Most small time collections, say from a grocery store, small doctor bill, credit card bills, or other minor random things, do not pursue legal actions. In most cases, they simply harass you personally and report the negative item to your credit reports. At which point you have to then deal with credit repair, which honestly sucks.
The item reported then usually will go through a cycle of sales. Meaning it is sold from collection company to collection company. Which may sound bad, but in the long term is beneficial for you because the more it is sold, the less value it has for its current owner. Always remember, only one collection company can report the item at a time to the credit bureaus. Dispute all others as duplicate accounts.
However, some companies will pursue other actions against you. This usually happens more on big ticket items like expensive computers, installment loans, tax debts, etc. If that happens, they may hire a lawyer to sue you (rare because most times it is not worth the money), they may file a judgement against you for the amount plus interest, or they may file a lien against you. Those are the ones you want to avoid because they are near impossible to get removed from your credit until the statute of limitations runs out. And the SOL runs out from the time the lien or judgement is satisfied, not from the date is was granted. In addition, they could garnish your wages which also is bad.
If you are not sure what actions a company is likely to take, do some research on the matter. Try Googling the company and their collection habits. Speak directly with the company and ask them their collection practice. Remember never to promise or say you have intentions to do anything with the account. Just probe for more info. Ask other people if they have experience with that company. It really does help to know how far you can go in a bind when you don’t have many options.
