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Can a firm that bought charged off debt pursue the full amount of the charge off or are they limited to the purchase price of the debt?
Wiki User
∙ 15y ago
They are allowed by law to collect the entire amount of the debt, regardless of the purchase amount. This is the reason many collection agencies are willing to negotiate a settlement.
If the agreement authorizes interest payments, and or other charges, (like expenses in collection or enforcing the agreement)...they are absolutely part of the rights another purchaser (the collection agency) may and does purchase. These terms are virtually always included in any loan agreement.
There is no requirement that any future owner of the rights be named in the original agreement or even have any knowlege of the original deal..for obvious reasons (like that requires knowing who the buyer, maybe years in the future, would be....loans of all natures are bought and sold, or transferred between companies for their own accounting/finance purposes all the time...daily, lord knows what other credits or things were int he original deal, etc). And rightfully so, as who you owe it too is entirely irrelevant to your obligation to pay, and pay the losses they incur for your actions.
It is frequently said the purchaser steps into the shoes of the seller.
Wiki User
∙ 15y ago
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