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Bob lives in the United States. A business billed Bob. Can the business send the bill to a third-party debt collector at any time? (e.g., does the business have to wait a certain amount of time? ; does the business have to first try to contact Bob regarding the bill?)

  • Are you trying to understand the timing from the consumer point of view or from the company point of view? – mhoran_psprep Jan 13 '18 at 12:10
  • @mhoran_psprep from a consumer standpoint; basically how quickly can a bill become a bad note on one's credit score, and is the consumer notified before it happens? – Franck Dernoncourt Jan 13 '18 at 22:16
  • @FranckDernoncourt Ah, whether it can impact your credit score is different than whether you can be sent to a 3rd party debt collector - asking about notifications being required would also be different - you may want to redirect what you're looking for in your question. – Grade 'Eh' Bacon Jan 14 '18 at 1:19
  • @Grade'Eh'Bacon "whether it can impact your credit score is different than whether you can be sent to a 3rd party debt collector" -> that's correct. Understanding the impact on the credit score is my end goal, and to do so I would like to first understand whether a bill may be sent to a third-party debt collector at any time. – Franck Dernoncourt Jan 14 '18 at 1:22
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There is no particular need for consumer protection laws to prevent a business from immediately turning your account over to a debt collector. This is because the act of 'sending the bill' to a debt collector is actually referred to by that business as 'factoring' their account receivable.

This means the business is actually selling the debt owed by you, to a 3rd party, for a 'factor' of what it is worth. Depending on how 'uncollectable' a debt collector might view you, they might be able to buy your debt for as little as $.20 on the dollar. Taking a % fee 'off the top' of the business's top line revenue likely means that they would be losing money in total, for having served you.

So there is no real risk of a business immediately sending your account to a debt collector. And if they did (let's say - because they are extremely cash-poor and need your account paid TODAY, and not within the originally agreed 30 days), then it wouldn't be the act of selling to a 3rd party that matters. It would be your treatment by that company that matters. And in that circumstance, just as if the company itself still held your bill, the debt collector will need to abide by all the rules in place to prevent harassment of the debtor.

  • Thanks. "There is no particular need for consumer protection laws to prevent a business from immediately turning your account over to a debt collector" -> I understand that your point is that there is no need for such laws; but is there such laws? – Franck Dernoncourt Jan 13 '18 at 9:31

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