# Allstate canceled my policy due to late payment and sent to colkection



## UberLAguy (Aug 2, 2015)

OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.

Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.

Should I pay?


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## SHalester (Aug 25, 2019)

pay if you like your current credit score.......don't pay and watch it sink.


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## oldfart (Dec 22, 2017)

Assuming this was the payment you missed I’d say pay it

chances are Allstate sold the debt for pennies on the dollar to the collection agency, So Allstate won’t get a penny out of what you pay. What I’ve done in similar situations is to call the creditor (Allstate in your case) to ask if I can pay them directly. if no then I wouldn’t pay the collector


It’s up to you, it really depends on how much you value your credit


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## BigJohn (Jan 27, 2016)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


So, you are asking if you should take responsibility for your (non)actions?

Hmmmmm, you already know the answer...


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## SpinalCabbage (Feb 5, 2020)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


Pay it. It's a legitimate debt and it'll cost you more than $118 in time and effort to fix your credit score if you don't pay it.


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## Christinebitg (Jun 29, 2018)

UberLAguy said:


> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.


Tell them to get stuffed. What is their basis for the $118 ? The collection agency almost certainly has no idea.

If they report it to credit bureaus, you should contact each of the major ones (there are three, last time I checked) and inform them that it's a disputed bill. They have specific actions that they have to take when that information is conveyed to them.

Or as an alternative, you could offer them something less. Their 30% reduction amounts to a total of $82.60 that you would pay them. Get some definition from them about what they'll do if/when you pay them. For instance, you need them to agree to not report it to those credit agencies. At some point, it's cheaper to pay them off than to mess around with it, but you might want to offer them 50 cents on the dollar, assuming they can give you a credible description of you having received some benefits from it -- such as insurance coverage for a specific period of time.


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## Invisible (Jun 15, 2018)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


Before you pay with collection agency, ask them if they reported you to credit bureaus. If not, pay it ASAP before they do. 

Setup auto payments with Geico, so it doesn’t happen again.


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## Chocoholic (Aug 7, 2018)

Depends on what you want to do. There are pros and cons all over the place. Under CA law, a written agreement can be collected for up to 4 years from the last transaction or event related to that debt. (There are numerous events that will restart the clock, including making payments or admitting that the debt is valid in any way. That last one is why collection agencied always record calls.) You could ignore it for 4 years and hope they don't actually file in court. (For that amount, they probably won't.) But, during that period, reports of an account in collections will constantly appear, disappear and reappear on your credit report while the debt gets sold from one collection agency to another.

Or, you can pay it off now and be done with it. BUT, that has risks too. It will put a ding on your credit report, saying "settled for less". It will be a single report that will be there for something like 2 or 4 years (don't remember exactly how long.)

However, you could negotiate a settlement with them, but with some conditions. First of all start with this: "I am NOT acknowledging that the debt is valid or legitimate, but I am willing to discuss a settlement to make it go away. " 

Remember, they bought the debt for pennies on the dollar. If they're offering to settle for 30% off, you could counter for, say, 50% off. You can negotiate the amount as you see fit, but at that price, it'd be worth it at 100% to make it go away.

Now, the most important part. Any settlement must be conditioned on the removal of any and all adverse or negative entries on your credit report already present, and nothing new being added related to this debt, other than "paid in full". Also, there needs to be a penalty clause so that if they don't, they pay you a fee, say $1000. They want the money and don't really care about anything else. AND, IT NEEDS TO BE IN WRITING BEFORE PAYMENT IS MADE!

You can negotiate with them for any variations to this, as you see fit, but that's my suggestion. To me, it would be worth paying the full $118 to have no credit report dings.

My bottom line advice? Pay it off and make it go away. It's not worth the headache of dragging out and extending the clock on when it will fall off your credit report.


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## observer (Dec 11, 2014)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


If it was the last payment, did you have insurance coverage up till the last day of coverage?

I've canceled policies and the insurance company has refunded me money from the date of cancellation forward.


