Debts Sold To Debt Collectors. Free Advice. StepChange (2024)

FAQs

Can you dispute a debt if it was sold to a collection agency? ›

Can you dispute a debt if it was sold to a collection agency? Your rights are the same as if you were dealing with the original creditor. If you do not believe you should pay the debt, for example, if a debt is stature barred or prescribed, then you can dispute the debt.

Unpaid debt doesn't go away. Until the debt is either paid or forgiven, you still owe the money. This is true even if it's a credit card debt that is sold to a collection agency and even if you think it's unfair.

Your creditors can transfer and sell your debt to a collection agency without your permission. Creditors may choose to sell a debt — often for far less than it is worth — because they do not believe you will pay what you owe. Selling the debt can help them recoup at least some of their investment.

If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.

If you don't pay a debt collector or collection agency, you'll likely face increasing efforts to collect the debt via phone calls, letters, or even social media contact. Not paying a debt in collections will also hurt your credit score. If you don't pay, the collection agency can sue you to try to collect the debt.

Generally, paying the original creditor rather than a debt collector is better. The creditor has more discretion and flexibility in negotiating payment terms with you. And because that company might see you as a former and possibly future customer, it might be more willing to offer you a deal.

If there are negative items on your credit report but the information is accurately reported, you can write a goodwill letter to ask the creditor or collection agency to remove the collections account from your report. This isn't guaranteed to work, but it won't hurt to ask.

Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.

The California statute is called the Rosenthal Fair Debt Collection Practices Act. Creditors and debt collection agencies are permitted to take reasonable steps to enforce and collect payment of debts. That is because an efficient and productive economy requires a credit process.

Can debt collectors take money from your bank account without permission? ›

Debt collectors can ONLY withdraw funds from your bank account with YOUR permission. That permission often comes in the form of authorization for the creditor to complete automatic withdrawals from your bank account.

Send a 'drop dead' letter

You have the right to ask them to stop contacting you. To do so, you can send what's sometimes referred to as a “drop dead letter” — a written notice to the debt collector informing them you want no further contact. By law, debt collectors are required to follow this request.

The debt trap is a situation where you've been forced to take on more borrowings in order to pay off your existing debts. Eventually, you're stuck in a situation where the debt spirals out of control and exceeds your capacity to pay it off.

If You Owe Money

The creditor will sell your debt to a collection agency for less than face value, and the collection agency will then try to collect the full debt from you.

Your original creditor may be most willing to take your debt back if you have already worked out a plan with your debt collector and begun repaying what you owe. However, there's no guarantee that the creditor will reaccept the original debt.

A charge-off doesn't mean collection efforts will stop. Instead, the new owner of the debt—the debt collector—will continue to take steps to collect on the account.