Can a Daycare Send You to Collections?
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Daycare is extremely expensive. Your family doesn’t have to be impoverished to be greatly impacted by this cost.
You could scrape by month-to-month covering all your expenses, only to one unforeseen situation cause you to have unpaid bills.
You hear a lot about what happens if you can’t pay your mortgage or car loan, but what does happen if you can’t pay your daycare bills?
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Can a Daycare Send You to Collections?
A daycare center can send you to collections if you have not paid. For most daycares, this is a last resort. If you miss a payment, reach out to the daycare center to come up with a solution for re-paying any incurred debts. This way, you can avoid the hassles of dealing with a debt collector.
Looking for a Good Quality Daycare?
Find an affordable and qualified daycare center that fits your needs.
Unpaid Daycare Fees and Collections
I grew up in poverty. It’s not something I love talking about, but it’s the truth. My family couldn’t always afford to pay for meals, much less daycare.
I know what it is like living in a home where money is tight and, at times, non-existent. I am also far too familiar with collections agencies.
Related: Can You Write-Off Daycare on Your Taxes?
When Your Family Owes Money
You may enter into a daycare contract believing you’ll be able to pay all bills fully. Something then happens that makes paying the bill impossible.
It could be a medical emergency, an issue with a paycheck, a sudden job loss, or mishandled funds. Whatever the cause, the result is the same: the daycare fee doesn’t get paid.
Most daycare facilities have contracts that state the amount of the bill and when it’s due. It may offer a grace period of three to five days, after which time an interest fee or late fee is charged. In most cases, your child will not be allowed to continue attending the daycare until the bill is covered in full.
The first thing a daycare will do is contact you to remind you to make your payment. If the payment is still not made, the daycare may kick out your child. Calls will continue, bills and notices will be sent via mail, and eventually, a bill collector may get involved.
Ways You Can Avoid Collections
If you know you’re not going to be able to pay the childcare bill, you should directly confront the issue. You should meet with the manager of the daycare facility to explain the situation and discuss any options you may have.
A daycare is under no obligation to provide a new payment structure, but most are more than willing to do so. Some may allow you to pay via credit card. Some might offer the option to pay smaller amounts on a weekly basis rather than in one lump sum.
Another option is to work off some of the money that is owed. Offer to provide services, like cleaning or landscaping. Many daycare centers will balk at this option, but some may offer it as an alternative to a costly and often frustrating collection agency.
Being Pro-Active With Debt
I know from experience that a collection agency will not stop once they start. The best way to avoid a collection agency is to try to avoid the debt in the first place.
As soon as you realize you’re going to come up short, let the daycare center as soon as possible. Tell them how much you can afford to pay and give them a plan for repaying any outstanding payments.
Find Low-Income Daycares
Another way to be pro-active is to only consider those daycare providers that work with low-income families. These providers often have long waitlists, but they’re accustomed to managing tricky financial situations.
Find Daycares with Scholarships
Yet another option is to seek daycare centers that have scholarships. The nursery school my children attended offered scholarships for needy families, but they weren’t widely advertised. Those who didn’t take the time to ask learned about this excellent service.
Looking for a Good Quality Daycare?
Find an affordable and qualified daycare center that fits your needs.
You Have Options
A daycare center provides a service for a fee. If they’re not paid on a timely basis, it’s their right to send bills to collections.
But just because you miss a payment doesn’t mean it’s immediately going to collections. As you’ve seen you do have options that could either avoid or delay your bill going to debt collectors.
What are some of your tips for paying for childcare? Tell us in the comments.
I like would to pay off my remaining debt but its already been sent to a collection agency so who or where do i send the payment
Reach out to the daycare and see what they tell you. If they let you pay them, get a receipt to have proof in case the collection agency contacts you later. Otherwise, you’ll have to contact the collection agency and pay them. My biggest issue with collection agencies (amongst many things) is the exorbitant fees they’ll try to charge you.