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Q: I don’t understand collection agencies and how they work. If a company purchases your debt, are you legally required to repay them?
A: Yes. If the debt was sold to a collection agency or some other company, you are required to pay them. You can check with a lawyer for individual legal advice, but if the sale was legitimate, you now owe the company that purchased your debt.
Be wary of scams and illegal behavior by collection agencies, though. Some of these companies are on the up and up, but others will do anything they can to make a profit. This includes, but is not limited to, harassing phone calls, threats, trying to collect debt that belonged to family members, and trying to collect debts that have already been paid or that have passed the statute of limitations.
Some companies may even claim to have purchased your debt when they have not. This can be deceptive, since you do actually owe the money, so you think they are legitimate. If a new company contacts you, trying to collect a debt, your best defense is to ask them to validate the debt.
To request the validation, you should send the collection agency a letter asking for important information such as amounts owed and proof of the transfer of ownership of the debt. If you need help writing the letter, you can find a sample letter at this website. If the collection agency cannot validate the debt, you are not required to pay.