You usually won’t have to worry about trying to find a debt collector: they will find you. If you have old debts that you want to pay off, though, you may have to put some effort into finding out who to pay. Collection agencies sometimes sell debts to other collection agencies, so the company that now holds your debt may not be the one that you heard from last.
There are several ways for you to find the phone number of the collection agency that currently holds your debt.
How Collection Agencies Work
Before you consider contacting a collection agency, it may help to understand who you are trying to reach.
Debt collectors work in two ways:
- A debt collector may be retained by a creditor to act as a collection agent. In this case, the collector will remit the payment they collect to the original creditor and keep a commission as payment for their services.
- Debt collectors also purchase debts from creditors and pursue collection of the debts. If the debt has been purchased, none of the money collected is remitted to the original creditor. The debt collector owns the debt and keeps all payments.
Debt collectors who buy debts often purchase large packages of similar debts. Newer debts are more expensive, older debts less expensive. Debt collectors pay an average of four cents for every dollar of face value, so their profit margin on a debt they collect is substantial.
If you have a debt in collection and no collector has called you, your debt may have been sold as part of a package to a collector that has not chosen to pursue the debt. If a debt collector purchases a package of debts, they will prioritize the debts that they think are most collectible and potentially most profitable. If you haven’t heard from the agency, your debt may not be a priority.
Check for Contact Information in Your Credit Report
If you want to track down and pay old debts, your credit reports are your first stop. You have a credit report from each of the three major credit reporting companies: Experian, Equifax and TransUnion. Order all of them, because not all debts are reported to all credit reporting companies.
Most collection agencies will report your debt to one or more credit reporting companies. If your debt has been reported, the collection agency and its contact details should be listed on the credit report.
If a debt is more than seven years old or was not reported to a credit reporting company, it may not show up on any of your credit reports.
Get the Phone Number from the Original Creditor
If you remember who you originally owed money to, you can try contacting them. Ask them if the account is still with them and, if not, what collection agency it was sold to. This may not be effective for two reasons:
- Some creditors may not be willing to discuss old debts, especially if they have been sold.
- The collection agency that bought the debt may have resold it to another agency. The original creditor will not be able to tell you about any subsequent transaction
If you’re serious about tracking down old debts, contacting the original creditor is still worth a try. If the debt is still owned by the original creditor you may have the satisfaction of paying the business that you originally owed money to.
Wait and Monitor All Your Correspondence
Most debt collectors will not wait for you to contact them. They will find you and try to collect the debt. If you know you have a debt with a collection agency, but you can’t identify the agency, you can simply monitor your voicemail and wait for the collector to make contact.
When a debt collector does contact you, be sure to ask them to validate the original creditor and amount of the debt. Some collection agencies may try to add additional fees or collect debts that they do not own or that are not even yours.
Think Before You Call
Paying debts is a legal obligation and most of us feel that it’s a moral one as well. You should still think twice before contacting a collection agency. Remember that you are not paying the original creditor. You’re paying a collection agency that bought the debt for a tiny fraction of its original value.
Old debts never entirely go away, but their actual and potential impact on your life diminishes in two ways:
- Debts are removed from your credit report after seven years. Once that period expires the debt will no longer appear on your credit report or affect your credit.
- The statute of limitations on debt varies from state to state but is often four to six years. When it expires a creditor can no longer pursue legal action to collect the debt.
In some states, making a payment on a debt may restart the statute of limitations and extend your liability. Look into the rules in your state before making a partial payment on an old debt.
If you do track down a collection agency, be sure to verify that they currently hold your debt before you pay them. If you plan to ask the collection agency to remove the debt from your credit report or report it as paid in exchange for a payment, be sure to get any agreement in writing.
If a collection agency has bought your debt as part of a package and has chosen not to pursue it, your best move may be to simply let it be. If the collection agency does call you, make sure to negotiate. The agency probably bought your debt for pennies on the dollar and may be willing to settle for a payment lower than the original amount you owed.
Debts that have been sold to collection agencies may be difficult to track down if the collection agency is not actively pursuing collection. You may be able to identify the collection agency by checking your credit report or asking the original creditor.
If you cannot identify the collection agency, you can wait for them to contact you. Remember that it is not always in your interest to initiate contact with a collection agency. Consider leaving the situation alone and waiting for the collection agency to call you.