Home > Managing Debt > Can I Bypass a Debt Collector?

Comments 0 Comments
Advertiser Disclosure


When I am assisting people to resolve unpaid bills I’m often asked, “Why do I have to pay the debt collector? Why can’t I just pay my creditor or lender and avoid the collector all together?” A reader recently wrote in with just this question:

I have a $5,000 balance on my credit card and it is now at a collection agency since last month. I have never made a payment to the collection agency yet. Can I pay off my credit card and request to have it reinstated directly through my credit card company? Or is it mandatory to go through the third-party collection agency?
I feel it will be worst for me going through the collection agency to pay off my debt.

It’s natural to want to avoid paying a debt collector. Most of us, given the choice, would want to call the creditor we stopped paying. And sometimes you can deal directly with your original lender. But depending on the type of bill, how long ago you stopped paying, and certainly if you are already hearing from debt collectors, you may have to resolve the bill by paying the debt collector.

Why is it that you are stuck paying a debt collection company? In a word: contracts.

For example, when you open a credit card, the terms and conditions of your agreement will often speak to what happens if you do not make payments, and that generally your account could be placed with, assigned to or sold off to a debt collector.

You have opportunities to work with your creditor to resolve debts. But after a certain length of time without receiving the required payment from you, your creditor is going to drop your account into their established debt collection pipeline. Once that occurs, it is not common to be able to go around a debt collector to your original lender. Here are some things you can expect if you try to:

  1. The creditor will tell you they have your account out for collection and give you the name and number of the agency or firm you should contact to make payment arrangements.
  2. Your creditor has sold the rights to your debt to another company (make sure you confirm the company to whom your account was sold).

You can successfully resolve debts with debt collectors right when they first start calling you. You can also wait them out a little to see if you can strike a better bargain. If you wait long enough, in some instances you may be able to catch your account back in the hands of your lender — if the lender still holds the debt — which would allow you to work directly with them to pay the account. My experience is that the window of opportunity to catch your account between debt collectors is really small, and often not worth the energy as a strategy to pay debts when there are sometimes better deals that can be worked out with the debt collector.

Sometimes your debt has been purchased by a debt buyer rather than just placed with an agency to collect on behalf of the lender. When your debt is purchased, you will have no real options to work with your original lender. But here again, there are sometimes better outcomes that can result with a debt buyer than with the creditor.

Debt Collection Caveats

You should be aware of some warnings about debt collection scams, and making sure the debt collector you are dealing with is either legitimately working for your original creditor, or is the new legal owner of your debt. Calling your creditor to confirm you would be paying the right collection firm, if you have even the slightest doubt, is a must.

Whether or not you can work to reinstate your account at all is going to vary. In most cases, such as with credit card debts that go more than 90 days past due, the answer is no. In fact, many credit card issuers do not place accounts with outside collectors until they close them for nonpayment. And once your creditor closes the account, the odds of reopening it are slim.

If your accounts are not yet several months late, but with a debt collector, you could call the creditor and ask about your options to reinstate your account, or what would be more likely is possibly opening a new account once the prior one is paid in full.

It is worth mentioning that debt collectors will generally have no ability to impact or influence how your original lenders report your account to the credit bureaus. And that even if you are able to work out payments and resolve the debt with your lender, late pays and charge-off reporting will typically stay until they age off (as much as seven and one half years from when your payments stopped).

Over time, you can recover from temporary financial setbacks that resulted in unpaid bills and damage to your credit scores. As you work to rebuild your credit, it’s important to make on-time payments and keep your revolving debt (like credit card debt) low to have the best impact on your score. You can track your progress by getting your credit scores for free on Credit.com, updated every 14 days.

More on Managing Debt:

Image: Wavebreak Media Ltd

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team