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Can debt purchasers continue to charge and increase the original debt? – Dennise

Can debt purchasers continue to charge and increase the original debt? – Dennise

I have an old credit card bill. I am not sure when, but do recall the that original creditor, first reduced my credit limit, then closed my account. The Limit was $5000K, they reduced it to $3,000.00K. I owed about the full amount of $3000 on it. I do know that it has gone through several collection agencies and each time the amount has incresed. There was NO activity on the account, as they CLOSED it, so I am not sure how interest could have continued.

Can Debt purchasers continue to charge and increase the original debt?

—Dennise

Your original agreement with the creditor would have outlined how your account can be treated after default. In many instances, your agreement with the creditor will allow for interest to continue to accumulate during the collection process. This, and the late fees and over limit charges, cause the original balance to increase. Your question assumes your debt was purchased. Have you verified that with your original credit card lender? Have you received collection calls and letters that indicate a debt buyer now owns the account?

 

You do want to be aware of the fees that are being added, and how they were calculated. You can request this information from a debt collector contact you, but you will want to do that in writing.

 

You can call the original creditor and ask how they are applying interest to the account (if they still own it). If your credit card issuer sold the debt off to a debt purchaser, the debt buyer will often have a hard time getting their hands on the agreement you had with your creditor in order to show the validity of how the balance on the debt is increasing from month to month.

 

Call your creditor first and find out if the debt was sold.

 

Do you have a strategy to resolve this debt? Who was the original creditor?

 

Post answers and additional questions in a comment reply below.

 

Any reader with questions about this topic is welcome to post in the comments for feedback.

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About Michael Bovee

Michael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.

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