What Happens if You Don’t Pay a Collection Agency?
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If you don't pay a debt collector or collection agency, you’ll likely face increasing efforts to collect the debt via phone calls, letters, or even social media contact. Not paying a debt in collections will also hurt your credit score. If you don’t pay, the collection agency can sue you to try to collect the debt. If successful, the court may grant them the authority to garnish your wages or bank account or place a lien on your property. You can defend yourself in a debt collection lawsuit or file bankruptcy to stop collection actions.
Written by Mae Koppes. Legally reviewed by Attorney Paige Hooper
Updated May 8, 2025
What Happens if You Ignore or Don’t Pay a Debt Collector?
In most cases, it’s not a good idea to ignore a debt collector. Yes, even though they’re stressful and sometimes aggressive.
Unfortunately, ignoring a debt collector or not paying a collection agency won’t make them stop sending letters or making collection calls. It won't make the debt go away either. So your best bet is to learn about your rights and their limitations and empower yourself to confidently take action on your unpaid debt.
What Are the Consequences of Ignoring Debt Collectors/Collection Agencies?
There are several potential consequences if you ignore a debt collector:
Your debt will continue to grow. Interest charges, late fees, or collection fees may be added, making the total balance even harder to pay off.
You’ll likely face repeated collection attempts. Expect frequent phone calls, letters, and possibly even messages on social media. This can be stressful and overwhelming.
Your credit score will take a hit. Collection agencies typically report unpaid debts to the credit bureaus, which can hurt your credit score and make it harder to get loans or credit cards in the future.
You could be sued. The original creditor or collection agency may take you to court. If they win, they can get a judgment against you, which may result in the following:
Wage garnishment, where money is taken directly from your paycheck.
Bank account levy, where funds can be withdrawn from your bank account.
Property lien, which is a legal claim placed on your home or other assets.
What To Do if a Creditor Sues You
If a creditor sues you, don’t ignore the lawsuit! Make them prove that you owe the debt. Answer their summons and explore your legal defenses.
You don’t have to hire a lawyer to respond to the lawsuit, but if you want additional support and can't afford to hire an attorney, you can:
Contact your local legal aid organization.
Draft an answer letter for a small fee with Upsolve’s partner Solo. They've helped 234,000 people respond to debt lawsuits, and they have a 100% money-back guarantee.
If You Can’t Afford To Pay the Debt, Take Other Action!
It isn't a good idea to pay a debt collector the full amount that is past-due if you can't afford it. In most cases, when you haven't paid the original creditor, it's because you couldn’t afford to pay it. It would be reasonable to assume that you also can’t afford to pay the debt collector.
In this case, you may want to take advantage of a free consultation with a nonprofit credit counselor. Upsolve can help you schedule a free consultation with Cambridge Credit Counseling, an NFCC-certified nonprofit.
The credit counselor will consider your financial situation and make a recommendation. They may suggest any of the following:
Each of these helps in a different way. With a debt management plan, the credit counselor will contact your creditors and negotiate a better interest rate and payment plan that will allow you to pay the full balance. With a debt consolidation, you will use a loan to pay off all your debts. With a debt settlement, either you or a paid negotiator will contact the debt collector and negotiate a settlement for less than the full amount due.
The most powerful tool available is bankruptcy. You can start with a free consultation with a bankruptcy attorney to see if this is the right path for you.
Do You Have To Pay a Debt Collection Agency?
The answer depends on your situation. In some cases, paying the debt may be the best option to avoid further consequences, like a lawsuit or damage to your credit score. But in other situations, you may not be legally required to pay. Two such common scenarios are:
If the debt is past the statute of limitations
If you yourself are judgment-proof
Let’s take a closer look at each.
If the Debt Is Time-Barred Because It's Old Debt, Know Your Rights
If the debt is old and the statute of limitations has run out, the creditor loses the right to bring legal action against you, the lender. Sometimes this is called time-barred debt. Each state sets its own statute of limitations on time-barred debt, which may vary by the type of debt or contract.
The start date for the statute of limitations is also a matter of state law. Does it begin the day you signed for the debt? The last time you made a payment on the debt? The first time you didn’t make a payment? These issues can get complicated.
