While not all municipalities have taken up this private collection agency route we estimate that it will not be long before all municipalities take up this path. Previously it might have been borderline prudent to put off payments for municipal licenses or fines to keep cash flow fresh, doing so now is an extremely dangerous proposition especially if you want to keep a good credit record. 

We strongly recommend that consumers be acutely aware of the situation especially when it comes to municipal fines or yearly license charges. It is indeed a very bad thing if your debt is sold to a collection agency. The first thing that happens is that you will be charged quite a bit more to cover “administrative charges” associated with the collection. The collection agencies will also give you very little notice regarding re-payment periods etc and are quite vicious chasing up what you owe them.

On another note collection agencies are also known to report erroneously to the credit bureaus either intentionally or not. The problem is that getting items removed from your credit report is a long and arduous process. It can take even years to get a single error corrected, even then there is no guarantee that it will happen.

The best defense now is to be aware of what you owe your municipal counsels so that you aren’t drawn into bad credit but these seemingly small items. There is nothing worst than to have your credit score ruined by your kid’s lost library book or your dog’s expired license.

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