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## Mole (Mar 9, 2017)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


Tell them you piss poor broke and offer them $50 see what happens.


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## UberBastid (Oct 1, 2016)

Mole said:


> Tell them you piss poor broke and offer them $50 see what happens.


Yup.
Collections prolly paid ten cents on the dollar.

Make an offer ... a "My lawyer says I should just include it on the bankruptcy we'll be filing next month. Or ... a right now, once in a lifetime payment of fifty bucks."


.


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## Big Lou (Dec 11, 2019)

I opened a policy with State Farm for my U/L driving. When I was done due to Covid, I asked to suspend my policy and then went back to AAA insurance.
Without notice I got a nasty letter from State Farm for a payment demand of $87.00 with threats and all. When I called the Agent, I wasn't his pal anymore.. I asked what that was for since I pay in advance, I got some mumbo jumbo answer.
I told him how much I love his company and can't wait to do business with them again with this practice. 
Of course I paid it... what am I going to do? Risk my credit rating and have to got through the trouble of removing it?
Wasn't worth it. 

*Bottom line...... Insurance companies are not your pals. *


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## GIGorJOB (Feb 29, 2020)

You pay it if you have credit and scores worth preserving, if not, that's up to you. Before you do anything make sure it is confirmed they have not already reported it, don't trust a word these people tell you.

Might want to try to inquire with Allstate and see if you can still make payment with them to confirm if the debt has truly been charged/sold off or not. Could be a scammer.

When these folks call, most try to record and bait you into admitting specifics and confirming certain details which helps them validate the debt and then try to use that against you to enforce and lawfully collect it later on, if you don't pay.

If they agree not to report it in writing if you pay the negotiated on amount, then you could pay it with some sort of confirmation afterwards and simply move on.

Might want to also record the conversation if lawful to do so where you are for extra protection. Would also ask to conduct parts of the transaction and records via mail, email, or fax, etc and use some form of payment that could not compromise you. Although traditional snail mail is a little risky due to the timing and possible reporting.


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## tohunt4me (Nov 23, 2015)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


Wait till it gets offered for $18.oo

Its already hit " Charge off" Dept.
Your credit is screwed.


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## tohunt4me (Nov 23, 2015)

Chocoholic said:


> Depends on what you want to do. There are pros and cons all over the place. Under CA law, a written agreement can be collected for up to 4 years from the last transaction or event related to that debt. (There are numerous events that will restart the clock, including making payments or admitting that the debt is valid in any way. That last one is why collection agencied always record calls.) You could ignore it for 4 years and hope they don't actually file in court. (For that amount, they probably won't.) But, during that period, reports of an account in collections will constantly appear, disappear and reappear on your credit report while the debt gets sold from one collection agency to another.
> 
> Or, you can pay it off now and be done with it. BUT, that has risks too. It will put a ding on your credit report, saying "settled for less". It will be a single report that will be there for something like 2 or 4 years (don't remember exactly how long.)
> 
> ...


If they file, write a hand written rebuttal. Argue at least 3 points. File with clerk of court for $ 30.00.
Never accept registered mail. Never answer unknown numbers.


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## Daisey77 (Jan 13, 2016)

Personally, I would pay it and then beg Allstate to take you back. Do you think you're going to be any happier with Geico😅😂🤣. Not to mention if you don't pay it that will be a lapse in coverage. I don't know about your state but here rates go up triple if there's a gap in coverage but then again Geico do that anyways. good luck😁


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## Christinebitg (Jun 29, 2018)

tohunt4me said:


> Never accept registered mail.


This is a mistake. I live with a trial lawyer. If you don't accept it, there are other ways of having you served, and those you probably won't find out about until there's a judgment against you.


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## June132017 (Jun 13, 2017)

All State is a scumbags for doing this to you. Good to know this. I guess they all do it though. A bunch of leaches on society.


