On a debt collection agency's letter, what does “balance” refer to?
"Without more info to go on (such as a screenshot of the relevant portion of the statement or what country you're in), I will run with the answer that ""balance"" is the amount the collection agency is attempting to collect from you, including any and all fees the agency may have added. One important idea to keep in mind is that depending on how old the debt is, the amount involved, and the importance to the agency to collect it, you may be able to negotiate a settlement for less than the full amount.  This isn't always possible, but sometimes you get lucky, and it doesn't hurt to try. Collection agencies work in several ways.  Some will actually buy the outstanding debt from the original creditor for some percentage of the debt's face value and then take their chances on whether they collect anything at all, while others work on behalf of the creditor and earn some percentage of what they manage to recover.  In the latter case, your chance of negotiating a reduced amount is better, because the agency is being evaluated by the creditor on how quickly and efficiently they collect debts.  An agency that is slower or less effective than another is less likely to continue earning the creditor's business. I hope this helps. Good luck!" The balance is the amount due.
"The term for money owed to you by a company would be a credit balance.  Consider, when an item is credited to your account, it's in your favor. Whereas, money you owe to a company may be referred to simply as a balance, or balance owing, or less frequently a debit balance.  A related term balance due would be the payment you owe in the current period, i.e. not representative of the entire amount owed. I don't think the terms ""positive balance"" or ""negative balance"" are considered idiomatic in business.  Rather, accounting terms like debit and credit have taken hold instead – and are often a source of confusion. But I suggest that if you have a negative balance on a credit card, it's a credit balance in your favor.  Unless they mix it up." I too was very confused when I tried to be tricky and paid down my balance BEFORE the bill date. I thought this would be a great thing because it would show my utilization near zero percent. The opposite happen, it dropped my credit score from 762 to 708. Here is the best example I can come up with when it comes to utilization. Lets pretend you are an insurance company and you trying to figure out who are the best risk drivers. The people that drive 10% of the day are a better risk than the people that drive 50% of the day. The people that drive 50% of the day are a better risk than the people that drive 90% of the day. Here is the rub when people drive 0%. When you look at the people at 0% they appear to be walking, busing or flying. What they are NOT doing is driving. Since they are not driving (using Credit) they are viewed as POOR drivers since they are not keeping up on their driving skills. (Paying bills, watching how they spend, and managing their debt). So, now before the billing date I pay down my balance to something between 5 to 10% of my utilization. After the bill is issued, I pay it off in FULL. ( I am not going to PAY these crazy interest rates). What shows up on my credit report is a person that is driving his credit between 5 and 10% utilization. It shows I know I how to manage my revolving accounts. I know it's dumb, you would think they reward people that have zero debt, I don't hate banks I hate the game. ( I do love me some reward points =)) Collections companies buy debt for a fraction of the face value of the debt (as little as 5-7 cents on the dollar), and you can often settle debt for a fraction of the face amount (perhaps 10-25 cents on the dollar). But there are several considerations.  Do you owe the debt (is it a legitimate debt), can you afford to pay the debt, what is the age of the debt (remember, there is a statute of limitations on debt, varies by state), and what are the consequences of non-payment or settlement of the debt. Rather than confirm that you owe the debt, tell the debt collector that you need proof that the debt is yours (you should do this by certified letter).  Be careful not to confirm the debt, or agree to pay it, or make any payments (yet). You said that your doctor ordered the product for you. You said the company sent you a product (you have the product). Once you have confirmed that the debt is yours, you should determine the age of the debt (when was the last time you paid on the debt).  Each state has statute of limitations on debt, depending upon the age of the debt (this is why it is important not to send the collector money until you have verified the debt). You did not state when the debt was incurred (assume under SoL). Ask yourself whether you can afford to pay the debt.  The amount of the debt, and your ability to pay, and whether you want to avoid the time and expense of dealing with the collector (they are trained to be annoying) are all factors to consider.  You should also consider the negative consequences (credit score effects), and whether the cost of a derogatory entry is worth fighting the debt. You did not explain your financial situation; paying the $55 may be trivial, or it may be a hardship. Before you settle any debt, you should send a letter (keep a copy and proof you sent it, certified), and demand that the debt collector provide proof that you owe the debt.  Often this proof does not exist, or is insufficient to gain a judgement (you would need legal help here).  And should a debt collector agree to settle the debt for a lower amount, you need to get that agreement in writing.  Be aware that when you settle a debt, the collector can (and will) send you a 1099 for the portion of the debt which has been forgiven, and can report to the credit bureaus that you settled a debt for less than the full amount (negative mark against credit).  Derogatory credit items will haunt you for years. Decide whether saving $20, $30 or even $55 is worth the trouble.  