What To Do Instead Of Paying A Collection Agency

Dealing with collection agencies is a truly unpleasant experience, but just how did your debt become the collection agency’s business in the first place?  Most of the time, a creditor (such as a hospital credit card company, or any other entity from which you have consented to receive services in exchange for payment) sends your debt to a collection agency after you go four months without making any payments, despite the creditor’s efforts to contact you and seek payment.  Interactions with collection agencies are often so unpalatable that consumers refuse to pay them on principle; paying a collection agency is more humiliating than remaining in debt.  A Jupiter debt lawyer can help you find the best options when your debts have gone to collections.

Negotiating With the Original Creditor

When you get a notice from the collection agency, you should contact the original creditor.  Many collection notices identify the creditor that referred your debt to them.  Even if the notice does not name the creditor, the collection agency is required to provide the identity of the original creditor to you if you ask.  Instead of immediately paying the collection agency, you should contact the creditor and ask them if they still own the debt or if they have sold it to a collection agency.

If the original creditor still owns the debt, try to negotiate a settlement with them, whether it requires you to pay in a lump sum or installments.  If the creditor has sold the debt to the collection agency, try to convince them to buy it back.  Tell him that you are prepared to pay as much as you can, and you would rather that the creditor get the money than the collection agency.

Discharging the Debt in Bankruptcy

It is possible to discharge many types of consumer debt in bankruptcy.  If you are despairing of being able to pay the debt, contact a bankruptcy lawyer and find out whether it is possible to make the debt disappear by filing for bankruptcy.  Filing for bankruptcy does not enable you to get rid of tax obligations or child support payments (you still have to pay your ex-spouse, even if your kids have reached adulthood), but by discharging other debts, it may free up funds for tax debts and child support.

Is It Ever a Good Idea to Pay a Collection Agency?

If you have enough money to settle the debt (even if it is for less than the original amount you owed), and the collection agency refuses to buy the debt back, paying the settlement amount to the collection agency may be your best option.  Be sure to request a letter from the collection agency certifying that you have settled the debt, so that you can show it to credit bureaus in the event of a dispute.

Take Charge Instead of Ignoring Collection Notices

Whether or not to settle a debt with a collection agency depends on your circumstances and those of the debt.  Contact Nowack & Olson, PLLC in Jupiter, Florida to discuss your case.

Resource:

equifax.com/personal/education/covid-19/debt-collectors-vs-creditors/