If you agree on a payment plan or want to pay off the debt for less than amounts owed, obtain the written agreement so you can hold the collector accountable. If not, it will stop collecting the debt. Selling a debt from a creditor to a collector is often sloppy. If you have the money to pay off the debts and want to sort them out, you can talk to a nonprofit credit counseling center and agree on a debt management plan.
What happens if you don’t pay debt collection?
If the collection agency tries to sue you for a debt after the time frame for filing a lawsuit has expired, you cannot be forced to pay. Note that your settlement payment will update the date of the last activity, which means that the debt will remain in your report for another six years. As I’ve already explained, if you haven’t made a payment for a long time by not paying, the debts will be erased from your credit report sooner than if you pay the collection agency.
References:
- Should I Pay Off a Debt in Collections and Will it Help My Credit?
- How to Deal With a Debt in Collections – NerdWallet
Barry Ritholtz is a renowned finance expert, author and blogger. With over 30 years of experience in the financial industry he has gained a reputation as a thought leader and influencer in the investment community.