Q: I have obtained my credit report and I noticed that an old insurance agency sent my account to collections for $120. I did not cancel my insurance policy therefore they dropped me after failing to pay by the due date.

Can my ex-insurance company send me to collections for not paying for the month in which I was covered? I would like to fight this and get it removed from my credit report. Thank you,

A: It depends on what your contract says. Please read it and see what you were supposed to have done in order to cancel the contract without a penalty. If you were supposed to give them 60 days notice and you simply stopped paying your bill, then you may indeed owe the money.

On the other hand, it could simply be a false debt. Call the collections agency and demand to see a copy of the bill or contract under which they are claiming you owe this cash. If they can’t provide you with anything, you may have grounds to force them to remove this negative information from your credit history and stop calling you.

But, consider the bigger picture. You may be ruining your credit over a $120 bill. The simple fact that this was sent to a collection agency could sink your credit score.

If fighting this bill doesn’t work, then negotiate a payoff in which you pay the bill in full but they agree (in writing) to simply report the sum is “paid in full” on your credit history.

Jan. 19, 2009.