What Happens If a Collection Agency Refuses My Payment?

Collection agencies work as a middleman for a larger company, or as an independent agency. When you owe a bill to a hospital, credit card company or any other creditor, the company has the right to use a collection agency to seek payment. The agencies may also buy your debt and seek payment from you to make back its money. Collection agencies have the right to refuse partial payment and seek the full amount due.

Legal Rights

According to Finance House, a collection agency has the legal right to refuse a payment from you, if you pay less than the total amount due. The agency does have the right to accept a smaller amount than the total debt. For example, the agency may agree to accept $500 for a hospital bill of $1,000. When you work out a smaller amount, you typically must send the new amount due within a set period of time, such as 10 days.

Misconceptions

Paying only a fraction of the bill does not mean the collection agency must accept the payment. Anytime you send less than the total amount due, the agency has the right to refuse the partial payment and refund it to your account. In some instances, the agency may accept the payment as a good faith effort that you will pay the total amount due.

Repercussions

A collection agency will continue to contact you for payment of a debt, unless the debt is paid in full. If the first agency cannot get a payment from you, then it might sell your debt to another party and the cycle begins again. The collection agency may continue to phone you, contact you by email or cell phone if you provided that information and send letters. The agency may even threaten to take you to court. If it is successful in court, the agency could garnish your wages to collect on the debt.

Warning

If you work out a payment plan or agree to pay a fraction of the debt, then make sure that the collection agency sends you a letter in writing that lays out the details of the new agreement. In the future, the agency must follow the guidelines set forth in the letter. The agency cannot refuse a payment if you have an agreement and you send the amount detailed in that agreement.