Skip to main content

What happens when a creditor turns an account over to a collection agency, as far as my credit goes?

Alamogordo, NM |

I was out of work for a while and our credit card bills stacked up. I cannot afford the minimum payments.

Attorney Answers 1


If the collection agency is a reporting agency they will report the debt as a collection account on your credit, this will be a negative report and certian financial organizations may not lend or require you to pay this before doing business with you. In addition certain government contractor may require the collection be paid prior to hiring.

You will need to consult with a consumer protection lawyer locally.

1. Start keeping a detailed log of all calls and letters. You should also demand in writing all communications from creditors is in writing.

2. Do not give them any personal information because that is how collectors decide on which accounts to recommend suing.

3. If you are going to make payments use money orders and not personal checks or “check by phone” because if they find a bank account the collector will be more likely recommend a lawsuit the their legal department.

4. All collections are negotiable.
If you are going to settle mark the check “settled-in-full” at the very top back of the check and include a letter explaining you are offering a settlement, keep copies of everything

5. Get written confirmation of any payment plan the agency will accept.

I do not practice in your state and you will need to consult with a local lawyer for protection under your state law.

I have pasted a link to the FDPCA to help you with your federal rights;

I hope this information and generic advice is helpful.

Good Luck

Mark as helpful

Bankruptcy and debt topics

Recommended articles about Bankruptcy and debt

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics