My credit card debt was sold to a third party. When this happens, do you still owe the original amount? I know these kinds of companies only pay pennies on the dollar. Also: does the original creditor get a "kickback" if this company is able to collect anything?
2006-10-09 04:58:41 · 7 answers · asked by michelle j 2 in Business & Finance ➔ Credit
You still owe the same amount and the original creditor may get a kickback it depends on the terms of the sale.
2006-10-09 05:01:07 · answer #1 · answered by jimmywalls1982 3 · 0⤊ 0⤋
First of all, you still owe the debt. The debt and the rights to collect it were likely sold for pennies on the dollar. In addition, this debt could be resold to yet another collector at some point in time.
The original creditor usually does not get a kickback, although this would depend on the contract that they have with the collector. Usually, creditors must get the account off their books entirely if it is no longer a collectable account.
2006-10-09 12:02:18 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yes, you will still owe the original amount. Depending on the sale the first company probably sold your debt at a lower price in order to get something from what is owed. I doubt there will be a kickback to the first company unless it was in the sale agreement. Be warned, the new company will probably come after you like a rabid dog looking for the entirety of the debt. The first company decided they didn't want to deal with collecting anymore, the second company will be devoted to it.
2006-10-09 12:13:58 · answer #3 · answered by low_on_ram 6 · 0⤊ 0⤋
Kickback? Depends on the type of sale. Mostly the third party "bought" your debt for a fraction of the ttoal amount. The credit card wants to spend their money creating more wealth, not increasing salary overhead by chasing you for another year. They can take the money and put it back into the company. The third party company's "fee" or "profit" is getting you to pay the whole debt. They quite possibly might be willing to make a deal with you on the amount but you will contractually have to commit to payments.
2006-10-09 12:17:02 · answer #4 · answered by dougzinboston 4 · 0⤊ 0⤋
Greetings!
As part of the terms of service which you agreed to when you received your card, they can sell the debt to third parties for collection. Usually those companies pay depending on the credit rating of the person, anywhere from 10 to 30 cents on a dollar.
It is a flat out sale and you are liable for the entire debt plus interest.
Good Luck
2006-10-09 12:03:40 · answer #5 · answered by Anonymous · 0⤊ 0⤋
The company will go for the original amount. The first creditor has already been paid for your account by the secondary agency.
Be careful, as the new company may "re-age" your debt and make it appear on your credit history again. Read Liz Pulliam's columns on MSN.
2006-10-09 12:02:03 · answer #6 · answered by Jenyfer C 5 · 0⤊ 0⤋
Why come you so worried about what your original creditor did to the debt you have yet to pay for?
If you spent half as much time focusing on paying the debt as you did worrying about the underlying transactions of "selling bad debts", you would be well on your way to improving your FICO score.
Just pay the debt when you get the "ends" and let the creditor worry about how to make money off of your inability to pay your debts on time.
2006-10-09 15:22:10 · answer #7 · answered by DaMan 5 · 0⤊ 0⤋