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Finding out your debt is in collections can feel overwhelming—but it’s something millions of people deal with. It doesn’t mean you’re out of options. In fact, it can be the point where things start to turn around.
Here’s what you need to know.
🧾 What Does It Mean When Debt Goes to Collections?
When you miss payments for a few months, your lender may decide they’re not going to try to collect anymore. At that point, they may:
- Hire a third-party collection agency to collect the debt
- Sell the debt to a collector for less than it’s worth
That collector is now trying to recover the money—and make a profit doing it.
📉 How Debt in Collections Affects You
- It can be reported to the credit bureaus and stay on your credit report for up to seven years, even if you pay it off
- It may lower your credit score significantly
- You could get collection letters, phone calls, or even settlement offers
- It can cause added stress during an already difficult time
But remember: just because the debt is in collections doesn’t mean it’s unfixable.
💡 What You Can Do If You’re in Collections
1. Confirm the debt is real
Ask the collector to validate the debt in writing. You have the right to know what it is and who it came from.
2. Know your rights
Collectors can’t harass you, lie to you, or threaten you. You can ask them to stop calling and communicate by mail.
Learn more here:
👉 https://www.consumer.ftc.gov/articles/debt-collection-faqs
3. Don’t ignore it
Debt in collections doesn’t go away. Ignoring it could lead to more fees or even legal action, depending on the collector.
4. Consider a settlement
Many collectors are open to settling the debt for less than the full amount, especially if they bought it for cheap. You don’t have to pay everything to start moving forward.
How Relief Helps
We work directly with creditors and collectors to help users request savings on eligible debts in collections. No phone calls. No paperwork. Just a clear way to reduce what you owe, right from your phone.
If the collector agrees, you’ll see the new balance and can decide what works best for you.
⚠️ Disclaimer: Relief does not provide financial advice. The information in this article is for educational purposes only and should not be considered a substitute for professional financial guidance. Please consult a certified financial planner or advisor for personalized support.
Links to external websites are provided for convenience and informational purposes only. Relief is not affiliated with these third-party sites and does not endorse or guarantee the accuracy of their content.
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