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## Invisible (Jun 15, 2018)

June132017 said:


> All State is a scumbags for doing this to you. Good to know this. I guess they all do it though. A bunch of leaches on society.


Why are they scumbags? I doubt he was just a day or two late. He would’ve received warnings letters to pay and given a date to pay by.


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## FLKeys (Dec 27, 2018)

Most insurance companies will not carry your policy beyond what you paid for. If you are making payments and miss one the policy should be cancelled on the last day you have paid through. A notice of cancellation should have went out for the last day you were paid through and a last day to make payment by to have the policy reinstated with no lapse. 

I see no reason why they would carry it past what you paid for and if they did shame on them.


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## Mad_Jack_Flint (Nov 19, 2020)

Pay All State instead and then tell the collection agency you already paid the Insurance company...


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## UberBastid (Oct 1, 2016)

Christinebitg said:


> This is a mistake. I live with a trial lawyer. If you don't accept it, there are other ways of having you served, and those you probably won't find out about until there's a judgment against you.


It's true.
When I was in real estate working for the evil banks during the last forclosure fiasco I was in and out of court all the time. Sometimes as plaintiff, sometimes as defendant, sometimes as witness ... I didn't mess with service.
I would make an appointment for them to come to me, or I'd meet them someplace.
Evading makes you look bad, and serves no purpose. 

.


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## CaveatLector (Mar 17, 2021)

oldfart said:


> Assuming this was the payment you missed I’d say pay it
> 
> chances are Allstate sold the debt for pennies on the dollar to the collection agency, So Allstate won’t get a penny out of what you pay. What I’ve done in similar situations is to call the creditor (Allstate in your case) to ask if I can pay them directly. if no then I wouldn’t pay the collector
> 
> ...


Paying the creditor directly does not change anything on your credit report.


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## UberPotomac (Oct 8, 2016)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


You should pay the amount due to Allstate . Never to a collection agency . They will take your money and screw your credit .If they refuse, send a certified check and keep records of everything .


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## Chocoholic (Aug 7, 2018)

Also, negotiate a settlement. No matter what price you negotiate, add a requirement that nothing be reported to the credit reporting agencies and all adverse reports are to be removed. Add a penalty clause so that if they don't, they pay you an outrageous amount.


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## _Tron_ (Feb 9, 2020)

This is a revived old thread? At this point maybe someone should ask @UberLAguy what result he achieved. Maybe we could all learn something.

Hopefully in one of the responses it was mentioned that if the bill had already gone to collections, his credit report was already trashed. The best was to fix something like this, in my view, is to get the original creditor to acknowledge the mistake (insurance usually expires if the premium is not paid) and withdraw the delinquent report from the credit reporting agencies. That is the only way to restore the credit to its former stranding. It may take years, and cost thousands of lives, but it's the only way to truly undo the damage.


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## _Tron_ (Feb 9, 2020)

If all else fails you could go burn down your neighborhood Allstate office just to eek out a bit of satisfaction.


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## Stevie The magic Unicorn (Apr 3, 2018)

Since it’s already in collections…

Allstate sold the debt to that debt collection agency. Like others have said for pennies on dollar. They have already written off their loses.

Now the collection agency has said debt that they paid only a portion of. Say $3.00.

They are going to spend $X in labor collecting that bill from you.

If you offer anything beyond $X + $P + $C + $3.00 they will settle and take what they can get.

$P = profit and $C = commission.

Once you understand this equation you understand that you don’t actually have to pay what you originally owed, just enough to make the collection agency happy.

I’d offer $20+ not reporting you to the credit bereaus.


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## kingcorey321 (May 20, 2018)

Progressive . I switched to aaa. Progressive said i must continue to pay the next two months !
I said ow ok sure even though i told you i am switching.
Well progressive put it on my credit report also collections . 
End result i disputed the collections report also told progressive i will sue the shit out of them for this . They lifted the collections report . Also a collection agency is still trying to collect lmao. I told them to kiss my butt its off the collection report .  If you do not know what you are doing it will for sure attack your credit report . 
If you have crap credit ow well who cares ?


