What to Do If a Bill Goes to a Collection Agency?

Collection agencies purchase your debt, sometimes for pennies on the dollar, from your original creditor. Collection agencies can strike fear in certain consumers when they are attempting to collect a debt. Being armed with the Fair Debt Collection Practices Act and negotiation skills will allow you to resolve any issues if a bill goes to a collection agency.

Reviewing Credit Report

Obtain a copy of your credit report. A copy of your credit report will determine if the collection agency is reporting the debt. You can get your credit report by going to Equifax.com, TransUnion.com, or Experian.com. You can also contact the credit bureaus via mail or phone to request a copy of your credit report. You are entitled to one free credit report per year or if you are denied credit for any reason. If you do not see the bill on your credit report, you can wait for correspondence from the collection agency.

When a collection agency has received your debt, by law it has to contact you within 30 days of receiving the debt based on the Fair Debt Collection Practices Act. When the agency contacts you via mail you can dispute the charge, if necessary and it cannot further attempt to collect on the debt until the dispute has completely been investigated.

Working with the original creditor

Contact the original creditor to see if you can settle the debt. Depending on how early the debt was sent to the collection agency you may be able to negotiate a payment with the original creditor. If you settle with the original creditor you can send a certified letter to the collection agency informing them the matter has already been handled and to cease further contact.

Satisfy Debt

Determine how you will like to handle the bill. Look into your current finances, extra money and budget to determine if you can repay the debt. Once the collection agency receives your debt, you do not have to pay the full amount to settle. Determine what is best for you and contact the collection agency via mail or phone to negotiate a payment. If you both mutually agree on a settlement amount get the agreement in writing before you make any payments. If you choose to mail letters to the collection agency do so via certified mail to prove that someone signed for and received the letter.