What happens if a collection agency refuses payment

Unfortunately, there are bad actors out there who may try to take advantage of people with debt. Generally, we procrastinate or put off doing things that make us stressed or anxious, according to the American Psychological Association.

To change, let go of shame and guilt, says the APA — and acknowledge your anxieties. Then work on a spending plan a budgeting guide might make it less scary. And try tools like auto-payments and financial apps to help keep you on track, the APA suggests.

When a debt collector contacts you, it can feel overwhelming. But taking a step back and thinking through ways to confirm and settle the debt can help reduce the stress of the debt collection process. Read this post in Spanish.

Image: Couple reviews their debt collection rights before paying a debt collector. Advertiser Disclosure We think it's important for you to understand how we make money. Show Hide. About the author: Paris Ward is a content strategist at Credit Karma, providing readers with the latest news that will aid their financial progress. A collection agency is either acting on behalf of the creditor or is the creditor, since it owns the debt.

The agency can choose to refuse your settlement offer and instead request payment of the debt in full. Also, many states permit collection agencies to add interest and fees to the balance of the original debt, and you're generally responsible for payment of this increased amount. Most collection agencies will accept an offer on a debt if it considers the offer a reasonable one.

If the agency does not accept your first offer, consider a revision. Offer a different amount that may appeal to the agency and help facilitate the acceptance of a settlement offer.

For example, if your offer of 50 percent of the debt was refused, make a new offer of 60 percent. Although it's more than your original offer, it's still less than the total debt owed. Who owns the debt can play a role in how you handle a rejected settlement offer.

If you negotiate with and make payments to the creditor, the collector may refuse to credit you for those payments. You can negotiate a payoff of the debt in one lump sum, or perhaps you can negotiate a better payment plan.

These are the same options available if you negotiated directly with the collector, although the creditor may be more flexible and willing to compromise. Also you might want to ask to have the negative credit information on the debt removed from your credit file, or shown as payment in full, if you make the payments under the new agreement.

Learn more about negotiating improvements on your credit report. Put any agreement you reach with the creditor in writing—preferably, in a letter from the creditor to you, although a letter from you to the creditor confirming the agreement and asking the creditor to correct any errors is better than nothing.

Part of the written agreement should be an acknowledgement by the creditor that it owns the debt. Send a copy of the letter to the collector.

If you need help dealing with a creditor or debt collector, or would prefer someone else handle your debt negotiations, consider talking to a debt settlement lawyer. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site.

The attorney listings on this site are paid attorney advertising. In some states, the information on this website may be considered a lawyer referral service. But depending on your situation, you may never need to pay a debt collector. Not sure where to begin? SoloSuit can help. Debt seems like a fact of life for many Americans.

Four out of five Americans 80 percent owe some debt. There are usually two parties in debt collection cases. Often, a lender finds they can't collect a debt from a borrower. Interest keeps piling up on the borrower's loan, and there's no money coming in to pay it. A lender now has two options:. A debt collection agency is a company that buys unpaid debt from a creditor. Debt collection agencies usually buy these debts for pennies on the dollar.

Then, they attempt to track down a debtor and force them to pay. Because these companies specialize in tracking down alleged debtors, they're better suited to collecting unpaid debt than lenders themselves. They employ a small army of sleuths equipped with the world's best search tool: the internet. Against these odds, an alleged debtor is hopeless. Debt collection agents can track their prey using anything from bank records to voting data - even internet providers! At first glance, it might make sense to just pay off a debt collection agency.

After all, that's the easiest way to make them leave you alone, right? Not exactly. Sure, paying a debt collection agency may get them off your back.

But that's all it'll do. Evidence of the unpaid debt will remain on your credit report for another seven years. The actual amount of the debt doesn't matter. This can affect your ability to secure loans in the future. What's worse, intent doesn't matter in debt collection cases. Many debtors aren't trying to dodge their creditors.