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## Diamondraider (Mar 13, 2017)

SpinalCabbage said:


> Pay it. It's a legitimate debt and it'll cost you more than $118 in time and effort to fix your credit score if you don't pay it.


If the debt has been sold, the OP’s credit had already taken the hit.


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## tohunt4me (Nov 23, 2015)

UberLAguy said:


> OK, i have Geico now. But before this I used Allstate. I forgot to follow up with the last payment. They canceled the policy, then I went with Geico.
> 
> Now a collection agency called me and said I owed $118. They are willing to reduce it by 30%, pay or else they report to credit bureaus.
> 
> Should I pay?


"You're in Good Hands" with the Collection Agency.









Pay them or they will create Mayhem !


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## tohunt4me (Nov 23, 2015)

Christinebitg said:


> This is a mistake. I live with a trial lawyer. If you don't accept it, there are other ways of having you served, and those you probably won't find out about until there's a judgment against you.


Never Accept Registered mail .
Don't be friendly with the neighbors( so they won't accept for you)
Learn to spot the servers car from at least 1/4 mile away.
If you do get served, file counter argument on a few points & file with clerk of court. Used to cost $30.00
Makes them have to start ALL OVER AGAIN.
DO NOT ANSWER THE PHONE.
Screen calls with caller i.d. & answering machine.
Never acknowledge your name to an unknown caller.
Hang up when warned call is recorded

" I DONT RECALL" any debt . . .

" I WAS UNAWARE" there was a problem.

Statute of Limitations.
Statute of Limitations is 7 years in most states.

It's about 3 years in California.( On debts)
$60,000.00 " Disappears" . . . Poof*
( The pen IS mightier than the sword)

$130.00 can go away also.


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## Christinebitg (Jun 29, 2018)

tohunt4me said:


> Never Accept Registered mail .
> Don't be friendly with the neighbors( so they won't accept for you)
> Learn to spot the servers car from at least 1/4 mile away.
> If you do get served, file counter argument on a few points & file with clerk of court. Used to cost $30.00
> ...


That's not going to help very much.

First, because you can be served in other ways if you dodge service. Then you'll end up with a default judgment against you.

Unless you have no money and no assets they can attach, this is truly not a good thing. (Here in Texas, they can't seize a house that's your homestead. And they can't garnish wages. In some states, they can.)

Filing a counter claim does not postpone much. It might slow down the discovery process somewhat. The original claim and your counter-claim will be heard at the same time.


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## tohunt4me (Nov 23, 2015)

Christinebitg said:


> That's not going to help very much.
> 
> First, because you can be served in other ways if you dodge service. Then you'll end up with a default judgment against you.
> 
> ...


They can NOT get a default judgement on you for a problem you were ' UNAWARE' of.

Never being served renders you ' officially UNAWARE'.

They must first answer your counterclaim.

The counterclaim will nullify failure to appear criminal charges after being served.

Then you must be served again ,after they respond to counterclaim .

Look, if you leave the country, not even the Federal Government can confiscate your land or property.

The KEY is not being available to the Legal System.


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## Christinebitg (Jun 29, 2018)

tohunt4me said:


> Then you must be served again ,after they respond to counterclaim


Not true.


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## tohunt4me (Nov 23, 2015)

Christinebitg said:


> Not true.


Worked for me . . . .


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## Christinebitg (Jun 29, 2018)

tohunt4me said:


> Worked for me . . . .


Was your claim against them filed as a completely separate lawsuit, maybe even in a different court? Getting the two cases consolidated could reset a bunch of deadlines.

Technically speaking, that wouldn't be a counter-claim, if you follow what I mean. A counter-claim is a claim asserted against the petitioner that is filed as part of the same (original) lawsuit.

A counter-claim would have its own set of discovery deadlines, but service isn't required, because you're already in the lawsuit.


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