Highlights:
- If you have past due debt that's been sent to collections, you may still be able to negotiate repayment directly with your lender.
- Debt collectors are third-party organizations that buy delinquent debt from your creditor, then keep trying to collect your debt in the full amount.
- 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.
If you have delinquent debt that's been sent to collections, there might be options. In some cases, you may still be able to negotiate repayment directly with your lender.
Working with your original creditor instead of a debt collector can be beneficial. However, this approach won't work for everyone. Find out when you may qualify to bypass debt collectors and work directly with your original creditor to repay what you owe.
What is a creditor?
A creditor is any person or financial institution — such as a mortgage lender, credit card company or bank — that extends credit to a borrower. For example, when you take out a home loan, your mortgage lender acts as your creditor.
When you pay back your credit card's outstanding balance or make your monthly mortgage payment, you're repaying your creditor. If you fall behind on your payments, a creditor may take drastic measures to recoup their money. In some cases, your original creditor may sell your debt — often for far less than the debt was originally worth — because doing so will let them recover at least a portion of their investment.
What is a debt collector?
Debt collectors — also known as collection agencies — are third-party organizations that attempt to recover unpaid debts. Debt collectors purchase delinquent debt from your creditor, then keep trying to collect your debt in the full amount — or at least enough to cover what they paid and turn a profit.
What's the difference between a debt collector and a creditor?
While both debt collectors and creditors may contact borrowers about unpaid debt, there are key differences. Creditors issue loans, credit cards and lines of credit, while debt collectors do not. Debt collectors can only recover an existing debt when working with a creditor to acquire an overdue credit account.
Creditors may attempt to collect your debt immediately following a missed payment. However, they usually wait until you have missed several monthly payments to declare your account a charge-off. This means that the creditor has determined your debt is unlikely to be paid. After your account has been delinquent for a few months, they may ultimately sell your balance to a debt collector.
Why is it helpful to bypass debt collectors?
The debt collection process can have severe financial consequences. If the contract with your original creditor permits, a debt collector may raise your interest rate. They may also charge extra fees, making repayment through a debt collector very expensive.
Plus, a debt in collections will likely be recorded on your credit reports and can have a significant negative impact on your credit scores. This damaging credit information can stay with you for up to seven years.
Luckily, if you act quickly, you may be able to sidestep debt collectors altogether and negotiate a repayment plan directly with your original creditor.
How to bypass debt collectors and work with your original creditor
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. So, if you want to bypass a debt collector, contact your original creditor's customer service department and request a payment plan. They may be willing to resume control of your account and put you on a flexible repayment plan. Keep your discussion polite, and remember to provide a reasonable justification for your appeal.
Still, your original creditor may be unable or unwilling to reaccept your debt, especially if they have already sold your debt to a collections agency.
What to do if you can't pay your debt collector
If your debt is sold to a debt collector, but you are ultimately unable to pay, your best course of action is to contact a nonprofit credit counseling agency or seek legal aid, as the collections process can be lengthy, complex and expensive.
To mitigate future damage to your credit history, remember to act fast. It's important to contact your original creditor as soon as you're unable to make a debt payment. Waiting even a few months can result in a downward spiral that negatively affects your finances for years to come.
FAQs
So, if you want to bypass a debt collector, contact your original creditor's customer service department and request a payment plan. They may be willing to resume control of your account and put you on a flexible repayment plan.
Can an original creditor remove a collection? ›
If you have an excellent credit history, you may be able to get the original creditor or collection agency to remove the derogatory mark as a favor or act of “goodwill.” You'll generally have to pay the collection account off first, though, if you haven't already done so.
How can I get debt out of collections without paying? ›
How can you remove collections from a credit report?
- Step 1: Ask for proof. There needs to be evidence that the debt is genuinely yours to pay for it to stay on your credit report. ...
- Step 2: Look for and report inaccuracies. ...
- Step 3: Ask for a pay-for-delete agreement. ...
- Step 4: Write a goodwill letter to your creditor.
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take.
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.
What is the 609 loophole? ›
2) What is the 609 loophole? The “609 loophole” is a misconception. Section 609 of the Fair Credit Reporting Act (FCRA) allows consumers to request their credit file information. It does not guarantee the removal of negative items but requires credit bureaus to verify the accuracy of disputed information.
Can I deal with original creditor instead of collection agency? ›
If you have delinquent debt that's been sent to collections, there might be options. In some cases, you may still be able to negotiate repayment directly with your lender. Working with your original creditor instead of a debt collector can be beneficial. However, this approach won't work for everyone.
What is the 11 word phrase to stop debt collectors? ›
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.
What happens if you never pay a debt collector? ›
If you never pay a debt in collections, the immediate consequence is a significant negative impact on your credit score. This derogatory mark can stay on your credit report for seven years, affecting your ability to secure loans, credit cards, and favorable interest rates.
Do debt collectors eventually give up? ›
Unfortunately no, not really. You can certainly attempt to ignore your debts, and you may even find there are circ*mstances where creditors and collectors may just give up on trying to collect from you. But that doesn't mean you're out of debt.
One of the most rigorous rules in their favor is the 7-in-7 rule. This rule states that a creditor must not contact the person who owes them money more than seven times within a 7-day period. Also, they must not contact the individual within seven days after engaging in a phone conversation about a particular debt.
How long before a debt is uncollectible? ›
What not to say to a debt collector? ›
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.
How can I get a collection removed without paying? ›
Send a dispute
The FCRA allows consumers to dispute credit report errors and fraud. So, if you check your credit report and discover a collection account that shouldn't be there, you can send a dispute to Equifax, TransUnion, or Experian and ask them to remove it.
Do I have to pay a debt if it has been sold? ›
The debt is still very much yours, and yes, you're still responsible for paying it. What happens is that the original creditor sells your debt to a collector for a fraction of the total amount owed. Now, it's the collector's job to try and recoup as much of that debt as possible from you.
What happens if debt collectors can't find you? ›
What happens if debt collectors can't find you? If a debt collector is unable to find you, don't think you are in the clear. If you continue to ignore communicating with the debt collector, they will likely file a collections lawsuit against you in court.
How do I get a creditor to remove a paid collection? ›
If you already paid the debt: Ask for a goodwill deletion
Write the collector a goodwill letter explaining your circ*mstances and why you would like the debt removed, such as if you're about to apply for a mortgage. There's no guarantee your request will be accepted, but there's no harm in asking.
Does original creditor have to validate debt? ›
Debt Collectors, Not Creditors, Must Verify Debts
This requirement includes law firms that are routinely engaged in collecting debts.
Can the original creditor collect on a charged off account? ›
Accounts Charged Off
Once sold, the creditor charges off the account. 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.
Can a creditor agree to remove a default? ›
Once a default is recorded on your credit profile, you can't have it removed before the six years are up (unless it's an error). However, there are several things that can reduce its negative impact: Repayment. Try and pay off what you owe as soon as possible.
