How to Find Out What Collection Agency Owns Your Debt
George Simons | October 19, 2022
Summary: Are you trying to track down who owns one of your old debts? Are you worried that a shady debt collector is lying about owning the debt? Here's how to find out what collection agency owns your debt.
If you have been unable to pay your debt, the creditor may decide to sell off the debt to a collection agency. Other than selling the debt, they may choose to assign it to a third-party debt collector or collection attorney but still retain ownership of the debt account.
This is because they don't want to go through the hassle of collecting the debt from you. Chances are they tried contacting you for some time to repay the debt, finally gave up, and sold the debt to a collection agency.
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How to tell if your debt was sold off to a collection agency
When a debt is sold off, it may be difficult to track down the collection agency that owns it, given that there are over 7000 debt collection agencies in the US, according to IBISWorld.
Your bank can sell the legal rights to your debt to any of the agencies, but you typically won't know they did unless they notify you. If they fail to notify you, you may end up receiving a call from an unknown agency requesting you to pay them. When this happens, here's how to verify who owns your debt:
1. Contact the original creditor
If you keep receiving calls, mails, or letters from unknown entities asking you to settle your debt, it's advisable first to contact the original creditor. The original creditor has all the records of your debt. They can tell you who legitimately owns your debt and how to make the payments.
2. Review your credit report
Your credit report may contain the details of the company that bought the debt from your original creditor. You can access your credit report from major credit bureaus such as Equifax, Experian, and TransUnion. In addition, any collection accounts you have will be displayed as separate records on the credit report.
3. Obtain contact info of the collection agency from your credit report
Your credit report should contain the contact info of the debt collection company you owe. Use this information to contact them before your credit score gets worse.
4. Request for debt validation from the collection agency
If you're not sure whether you owe a collection agency, send them a letter stating that you dispute the debt's validity and want them to provide documentation verifying the debt.
The collection agency will respond by sending a debt validation letter. A debt validation letter will include the name of the company you owe the debt to, the name and address of the original creditor, and the amount you ought to pay. After receiving the letter, you'll have 30 days to respond to it.
Remember, if you don't know how to respond to a debt collection lawsuit, SoloSuit makes everything easier for you. The software helps you draft an answer, which is then reviewed by an experienced attorney. The answer will then be forwarded to the court and a copy delivered to the debt collection agency on your behalf.
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Should you pay a collection agency?
Here's what to do after confirming the legitimate debt collection agency that you owe your debt to.
- Clear the Debt. Clearing your debt may not affect your current credit score, but your credit report will reflect that the collection account is paid off. However, the information will remain on your credit report for at least seven years after you've cleared the debt.
- Negotiate With the Collection Agency. Not everyone can clear their debt all at once. For this reason, if you can't clear the debt in its entirety, you can negotiate with the collection agency to allow you to pay it off in installments. Alternatively, you can negotiate to pay a certain amount in exchange for forgiving what remains.
Note that the collection agency isn't obliged to make a deal with you, and they can reject any offer that doesn't suit their needs. But if you do negotiate a deal with the creditor, ensure it's in writing to prevent them from claiming that you still owe them money.
- Dispute the Debt. If you receive a debt collection notice and you're sure the debt isn't yours, you can dispute it in writing within 30 days of receiving the notice. In that case, the creditors must cease contacting you unless they prove that the debt belongs to you.
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What happens if you don't pay a debt collection agency?
Ignoring debt can negatively affect your credit score, making it harder for you to borrow loans from other financial institutions. And when you qualify for a loan, you may have to pay high interest rates.
Debt collection agencies may escalate their efforts to recover the debt by filing a lawsuit against you. Therefore, if you receive a court summons and complaint from a debt collector, you need to file a response within a set time frame.
Failure to file a response gives the creditor an upper hand in the case. The creditor can go ahead and request the court to enter a default judgment against you. If the judge grants the creditor's request, it means you'll have no chance to tell your side of the story, and the creditor automatically wins the lawsuit.
Note that if a creditor wins a collection lawsuit, the court gives them the power to find legal means to recover their debt. For example, most creditors opt for wage garnishment, a legal procedure through which some of your earnings are withheld or sent directly to the creditor.
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Creditors can also resort to non-wage garnishment or bank levy. This is a legal action that allows the creditor to seize money from your bank account.
On the other hand, you have a chance to fight the case and even win it if you file a response to the court early enough. So whatever happens, don't ignore the lawsuit even if you believe you don't owe that debt.
It's always advisable to work things out with the original creditor and find a way to settle your debt. However, this may not be the case if the debt was sold off to a collection agency. The situation might be a bit more confusing, especially if the debt was sold from one collection agency to another. For this reason, always ensure you're paying the right party by finding out the legitimate collection agency that owns your debt.
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
>>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
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