If you’ve ever missed a payment and received a notice that your debt is “in collections,” you might wonder what that really means. For some, it brings uncertainty and stress. For others, it's a reminder to take action. Either way, understanding the debt collection process helps you stay in control.
At Advanced Collection Bureau (ACB), we work with businesses, landlords, and consumers to resolve outstanding debts in a way that is clear, professional, and legally sound. Whether you're trying to recover money or manage an account that’s gone into collections, this guide explains what happens next and what your options are.
Step One: The Debt Is Transferred or Assigned
When an account becomes seriously past due—often 90 to 180 days—the original creditor may send it to a debt collection agency. This could be a third-party agency acting on the creditor’s behalf, or it could mean the debt has been sold outright.
Once this happens, the debt collector becomes the main point of contact. Their job is to recover the money owed using compliant methods, such as calling, emailing, or sending letters.
If you’re a landlord or business and unsure whether it’s time to involve a collection agency, see When to Hire a Debt Collection Agency: A Guide for Landlords.
Step Two: Credit Reporting Begins
One of the most impactful parts of the collection process is credit reporting. Once a debt enters collections, it may be reported to the major credit bureaus. This can lower a person’s credit score and affect their ability to rent, finance, or get approved for loans.
The longer the debt stays unresolved, the more serious the damage to their credit profile.
At ACB, we report to credit bureaus twice a month—more frequently than most agencies. This encourages quicker resolution and benefits clients who need accountability built into the process.
Learn more in How Credit Bureau Collection Services Impact Your Credit.
Step Three: Communication From the Collector
After taking over the account, the collector will begin contacting the debtor. These communications are regulated under the Fair Debt Collection Practices Act (FDCPA). Agencies must treat people respectfully and avoid harassment or misleading statements.
Many people are surprised to learn that debt collectors are often open to negotiation. They may offer payment plans or settle for a reduced amount, depending on the account details and the financial situation of the debtor.
We explore this further in What Is the Lowest a Debt Collector Will Settle For?.
Step Four: Potential Legal Action (If Unresolved)
If a debt remains unpaid and communication efforts are ignored, the creditor or collector may consider legal action. This typically involves filing a civil lawsuit. If the court rules in favor of the creditor, the judge may authorize actions like wage garnishment or bank levies, depending on state laws.
Legal steps are not taken lightly and are usually considered a last resort. But for businesses or property owners, pursuing legal recovery can sometimes be necessary—especially for large balances.
To understand the consequences of ignoring collections, read What Happens If You Never Pay Back a Debt Collector?.
What This Means for Creditors
When a debt goes into collections, it’s not just the debtor who is affected. The creditor’s ability to recover funds diminishes with time. That’s why prompt action matters. At ACB, we use advanced skip tracing, legal compliance, and account management tools to recover more—without charging you anything unless we collect.
If you need help resolving delinquent accounts, our team provides direct, U.S.-based support with no outsourcing and no upfront fees.
What This Means for Debtors
For consumers, going into collections may feel overwhelming, but it’s not the end of the road. The key is to communicate. Agencies like ACB are often willing to work with you on realistic options to resolve the debt and move forward.
Waiting too long only increases the risk of credit damage, fees, and legal issues. Addressing the debt early shows good faith and may lead to a better outcome for all parties involved.
