What are the Repercussions of Not Paying a Commercial Collection Agency?

Commercial Collection Agency

Are you wondering if you can ignore collection agency notices without any repercussions? The answer is no. If you owe money to any third-party companies, there are chances that they will hire a commercial collection firm to pursue you.

Because these agents are experts in handling many such unpaid dues, it is not ideal to stall or ignore them. If you run the risk of having your account reach a collection agency, be careful. It is time to start taking your debt seriously and chalking out a payment plan.

You might think that the repercussions are small but that is not true. Issac Jenkins owed money to a small business firm. After requesting him to pay his unpaid dues for months, the owner finally hired collection agency services. Issac thought that these agencies will deal with the matter and give him an extended time frame but he had to face a lawsuit.

You should know that reputable agencies have lawyers on board to deal with legal issues if the need arises. If you fail to establish contact with the agent, they will ask their lawyers to draft a legal notice against you. So, before you decide to not pay off an outstanding debt like Issac, or ignore a collection agent you need to know the consequences of your actions.

Fall in Credit Score

Reputable commercial collection servicesreport accounts to credit bureaus. This will impact your credit score for the next few months, sometimes even years. If you have an unpaid due for a credit card or loan, your credit score will see a huge fall.

Late payments of unpaid credit card dues or loan dues will set your credit score to fall even before the collection agent establishes contact with you.

Many collection agents have noticed that the accounts they send to credit bureaus have already a history of unpaid dues. Once the agent makes a record, it will fall even lower. The ideal way to deal with it is to pay off the dues. Your credit score will show a new ‘due cleared’ record and collectors will not bother you anymore.

Constant Calls From Collection Agents

Every collection agent that has been assigned to you will contact you frequently until the due is paid. Reputable collection agencies do not put a hurdle to your personal lives but there are a few apples rotten in the basket.

You cannot establish any contact with the original creditor anymore, because the whole account is now in the hands of the agent. Even the payment plans have to be worked out with the agency. 

The ideal way out is to establish respectable contact with any of the best collection agency that has been hired by the original creditor. Once the payment is clear, you can sleep soundly!

Credit Report Marks

If you have outstanding debt, it gets considered serious delinquency. It is a signal to the state that you have not been keeping your payment promises. You will get considered a riskier borrower. Due to this reason, when you apply for new credit, it will get turned down. No one will let you borrow any amount because of the unpaid dues on the credit report.

For example- You will get turned down for a mortgage if you have unpaid dues mentioned on your credit report. So, it is best to pay off the debts, when the credit collection agency contacts. When you pay the dues, it won’t show on your report anymore and your credit marks will be higher.

Once the due report falls off your credit, you will be stress-free. This way, you can plan your future financial endeavors. There will be no more worries about negative credit report marks.

Job Searching

This is one of the most serious repercussions of not paying a debt collection agency. Most employers check your credit report and credit report marks, before hiring you. If you have not paid off your debts to the agency, your credit score will show that to the employer.

This will create a negative image of you in the mind of the employer. There are likely chances that you won’t get hired for the position.

This practice is most common in financial fields and upper-management job profiles. No company will want to get involved with a candidate who has a background of unpaid dues. This puts the company in a negative light. It is best if you pay off the agency in time. Otherwise, your poor credit report will reflect negatively when you apply for a job.

Unfavourable Rates of Interest

If a creditor has hired collection agency servicesto clear all unpaid dues, it does not mean that you cannot make other personal purchases. Some people think that because unpaid dues are mentioned in their credit score, they cannot spend for new purchases. This is not true. You can make your private purchases, however, there is a catch.

You are liable to pay a higher interest rate to reduce the risk of nonpayment. It becomes difficult to pay a higher amount for every service that you buy, so the best way out is to pay the dues to the agent on time.

Possible Lawsuits

As I cited Issac’s example, collection agents can make a lawyer draft a legal notice to you. If you fail to comply with the payment options or ignore the agencies, they will take legal help. The court will likely pass the judgement in their favour, due to the proof that they have of your nonpayment. 

It is advisable to not ignore any debt collection agent under any circumstance. If at all a lawsuit has been summoned against you, it is best if you hire an expert attorney.

If a commercial collection agent has been hired to deal with your unpaid dues, get serious. In no time stalling or ignoring will help your case. Many agents are stern and will exert force on you.

However, among other reputed agencies, Nelson, Cooper & Ortiz LLC agents listen to your side and then chalk out a plan. You are lucky if you have such an agent. So, take advantage of that luck and clear your dues sooner than later.