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Should You Negotiate With The Original Creditor After A Collection Agency Contacts You?


Collection agencies ask you all kinds of intrusive questions about your finances, but they are usually not especially forthcoming about how your debt became their business in the first place.  There are several ways that a collection agency can get the right to seek payment of a debt from you.  The trouble is that most collection agencies are so unpleasant that most people respond to communications from collection agencies by ignoring written notices and blocking phone numbers, or else by unleashing their vitriol.  The backstory of how your debt ended up with the agency can make a difference as to the best way to respond to the collection agency.  Sometimes contacting the original creditor is the best way to settle the debt, but what you should say to the original creditor depends on the circumstances.  A Philadelphia consumer law attorney can help you develop a strategy for dealing with debts that have gone to collection agencies.

What Happens to Your Debts When You Don’t Pay Them?

When you are late paying an installment on a debt (it can be a credit card balance, a medical bill, or almost any other kind of debt), the creditor will start by sending you additional reminders; they might also charge late fees.  If four months go by without you making any payments, the creditor might decide that it is not worth the efforts of its billing department to keep trying to collect the debt from you; this is sometimes referred to as charging off your debt.  If this happens, one of two things can happen, both of which involve collection agencies.

In the first scenario, the creditor assigns your debt to a collection agency, but the creditor still owns your debt.  The collection agency might be willing to negotiate with you to settle the debt for a lower amount, either by a lump sum payment or installments.  When you pay, the creditor still gets some money.

In the other scenario, the creditor sells the debt to a collection agency.  In other words, the collection agency settles the debt with the creditor for a lower amount than the face value of the original debt.  Then it tries to collect payment from you to get a return on the investment it made by buying your debt.

Can You Still Pay the Original Creditor After Your Account Goes to Collections?

When you get a notice from a collection agency, call the original creditor and ask if they still own the debt.  If they do, try to negotiate a manageable payment plan directly with them.  If they have sold it, you may be able to convince them to buy your debt back.  To make sure that you don’t end up in debt both to the original creditor and to the collection agency, contact a debt settlement lawyer.

Contact an Attorney Today for Help

A Philadelphia consumer attorney can help you settle your debt with collection agencies or with the original creditors.  Contact Louis S. Schwartz at CONSUMERLAWPA.com to set up a free, confidential consultation.



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