When you receive a notice from a collection agency, you may wonder if you can negotiate the debt with the original creditor. Like many consumers, you may be unfamiliar with creditor procedures and the difference between the collection company and the original creditor.
There are a few key considerations that can help you resolve your outstanding account.
Does the collection agency work for the original creditor?
Before you offer any settlement, find out who holds ownership of the account. Sometimes, collection agencies work on behalf of companies. In other cases, they buy the debt from the original creditors. If your original creditor still owns the account, you can negotiate the settlement and pay them directly.
What if the original creditor sold the account?
If the collection agency owns the account, your original creditor no longer has a say in its handling. You can ask the creditor to buy the account back, but they may not be willing to do so. If this is the case, you must settle with the collection agency that owns it.
Why would the creditor sell the account?
Some creditors choose to sell outstanding accounts for less than face value to settle their accounts receivable aging. This resolves the account on their books. Since the company buying the account receives it at a discount, the buyer’s profit comes from securing full payment from the debtor.
It is important to determine who owns your debt before you make any payment. This protects you from paying the original creditor and still owing the company that bought the account.