Probably not. Learn from this. When a company sends you something you did not order, contact them, and send it back or demand they pay shipping, and send them a letter demanding $5/day storage and $20 handling fee to ship it back to them. Disclaimer: Heed the insane ravings of a deranged heretic at your peril... hire a lawyer. Reading stuff like this makes me want to go into the debt collection business. Just send letters to random people demanding money. Sounds like an easy way to make a living. What's your name and address? Just kidding. If they are sending stuff to a Virginia PO Box, close the box with no forwarding address and consider it case closed. If they are targetting you personally in New Hampshire, the best thing to do is to sue proactively before it goes to collection. New Hampshire has strict anti-debt-collection laws. Basically, what you do is go to small claims court and fill out a one-page form. Sue them for $2000, $3000 or whatever is convenient. Do not hire a lawyer. You can do this in 2 hours of your own time. Your grounds are: (1) Violation of the creditor of NH FDCA laws. According to the laws the creditor has to put all kinds of specific stuff in their threat letters. Since they are not doing this, they have violated NH FDCA. Read the FDCA so you know which specific items they are violating. (2) Extortion. Since you do not owe them any money, demanding money from you is extortion which is both criminally and civilly actionable. You sue them for mental anguish due to extortion.  The validity of your claims is irrelevant. You just need to get them in court. There are two possibilities: (A) They fail to show up. In this case you win and they owe you $3000 or whatever. Not only that if they later try to collect from you send a copy of the judgement to the credit bureau or collector or whatever and that is proof you owe them no money. (B) They hire some stooge local lawyer who appears. Accept the court's offer for arbitration. When you go into arbitration with the lawyer tell him you will drop the lawsuit if they send you a check for $500 and a hand-written guarantee from him that you will never hear from his client again. Either way, you come out ahead. By the way, it is absolutely guaranteed that the enemy lawyer will accept your offer in (B) above because the SEO company is already paying him $5000 to show up to answer your lawsuit, and the lawyer does not want to hang around all morning in court waiting for the case to be heard. If he can get out of there in half an hour for only $500 he will do it. -------------------------------UPDATE If all you are getting is calls and the caller refuses to identify themself, then it is definitely an illegal scam. It is illegal in New Hampshire to make collection calls and refuse to full identify who is calling. The phone company has methods for dealing with illegal calls. First you have to file a police report. Then you call Verizon Security at 1-800-518-5507 (or whatever your phone company is). They will trace the call and identify the caller. They you can make a criminal complaint in their jurisdiction unless the call is from Pakistan or something. Run your credit reports for the 3 major agencies to find out which of them have the debt was reported on and initiate the dispute process with each agency that reports the invalid debt. This will cause the person who put it on the report to either prove that it is valid or remove it from your report. Ignoring debt collector calls is not a good option, regardless of whether the debt is valid. They obviously think the debt is yours so their response is naturally to put it on your credit report. In most cases it is a good idea to respond in writing that it is not your debt. I doubt you have much recourse against the creditor. For one thing they DID try to contact you and you dodged them. That is not their fault. Secondly, it is unlikely you would prevail unless you could prove that they maliciously put false information on your credit or through gross incompetence did so. More likely is that they are mismatching you to a debt from someone with a similar name, or there is an accounting error somewhere. Or possibly you owe the debt and no one ever sent you a bill. It happens with medical bills all the time. "A.1 and B.1 are properly balanced, but ""Business Expense"" is an expense, not an asset. The T entries should be timestamped.  The time should be equal to the time on the credit card receipts.  This will make audit and balancing easier. A or B can be used, but if the the business is to be reimbursed for personal expenses, the accounts should be renamed to reflect that fact. More explicit account names could be ""Business expense - stationary"" and ""Personal expense - lunch"" or even better ""Personal expense - cammil - lunch"".  With a consistent format, the account names can be computer parsed for higher resolution and organization, but when tallying these high resolution accounts, debits & credits should always be used. When it comes time to collect from employees, only accounts with ""Personal expense"" need be referenced.  When it comes time to collect from ""cammil"", only net accounts of ""Personal expense - cammil"" need be referenced. An example of higher resolution, to determine what ""cammil"" owes, would be to copy the main books, reverse any account beginning with ""Personal expense - cammil"", and then take the balance.  Using the entries in the question as an example, here's the account to determine ""cammil""'s balance: Now, after all such balancing entries are performed, the net credit ""Personal expense - cammil"" is what ""cammil"" owes to the business. The scheme for account names should be from left to right, general to specific." If one does pay, one should only pay after they get a letter stating such a payment fully satisfies the debt. Then, one should only pay via money order or cashiers check.  Never pay by personal check or credit card.  Send such a payment via certified mail to ensure delivery. As stated in other answers: There might be an issue of honoring your debts, but that doesn't come into play here.  You already didn't pay your debt, and the original owner of the note already took money.  Paying this debt is only money in pocket of the debt collector.  