Here’s what will (and won’t) happen when your debt goes to collections

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October 28, 2026 / 1:42 PM EDT / CBS News

Falling behind on a debt can be stressful enough when you're dealing with your original lender. When that overdue balance gets turned over to a collection agency, though, the situation can suddenly feel much more serious. The calls and letters demanding payment may become more frequent, the language can become more urgent and the consequences of not paying can be harder to gauge. For borrowers who are already struggling to cover their monthly expenses, that added pressure can make a difficult financial situation feel impossible to manage.

And with many Americans stretching their budgets to keep up with everyday costs and high-interest debt, it's not hard to see how an overdue payment could eventually become a collection account. In fact, in a recent survey from Freedom Debt Relief of consumers with over $10,000 in unsecured debt, 36% of Gen Z borrowers and 34% of millennials said they could only consistently make minimum monthly payments on their debts, highlighting how financial pressures are continuing to build for younger Americans. But having…

Original source: https://www.cbsnews.com/moneywatch/