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If a bank charges off your debt and that debt down the road is bought buy a collection agency for penny's on the dollar can they come after you for the entire debt that was charged off by original cre?
Wiki User
∙ 14y ago
Yes, and this is a common misunderstanding of the inter-workings of a bank or credit card company that consumers have. When they "charge-off" an account this does not change anything for the debtor or the amount of money that is owed. This is an accounting practice where an asset or expected revenue is converted into a bad debt, at which point most liquidate them to third-parties at discounted rates, typically after 120 days unpaid.
Once this occurs the new owners now own the debt and your obligation for repayment transfers from the original creditor to this new owner. The discount the new owner paid is not relevant nor does it change your obligation. Lastly, as these new owners are investing on bad debts for repayment, they tend to be more aggressive then the original credit, which can include filing lawsuits for repayment, which they can, since they are the owners of the debt.
Your best bet is to try to work out a settlement, however do not expect them to agree to 1-cent on the dollar, especially if they know your good for more or would make more by getting a judgment and filing for wage garnishments.
Wiki User
∙ 14y ago
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Can a collection agency charge fees or interest in new jersey?
Collection agencies can't add charges. Fees and interest charged to your account are per the terms of your contract with the creditor.
If you owe a company money and it is placed in collections can you pay the original company or do u have to pay the collection agencies?
You have to pay the collection agency. The original company has a signed contract with the collection agency and they pay the collection agency a % of what they collect from you. That's how they make their $$. The original company did not want to have the outstanding balance on their books.
Can NSF charges be sold to a collection agency?
Yes. And there can be, depending on what state you live in, criminal misdemeanor charges.
Does the creditor or the collection agency get the money you pay on a debt?
When a collection agency takes on a bad debt, in many cases they are "puchasing" the debt from the original creditor. When you then pay off the collection agency, your money will stay with that collection agency. This is the most common scenario, but some companies do have their own internal collection agencies (Capital One, for example, has their own collection subsidiary in Idaho - the Westmoreland Agency). Hope this helps!
Can you be sued by the original creditor if they have already sold your case to a collection agency?
If they've sold your case to a collection agency, they have been "paid" for your debt with the money the collection agency gave them for your case, so, no, they can't legally sue you - as far as I know.
Do you still need to pay a company if you are paying a collection agency for the charged off debt?
No, as they are the legal agent of the original Creditor and the arrangements made with the collection agency are binding on the original Creditor.
Can a collection agency file criminal charges for a bad check?
Can a collection agency file charges for a bad check
If something has been sent to collection can the collection agency charge you interest?
If the original creditor charged interest then the collection agency will continue to accrue interest at either your states legal rate or whatever you agreed to in the original contract until the debt is either paid or sold to another collection agency or placed with an attorneys firm for legal litigation.
Can a collection agency charge fees or interest in new jersey?
Collection agencies can't add charges. Fees and interest charged to your account are per the terms of your contract with the creditor.
Can a secondary collection agency purchase a charged off debt and then begin to add late fees and add additional debt to the original?
Yes, it is perfectly legal for a debt to be sold and for the debt to continue to accrue interest and penalty charges.
If you owe a company money and it is placed in collections can you pay the original company or do u have to pay the collection agencies?
You have to pay the collection agency. The original company has a signed contract with the collection agency and they pay the collection agency a % of what they collect from you. That's how they make their $$. The original company did not want to have the outstanding balance on their books.
Why original creditors sale accounts to a collection agency?
Original creditors sale their accounts to collection agencies when the account has been past due and they have not effectively collected. At that time, the original creditor will charge off the balance from their accounts receivable and turn the account over to a collection agency. When the collection agency collects the debt, a portion of the amount received is paid the the collection agency and the remainder is returned to the original creditor as profit.
Can you be charged interest on medical bills by a collection agency?
Yes, unfortunately a collection agency can charge interest and other fees when they obtain a debt.
Can NSF charges be sold to a collection agency?
Yes. And there can be, depending on what state you live in, criminal misdemeanor charges.
Can a collection agency increase interest on a charged off account?
Yes.
Can a credit collection agency threaten felony charges?
No it is a violation of the Fair Debt Collection Practices Act
Can a collection agency add charges and interest to an old debt in Wisconsin?
Of course.
