Start My Answer

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

Hannah Locklear | December 14, 2022

Sometimes you just get tired of the debt collectors calling.

Summary: You can pay off a debt to the original creditor if they haven’t sold the account to a debt collection agency yet. There is a chance the debt may have been transferred to collections, but that doesn’t mean it’s too late to reach out to your creditor and settle the debt once and for all. SoloSettle can help you settle a debt when you feel in over your head.

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.

Use SoloSuit to respond to debt collectors in under 4 minutes.

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. As of 2022, about $15.84 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.

Respond with SoloSuit

Get Started

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.

Note that the original creditor can remove the debt from collections if you pay it off, either in full or partially.

If a creditor sells a 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.

So, if you find yourself asking, “Can I settle a debt with the original creditor?” — the answer is yes!

Now, let’s break down an example.

Example: Lauren has fallen seriously behind on her credit card payments. She is $3,000 in debt, and after a few months of missed payments, the creditor sends her account to collections. When the debt collectors start calling, Lauren knows she needs to act. Unfortunately, she can’t afford to pay off the full debt right now, so she reaches out to her creditor to explain her situation. Luckily, the creditor still owns the debt and is willing to negotiate a debt settlement. Lauren uses SoloSettle to send an offer and start negotiations. After a few rounds of offers and counteroffers, they reach a settlement agreement of 70% of the debt amount, or $2,100 to be paid in a lump-sum payment before a specific deadline.

Check out this video to learn more about how to settle a debt:

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 not 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 the debt collection agency

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!

Let’s look at another example.

Example: Derek is being sued by a debt collector for a credit card debt that he failed to pay off. After almost a year of missed payments, the credit card company sold the debt account to the collection agency, and when Derek failed to respond to the debt collectors’ calls, they filed suit against him. Not sure what to do, Derek used SoloSuit to draft and file an Answer to the lawsuit. This helped him avoid losing automatically by a default judgment and gave him time to set up a payment plan with the collection agency. The case got dismissed, and Derek was able to pay off the debt over a period of time.

Is it better to pay the original creditor or collection agency?

The answer is yes—and no.

It really depends on your financial situation. If the original creditor hasn’t sold your debt to a collection agency yet, they may be willing to work with you and restructure the debt so you can afford to pay it off. This may look like a lump-sum payment or a monthly payment arrangement, depending on your circumstances.

If the debt has already been sold to a collection agency, do not pay the original creditor. They no longer have ownership of the debt, so paying them would not satisfy your new obligations to the collectors.

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 fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to answer a summons for debt collection in your state

Here's a list of guides for other states.

All 50 states.

Guides on how to beat every debt collector

Being sued by a different debt collector? Were making guides on how to beat each one.

We have answers

Join our community of over 40,000 people.

You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now are are just look for support, we're here for you.

Get Started

Win against credit card companies

Is your credit card company suing you? Learn how you can beat each one.

Going to Court for Credit Card Debt — Key Tips

How to Negotiate Credit Card Debts

How to Settle a Credit Card Debt Lawsuit — Ultimate Guide

Get answers to these FAQs

Need more info on statutes of limitations? Read our 50-state guide.

Why do debt collectors block their phone numbers?

How long do debt collectors take to respond to debt validation letters?

What are the biggest debt collector companies in the US?

Is Zombie Debt Still a Problem in 2019?

SoloSuit FAQ

If a car is repossessed, do I still owe the debt?

Is Portfolio Recovery Associates Legit?

Is There a Judgment Against Me Without my Knowledge?

Should I File Bankruptcy Before or After a Judgment?

What is a default judgment?— What do I do?

Summoned to Court for Medical Bills — What Do I Do?

What Happens If Someone Sues You and You Have No Money?

What Happens If You Never Answer Debt Collectors?

What Happens When a Debt Is Sold to a Collection Agency

What is a Stipulated Judgment?

What is the Deadline for a Defendants Answer to Avoid a Default Judgment?

Can a Judgement Creditor Take my Car?

Can I Settle a Debt After Being Served?

Can I Stop Wage Garnishment?

Can You Appeal a Default Judgement?

Do I Need a Debt Collection Defense Attorney?

Do I Need a Payday Loans Lawyer?

