Episode #99: "From Bills to Collections: The Truth About What Happens Next"

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Transcript

Welcome to Fiscal Physical Podcast

Speaker 1 0:01

Welcome to the Fiscal Physical Podcast. Join us each week as we sit down with the founder of Alchemy Wealth Management and author of your Fiscal Physical, Ryan Nelson. Tune in to gain valuable insights and practical tips as we simplify complex financial concepts into digestible lessons. From budgeting to retirement planning, this podcast is your go-to resource for mastering financial literacy.

Aaron Hoisington 0:33

Welcome everybody to this episode of the Fiscal Physical Podcast. My name is Aaron. I am here with Mr Ryan Nelson, founder of Alchemy Wealth Management, one of my good buddies. And Ryan, how's the day going today? My man, it's going well. How's your day going? Not too bad, my man, just living life here. How's?

Ryan Nelson 0:53

business today. Business is great. Yeah, I can't complain, business is really good.

Aaron Hoisington 0:57

That's good man. I'm glad to hear that you do a needed service, I would say, and you do it very, very well, Thank you. Anybody want to check out Alchemy Wealth Management? Highly recommend, just for your financial planning. Is it financial planning? Is that what you would call it?

Aaron Hoisington 1:14

Yeah, yeah, financial planning financial advice, advice, planning, kind of all wrapped into one there. So hopefully you guys have been listening to this podcast since the beginning. If you're just new, I really appreciate you guys checking us out. We drop every Tuesday here, but we cover a variety of topics on here, ranging from increasing people's financial literacy and today, ryan, we're going to be talking about debt collection or collections in general. So the debt man cometh, if you will. So you're pretty fired up about that, oh yeah, oh yeah, I love to hear it.

Aaron Hoisington 1:47

So maybe not the sexiest of topics here, but something people really probably should be aware of, specifically how collections work. I've said it many a time on this podcast. A lot of times you know people hear oh, it gets sent, some got sent to collections. Like, until you actually have something sent to collections, you really don't know what that means. And even if you do, you maybe still don't know what that means. So I think it's a good episode here to bring up, because at some point in your life you'll probably have some sort of debt, whether it be medical, whatever that gets sent to collections. So hopefully you don't. But hopefully, ryan, you can break down for the listeners kind of what that means, the process and kind of how to be the most aware of what to, what to kind of do in those situations or what to expect. So you ready for that?

Understanding Debt Collection Process

Ryan Nelson 2:34

Let's do it All right, let's fire it up, yeah. So let's talk a little bit about when debt goes to collection. So first there's a debt transfer. So when, when payments are missed for an extended period of time, that's when typically we talk about it going to collections and what happens is typically the creditor will sell or assign the debt to a collection agency. So they take the debt from themselves, they assign it or sell it over to the collection agency and then the collection efforts begin. So then the agency is in charge of trying to get this debt from you. So instead, maybe you got the debt from company ABC. Company ABC sells it to this collection agency.

Ryan Nelson 3:10

Now the collection agency owns the debt basically and is now trying to get it from you. So they'll start their collection efforts. They'll try to contact you, call, send you letters, send you emails. They'll take all sorts of efforts to try to recover that balance. Additionally, there's a credit impact. So the collection account is reported to the credit bureaus and that will typically lower your credit scores pretty significantly. They will open up a negotiation.

Ryan Nelson 3:40

So if the debitors can get a hold of you, sometimes they'll negotiate settlements. They'll come up with a payment plan. They'll try to figure out or work through with you some way to at least get some money, which we can touch on that in a little bit later, but that's important to be aware of and even to take advantage of. There can be some legal action. So, if unpaid, to take advantage of, there can be some legal action. So, if unpaid, the agencies can pursue lawsuits that could result in things like wage garnishment or bank levies, depending on the state laws. So even if you just depending on what the debt is and what the state laws are, if you just think you're just not going to pay it and just ignore, it all and say I don't care what it does.

Ryan Nelson 4:22

To my credit, there may be ways that they could engage in some legal repercussion to actually garnish your wage or do a bank levy to actually get their hands on some of that money. There is a statute of limitations, so debt has a legal timeframe for collection through the courts. But this does vary by states and I would be too ignorant to speak to all the different states' regulations right.

