- Associated Press - Monday, July 4, 2016

DENVER (AP) - Colorado’s official debt collection agency has not reported people who have avoided paying court-ordered child support and other obligations to credit agencies for a year because of computer problems.

As a result, hundreds of thousands of people who owe the state more than $340 million could be able to keep skipping payments until next year without hurting their ability to borrow money or get the best insurance prices, The Denver Post reports (http://tinyurl.com/zspjgjm.)

Colorado’s Central Collection Services, administered by the state’s Department of Personnel and Administration, hasn’t notified credit-reporting agencies for the past year, and it may be another year before it resumes reporting.

“Finding out that someone else got off while you don’t get a break . hardly seems fair,” said John Lynch, director of the Center for Research on Consumer Financial Decision Making at the University of Colorado’s Leeds School of Business. “That’s similar to the whole wave from the mortgage crisis, of who was underwater, who got a walk-away deal while the other guy was paying his mortgage on time.”

Agency spokesman Doug Platt said officials decided to go ahead with the $7 million computer upgrade after another state agency reported problems with records.

Some state agencies collect debts on their own, including the Department of Revenue and some parts of the Judicial Branch.

Debtors affected by the delays have not been identified.

“The debtors themselves are probably happy about it, but perhaps the business that relies on credit scores are harmed since the scores aren’t that accurate,” Lynch said. “If you’ve chosen not to pay that bill and the impact of that choice isn’t seen, there’s little incentive to pay up.”

Platt said the agency has other means of pursuing payment, including garnishment and the assessment of penalties and interest. He said credit reporting is only one of the tools used by the state to collect money it’s owed.

In the meantime, Platt said anyone who incurs the debt during the reporting blackout and pays before it’s lifted won’t have any mark on their credit history.

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Information from: The Denver Post, http://www.denverpost.com

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