Can Anyone Turn in an Account to a Collection Agency If You Are Paying on That Account?

When you cannot afford to pay off a debt, your account could eventually be turned over to a collections agency in an attempt to collect the money you owe. While this is common if you are not making payments, in some cases, your account can be turned over even if you are making regular payments.

Lower Than Minimum Payment

Just because you are making a payment, that does not necessarily mean the creditor won't turn you over to collections. For example, if you have a minimum payment of $100 on your credit card statement and you only send in $50 each month, the credit card company will not stand for this. After a few months of doing this, the credit card company will then turn your account over to its collections department.

Agreed-Upon Terms

With other types of debt, in which a minimum payment amount is not established, you will need to agree to payment terms to avoid having your account sent to collections. For example, if you accumulate $10,000 in medical debt and then you randomly start sending $10 per month to the medical provider without setting up a payment plan, the medical provider could send your account to collections. You must set up a payment plan with the creditor detailing how the money will be paid.

Time Frame

Typically, a creditor will take some time before your account is sent to collections. Your account will not be sent after a single payment. In most cases, the creditor will wait three to six months before it charges off your account. When your account is charged off, it does not mean that you do not still owe the money. Instead, your account will simply be sold to a collections agency and then you will have to pay the money you owe.

Considerations

Once your account is turned over to a collections agency, you should do your best to handle the debt. Talk to the collections agency about setting up a payment plan that you can work with. If you do not pay off the debt, the collection agency could file a lawsuit against you in civil court. When this happens, you could have a judgment issued against you by the court. This could then result in a bank account levy or wage garnishment to repay the debt.