Negotiating with Collection Agencies

Ryan Nelson 4:48

So that'd just be something just to be aware of and then look up. In your specific state, I will say, medical debt is sometimes treated a little bit differently. So recent semi-recent credit reporting changes reduced the impact of smaller or unpaid medical collections. And so you know, theoretically, maybe medical claims could impact your credit a little bit less. But coming back to like a financial planning tip and advice, like obviously you know, what we would always be harping on is don't take the debt in the first place, Try to avoid the debt to begin with. A lot of times it's like water under the bridge you already had the debt, Maybe it's already in collections and you're trying to get everything all figured out, and so it's like, okay, yeah, Ryan, we know, but we already have it.

Aaron Hoisington 5:41

I got it.

Ryan Nelson 5:41

Yeah. So I would say, open that communication with the, with the collection agency, and I mentioned before that they are willing to negotiate in a lot of, in a lot of um times, and so I'd say, take advantage of that and don't even always take the first offer they provide to you. So do a true negotiation right and see what you can get the payment down to, and and if you do this early um oftentimes you can prevent some of these negative consequences. So I would say, if you already find yourself in the position with some sort of debt going to collection, open up that communication ASAP, try to start the negotiations and see what you can do to prevent the negative consequences, and you may be shocked at how flexible this really is.

Aaron Hoisington 6:29

Yeah, no, those are all great kind of ways to think about it. It's funny. So so recently I mean I guess semi-recently like uh, uh, my wife had some some a bill go to collections that she just wasn't aware of, apparently, and uh, so we've been working with like the collection agency and like the it's a medical bill that we thought we had paid but the insurance didn't. It's this whole big mess and mess, and so it's really interesting to like one. I do not envy the people who have that job. First off, for sure, respect, mad respect for employment and such too. But man, that would not be my dream job to say the least For sure.

Aaron Hoisington 7:04

It's really interesting. I've gotten to learn a bit more about like cool how that process works. And they're're like it's like cool, we'll set up this payment plan for x amount, like over a you know, to pay off this amount, and you're like, yeah, how about I'd pay this amount? They're like okay, like like it's like one of those things. It's like it. It kind of is shocking like what will actually be accepted, like for certain times, because sometimes people just don't pay it or they don't get the money or whatever. So it's, it's really. You know you never want to get to the point where it gets down to like wage garnishment or certain things like that. Like that. You've kind of let it escalate there. But it is really that open communication, like I said many a time just in life in general is very big.

Aaron Hoisington 7:44

But even if it's with a debt collector who you know, sounds scary, but it's also just like they probably have a job to do here too.

Ryan Nelson 7:52

So, and I think most people are probably shocked and surprised at how flexible it can be.

Aaron Hoisington 7:57

Oh yeah, without a doubt, it's funny to think about. Like, uh, when I first moved to Reno so 2013, I was an intern at a, a, a place called USAC, which is through the university of Nevada study abroad program. And uh, when I was an an intern, I got to work in like the all the different departments and one of them was the billing department. Okay, and they didn't have a lot for me to do, like I. They were like well, you're not gonna, like you know, run our software or whatever. And they're like you're here for like three days in this department. So they had me making like collection calls oh, interesting, like to like the people who just haven't paid unpaid balances on their programs or the trips that they took through them. And I did that for three days and I was like this is horrific. I was like because you call people and they're like no, I paid that. And I was like I don't know if you did or not. It says you didn't.

Aaron Hoisington 8:44

I'd recommend following up through somebody else, it's not through me, but obviously I was like you know that you, you just say like, oh, it might go to collections later. I didn't know if it went to collections or whatever, but it was a. It was a funny kind of insight into that like collector, if you will. So I'll put that on my resume that I was a debt collector at one point. But, um, anything, uh, anything else, ryan, that you can think about, to uh share with the listeners here, just to kind of be the medical debt piece was interesting as far as like, because I feel like that's I don't know if you see that as like the most common one or one of the most common ones Like it's interesting, it doesn't affect your credit as much as like less impact, if you will.

Ryan Nelson 9:23

Yeah, I don't know that I see one being more common than the others, Definitely, I guess. From a collection standpoint it is, I guess, probably one of the more common ones that goes to collection yeah.

