I need some advice on how to deal with a collection on my credit report. About 4 years ago my I had a fire in my apartment while I was cooking (to make a long story short it was basically my fault in that I should have been paying more attention). The kitchen was damaged pretty badly and there was smoke damage throughout the apartment. The apartment management was not willing to let us live in an empty unit while it was repaired/cleaned up. My husband and I had no choice but to move out as we couldn't continue to pay that rent and another rent for a place to live while it was repaired. The apartment kept our security deposit (obviously). A few months later we got a letter from a collection agency saying we owed $7100 for damage and for breaking the lease. We called them and asked them to break down the charges and they told us that it was incorrect and it was actually 2400. We asked for a breakdown and we were sent a letter from an attorney on behalf of the apartment complex stating the it was basically for rent for 3 months while they couldn't rent the apartment. Well, we just didn't do anything about it and it is still on our credit report. I am wondering if this debt is valid. For example, it isn't like I ever admitted fault so hypothetically it could have been a fire caused by faulty wiring, etc. We wanted to rectify the situation at the time it happened but renters insurance only pays for your belongings. I am sorry this is so long but what I am wondering is if I should just pay this or what. I read something on another board saying to write a letter to the collection agency asking for written proof and documentation that the debt is ours. Is this something I should do? I asked this question before on another board and no one responding. I appreciate any advice or suggestions anyone could give me.
RE: need help on coll acct (Lo Renter's insurance typically comes with some small amount of liability insurance just to cover situations like you describe. In addition, your landlord (unless he's a complete fool) probably has fire insurance. So he should have filed a claim with his insurance company who then would have subrogated against your insurance company if they thought you were liable for the fire. In addition, your renter's policy probably had some provisions about paying for alternative housing if your unit became uninhabitable for whatever reason. Given that this happened 4 years ago, none of the insurance companies will want to hear about it and won't do anything about it. What you can do is demand to know if the landlord filed a claim with his insurance company and got compensated for the un-rentability of the unit. He cannot collect from you and the insurance company. You should write back to the collector and demand documentation of the amount due. It may be that this debt, if it's 4 years old, is nearing the statute of limitations and they are giving it one last shot. What you might want to do is try to settle with the collection agency for less than half. Anything they get out of you in found money. If you do decide to settle, get an agreement with them upfront that once you pay the amount you agree on, that the negative item will be removed from your credit report. Get this agreement in writing from them and signed by someone with the authority to do so (the manager or owner of the collection agency) before you pay them anything. This then become a binding contract. If you pay them the amount agreed to, they must remove the item from the credit report or they will be liable for damages. Make sure the agreement covers "all Consumer Reporting Agencies to whom this matter was reported or to whom this matter may potentially be reported." Good luck.
RE: need help on coll acct (Lo Thank you so much for your advice. I forgot to mention that they haven't actively tried to collect on this for the last 2 1/2 years. I am wondering if my first plan of action should be to just write a letter asking them to send me documentation of the debt? What do you think? Like I said, I read somewhere that they probably wouldn't have it. Also, even if they do, should I ask for proof that the apartment's ins. policy didn't cover the cost for loss of rent? I'm just wondering if you think I should try that before offering to pay for deletion. Thanks again.
RE: need help on coll acct (Lo Yes, I would ask them to send you documentation of the debt. All they really would have to do is produce a signed copy of your lease though. I would definitely ask them to demonstrate that the insurance company denied their claim for "loss of use". Most property insurance covers "loss of use" for a certain period of time because a property was rendered unihabitable because of some covered casualty (such as a fire). If you were the owner of a house, this would cover alternative living accomodations (hotel), meals, and incidentals while you were displaced from your home while repairs were being made. In the case of the landlord, it would cover the loss of income from not being able to rent the unit because it was uninhabitable due to a covered casualty. In summary, I think they're case for trying to collect from you is tenuous at best, but I have no idea what the provisions of your lease were, what the provisions of your renter's insurance policy were, the provisions of the landlord's property insurance, or the laws of the state/city in which this incident took place. I would suggest you seek out assistance from a local tenants organization for specifics.
RE: need help on coll acct (Lo Again, I really appreciate your help. That is what I will do then! If that is the case then all I should really be liable for is the deductible on their policy, right?
RE: need help on coll acct (Lo Technically yes, you should only be liable for the deductable which might be anywhere from $100 to $500. Given that this happened 4 years ago, they may not still have all of the documentation regarding the claim though. It's worth a shot to challenge it on the basis that they are trying to collect from you money they should have collected from their insurance company. Even if the fire was your fault (ultimately), you lease probably had provisions in it about what would happen if the place became uninhabitable in the case of a fire or natural disaster. Any kind of a kitchen fire probably would be messy enough (from smoke damage at the least) to render a place uninhabitable.
