Legal Question in Credit and Debt Law in Indiana

Re: Sent to a Collection Agency

There is no specific law that requires creditors to accept payments toward an obligation and your creditor is entitled to seek the assistance of a collection agency. Your creditor could have also sued you for the balance and sought a wage garnishment regardless of the fact that you were voluntarily paying the obligation. It may not have been an efficient mechanism for collection in your mind, but it is legal. Either the creditor or the collection agency may report to the credit reporting bureau that the obligation was not paid in full upon presentation. Whether this affects your credit is a question that the next person to grant you credit will answer.