Knowledge Center

When Is It Best to Bypass Debt Collectors and Go Back to Your Original Creditor?

Reading time: 3 minutes

It’s possible in some cases to negotiate with a lender to repay a debt after it’s already been sent to collections. Working with the original creditor, rather than dealing with debt collectors, can be beneficial. Often, the original creditor will offer a more reasonable payment option, reduce the balance on your original loan or even stop interest from accruing on the loan balance altogether.

However, your ability to bypass debt collectors depends on your specific situation. Before you reach out to the original creditor, it is important to know when and how to do so, in addition to how the whole situation may affect your credit history.

The debt-collection process

Lenders handle past-due balances in varying ways, so it’s hard to generalize about when a creditor will turn to third-party debt collectors. The creditor will probably try to collect the debt from you almost immediately after a missed payment. Typically, they won’t declare your debt a charge-off (meaning they no longer expect to get paid) and send your balance to outside collectors until it has been delinquent for several months.

Although the charge-off timeline is different depending on the kind of debt you owe, creditors will usually wait until you have missed at least four monthly payments. It’s common for creditors to contract with outside agencies to handle collections. They might even sell the rights to the debt entirely.

Under the Fair Debt Collection Practices Act (FDCPA), collection agencies cannot use abusive, unfair or deceptive practices. For example, they cannot contact you at inconvenient times, such as before 8 a.m. or after 9 p.m. If a debt collector contacts you within the guidelines of the FDCPA, the Federal Trade Commission (FTC) recommends talking to the collector at least once to see if you can resolve the matter.

When should I try to work with the original lender?

Typically, the original creditor is most willing to negotiate when your balance has recently been sent to a collector. At that point, which is generally within six months, the creditor does not have many expenses in the file and can pull it back easily.

You should call the creditor’s customer service number and ask to set up a payment plan. Avoid coming off as angry or confrontational; being friendly and polite will make the creditor more likely to want to work with you instead of letting a debt collector take over.

Additionally, your chances of success increase significantly if you can give a good explanation as to why you should be offered a payment plan instead of having to pay off the full balance.

Still, there’s no guarantee you’ll be able to pursue this course of action. It could be difficult or impossible to go back to the original lender, depending on the circumstances. This is especially true if the creditor has sold the rights to the debt.

Debt collection and your credit history

It’s vital to be aware that even if you pay off a debt, letting it go to collections may damage your credit scores. Although satisfying your debt and having it marked as paid on your credit reports could help your creditworthiness in the eyes of lenders, even a paid collection account could remain on your credit history for up to seven years.

In the end, it is best to make payments on time and manage your money wisely. However, if you find you’re having trouble making payments, contact your lender as soon as possible to see if you can negotiate a solution that will avoid debt collectors altogether.

Free Credit Score

Get your free credit score today!

We get it, credit scores are important. A monthly free credit score & Equifax credit report are available with Equifax Core CreditTM. No credit card required.

Learn More