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.

You cannot pay the original lender, as they no longer own the debt. Remember that all communication, including payment, will now go to the debt collection company. If you are sued by the debt collector, contact an attorney right away – don't panic!

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.

Old (Time-Barred) Debts

In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement.

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.

Once the collection company gets the letter, it must stop trying to collect the debt until it sends you written verification of the debt, like a copy of the original bill for the amount you owe.

Only one can own the debt at any given time, but it can be sold many times. The older the debt, the higher the probability that it will be sold multiple times. Sure can! Also some third party agencies get paid to handle debt and don't purchase it at all.

Don't provide personal or sensitive financial information

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.

You can sue the debt collector for violating the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and might also have to pay you damages. If you're having trouble with debt collection, you can submit a complaint with the CFPB.

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

Can a debt collector access my bank account? Yes, a debt collector can take money that you owe them directly from your bank account, but they have to win a lawsuit first. This is known as garnishing. The debt collector would warn you before they begin a lawsuit.

Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.

Debt collectors lose the right in many states to sue consumers after three or more years. But there's a loophole: If the consumer makes a payment, even against his or her own will, that can be used to try to revive the life of the debt.

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.

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.

Normally, collections are disputed because the debtor believes they are incorrect for some reason. For example, if you review a copy of your credit report and you see a collection account that you believe belongs to another person, has an incorrect balance or is greater than seven years old, you can file a dispute.