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Should I Pay Debt Collector Or Original Creditor

If you have a debt that has been unpaid for a long time, your creditor may engage a debt collection agency or sell your debt to a debt purchaser to pursue payment. Consumer Credit Act debts can be sold or transferred to another company at any moment after you stop paying; this is a standard part of the debt collection process. This rule applies to the majority of typical types of consumer debt, including overdrafts, loans, credit cards, shop cards, catalogues, and hire purchase.

When A Debt Is Sold To A Collection Agency, What Happens Next?

Rather than collecting debts owned by other companies, a "debt purchaser" acquires debts to collect. The creditor normally has no further participation in collecting the loan when it is sold, and they receive some money right away.

Who Purchases Debts?

Some collection companies may buy debts and pursue them on behalf of creditors. A debt purchaser will usually buy or assign a large number of debts from creditors. Although the debts will be sold for less than their face value, the debt purchaser will be entitled to the full amount owed. This is where they make their money.

If a £100 debt is sold to a collection agency for £70, the firm will endeavour to collect the entire amount and profit £30. What is paid for a sold debt is normally kept private between the creditor and the collection agency, so you're unlikely to find out.

Do I Have To Pay If A Debt Is Sold To Another Company?

You owe the money to the debt purchaser, not the original creditor, once your debt has been sold to them. When collecting the debt, the debt purchaser must follow the same procedures as your original creditor, and you retain all of your legal rights. They can't, for example, add interest and charges to your debt unless you gave them permission to do so in your original credit arrangement.

Debt Collectors Who Work For The Creditor

If a creditor is having trouble collecting a debt, they may hire a collection agency to try to reach out to you. Debt collectors or debt collection agencies are the most common names for these companies. Unless they specifically state that the debt has been sold, they are acting on behalf of the creditor, who still owns the obligation.

How Will I Know If A Debt Purchaser Has Purchased My Debt?

When your debt is sold, your original creditor should notify you. You'll also receive a letter from the debt's new owner, outlining who they are and why you need to pay them right now. The original creditor's name and, in most cases, account number should be included in the letter so you can tell whose debt it pertains to. If you're unsure, contact the debt buyer and inquire.