What might happen if I ignore or avoid a debt collector? What happens if you don't pay a collection agency?

It depends.

They may be annoying, but debt collectors do have their purpose. As a professional, the debt collector wants to help you resolve the debt. 

When those calls come in at random times, it can be disruptive or inconvenient. Still, it’s far better to let the debt collector know when and how to contact you. Perhaps you’d prefer to communicate via email—if so, let them know! But one thing’s for sure ... 

Avoiding or ignoring a debt collector will not make the debt go away.

First off, what is a debt collector and why are they contacting me? What is a collection agency?

A debt collector is a person or a company that regularly collects debts owed to others, usually when those debts are past-due. This is the definition provided by the federal Fair Debt Collection Practices Act [1], generally speaking.

Debt collectors include collection agencies and even lawyers who collect debts as part of their business. Some companies buy past-due debts from creditors or other businesses and then try to collect them. These debt collectors are also called debt collection agencies, debt collection companies, or debt buyers.

There are several reasons a debt collector may be trying to contact you:

• You are past due on a debt, or a creditor believes you are. Your creditors may have their own in-house debt collectors. Your creditors may hire a debt collection agency to collect their debts. They may also sell your debt to an outside debt collector.

• The debt collector is trying to locate someone you know. This is possible so long as the collector does not reveal that they are collecting a debt.

• A debt buyer has bought your debt and is now attempting to collect that debt.

Credit Report and Credit Score Problems: What happens if you owe a debt and ignore the debt collectors? 

If you owe the debt and don’t resolve it, the debt may end up on your credit report. This will affect your access to credit and your credit score. The debt collector or creditor likely will report your debts to a credit reporting agency like TransUnion, Experian, or Equifax.

Something worse could happen, as well ...

Court Judgment & Extra Costs Tacked on Debt: What happens if you owe a debt and ignore the debt collectors? 

If you just don't pay a collection agency, the debt may ultimately end up as a court judgment against you. This assumes that the debt is one upon which you can can lawfully be sued. 

This also assumes that the creditor wants to seek a judgment from the court against you to enforce the debt. Sometimes creditors don't want to take this approach due to the extra effort and expense. For example, your debt may be too small to justify going to court.  

But beware if the debt collector takes this approach ...

It is an expensive process for the debtor collector to sue you in court. But in most states, all those court costs, attorneys fees, etc. ultimately get charged to you, the debtor. Watch out! This could double or even triple the amount of your debt, when all's said and done. 

Lost Opportunity to Dispute: What happens if you owe a debt and ignore the debt collectors? 

If you believe you don’t owe the debt or don’t owe the amount sought, find a way to communicate with the debt collector. Let them know! 

The professional debt collector’s role is to collaborate with the consumer and the creditor to find solutions and aid in the resolution of defaulted debts. This can include resolving disputes about debts that may not be owed for one reason or another. 

The debt collector can also negotiate payments or settlements of defaulted debt where the circumstances call for it. More on this below ...

If a Creditor sells your debt, are you obligated to pay?

Typically, yes. The third-party buyer of your debt assumes the original creditor's rights and can legally pursue collection of the debt. 

Nevertheless, the debt collection agency will need to provide proof and verification of their purchase. This may provide some additional leverage in your negotiations. More on that below ...   

If a new party has purchased your debt, they have purchased your debt for far less than the original amount owed. Sometimes, it's just pennies on the dollar. This is great for you, negotiation-wise. 

What should you do if a debt collector calls you?

Whether you believe you owe the debt or not, arrange to speak with the debt collector at a convenient time. When you speak with the debt collector, have your relevant records ready. Schedule enough time to have a meaningful conversation with the debt collector. 

By discussing potential disputes, questions, and resolutions with the debt collector, you’ll do your part to limit the consequences of collection activity, help resolve any potential errors, reduce or eliminate the debt collector’s need to contact you in the future, and resolve the outstanding alleged debt.

How to Negotiate with a Debt Collection Agency On Your Own

I've put together a guide to help you negotiate with a debt collection agency on your own: 

Endnotes: What happens if you don't pay a collection agency?

[1] Fair Debt Collection Practices Act, for further information

Original title: What might happen if I ignore or avoid a debt collector?