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I understand that bills are sold to collection agencies if they are unpaid. But what about very small bills then? For example, say if there is a bill of less than $10.00, will the company bother to sell it at all? What will happen if the small bill remains unpaid?

Edit: Does failing to pay such small bills affect one's credit score?

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    It might be written off, or it might be sold for computerized auto-collection. I've seen both happen. – RonJohn Aug 15 at 21:07
  • Thanks @RonJohn! What does computerized auto-collection mean? – Zuriel Aug 15 at 21:08
  • Letters are mailed to you demanding money, instead of someone phoning you and demand the money. While a human might say, "$10 isn't worth my time", the computer doesn't care: it takes an input file full of debts -- no matter how trivially small -- and addresses and sends them out. – RonJohn Aug 15 at 21:14
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    Computer programs can be extraordinarily persistent and brain-dead. As long as it's not paid, it stays in the "unpaid debts" file, and they send it out the next month, escalating to more and more frequent automated phone calls, etc. – RonJohn Aug 15 at 21:21
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    "but it costs them a few cents to send each snail mail" Maybe the computer programmer (or the person who specified the design) wasn't smart enough to think of that. – RonJohn Aug 15 at 21:47
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Legally many things could happen, the lender could sue you, sell the debt to a collections agency (Possibly aggregated with many other small debts). They could call, mail or otherwise bother you to pay or they could report you to credit agencies.

However all these actions cost the lender expenses which they may or may not be able to recover from you. In the worst case (for you) they could sue you or send the debt to a collection agency who would then bill for you the debt itself and also their expenses for collecting it. These will sometimes be awarded by a court to the collector depending on circumstances.

More likely you will receive mail or robocalls demanding you pay, these could be as little as once a month or even every day if they are determined, but they may not bother if the debt is very small and the costs of doing so exceed it. They also could report you to the credit bureaus to damage your credit report, but this also costs them something.

However if the debt is only a few dollars it is also possible they will just write it off and not bother trying to collect. This doesn't make it legally go away immediately but it will eventually likely roll off due to statute of limitations rules for loans.

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