Unpaid creditors often enlist the aid of collection agencies when attempting to recover delinquent consumer accounts. Collection agencies coerce debtors into paying by calling repeatedly, sending letters and sometimes threatening lawsuits. Most consumers who pay collection agencies do so via monthly payments.
Prevention/Solution
Debt collection agents often work on commission and receive a percentage of the money they collect. Therefore, it's in the financial interest of a debt collector to refuse low payments if he believes he can convince the debtor to make larger ones. Debtors can speak with a supervisor and explain their financial situation in an effort to negotiate more affordable monthly payments.
Time Frame
Until a consumer makes a payment on the debt, the statute of limitations period on his debt is steadily elapsing. Once the statute of limitations, which varies by state, expires, the collection agency loses the right to sue the individual. Thus, refusing to accept a debtor's payment can result in the collection agency losing the ability to forcibly recover the debt. As soon as the company accepts a payment, however, the statute of limitations resets.
Considerations
If a collection agency believes a debtor can pay the debt in full and the statute of limitations period has yet to expire, it can file suit against the debtor in court. In most states, winning the lawsuit gives the collection agency the right to garnish the individual's wages and bank accounts.
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