You may also owe taxes on the amount that is forgiven. If you’re paying collection agencies, there are a few rules of thumb to follow when making debt collection payments. Make a payment. Is It Possible for a Collection Agency to Actually Sue You? Starting a payment plan can be seen as restarting the clock on the debt. "What If I Believe I Do Not Owe the Debt or I Want More Information About the Debt?" These collection agency representatives utilize payment plans, post dated checks and automatic checks to help you reach a balanced account. LaToya Irby is a credit expert and has been covering credit and debt management for The Balance for more than a decade. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. If you don’t pay a collection agency and you do owe the money, the collection agency may eventually file a lawsuit against you. The statute of limitations for creditors/collectors to file a lawsuit is based on the date of the last payment on the debt. Having a debt in collections can be nerve-wracking, especially when you’re trying to do the right thing and make every effort to pay your debt. The more you can pay and the sooner you can pay off the debt, the more likely it is that the collector will accept your request for a payment arrangement. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. The debtor is required to either make immediate payment to the collection agency or work out an alternate payment plan. We have several types of payment plans to help you. Here's a Sample Letter You Can Use to Stop Debt Collector Calls, How to Remove a Debt When the Statute of Limitations Expires, 9 Tips to Successfully Negotiate With Debt Collectors, Need to Send a Pay for Delete Letter? This page contains frequently asked questions about the program. This collection agency is licensed by the Collection Service Board of the Department of Commerce and Insurance. Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. We wanted to take some time to tell you a bit about ourselves. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. Use the letter below to write your own debt payment agreement letter. Collection agencies make a number of mistakes, but refusing to accept a payment plan should not be one of them. Thanks for stopping by. If you can’t afford to pay the debt with cash on hand and can’t manage to restructure debt or loans to cover the balance, then you may need to make arrangements with the collection agency. Collection agencies make a number of mistakes, but refusing to accept a payment plan should not be one of them. Some collection agencies do consider payment plans. This is a one-time offer and a precedent is NOT being set. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. If you fail to make an on-time payment on the plan you have a newer date of default. ]. In that sense, we are no different from any other news organization that is supported by ad revenue. First, don’t allow debt collection agencies to make automatic withdrawals from your bank account. Thanks for your patience. Can "No Contract" Get You Off the Hook for Collection Accounts? However, they are not legally obligated to agree to a payment plan. 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