🚨 It’s important to note that the statute of limitations is a defense, not an automatic bar to a lawsuit. In other words, to benefit from the statute’s protections, you must respond to the lawsuit and raise the statute of limitations as a defense.
If you think the statute of limitations has expired, you may want to consult with an attorney in your state. You may be able to get free legal advice by contacting legal aid. You could also contact your state attorney general's office. The Federal Trade Commission (FTC) provides good information about how to deal with collectors trying to collect time-barred debt.
If you can prove a debt is time-barred, and it's not the original creditor that's trying to collect, you may be able to sue the debt collector under a federal law called the Fair Debt Collection Practices Act (FDCPA). In this case, it’s a good idea to contact a consumer attorney.
If You Are Judgment-Proof, Know Your Rights
If you are judgment-proof, that means that even if a debt collector sues you and wins a judgment against you, there is nothing they can legally do to collect the judgment amount. You’re considered judgment-proof if all your income is exempt from wage garnishment and you have no non-exempt assets that the debt collector could seize.
Being judgment-proof isn’t an official status, and it can change if your financial situation improves or if you receive an unexpected windfall, like an inheritance or lottery money. If you are no longer judgment-proof, the creditor will then be able to collect on any judgment they won against you, even if you were judgment-proof at the time. That said, most judgments do have an expiration date, which is determined by state laws. A creditor can’t collect a judgment against you if the judgment has expired.
💡 Remember, being judgment-proof doesn’t mean that you don’t owe the debt. Creditors and debt collectors can, and likely will, continue to contact you to find out whether your financial circumstances have changed. If the debt collector is not the original creditor, you can send a written notice demanding a stop to the collector calls. If they don’t stop contacting you, they may be in violation of the FDCPA. The FDCPA usually does not apply to the original creditor but does apply to collection companies and debt buyers.
What if You Aren’t Sure if the Debt Is Legit?
It’s almost always a good idea to start by asking the debt collector to verify the debt they’re trying to collect. This allows you to see how the amount of the debt was calculated and if the debt collector really has the legal right to collect the debt. From there, you can decide whether you want to dispute the debt, offer a settlement, or get extra help. (See “If You Can’t Afford To Pay the Debt, Take Other Action!” above.)
How Bankruptcy Can Help You With a Collection Agency
Bankruptcy is the most powerful tool in your arsenal to deal with any debt.
Regardless of the type of debt the debt collector (or original creditor) is trying to collect, the automatic stay stops collection activities the minute you file. The stay remains in effect until either the debt is eliminated by discharge or the case is dismissed by the court. Whether the debt is discharged depends on the type of debt and the type of bankruptcy you file.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common type of consumer bankruptcy. It can eliminate most of your debts, such as credit card debt, collection accounts, and medical bills, in 3–4 months. A Chapter 7 bankruptcy doesn’t eliminate most secured debts unless you surrender the collateral.
There are also certain unsecured debts that can’t be discharged in a Chapter 7 bankruptcy, such as recent tax debt and court-ordered support payments. You may be able to have your federal student loans discharged, but you’ll have to take additional action to prove they’re causing undue hardship.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is another kind of consumer bankruptcy. It takes longer because there is a 3–5-year repayment plan. If you don’t qualify for Chapter 7 because your income is too high, or if you have a lot of secured debt for which you wish to keep the collateral, you can look into Chapter 13. While you can file a simple Chapter 7 case on your own without a lawyer, most filers find that they need to hire a bankruptcy attorney for a successful Chapter 13 filing.
Is Bankruptcy Right for You?
The debt solution for you is completely dependent on your particular financial situation. Carefully consider your personal finances and all your debt relief solutions before deciding what’s right for you. To learn more, read this article: What is Chapter 7 Bankruptcy & Should I File?
Let’s Summarize…
If you don't pay a debt collection agency, there can be several consequences. Your debt will continue to grow. You’ll have to deal with the stress of collection agencies contacting you. Your credit score will take a hit. And you could even be sued and have your wages garnished.
At some point in the collections process, ideally before being sued, discuss the situation with a nonprofit credit counseling agency or a bankruptcy attorney. Nonprofit credit counselors are the best place to start. If you think bankruptcy might be the best solution, Upsolve provides a free tool to help you file your own Chapter 7 bankruptcy. In more complicated cases, it's good to contact an experienced bankruptcy attorney in your area.
