Short Answer: PRA Group, formerly Portfolio Recovery Associates, is a legitimate, publicly-traded company that purchases delinquent loans at a discount and tries to collect on them. If you ignore the company’s communications, PRA Group may sue you for your unpaid debt. While you should respond to PRA, you’ll want to request communications in writing and you may be able to negotiate a settlement. For more on dealing with PRA, see below.
Should I Pay Portfolio Recovery Associates?
Portfolio Recovery Associates is a debt collection agency that currently does business as PRA Group. As a publicly-traded company (Nasdaq: PRAA), it buys delinquent loans at a discount and tries to collect on them. If you’ve been contacted by PRA, you should respond; if you don’t, you could face a potential lawsuit. But, before you make a payment, you should try to negotiate a settlement.
What to Do If PRA Group Contacts You
If someone from PRA contacts you, you should first verify that you’re speaking with a legitimate debt collector. By law, PRA must provide you with written notice that contains information like the creditor’s name and how much you owe, according to the Consumer Financial Protection Bureau (CFPB). PRA Group will need to provide this information within five days of contacting you. You should request to receive all future communications in writing; do not provide any financial information over the phone.
Once you’ve received a collection request in writing, you should find out when you last made a payment on the debt. You can do this by searching your own records or reviewing your credit report. You can get a copy of your credit report at AnnualCreditReport.com.
Most statutes of limitations fall in the three- to six-year range, according to the CFPB. If your debt is outside of the statute of limitations, you do not have to pay it. However, PRA Group may still try to collect on the debt and may even pursue a lawsuit to recover it.
Why You Should Respond to a PRA Group Lawsuit
Even past the statute of limitations, you should still respond to a lawsuit. If you are sued for a debt, you must appear in court and show that the statute of limitations has passed. When faced with a lawsuit, you may want to retain the services of an attorney who specializes in debt collection.
You can also try to negotiate with PRA. If you’re dealing with a debt collector and a recent unpaid debt, the CFPB suggests you formulate a realistic repayment plan. The total repayment amount can be less than what you actually owe. Just be sure to get the agreement in writing.
For more information on settling delinquent accounts, see our article on how to pay off debt when you have a low income.