What Does It Mean When a Collection Company Refuses Your Payments?
It might sound counterintuitive, but collection agencies frequently refuse payments. Debt collectors usually do this as a matter of company policy and to ensure that you pay the full amount with a method the agency accepts. Refusal to accept a payment does not absolve you of the liability to pay the debt, and the creditor usually cannot change the amount you owe.
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Identification
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When a collection company refuses your payments, it likely means that you are not paying the debt in full. Debt collectors sometimes only accept payments in full rather than partial payments. The main reason collectors refuse partial payments, according to Consumer Credit Counseling Service, is that they do not want the collection effort to string on for many months. Also, the debt collector does not want you to construe a partial payment as settling the debt.
Payment Method
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The reason for the debt collector refusing your payments might be simple; it may be that you are not remitting payment via a method the agency accepts. For example, the collection agency might only accept certified funds, such as a money order or cashier's check, and not cash or a personal check, according to Bills.com, a personal finance website. The original contract usually states the method of payment accepted by the creditor. In general, a debt collector must abide by the terms of the original loan note.
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Good Faith Effort
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Keep records of your attempt to pay the debt in good faith in case the collection agency decides to sue you. A judge might discharge your debt if you show repeated attempts to pay the balance and the creditor refused to accept your payments. However, refusal to accept your payment never cancels the contract, only the instrument you use to make payment. For example, if the lender refuses to accept a personal check, that check is no longer valid.
Tips
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Talk to the debt collector about making partial payments or using your preferred payment method. Whatever you negotiate, get the agreement in writing. You can also send in payment on your own and include a cover letter with certain stipulations, such as that accepting the payment means accepting the payment schedule you set forth in the letter. In addition, you should review the balance the debt collector shows on your bill. Unless the contract specifically allows it, debt collectors usually cannot add penalties and fees.
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References
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