You should pay a bill that went to collections, if you can pay it or even work out payment arrangements with the debt collection agency.
The debt will not go away, although there's a statute of limitations on how long the debt collector has to sue you.
If the debt is large enough the debt collector could take you to court and garnish your wages, levy your bank account and even place a lien on your home or property.
Some debt collectors will even settle for less than what you owed and if you don't pay they will continue to contact you.
If you never pay a bill in collections, it will lead to long term credit damage and the debt can also accrue interest and eventually if the debt in collections is large enough, you could face a lawsuit where the debt collector can take you to court and sue you for the unpaid debt.
A debt in collections will drop your credit score and remain on your credit report for up to 7 years from the date the account first became delinquent.
When this happens, it severe impacts your ability to take out credit cards, rent an apartment, buy a home or buy a car etc or even get certain jobs.
Every state also has a statute of limitations on debt, which is usually 3 years to 10 years on how long a creditor has to sue you over a debt.
If this window of statute of limitations expires, the debt is time barred and the debt collector can no longer sue you, but the negative mark will still remain on your credit report until the 7 year reporting window is up.
If a debt is ultimately canceled or forgiven, the IRS may also consider the forgiven debt amount as taxable income.
I have a $200.00 debt owed to a electric utility that was sent to collections over 10 years ago and nothing has happened, even though I still owe it.
But in the beginning I was called relentlessly and even sent mail relentlessly, but at the time I had no income and now I'm at a point where I don't care about my credit and still cannot actually afford it right now.
The worst a debt collector can do is take you to court and sue you in court to obtain a judgement against you.
If the debt collector takes you to court and wins a judgement against you, the debt collector can by court order garnish your wages, levy your bank account or even place a lien on your property.
The debt collector cannot have you arrested or threaten any jail time for unpaid debt.
But you can be sued for the debt you owed.
However the debt collector does not always take someone to court over debt, especially if it's a debt that is a small amount and not worth the court costs.
If the debt collector does sue you and you fail to appear in court, then the judge can place a judgement against you in the debt collectors favor.
That means that if the debt is true and correct and you owe it, the debt collector will automatically win the judgement against you, if you fail to show up to the court for the lawsuit.
Debt collectors will first try to contact you, through mail and phone to try to get you to pay the debt and may even settle with you for less than the full amount.
Some debt collectors buy your debt for pennies on the dollar and will settle for smaller amounts to get their money back and some profit.
But some debt collectors are simply hired by the companies you owe the money to and won't settle for a smaller amount and in that case, you would owe the full amount.
If the debt goes unpaid and it's a large enough amount, the debt collector will take you to court and seek a judgement against you and if they win the judgement, the court may authorize the debt collector to garnish wages, levy bank accounts and even do property liens.
The judge can force your employer to divert a portion of your paycheck directly to the debt collector until the debt is paid off.
The debt collector can also freeze and seize funds from your checking or savings account with a court ordered judgement.
And they can also attach a claim to your real estate or home, which means they get paid out of the proceeds if you ever refinance or sell the home.
Before or during any legal action, with unpaid debt you face several ongoing penalties and consequences, which include destroyed credit score, relentless contact and accruing interest.
Debt collectors report your debt to major credit bureaus, which include Equifax, Experian and TransUnion, which can also prevent you from securing loans, credit cards, buying a car or even renting a home or apartment.
The debt collector can also legally call you repeatedly, send letters and email you until the matter is resolved.
And the original balance that you owe, can grow significantly due to added interest, court costs and collection fees, assuming your original contract permits it.