I'm in a vulnerable situation - should I let the collection agency know?Dealing with creditors can be even more difficult if you’re in a vulnerable situation. Vulnerability can range from dealing with the loss of a loved one to chronic mental or physical health problems. Show
There are other vulnerabilities you may be dealing with, such as feeling anxious about speaking over the phone, or living with a learning difficulty. It's important to let your creditors know if you're in a vulnerable situation. Once they’re aware of any difficulties you’re experiencing, they can offer you more support if you need it. Will a collection agency add more interest and charges?If the debt has been sold to a collection agency interest and charges will usually stop. The original creditor may already have stopped these after the account defaulted. However, in some cases a debt collection agency may continue adding interest and charges. They can only add amounts which are allowed in the contract you signed with the original creditor. If the debt is still owned by the original creditor they may continue adding interest and charges while the collection agency is contacting you. I’ve got more than one collection agency contacting me about the same debt – which one do I pay?Only one company should contact you about a debt. If you’re being contacted by more than one debt collection agency at the same time it’s best to contact the original creditor to explain what’s happening. They should tell you which company is dealing with your debt and stop the other company contacting you. Some debt collection agencies use more than one trading name. This means it can look like you’re being contacted by more than one company, but it’s actually the same company using different names. Check the addresses on letters – if they’re the same or very close, you’re probably dealing with the same company. Using several names is confusing and you could ask the collection agency to contact you using one trading name only. A collection agency is contacting me about a debt that isn’t mineThis is rare, but sometimes happens if a collection agency is trying to trace someone with a similar name to yours. Read our advice on what to do if you're being chased for a debt not in your name. How do I know the debt collection agency is real?Most debt collection agencies in the UK are regulated by the Financial Conduct Authority (FCA) and hold a valid consumer credit licence. You can contact the FCA to check if a collection agency is licensed or check the FCA register. Most collection agencies are also members of trade bodies such as the Credit Services Association. If their letter shows the logo of a trade body, you can also contact them to confirm they’re real. You can also contact us if you’re unsure. We deal with all major UK debt collection agencies and we can tell you if a company is legitimate. last reviewed: AUG 24, 2022 The original creditor is the company that gave you the loan or credit. An original creditor may attempt to collect a past due debt or account itself, or it may hire a debt collector. A debt collector is generally a third party who has been contracted to collect your debt or account. The name of the
company contacting you about an unpaid debt may be different than the original creditor who gave you the loan or credit. The original creditor also may sell your debt or account to another party who may then collect the debt or place it with a different debt collector. 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. Resource: equifax.com/personal/education/covid-19/debt-collectors-vs-creditors/  Consumer Law PA | Posted on September 7, 2021 Is it better to pay off a collection or make payments?It's always a good idea to pay collection debts you legitimately owe. Paying or settling collections will end the harassing phone calls and collection letters, and it will prevent the debt collector from suing you.
Will paying off collections improve credit score?Newer credit-scoring models from FICO® and VantageScore (like FICO Score 9 and VantageScore 3.0) ignore zero-balance collection accounts. So paying off a collections account could raise your scores with lenders that use these models.
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Is it better to pay debt collector or original creditor
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