There are numerous misconceptions when it comes to dealing with debt collectors. Although debt collectors have the authority to attempt collecting debt in numerous ways, there are many myths that need to be debunked. For instance, some believe that debt collectors have the authority to arrest you or put you in jail—this is definitely not true. Below are six of the most common debt collector myths, debunked.
You Can Avoid the Debt Collector and Pay the Original Creditor
After folks are contacted by a debt collector, they often prefer to work with the original company or creditor. However, depending on the original creditor’s relationship with the third-party debt collector, this isn’t possible. Once the original creditor hires a debt collector, the contract states that only the debt collector may receive payments. Typically, debt is sold to the third-party debt collector by the original creditor—so once this transaction (and contract) is made, it can’t be reversed.
After the original creditor sells the debt to the third-party debt collector, the burden is officially transferred. After this is done, the debtor cannot try to go back to the original creditor and make payments. From that point forth, the debt collector owns the debt.
Paying a Debt Collection Removes It From Your Credit Report or Raises Your Credit Score
Once you pay a debt collection, the debt collector updates your credit report. However, the update only shows that you’ve paid the debt. The debt collector is not obligated to remove it from your credit report. This is because paying off the debt doesn’t mean you never owed it in the first place. Paying off any debt is great, don’t get us wrong. But unfortunately, you still went into debt—and your credit report will still show that.
However, paying off a debt collection is definitely healthy for your credit score and overall financial health. You may not see an immediate increase, but your credit health will thank you for paying off a debt collection.
The Debt Will Go Away If You Ignore It Long Enough
Ah, if only that’s how it worked. Unfortunately, ignoring your debt does not make it go away. If that were the case, why would anyone pay up? While the debt collection calls and letters may eventually stop the longer you ignore a debt, the debt itself never goes away. Depending on the situation, even after the credit reporting time limit is up and the debt moves off your record, it will always exist in the creditor’s records.
Think of debt as something that follows you everywhere you go!
The Debt Collector Will Stop If You Make a Partial Payment
While it’s true that the debt collector may temporarily stop contacting you after you make a payment, it doesn’t mean they won’t continue attempting to collect. Once your debt is sold to a debt collector, it’s due in full.
Keeping up with your payments will ensure the debt collector stops calling you. By simply calling or keeping in touch with them, you may keep them off your back.
Sending a Cease and Desist Letter Makes the Debt Go Away
Did you know that debt can be transferred from one collector to another? That’s right, a cease and desist letter doesn’t ensure you won’t ever hear from a collector again. While sending a cease and desist letter stops the current debt collector from calling you, it doesn’t erase your debt. Your debt will continue remaining on your credit report and affect your credit score. This will continue affecting your ability to get approved for loans and credit cards.
Debt Collectors Are Obliged to Stop Calling You If You Tell Them to Stop
This isn’t entirely true, but it is in two ways:
First, if you tell a debt collector to stop calling you at work, they must oblige and stop calling you at work. Second, if you tell a debt collector to stop calling you during a certain time (for inconvenience) they must stop calling you during that time.
However, they will still call you outside of those two instances. Referring to the last point, the only way to get a debt collector to stop calling you is to send a written cease and desist letter.
Southwest Recovery is the most trusted debt collection agency in Texas. We are headquartered in Dallas with offices in Austin, Houston, San Antonio, and Oklahoma City. We operate with integrity, kindness and empathy and oblige by the Fair Debt Collection Practices Act (FDCPA). For more information about debt recovery, contact any of our offices today.