Can You Pay Your Original Creditor Instead of a Debt Collector?

Sometimes life gets messy. You fall behind on payments despite your best intentions. Now debt collectors call you constantly, demanding money you don’t have.

But here’s a question: Can you bypass the collector and pay your original creditor instead?

Navigating debt collection can feel overwhelming. Collectors operate by rules most people don’t understand. You need to know your options and rights.

We’ll help you understand when you can work with your original creditor. You’ll learn when to negotiate with collectors instead. Most importantly, you’ll discover how our partner Solo can help you respond to debt collectors and settle your debts.

Can You Pay Your Original Creditor Instead of a Debt Collector?

About $15.84 trillion of consumer debt exists in the United States. Americans use debt to buy homes, cars, and even groceries.

At least 1 in 3 Americans have a debt in collections. You’re not alone in this situation.

Debt passes to collections after you miss several payments. Your original lender may lack resources to track you down. They might view continued collection efforts as wasted money.

Original lenders have two options to recoup losses. They can hire a third-party agency to collect the debt. Or they can sell the debt outright to collectors.

Either way, the original lender loses control of your account.

Consequences of Debt in Collections

Collections damage your credit score significantly. Collectors will contact you constantly, pressuring you for payment. The collector may sue you if the debt remains unpaid.

You can often still pay your original creditor after collections begin. Contact the creditor’s customer service department directly. Explain your situation and propose a payment plan.

The creditor can reclaim the debt from the collector. You’ll work directly with them instead of the agency.

However, no law requires the original creditor to accept your offer. Your best chance is to contact them quickly. Creditors are most willing to negotiate within six months of sending your debt to collections.

The original creditor can remove the debt from collections if you pay it. Payment can be full or partial, depending on your negotiated agreement.

Are You Still Obligated to Pay if a Creditor Sells Your Debt?

You’re still obligated to pay even if the creditor sells your debt. You legally consented to repay the loan originally. Ownership doesn’t change your obligation.

You may be able to pay less than you owe. Original creditors want to cut their losses and extract some money. They’re generally more open to negotiations than collection agencies.

You have a bargaining chip. The original creditor just wants something from your debt. You may be able to settle for less than the full amount.

Payments can be made as one lump sum. You might also arrange smaller monthly installments.

Before paying the original creditor, confirm they still own the debt. If they sold it outright to a collector, you must deal with the collector. Working with the original creditor won’t be an option.

Debt Settlement Example

Lauren has fallen $3,000 behind on her credit card payments. After a few months of missed payments, the creditor sends her account to collections.

When debt collectors start calling, Lauren knows she needs to act. She can’t afford to pay the full debt right now. She reaches out to her creditor to explain her situation.

Luckily, the creditor still owns the debt and will negotiate. Lauren uses our partner Solo to send an offer and start negotiations.

After a few rounds of offers and counteroffers, they reach an agreement. Lauren will pay 70% of the debt amount, or $2,100. The payment must be made as a lump sum before a specific deadline.

Should You Pay a Debt Collection Agency?

If the original creditor sold your debt outright, you have choices to make. The truth is more complex than simply paying or not paying.

When to Avoid Paying a Debt Collection Agency

Collections put a hefty ding in your credit score. But paying off the debt may not fix that problem. Paying a collection agency may actually harm your credit score further.

Paying your debt can lower your credit score. You can get punished for trying to pay what you owe.

Your credit report isn’t permanent. Events that affect your credit score disappear after seven years. Collections, bankruptcy, and other negative items all fall off eventually.

If your debt has been in collections for nearly seven years, avoid paying it. Once you pass that seven-year mark, your credit report will clear.

When to Consider Paying the Debt Collection Agency

Sometimes paying is your best option. If you have the money and your debt recently went to collections, pay it and move forward.

Don’t just roll over and pay without negotiation. Contact the collection agency first. Ask them to write you a letter discharging the debt in return for payment.

Have them send this discharge to credit reporting agencies. You’ll get past the debt collection with minimal credit damage.

Paying your debt eliminates the possibility of a lawsuit. If you thought the credit penalty was bad, a lawsuit is infinitely worse.

Lawsuits involve court appearances and mountains of paperwork. If the collector wins, they have various options to recover their money. They can garnish wages and take money directly from your paycheck.

Responding to a Debt Collection Lawsuit

Derek is being sued by a debt collector for an unpaid credit card debt. After almost a year of missed payments, the credit card company sold his account. When Derek failed to respond to calls, they filed a lawsuit.

Not sure what to do, Derek used our partner Solo to draft and file an Answer to the lawsuit. The Answer helped him avoid losing by default judgment. It gave him time to set up a payment plan with the collection agency.

The case got dismissed. Derek paid off the debt over a period of time.

Is It Better to Pay the Original Creditor or Collection Agency?

The answer depends on your financial situation and debt status.

If the original creditor hasn’t sold your debt yet, they may be willing to work with you. They might restructure the debt so you can afford to pay it. Your options may include a lump-sum payment or monthly payment arrangement.

If the debt has already been sold to a collection agency, do not pay the original creditor. They no longer own the debt. Paying them won’t satisfy your obligations to the collectors.

If your debt recently entered collections, you probably feel stressed and confused. Stop and take a deep breath. Try to negotiate with your original creditor first.

If that’s not possible, try to settle with the collector. Remember to keep your chin up. You’ll get through this challenging time.

How Solo Helps You Resolve Debt

Our partner Solo makes it easy to resolve debt with collectors. You can respond to a debt lawsuit, send letters to collectors, and settle debts.

Solo’s Answer service is a step-by-step web application. It asks you all the necessary questions to complete your Answer. Upon completion, an attorney reviews your document. They’ll file it for you.

SoloSettle helps you contact your debt collector or creditor. You can negotiate the debt to settle for less, all online. The process simplifies and streamlines debt settlement.

No matter where you are in the debt collection process, Solo is here to help. You can resolve your debt and move forward with confidence.