original creditor
For many of us, 'debt collection' is a scary word.

Those who have experienced it know that the process is not for the faint of heart. Despite the efforts you have made to catch up on the bills, they don't seem to go away until you have paid all the debt.

There are several factors that make it hard for you to deal with the original creditor, including the amount and type of debt and the length of time for which it is not paid. While dealing with the original creditor may be the ideal choice, it is not always possible to avoid a collection agency.

Why does debt go to a collection?

A debt collector reaches out to you when you fail to pay your bill for some time, typically three months. The debt can be a hospital bill, cell phone bill, car loan, mortgage, or just about any money you owe. When you have shown signs of not paying the creditor's debt, they will send your account to collection, meaning that the collection agency will be responsible for getting your money.

There are two scenarios that can occur.

The original creditor, such as a mortgage lender or a credit card issuer, thinks you aren't going to pay the debt. The creditor uses its own collectors or hires a collection agency to reach out to you.

A collection agency buys your debt from the original creditor and collects the money you owe.

When a debt goes to collection, they will inform you by phone, email, or mail you about the payment for the overdue bills. When they first contact you, ask about the amount of debt and the creditor's name & number to ensure that the collection agency is the authorized entity to receive the payment.
How do creditors work with collection agencies?

Creditors often work with debt collectors in one of the following two ways.

The creditor pays a fixed fee to an agency and asks it to collect the debt on behalf of the creditor. They will most often get in touch with a local collection agency and ask them to collect the money on the creditor's behalf. For instance, if the creditor is in Dallas, it only makes sense to contact a Dallas collection agency to avoid long travel and communication gaps.

Also read: Does debt go away after 7 years?

The second way is to sell debt. The creditors often make calls and send warning letters before they finally give up. They may sell the debt to an agency that now owns the debt. The collection agency receives every penny that it can convince you to pay and keeps it.

Can you still pay the original creditor instead of a collection agency?

If your creditor has sold the debt to a collection agency, the agency now owns the debt. The creditor no longer has skin in the game, and you only have to make payment to the agency. However, many creditors have their own collection divisions, which means that you can still strike a deal and convince the creditor to remove your account from the collection status and return to a normal state of payments. 

Also, read Does Debt Consolidation Hurt Your Credit?

If you're able to pay the creditor all you owe, you can make an arrangement fairly quickly. You can negotiate a partial payment or settle an installment plan. It is advised not to promise more than you can pay because it will only make matters worse for you.

On the contrary, if your creditor has sold the debt to a third-party collection agent, you may not be able to continue making the regular monthly payments to the original creditor. The collection agent now owns the debt, and you would be responsible for paying them instead of the original creditor.

How to deal with creditors?

Once a debt goes to collection, your best option is to strike a deal with the collection agent as soon as they contact you. They will tell you how much you owe if you can pay them right away, they will leave and stop contacting you again. This, however, is not possible for every debtor.

If you don't pay and try to wait it out in hopes of avoiding the payment, the collection agency will make every effort to convince you to pay the debt. However, the Fair Debt Collection Practices Act has set some rules to ensure that the collection agencies play fair.

They can contact you by call, text, mail, email, or any other mean anywhere between the hours of 8:00 am and 9:00 pm. You can make them stop contacting you by asking in writing.
  • They cannot harass or threaten you with violence.
  • They cannot publicize your unpaid debts or talk to anyone else about your debt (more than once)
  • They cannot make harassing calls
  • It is advised to know your rights and only repay the amount that you owe.

Final Thoughts:

We've to be honest here. If you owe any money to a creditor, you need to pay it back. Debt collection can be overwhelming, but by knowing your rights and the limits of the collection agent, you can navigate through the tough process.


Author Bio


Audrey Throne has an ongoing affair with the words that capture readers’ attention. Her passion for writing dates back to her pre-blogging days. She loves to share her thoughts related to business, technology, health and fashion.

Find her on Twitter: @audrey_throne 

Audrey Throne

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