Do student loans go away after 7 years? — Student Loan Debt Guide

Am I Responsible for My Spouses Medical Debt?

Should I Marry Someone With Debt?

Can a Debt Collector Leave a Voicemail?

How Does Debt Assignment Work?

What Happens If a Defendant Does Not Pay a Judgment?

How Does Debt Assignment Work?

Can You Serve Someone with a Collections Lawsuit at Their Work?

What Is a Warrant in Debt?

How Many Times Can a Judgment be Renewed in Oklahoma?

Can an Eviction Be Reversed?

Does Debt Consolidation Have Risks?

What Happens If You Avoid Getting Served Court Papers?

Does Student Debt Die With You?

Can Debt Collectors Call You at Work in Texas?

How Much Do You Have to Be in Debt to File for Chapter 7?

What Is the Statute of Limitations on Debt in Washington?

How Long Does a Judgment Last?

Can Private Disability Payments Be Garnished?

Can Debt Collectors Call From Local Numbers?

Does the Fair Credit Reporting Act Work in Florida?

The Truth: Should You Never Pay a Debt Collection Agency?

Should You Communicate with a Debt Collector in Writing or by Telephone?

Do I Need a Debt Negotiator?

What Happens After a Motion for Default Is Filed?

Can a Process Server Leave a Summons Taped to My Door?

Learn More With These Additional Resources:

Need help managing your finances? Check out these resources.

How to Make a Debt Validation Letter - The Ultimate Guide

How to Make a Motion to Compel Arbitration Without an Attorney

How to Stop Wage Garnishment — Everything You Need to Know

How to File an FDCPA Complaint Against Your Debt Collector (Ultimate Guide)

Defending Yourself in Court Against a Debt Collector

Tips on you can to file an FDCPA lawsuit against a debt collection agency

Advice on how to answer a summons for debt collection.

Effective strategies for how to get back on track after a debt lawsuit

New Hampshire Statute of Limitations on Debt

Sample Cease and Desist Letter Against Debt Collectors

The Ultimate Guide to Responding to a Debt Collection Lawsuit in Utah

West Virginia Statute of Limitations on Debt

What debt collectors cannot do — FDCPA explained

Defending Yourself in Court Against Debt Collector

How to Liquidate Debt

Arkansas Statute of Limitations on Debt

Youre Drowning in Debt — Heres How to Swim

Help! Im Being Sued by My Debt Collector

How to Make a Motion to Vacate Judgment

How to Answer Summons for Debt Collection in Vermont

North Dakota Statute of Limitations on Debt

ClearPoint Debt Management Review

Indiana Statute of Limitations on Debt

Oregon Eviction Laws - What They Say

CuraDebt Debt Settlement Review

How to Write a Re-Aging Debt Letter

How to Appear in Court by Phone

How to Use the Doctrine of Unclean Hands

Debt Consolidation in Eugene, Oregon

Summoned to Court for Medical Bills? What to Do Next

How to Make a Debt Settlement Agreement

Received a 3-Day Eviction Notice? Heres What to Do

How to Answer a Lawsuit for Debt Collection

Tips for Leaving the Country With Unpaid Credit Card Debt

Kansas Statute of Limitations on Debt Collection

How to File in Small Claims Court in Iowa

How to File a Civil Answer in Kings County Supreme Court

Roseland Associates Debt Consolidation Review

How to Stop a Garnishment

Debt Eraser Review

Do Debt Collectors Ever Give Up?

Can They Garnish Your Wages for Credit Card Debt?

How Often Do Credit Card Companies Sue for Non-Payment?

How Long Does a Judgement Last?

​​How Long Before a Creditor Can Garnish Wages?

How to Beat a Bill Collector in Court

Not sued yet?

Use our Debt Validation Letter.

Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.

Let's Do It

It only takes 15 minutes.

And 50% of our customers' cases have been dismissed in the past.

"Finding yourself on the wrong side of the law unexpectedly is kinda scary. I started researching on YouTube and found SoloSuit's channel. The videos were so helpful, easy to understand and encouraging. When I reached out to SoloSuit they were on it. Very professional, impeccably prompt. Thanks for the service!" - Heather

Get Started