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Mark Cappel
UpdatedMay 16, 2024

Is it true that if I have a sub-$100 debt, collection agents are barred from collecting it and credit bureaus cannot report it?

A friend told me that if I owe less than $100 to a collection agency, by law, I do not have to pay them and they can do nothing about it. Is it true? Supposedly, if I refuse to pay a bill under $100.00, the collection agency cannot send this information to the credit bureau, which means there will not be negative items in my credit report. Besides that they can not call me anymore, or send me letters. Is it true? I live in Nebraska and I would like to know the laws regarding collection agency in this state.

Unless your friend is a Nebraska attorney you should consider the legal advice your friend expressed as nonsense, a "non-law," or urban myth.

Nebraska Law

I reviewed publicly accessible Web sites publishing Nebraska law to determine if that state has a $100 floor to collecting debt. I reviewed the Nebraska Legislature's library of state statutes, the Nebraska Uniform Commercial Code 3-311, and Statute 45-1047: Conduct of a collection agency to see any indication of a statutory limit on the collection of debts. I found none.

I found no evidence that it is illegal to collect a debt less than $100 in Nebraska. However, as an economic issue, it may be too costly for a creditor to collect the debt or file a judgment against a person with a sub-$100 debt, but that does not mean collecting small debts is outlawed.

Credit Score Reporting

Creditors are not legally required to report information to credit reporting agencies. The only requirements made by law are that those creditors which choose to report customer account information report accurate data, and that their reporting be done in a fair and consistent manner for all customers. For example, a creditor cannot report information for only half of its account holders, if all of the customers have the same type of account. Most lenders choose to report information to the credit bureaus to reward consumers who pay their accounts in a responsible manner. The negative credit consequences of falling behind on a debt can also serve as s strong incentive for consumers to pay their debts in a timely manner. In addition, creditors utilize credit reports in their underwriting process, so participating in the credit reporting system, and making as much information about consumers available, is an important business practice.

Unlike larger creditors, many smaller banks and individual lenders choose to not report account information to the credit reporting agencies, simply because the time and cost of reporting the information can be prohibitive given the small number of accounts such lenders may be handling. In addition, many individual lenders may not know how to report payment history and account information to the credit bureaus. Because your mortgage was privately financed, it is not surprising that your loan is not being reported. You will likely need to focus on building other positive trade lines if you are trying to improve your credit score.

Credit Score

Though the creditor has the option to report the debt, if they chose to do so, it will affect your credit score. Basic credit score information is invaluable because this sub-$100 debt will not be the only item on your report. If you have a credit card, mortgage, or other type of loan (car or student), these items will most likely have been reported. It is always advisable to get your free credit score annually to ensure there is no identity theft or reporting errors.


Contact an attorney in Nebraska who has experience in consumer law to verify my finding (or lack thereof). There may be a significant court case that I did not uncover that concerns sub-$100 collections. If the debt is less than $100, save yourself the headaches of annoying collection calls, protect your credit score, and pay the debt.

I hope this information helps you Find. Learn & Save.



Did you know?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Idaho, 14% have student loan debt. Of those holding student loan debt, 6% are in default. Auto/retail loan delinquency rate is 3%.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.