Debt collectors can attempt to collect on many different types of debt, but they must follow federal and state laws, including the Fair Debt Collection Practices Act (FDCPA).
Here are some of the most common types of debt that collection agencies may contact you about:
1. Credit Card Debt
✔️ Unpaid credit card balances that were charged off by the original creditor
✔️ Debts that have been sold to a third-party debt buyer
2. Medical Debt
✔️ Unpaid medical bills from hospitals, doctors, or specialists
✔️ Debts that have been transferred to a collection agency after the provider failed to collect
➡️ Note: The three major credit bureaus have changed medical debt reporting rules, so some small balances may not appear on your credit report.
3. Personal Loans & Payday Loans
✔️ Unpaid personal loans from banks, credit unions, or online lenders
✔️ Defaulted payday loans, which often have high-interest rates
➡️ Warning: Some payday loan collectors engage in illegal threats—always demand validation of the debt.
4. Auto Loans & Repossessions
✔️ Deficiency balances after a vehicle repossession
✔️ Past-due auto loan payments that lenders have sent to collections
➡️ Even after a repossession, you may still owe money if the sale of the car did not cover the remaining balance.
5. Mortgage & Home Loans
✔️ Past-due mortgage payments
✔️ Home equity loans (HELOCs) that have defaulted
➡️ Some debts related to foreclosure may be sent to collections, but lenders must follow strict legal processes.
6. Student Loans
✔️ Private student loans in default
✔️ Federal student loans (although collection rules may vary)
➡️ Federal loans have different collection processes, including wage garnishment without a court order.
7. Utility & Service Bills
✔️ Unpaid electricity, gas, water, and phone bills
✔️ Past-due cable, internet, and cell phone bills
➡️ Utility companies may shut off services, and unpaid bills can be sent to collections.
8. Rent & Lease Debt
✔️ Unpaid rent from previous landlords
✔️ Apartment lease break fees
✔️ Past-due property management fees
➡️ Some landlords report unpaid rent to credit bureaus or hire collection agencies.
9. Government & Tax Debt (Handled Differently)
🚨 IRS Tax Debt – The IRS and state tax agencies can collect directly, but they also use private debt collectors.
🚨 Traffic Tickets & Fines – Some local governments send unpaid fines to collections.
🚨 Unpaid Child Support – Child support enforcement agencies may use private collection agencies.
➡️ These debts often have different collection rules and may lead to wage garnishment or legal action.