Personal Finance: Playground Memories

Aaron Hoisington 9:36

Yeah, there's a lot of debt out there you can get yourself into, but, like you mentioned at the start of this, like obviously we prefer not to get there. Right, that's the best way to kind of prevent it is not do it. But if you're there, like, talk with your professionals and ensure that you get something set up there. But awesome, ryan, I feel good about this. Anything else you want to let the listeners know here? Nope, that covers it All. Right, then everybody hang tight with us, we'll be right back.

Speaker 1 10:01

And now to put the personal in personal finance.

Aaron Hoisington 10:08

Welcome back everybody to this side of the Physical Physical Podcast. I am still Aaron. I'm still here with Ryan and we're going to be, you know, taking a journey back in time here to. Everybody probably has heard of recess or playground time, whatever you want to call it, back in the day. So, ryan, I'm curious what is one of your favorite memories from recess or just on the playground?

Ryan Nelson 10:31

in general, I'm very curious to see what you say here because, yeah, yeah, it's a throwback. Yeah, I probably uh. You know they had one of those big jungle gym things. Sure, uh and uh just playing like tag on that is, uh is probably uh. One of my more fond memories, oh yeah what about you?

Aaron Hoisington 10:50

no, that's. No, that's gotta be, that's gotta jog some people's. But yeah, playing, jumping through that, climbing up on that, oh yeah. Like oh, it's just a blast Absolutely, and it's funny. I there was. I have some good memories of that too, and recently over last year I went back to touch the top yeah, yeah, it is it is puts it into perspective.

Aaron Hoisington 11:18

But back in the day I was like this thing is like the empire state building, it's huge kind of thing. But um, mine also, my favorite memory also, you know, revolves around that. Um, I was at the playground and my, we had like a play group growing up, so it was like eight families that we all get together like once a week and go play. And, um, there was this, you know, jungle gym and it had all this stuff in it and the middle there was like these bars you could hang on and like go to the other side. Now it's probably six or seven, something like that and so I got up there and I was got in the middle and then I just froze up completely and I couldn't do it. I couldn't go back, couldn't go forward and I was just like yelling for my mom.

Speaker 1 11:55

And like.

Aaron Hoisington 11:55

I'm just sitting there hanging, I'm shaking and like, and then like another parent, like saw me and like came over and like got me down, and they're like hey, like, don't do that again, like. Then I was like, oh yeah, absolutely, that was so scary, like. And then, not 30 minutes later, I did the exact same thing, again, and my mom was not happy about that, to say the least. But like I I'll never forget, like the second time, I was like well, this was really dumb.

Speaker 1 12:19

Yeah, yeah, yeah.

Aaron Hoisington 12:20

That's funny.

Aaron Hoisington 12:21

I have a young child at home too, and like you see, like if you tell him no for something, like not to do something, if he really wants to do it, he's probably going to do it anyway. Yeah, and like you kind of have to, you know you have to get stuck on the monkey bars a couple of times to really kind of. But I remember vividly that feeling of like, oh, I'm never going to do this again. And so I don't know if it's just the most, the one that stands out to me, I guess the most on the playground.

Ryan Nelson 12:49

So um sounds like you're still working through that. I am as.

Aaron Hoisington 12:50

I'm sitting here, I'm just like maybe I have some unpacking here to do.

Speaker 1 12:54

How much time do we have on this podcast here?

Aaron Hoisington 12:58

But no, I'd be curious to see what everybody else has out there for us. Let us know what your favorite recess playground moment is. We'd love to hear it poke a little fun at it, probably. But Ryan, what do you got to say? As we end this episode, my man, as always, stay the course.

Episode Closing and Disclaimers

Speaker 1 13:17

Thank you for joining us for the fiscal physical podcast. Until next time, happy listening and, as always, stay the course. If you have a question or topic suggestions, please email us at podcast at alchemywealthcom. If you enjoyed today's discussion, subscribe to the podcast to ensure you never miss an episode and consider leaving us a rating and review on Thank you book on Amazon. We'd be remiss if we didn't mention that personal finance is just that personal. Please don't take anything we say as advice. The preceding content is for informational and entertainment purposes only. It's not an offer or a solicitation, nor should it be construed or relied upon for tax, legal or investment advice. It doesn't consider your personal financial situation or objectives and may not be suitable for you.