agency.

We're talking $32ish of interest, but it's the principle, blah blah blah.

Is there a way to pay the original billed amount only? Please advise.

[HoneyBadger]

Normally, bills in collections are settled for less than the owed amount, but if you're concerned about your credit score, you should pay it in full, including any owed interest. Be forewarned that debt collectors are scummy folks, and they will try to rape and pillage your accounts. DO NOT give them electronic access to your accounts, under any circumstance. You can send them a check with certified mail.

[Irving]

I'm not worried about a credit score (it's not mine) so much. I'm reading that it is legal for debt collectors to charge "fees and interest," but the amounts are usually limited by the state. The interest doesn't seem out of line in that regard, but the examples used are either for loans, or credit cards, both of which have interest amounts in the original agreements. Since this is a medical debt, that was not originally subject to interest, my question is whether charging interest on that type of bill is allowed by the state.

On another note, I'm trying to negotiate a settlement of the original amount, but they haven't budged so far.

[Irving]

They're being reasonable enough. I'm just paying it. I've blown way more than $32 on crap I didn't need over the years.

[CO Hugh]

Why pay it if its not yours? They can probably charge interest, if none specified 8% a year.

[Irving]

The collection was for a medical bill for the wife, of which we had many last year. So of course it's in my best interest to make sure her financial obligations are met. They told me the interest amount was 8%. Not happy about any interest I didn't sign up for, but less predatory than it could be, given the industry. Sending a check rather than providing financial info.

[Skip]

8%!!!??! I guess that's not payday loan rate, but still.

I think I'm getting 0.03% on my vast fortune I have in the bank. It's so little, they don't even 1099-INT me!

[Dave]

Colorado's Fair Debt Collection Practices Act from 2011 does a decent job in protecting consumers from collection agencies. It lists the rules for licensing and bonding, states prohibited practices and spells out legal remedies. Section 5-12-101 of it states the interest rate is at 8% per annum unless both parties agree to a different rate.

https://apps.americanbar.org/litigation/litigationnews/top_stories/docs/Colorado-Fair-Debt-Collection-Practices-Act.pdf

[Gman]

The collection was for a medical bill for the wife, of which we had many last year. So of course it's in my best interest to make sure her financial obligations are met. They told me the interest amount was 8%. Not happy about any interest I didn't sign up for, but less predatory than it could be, given the industry. Sending a check rather than providing financial info.
I've been there before as well with medical bills that get missed when you're getting a bunch of them. Some medical groups will go to collections in a heartbeat, others are very forgiving and will bend over backwards to help you. Sometimes it's worth it to pay it and move on rather than spending any more time on it. I value my time.