Q. What is a
collection debt?
A. A collection debt is an "alleged" debt that has been charged off and sold by the original creditor to a collection debt buyer. It is worthless debt to the original creditor. The time frame that a current debt becomes delinquent and is charged off and sold is approximately 180 days. The collection agency attempts to get a payment from the consumer for the junk debt.
Q. What is a collection agency?
A. This is a legitimate business set up. However, the business practice is not legitimate in most cases. These companies attempt to collect payments from uninformed consumers for debts the consumer does not owe to the collection agency.
Q. Does the collection debt buyer pay off the balance due to the original creditor?
A. No. The junk debt buyer does not pay any former balances due. They purchase a portfolio of thousands of worthless accounts for a nominal amount.
Q. What do I do if I receive a phone call or letter from a collection agency?
A. First, check to see how old this "alleged" account is and when the last payment was made to the original creditor. It could be time barred (check statute of limitations for your state) and the collection agency is not able to collect on this account regardless if it is valid. Second, the account is not time barred, then the consumer will need to write to the collection agency to ask for validation of the questionable account.
Q. What do I do if I receive another letter from a 2nd collection agency on the same account?
A. This is not unusual. Often the 1st collection agency is not able to validate and they will sell to another collector. The 2nd agency will attempt to collect from the consumer. The consumer needs to write to this (2nd) agency with the letter reflecting the previous correspondence.
Q. Is this collection account deleted from my credit report automatically since the collector cannot validate?
A. No. The consumer needs to write to the CRA to remove the item from the credit report.
Q. What if I am served a summons or complaint at my house?
A. This means that a collection attorney in your state is suing you. You will need legal advice from a consumer attorney. You need to file an answer to the court quickly. Otherwise, this will rule as a default judgment.
A. A collection debt is an "alleged" debt that has been charged off and sold by the original creditor to a collection debt buyer. It is worthless debt to the original creditor. The time frame that a current debt becomes delinquent and is charged off and sold is approximately 180 days. The collection agency attempts to get a payment from the consumer for the junk debt.
Q. What is a collection agency?
A. This is a legitimate business set up. However, the business practice is not legitimate in most cases. These companies attempt to collect payments from uninformed consumers for debts the consumer does not owe to the collection agency.
Q. Does the collection debt buyer pay off the balance due to the original creditor?
A. No. The junk debt buyer does not pay any former balances due. They purchase a portfolio of thousands of worthless accounts for a nominal amount.
Q. What do I do if I receive a phone call or letter from a collection agency?
A. First, check to see how old this "alleged" account is and when the last payment was made to the original creditor. It could be time barred (check statute of limitations for your state) and the collection agency is not able to collect on this account regardless if it is valid. Second, the account is not time barred, then the consumer will need to write to the collection agency to ask for validation of the questionable account.
Q. What do I do if I receive another letter from a 2nd collection agency on the same account?
A. This is not unusual. Often the 1st collection agency is not able to validate and they will sell to another collector. The 2nd agency will attempt to collect from the consumer. The consumer needs to write to this (2nd) agency with the letter reflecting the previous correspondence.
Q. Is this collection account deleted from my credit report automatically since the collector cannot validate?
A. No. The consumer needs to write to the CRA to remove the item from the credit report.
Q. What if I am served a summons or complaint at my house?
A. This means that a collection attorney in your state is suing you. You will need legal advice from a consumer attorney. You need to file an answer to the court quickly. Otherwise, this will rule as a default judgment.