Can a charged-off account be sold to a collection agency?
Emma Miller
Updated on January 24, 2026
When an account is charged off, or written off as a loss, it remains on your credit report for seven years from the original delinquency date leading up to the charge off. Often, the original creditor will transfer or sell the account to a collection agency.
What does new account in collections mean?
When an account becomes seriously past due, the creditor may decide to turn the account over to an internal collection department or to sell the debt to a collection agency. Collections can appear from unsecured accounts, such as credit cards and personal loans.
Can collection Agencies renew debt?
Debt collectors can restart the clock on old debt if you: Admit the debt is yours. Make a partial payment. Agree to make a payment (even if you can’t) or accept a settlement.
What happens when an account is charged off and placed in collections?
If a creditor charges off your account or places it in collections, it will notify the credit reporting agencies. It will tell the reporting agency the date your delinquency began, which is important when determining how long the debt can continue to show up on your credit report.
When does an account get placed in collection?
The Collection and Charge-Off Process Usually, creditors charge off a debt about six months after you stop making payments on the account. Accounts placed in collection. If your account is placed in collection, but not charged off, the original creditor still owns the debt.
What kind of fee does a collection agency charge?
Flat Fee: A flat fee is a specific fee that is charged upfront in the collections process. Debt Buying: Collection agencies buy the debt from you at a reduced cost and obtain their fees through the collection of the debt.
When do you get paid by a debt collection agency?
With contingency fees, debt collection agencies only get paid on the debt amounts that are collected. If nothing is collected, there is no charge. When collecting on past due accounts, the age of the debt will determine the success of recovery.