The scammier they are, and the worse they treat you would factor in. Request verification in writing of the debt. They are required to provide this by law. Keep this for your records.  Send them a notice by certified mail stating that this is not your debt and not to contact you again. Indicate that you will take legal action if they continue to try and collect. Keep a log of if/when they continue to call or harass you. Contact counsel about your rights under the fair debt collection laws, but if they keep harassing you after being provided proof of your identity, they are liable. You could win a judgement in court if you have proof of bad behavior.  If your identity is stolen, you are not legally responsible for the charges. However it is a mess to clean up, so pull your credit reports and review your accounts to be sure. "&gt; Or just remember how much you spent. The purpose of my comment was to say the online balance isn't a true balance, not that I had trouble balancing a book.   Except that you rather obviously *don't* comprehend what the meaning of ""true balance"" is.  The balance the bank shows on it's online system (or it's statements) is very much a ""true balance"" **of the transactions the BANK is aware of** (i.e. the ones that have been processed).  That you think the bank should somehow be ""magically aware"" of the fact that you just signed a credit card transaction -- or that you wrote a check and mailed it off to someone -- demonstrate that you lack a fundamental comprehension of the system.  And the ""just remember how much you spent"" as an excuse for not properly (independently) **recording (and mathematically subtracting)** what you have spent...  Is demonstrative of both ignorance AND laziness." I would keep the letter in a file for follow-up, and I would do what you are already planning to do and wait to see what shows up on the credit report. If this does reflect an identity theft attempt, chances are that others will follow, so vigilance is key here. If there is a hard credit check, then you can dispute that on your credit report. If there is not a hard credit check, there is nothing further this credit card company can do to help you anyway. Never speak to a debt collector. Ask them to stop calling you and STOP talking to them. Communicate only via postal mail. Do not react in an emotional way, do not use foul language, etc. If they call you and attempt to harass or intimidate you, note the date/time, name of the caller and nature of the call. Ask them to cease communications via phone and hang up. You're missing alot of detail here. You need to understand: The key to these things is to fully understand the situation you are in and find out what your legal obligations are. "I was amazed to find out that many people think that credit ratings are equivalent across asset classes.   Rating agencies DO NOT and CAN NOT rate assets based on market exposure. There ratings represent the assets idiosyncratic risk, obviously assets that are more exposed to the market have higher risk in a market downturn but higher reward in a boom.    This is pretty well known and documented. The agencies that are paid by debt issuers are there to establish that the asset meets certain established criteria, often this involves the interest rate. Thus, as most people that are familiar with financial markets know, the major CRA's tend to be reactionary, and a much better gauge of actual credit worthiness is the market interest rate. However these ratings do have a purpose for creating standardized practices for governments and other public organizations. Subscriber based CRAs will almost always give much more accurate and detailed information, just as with everything else, if you want something done right, your gonna have to do it yourself.   That said it will be interesting to see how the agencies adapt to Dodd Frank which mandates that their ratings translate across asset classes. Especially since gov debt is in a whole different tax category and thus intrinsically has lower interest rates and thus lower default rates. In the end the rating agencies are just going to have to say... ""well since the interest rate is under inflation we know that it is Aaa..."" lol Thus they are useless. In addition the rating of government debt has less to do with ability to pay back obligations and more to do with (at least in a democracy) political will. How is this supposed to be quantified?" A credit on your account generally means that they owe you money. There could be several reasons for this: The pay button is generally always visible, even if you have a credit on your account. This gives you the option of prepaying your bill, if you choose, and also allows you to pay your bill if there is a database problem and the website is showing you the wrong total.  However, individual companies design their websites in different ways and use different terminology. I recommend a quick call to the energy company. They can tell you if you owe anything. I cannot speak specifically to the Netherlands or the UK specifically, but my prejudice has me believing that there would be more consumer protection in those two countries than that we have here in the the US, certainly not less. Debt collectors mostly do their job by bullying.  Here in the US they are mostly toothless and typically obtain payments when they invoke an emotional reaction.  In your case they are attempting to invoke fear.  Legal action over €400?  Get real.  It will cost them 20 times that to bring action, and they are equally likely to get a sympathetic judge to toss out the case. Now you very well know you should have returned the box, please don't be coy.  If you still have it, you should attempt to return it.  If not you should attempt to settle.  Offer them €80, going no higher than €160.  Get it in writing, that this satisfies the debt and use either a one time use credit card or a bank check/money order. People who provide services like that are called debt councilors or debt advisors. They help you to organize your debts, advise you in prioritizing them and also help you to negotiate or legally challenge any unreasonable levies.