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What’s the difference between a debt collector and a creditor?

Last month we discussed the Fair Debt Collection Practices Act and the code of conduct that debt collectors and creditors must follow when they are trying to collect money from you. Those rules change, depending on who is doing the calling. So how can you tell? The main difference between a debt collect and a creditor is that the creditor is who actually offered you the line of credit, whereas the debt collector is just the hired thug. The creditor gives you money; the debt collector tries to get it back.

The only reason you would pay a debt collector is if your debt has been reassigned or purchased. If your student loan, car loan or credit card debt has been purchased by another party, the ownership of that debt is transferred to the collector and they have a right to 100 percent of the payment. If the debt has merely been assigned to a debt collector, their job as the hired gun is to try and get you to pay back your debt. The collector gets a portion or percentage of whatever monies they collect on behalf of the creditor.

If your credit debt has been sold, the original creditor should not be sending you collection notices, or making annoying calls. If you are not sure who the creditor is, ask. Whomever you ask should be able to tell you who the original creditor was and exactly how much you owe. If they are unable to do so, tell them to stop harassing you. If they do not have that simple information, you most likely will not have to pay that debt.

Source:, “Debt Collectors Vs. Creditors,” Wanda Thibodeaux, April 17, 2011

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