why you should never pay a collection agency

5 Reasons Why You Should Never Just Pay a Collection Agency

Debt collectors can be intimidating. The calls start coming in, demanding payment on an old debt you may have forgotten about or don’t recognize. They insist you owe them money and pressure you to pay right away.

Many consumers pay up to make the calls stop. But before you give in, there are some important reasons why you should think twice about paying collection agencies.

1. You Will Restart the Statute of Limitations

When it comes to debt, there’s a time limit on how long a collector can sue you to recover what you owe. This is called the statute of limitations, and it varies by state. In Mississippi, it’s 3 years for credit card debt.

Once the statute of limitations expires, the collector loses the ability to sue you for the debt. But if you make a payment or even just a promise to pay, you restart that clock all over again for up to another 3 years. The debt essentially becomes legally enforceable against you once more.

So, if you’re close to the statute expiring, don’t give the collector more time by paying. Wait it out, and the debt dies. You can no longer be sued.

2. You Should Always Request Debt Validation First

Under the Fair Debt Collection Practices Act, you have the right to request debt validation from any collection agency. This requires them to provide documentation that proves you actually owe the debt they say you do. Shockingly, collectors often lack this proof.

They may have limited information about very old debts bought for pennies on the dollar.

Too many consumers pay debts they don’t actually owe because they fail to exercise their right to request validation. Don’t let this happen to you. Always ask for proof in writing before you pay a single cent. If they can’t validate it, you shouldn’t pay it.

3. Paying May Not Help Your Credit

Many people assume that paying a collection account will improve their credit score. But it’s not that simple. Paying an old collection debt can actually lower your credit score temporarily.

That’s because it re-ages the account, making it more recent again. This can hurt more than help in the short term.

Even after it’s paid, the negative status of “paid collection” will continue damaging your score for years. Paying gets the collector off your back but doesn’t erase the black mark. Don’t pay to try boosting your credit score. Know the real impact first.

4. You Could Negotiate a Better Deal

Collectors buy defaulted debts for pennies on the dollar, often just a few cents to the actual dollar. That means they have room to negotiate and settle for much less than you originally owed. But they’ll start by demanding the full amount, hoping you’ll pay without questioning it.

Don’t let them get away with this. Call their bluff and make a lower settlement offer. Many collectors will accept a deal to get anything they can. Just get any negotiated payment plans or lump sum settlements in writing before sending money.

5. Payment May Not Update Your Credit Report

Even after paying a collection account, the collector might not properly update your credit report. The unpaid status could incorrectly remain, damaging your score indefinitely. This happens more often than you’d think.

Before paying, get written confirmation from the collector that they will mark the debt “paid” on your credit report. You can’t expect them to do it if they won’t commit to it in writing. Don’t risk the payment not updating.

Don’t Act Rashly – Know Your Options

Bill collectors want to pressure you into rapid payment on old debts. But it’s crucial to slow down and understand all your options first. Paying debts in collections won’t always help resolve your situation. Sometimes, it can make things worse in the long run.

Get informed before you pay. Consult with an attorney experienced in consumer protection law. They can provide expert guidance tailored to your specific circumstances. Payment is your best path forward, but know why you’re paying and what it accomplishes before handing over the money.

Get Legal Help Dealing with Debt Collectors

Debt collectors rely on consumers acting rashly out of fear and misinformation. Don’t fall into this trap. Be an informed consumer who explores all options before deciding whether and how to pay collections. Protect yourself by asserting your rights under state and federal law.

If you need an advocate on your side, contact Ware Law Firm. Their team has the passion and experience to guide Mississippi residents through consumer protection issues. Let them review your case for free and discuss the smart next steps. Take control of your situation with legal expertise in your corner.

Author Bio

Consumer Law and Bankruptcy Attorney Serving Magee, Mississippi

Daniel Ware is CEO and Managing Partner of Ware Law Firm, a consumer protection law firm in Magee, MS. With more than 25 years of experience practicing law, he has zealously represented clients in a wide range of legal matters, including identity theft, lemon law, debt collection, and other consumer protection matters.

Daniel received her Juris Doctor from the University of Mississippi School of Law and is a member of the Mississippi Trial Lawyers Association. He has received numerous accolades for her work, including being named among The National Top 100 Trial Lawyers.

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