Do I have to pay a debt that has been sold? (2024)

Do I have to pay a debt that has been sold?

The answer to that is yes. Just because you originally took out a loan with one particular lender doesn't mean that they're required to hold onto it for the life of the loan. It's quite common when a loan is falling behind for it to be sold to a different company that specializes in collecting old debts.

Do I have to pay a debt if it has been sold?

Once your debt has been sold you owe the buyer money, not the original creditor. The debt purchaser must follow the same rules as your original creditor. You keep all the same legal rights. They cannot add interest or charges unless they are in the terms of your original credit agreement.

Is it true you don't have to pay a collection agency?

Not paying a debt in collections will also hurt your credit score. If you don't pay, the collection agency can sue you to try to collect the debt. If successful, the court may grant them the authority to garnish your wages or bank account or place a lien on your property.

What happens if you never answer a debt collector?

If you receive a notice from a debt collector, it's important to respond as soon as possible—even if you do not owe the debt—because otherwise the collector may continue trying to collect the debt, report negative information to credit reporting companies, and even sue you.

How to dispute a debt that was sold to a collection agency?

Within 30 days of receiving the written notice of debt, send a written dispute to the debt collection agency. You can use this sample dispute letter (PDF) as a model. Once you dispute the debt, the debt collector must stop all debt collection activities until it sends you verification of the debt.

What is the 609 loophole?

Specifically, section 609 of the FCRA gives you the authority to request detailed information about items on your credit report. If the credit reporting agencies can't substantiate a claim on your credit report, they must remove it or correct it.

How long before a debt becomes uncollectible?

The statute of limitations on debt in California is four years, as stated in the state's Code of Civil Procedure § 337, with the clock starting to tick as soon as you miss a payment.

Why you should not pay debt collectors?

By paying the collection agency directly, the notification of the debt could stay on your credit report longer than if you attempt to use another option, like filing for bankruptcy. When institutions check your credit report and see this information on it, it may harm your ability to obtain loans.

What is the 11 word phrase to stop debt collectors?

If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.

How to get out of collections without paying?

You cannot remove collections from your credit report without paying if the information is accurate, but a collection account will fall off your credit report after 7 years whether you pay the balance or not.

Will a debt collector sue me for $500?

Collection agencies usually won't sue you for a debt of less than $500. While every collection agency has a different policy regarding debt lawsuits, you should feel reasonably safe from a legal claim if you owe less than $500 on a debt. However, if you receive a court summons from a collection agency, don't ignore it.

How do you outsmart a debt collector?

Can I just ignore a debt?

You might get sued.

The debt collector might file a lawsuit and get a money judgment. A creditor with a money judgment can garnish a debtor's wages, go after the funds in a debtor's bank account, and seize property not protected by an exemption.

What's the worst a debt collector can do?

The worst thing they can do

If you fail to pay it off, the collection agency could file a suit. If you were to fail to show up for your court date, the debt collector could get a summary judgment. If you make an appearance, the collector might still get a judgment.

How likely is it that a collection agency will sue?

How likely is it that you will be sued for a debt? According to one Consumer Financial Protection Bureau report, 1 in 7 — or about 15% — of consumers contacted about a debt in collections were sued. But the likelihood of a debt collection lawsuit depends on several factors.

Does disputing a debt restart the clock?

Does disputing a debt restart the clock? Disputing the debt doesn't restart the clock unless you admit that the debt is yours. You can get a validation letter to dispute the debt to prove that the debt is either not yours or is time-barred.

Is it true that after 7 years your credit is clear?

Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point within three months to six years.

What is a 623 letter?

A business uses a 623 credit dispute letter when all other attempts to remove dispute information have failed.

What is a legal loophole to remove collections from credit report?

What is the 609 loophole? A 609 dispute letter is a written request to credit bureaus to remove inaccurate items from your credit report under section 609 of the Fair Credit Reporting Act (FCRA).

Can a 10 year old debt still be collected?

Can a Debt Collector Collect After 10 Years? In most cases, the statute of limitations for a debt will have passed after 10 years. This means a debt collector may still attempt to pursue it (and you technically do still owe it), but they can't typically take legal action against you.

What happens after 7 years of not paying debt?

Although the unpaid debt will go on your credit report and have a negative impact on your score, the good news is that it won't last forever. After seven years, unpaid credit card debt falls off your credit report. The debt doesn't vanish completely, but it'll no longer impact your credit score.

What is a creditor legally required to do if you dispute a debt?

A debt collector must stop all collection activity on a debt if you send them a written dispute about the debt, generally within 30 days after your initial communication with them. Collection activities can restart, though, after the debt collector sends verification responding to the dispute.

What happens if you refuse to pay collections?

If you ignore a debt in collections, you can be sued and have your bank account or wages garnished or may even lose property like your home. You'll also hurt your credit score. If you aren't paying because you don't have the money, remember that you still have options!

What happens if I pay the original creditor instead of collection?

Unfortunately, you're still obligated to pay a debt even if the original creditor sells it to a collection agency. As long as you legally consented to repay your loan in the first place, it doesn't matter who owns it. You may be able to pay less than you actually owe, though.

Will debt collectors give up?

If the debt is not collected, then the debt collector does not make money. In many cases, although you would think that debt collectors would eventually give up, they are known to be relentless. Debt collectors will push you until they get paid, and use sneaky tactics as well.