Can I Pay My Original Creditor Instead of a Debt Collection Agency?

George Simons

September 07, 2021

Sometimes you just get tired of the debt collectors calling.

Summary: Discover how you can pay your original creditor instead of a debt collection agency with SoloSuit.

Sometimes, despite our best intentions, a situation spirals out of control. That's especially true when it comes to repaying loans. You never meant to get behind on your payments. Now, debt collectors are hounding you night and day for money. But can you even pay your original creditor instead of a debt collection agency?

Navigating the world of debt collection alone can be difficult. Debt collectors operate by a set of rules that the average person knows nothing about. Let's discover whether you should pay your debt collector or if you can pay your original creditor instead.

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Can I Pay My Original Creditor Instead of a Debt Collection Agency?

They say that money makes the world go ‘round. That paradigm holds especially true in the US where our economy essentially runs on debt. About $14 trillion of consumer debt exists in the US. The average American uses debt to buy cars, homes, and even groceries.

Given those numbers, it's not surprising that at least 1 in 3 Americans have a debt in collections. So don't be ashamed. You're not alone.

Debt passes into collections after the borrower misses a few payments. The lender may not have the ability to track the borrower down or they may view it as a waste of money.

To recoup some of their losses, the original lender has two options. First, they can pay a third-party agency to collect the debt for them. Or they can sell the debt outright. Either way, the original lender no longer controls the debt.

If your debt passes into collections, you may face some serious consequences. It'll wreak havoc on your credit score. Collectors will harass you constantly, demanding money that you don't have. Finally, if a debt languishes unpaid for too long, the collector may sue you to recover it.

File an answer to a debt collection lawsuit with SoloSuit.

Even if a debt has passed into collections, you may still be able to pay your original creditor instead of the agency. Contact the creditor's customer service department. You may be able to explain your situation and negotiate a payment plan. The creditor can reclaim the debt from the collector and you can work with them directly.

However, there's no law requiring the original creditor to accept your proposal. Your best bet is to contact them as quickly as possible. Creditors are most willing to work with you before expenses begin piling up, usually within six months of passing your debt to a collector.

If a Creditor Sells Debt, are you Obligated to Pay?

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. Remember, the original creditor is simply trying to cut their losses and extract some money from the debt. As a result, original creditors are generally more open to negotiations than collection agencies.

That means you have a bargaining chip. Since the original creditor is just trying to get something from your debt, you may be able to pay off your debt for less than you actually owe. Payments can often be made either in one large sum or smaller monthly installations.

But before you pay the original creditor, make sure they still have the rights to the debt. If they sold your debt to a collector outright, this won't be an option for you. Instead, you'll have to deal directly with the collector.

SoloSuit makes it easy to communicate with debt collectors.

Should I Pay a Debt Collection Agency?

If the original creditor has sold your debt outright, you have some choices to make. You may have heard that you should never pay a collection agency. The truth is a little more complex than that.

When to Never Pay a Debt Collection Agency

If your debt has passed into collections, it'll put a hefty ding in your credit score. But paying it off may not fix that. Paying a debt collection agency may do more harm than good to your credit score.

That's because actually paying your debt will lower your credit score. You heard that right. You can get punished for trying to pay what you owe. Luckily, there's a loophole.

Your credit report isn't a permanent record. Events that affect your credit score - from debt collections to bankruptcy - disappear from your credit report after seven years.

As a result, if your debt has been in collections for nearly seven years, you may want to avoid paying it. Once you pass that seven-year mark, your credit report will be clear.

When to Consider Paying

Sometimes, it's best to play the game. If you have the money and your debt just recently went to collections, you may want to pay it and get on with your life.

You shouldn't just roll over and pay, though. Contact the collection agency and ask them to write you a letter discharging the debt in return for payment. Then, have them send this debt to a credit reporting agency. This is the best way to get past a debt collection agency with your credit relatively unscathed.

Protect your credit score with SoloSuit.

Paying your debt will also eliminate the possibility of a lawsuit. If you thought the penalty to your credit was bad, a lawsuit is infinitely worse. Lawsuits involve court appearances and piles of paperwork. If the collector wins, they have a variety of options available to recover their money. They can even take money directly out of your paycheck!

If your debt recently entered collections, you probably have a lot of emotions. You may be stressed, confused, and unsure of how to proceed. Stop and take a deep breath. Try to negotiate with your original creditor. If that's not possible, try to settle things with the collector. Above all, remember to keep your chin up. You'll get through this!

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

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"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance

What If I've Received a Letter From a Debt Collector?

If you've received a letter from a debt collector, the best way to respond is with a Debt Validation Letter. When a debt collector contacts you in any way, whether it's by phone or mail, you can respond with a Debt Validaiton Letter. This letter notifies them that you dispute the debt and requires they provide proof you owe the debt. They can't call you or continue collecting until they provide validation of the debt.

Get started with a Debt Validation Letter here.

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