Frequently Asked Questions - Part 4

Commercial Investigations Inc. gets many questions about the business of collection agencies. For those interested, here are some of the most frequently asked questions about collection agencies that we hope will help you understand collection agencies and the process of debt collection.

These questions and answers are geared towards debtors themselves, generally after they have been contacted by a collection agency.

Is a collection agency required to accept partial payments?
A collection agency does not have to accept partial payments. The collection agency can choose between demanding the full or partial amount. They do not have to accept payment plans either. They will decide on which to do depending on your ability and your will to pay off the debt, and how often you will be able to do so.

Must I sign a contract for a payment plan?
You do not have to sign a contract for a payment plan. The collection agency can require that you sign a contract before accepting any payments. After the agreement is made, if you are able to pay the agreed upon amount and on time, they collection agency won’t change how they are collecting or demand more money. But, if you break the agreement, the collection agency can demand you pay or sue you for the remaining balance. Before agreeing to any payment plan, make sure you will be able to afford payments and pay them on time.

Am I required to give postdated checks or pre-authorize payments?
You are not required to give a collection agency either of these. However, this can often make the situation much simpler on both you and the collection agency. It will make sure that your payments are in on time and you can avoid any further ramifications. Make sure that there will be funds available if you do write any postdated checks or pre-authorize a payment.