Collection agencies never seem to have enough tricks up their sleeves for scheming and lying to debtors.  Most recently, it was brought to my attention by a reader that a collection agency had threatened to have his Washington State Driver’s License suspended if he didn’t satisfy a debt.  Considering the circumstances of the situation, I can see how such a threat may have seemed possible.  But was this a lie – or can a collector use a lawyer to contact the State and suspend your license?

In some states driving a vehicle without insurance is grounds for license suspension, fines, or even a suspended registration.  In the following case, the debtor wasn’t driving the vehicle and therefore such legislation shouldn’t apply to him.  However, the damaged parties have the option of suing the owner of the vehicle for damages, since he failed to maintain liability insurance on the vehicle.

I live in Washington State. My girlfriend rear ended a person (I was the registered owner of the car and was not driving. I know that doesn’t matter) But I didn’t have insurance on the car at the time… Almost a year has passed now and a collection agency is saying I owe $21,000 dollars… I have asked for validation for what they claim I owe. All they sent me was an estimate for car repairs (totaled $350 dollars).  This is not very much damage to a car. I just don’t see how this could have done $21,000 dollars in medical bills to a car that was barley damaged ..

I have talked with the people that she hit and they told me that their medical bills didn’t exceed $4000 dollars. Anyway the creditor says they can’t give me the info on what medial expenses were paid. So how can they prove I owe that much money? Also, they say they are going to have my drivers licenses suspended if I don’t pay. Can they do this in Washington State?

I can’t afford a lawyer right now and I’m stressed out.  Any advice?

There are many layers to this particular situation.  First of all, the collection agency should provide clear answers on paper, showing from where the charges originate.  Their failure to produce any paperwork related to the $21,000 is a good enough reason for the debtor not to pay this bill.  Who in their right mind would pay anything like this? In this case the collection agency was assigned or bought the debt from an insurance company.  Therefore it goes without saying that the insurance company had all of the necessary paperwork related to the claim.  The collection agency’s refusal to produce validation means they are either trying to drive up their percentage of a settlement or they simply don’t have the necessary paperwork outlining the charges (they bought a debt with insufficient paperwork).

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Without the necessary paperwork the collection agency would be unable to achieve a judgment via civil court. This is why the collection agency resorted to scare tactics.  By threatening to have the debtors Driver’s License suspended, the collector hopes to squeeze some money from the debtor.  But since the owner of the vehicle wasn’t driving the car (his girlfriend was) the collector can only seek to force the owner to pay the damages.  It’s the girlfriend who stood to possibly have her Driver’s License suspended.

If the State was going to suspend the license, they would have done so after their initial investigation at the scene of the accident. The collection agency can only pursue this matter in civil court as an attempt to collect a debt. Thanks to their empty threats and faulty paperwork… I suggested this debtor ignore them for the time being. However, a clean credit report may require the work of a law office writing letters on behalf of the debtor.

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