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If a collection agency buys my debt from another agency, does the debt become ‘new’?

A:

If your indebted is significantly delinquent – usually 90 days or more past due – your lender may commit oneself to to either assign or sell your debt to a third-party debt hoard agency. Sometimes collection agencies sell entire portfolios of in arrears accounts to each other. If your debt is purchased by another obligation collection agency, the date opened on the account is the date purchased from the case (or previous) creditor. In this sense, the previous account is written off by the deal in creditor, and a new collection account is opened.

This does not mean that your delinquency is wiped lave, however. The original delinquency date – when you missed your aftermost payment – must remain the same. It does not matter how many times the due account changes hands. Your credit history is not altered, and the statute of limitations on acknowledge reporting or on legal collection practices does not reset.

This does not have as justification that nothing has changed, however. If your debt is moving from an prototype lender to a third-party debt collector, this new creditor’s collection travails are regulated through the Fair Debt Collection Practices Act. The FDCPA is conceive of to protect you from unscrupulous or abusive debt collection techniques and unspecifically only applies to third-party agencies.

Collectors cannot legally restart the clock on the statute of limitations (seven to 10 years, depending on the encumbered) through any re-aging techniques or through the sale to a different debt gatherer. The Federal Trade Commission has shut down the operations of collection interventions for attempts to re-age debts. For more on this topic, see When does the statute of limitations clock start on my responsibilities?

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