What Happens When You Don’t Pay Collections?

Shelly Bohorquez
Image of a past due bill

If you have some bills that have gone to collections, you may be wondering what happens if you don’t pay the debt collectors who are contacting you. This depends on the approach you take: if you ignore them, they’ll call you constantly; if you exercise your right to stop them from calling or contacting you, their only option may be to serve you a lawsuit.

Table of Contents

What Can Debt Collectors Do If You Don’t Pay?

Report You to Credit Bureaus

One of the first consequences of having a bill go to a debt collections agency is having it appear on your credit report as an unpaid debt. Having unpaid debts reported to credit bureaus can damage your credit score for months, or even years, and affect your ability to qualify for credit, such as mortgages, car loans, credit cards and other types of loans.

Persistently Write and Call You

In an attempt to reach you and get you to pay, debt collectors will often persistently call you and/or send you letters in an attempt to collect. While they are not allowed to call repeatedly (e.g. back to back), there is no law preventing them from calling multiple times a day unless you specifically tell them you prefer their contact with you be in writing.

Repossess Your Assets

If you default on a secured loan or line of credit, the company you borrowed money from to purchase a car or house can take back the asset by foreclosing on your home or repossessing your car to cover the cost of the loan. They can also take back rent-to-own items. However, this is typically not a step taken by debt collectors.

Can Debt Collectors Sue You?

Yes, debt collectors can sue you if you don’t pay. However, there are usually a few steps that precede a lawsuit. Often, collection agencies that are unsuccessful will transfer a debt to a different collection agency who will attempt to collect on the debt as well. Therefore, you may receive several calls and letters from various agencies before you get sued. However, if you send a cease-and-desist letter to prevent debt collectors from contacting you, their next step is often to sue you, as they are no longer able to contact you to collect the debt.

Statute of Limitations

The statute of limitations on a debt is typically only six years from the last instance the debt was acknowledged, so if they’re going to sue you, it will be within that time frame. Debt collectors are more likely to sue you if they know you have an income and means to pay, and are simply choosing not to; therefore, it’s often a good idea to maintain limited conversation with them.

If you are served with a debt collection lawsuit, it’s in your best interest to respond by the date requested in the paperwork. At this point, the court will judge how you are to repay, which could include a payment plan or even garnishment of your wages.

What Happens To Your Credit Score

Unpaid debts on your credit report can hurt your credit score for months until you pay the debt, or up to seven years before it falls off of your report. This can impact your ability to get loans and definitely you ability to get loans with a low interest rate. It can also impact your ability to get a job, especially ones that are in upper management or are finance oriented. Furthermore it can also impact your ability to pass a credit check when renting a house or apartment, as property management companies, as well as some landlords conduct credit checks when deciding which applicant to rent to.

Late Payments

Late payments on bills will be reflect in your credit score depending on what the payments are for and how often you are late to pay. Even standard unpaid utility bills can affect your credit score, however, the unpaid bills that reflect most on your credit report are for credit cards and other lines of credit. These types of accounts will quickly go into delinquency and default, which can make their full balance due immediately depending on the contract you signed.

Default and Delinquency

While you won’t go to jail for not paying your bills, certain bills will quickly go into delinquency. Delinquency is generally not reported until you have missed 90 days of consecutive payments on an account; therefore, if you can avoid not paying your credit card debt for three consecutive months, the late payment should drop from you credit report within one or two years, whereas delinquent accounts remain on the report for up to seven years.

Multiple Collections Accounts

Having multiple open collections accounts on your credit report can lower your credit score and reflect poorly on your ability to pay money you owe. If you do not take care of the debt once you are contacted by a collections agency, and they transfer the debt to another collector, it may duplicate across your credit report, compounding the negative impact and making it harder to repair your credit report over time, as the debt will have been reported to one or several credit bureaus. This can also become confusing when you attempt to pay off your open collections accounts and are unsure which agency is in charge of the debt

Liens and Repossessions

A lien is a form of security interest granted over an item of property to secure the payment of a debt. In the U.S., the terms are used interchangeably, although in other countries, a lien is more associated with real property than personal property, where security interests are usually defined in a security agreement for debts with secured loans. These types of agreements give the borrower collateral to ensure they are paid even if you don’t have the money for it — including potentially repossessing real property, depending on the type of debt and lien.


A charge-off occurs when a creditor decides that the debt is a loss for the company and stops trying to collect the debt. Once a debt is designated as a charge-off, it appears as a derogatory mark and remains on your credit-report for seven years. However, even though the creditor stops attempting to collect the debt from you, that doesn’t mean you don’t still owe the debt.

To improve your credit score, you should contact the original lender and try to pay the account before it’s sent to a collections agency. It will then show as a ‘paid charge-off’ which looks better on your credit report than an unpaid charge-off. Even if it has been sold, you can pay the account through a collection agency, and the effect will be similar.


Filing for bankruptcy is often a last resort in an attempt to resolve your debt. Although this will remove most existing debts, declaring bankruptcy will remain on your credit report from anywhere between seven and ten years, and possibly longer, depending on the type of bankruptcy you file for. It will also cause your score to drop between 160 and 220 points.

What Happens If You Ignore Debt Collectors

They Will Keep Calling You

If you choose to ignore calls from a collections agency, expect to continue receiving consistent calls for weeks, months, and potentially even years. They will likely call at a variety of hours and will attempt to convince you to pay the debt as soon as possible.

A New Collection Company May Take Over

If you inform them you can’t or won’t pay the debt, or if you ignore them or restrict their ability to contact you, a new collection company may take over and you will have to explain the situation of why you aren’t paying, when you might pay and what times they are allowed to call you all over again. While this process may be exhausting, always exercise your FDCPA rights.


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