The Frugal Creditnista

Multiple Collection Accounts For The Same Debt – Who Do I Pay?

Q & A:

“I have a number of collection agencies reporting the same debt on my account. Is this legal? I don't mind paying it off since it's not much but how do I know who to pay? If I do find out who to pay should the other collection agencies be allowed to stay on my credit report if I no longer owe them?”

Great question! It is common for people to have a number of collection agencies on their credit report for the same debt. It is legal IF the ones that no longer own the debt mark their tradeline (the item they have reporting under their company) as CLOSED or TRANSFERRED. Only one collection agency should have an open or active tradeline showing for you for that debt. If you look at your credit report again you may see the original account on there as well; it's typically marked as CHARGED OFF; meaning it's no longer an active debt. Whenever you see CHARGED OFF, CLOSED OR TRANSFERRED it means the account is closed or no longer active.

So, I would normally suggest to look for the company that is active, but in your case because there are so many companies I would send them a validation letter to see who owns the debt. Not doing this may run you the risk of paying a company that no longer owns the debt and still being liable for the debt with the company that does own it – not a good situation to be in. Further, there's a lot of fraud out here when it comes to collection agencies; many ‘ghost' companies pretend to be the owner just to take consumer's money. Another point to mention is that if a debt has passed to a few collection companies, the chances of them having all of the paperwork they need to collect from you in the first place is slim.

So, send a validation letter so that the collection agency can prove that they own the debt.

As far as the reporting on your credit report; the ‘Date of Last Activity' or the ‘Date of First Delinquency' should be the same on every single company that has ever tried to collect from you for this debt. This is the date your payment was first missed and never made current again. A collection account is a continuation of the debt with the original company. Thus, the dates must remain the same so that it can be deleted at the same time. If it is not the same; you have grounds for a deletion based on inaccuracies. Because a collection account is treated as a continuation of the original debt, it will be deleted at the same time as the original account.

In addition; if you're going to pay the debt; make sure that it is not past your state's statute of limitations. You didn't tell me what state you're in but a quick Google search will give you the answer. If you're going to pay it in full, you don't have anything to worry about. If, however, you're going to settle, beware; you will restart the clock on the statute of limitations giving them more time to pursue you for the remainder of the debt – namely take legal action against you.

Hope this helps! If you need further assistance feel free to contact me to review your report.

~ Netiva

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