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What happens when rent is sent to collections?

Landlords may escalate unresolved rent to a collection agency, which pursues payment and reports the debt to credit bureaus, after other collection steps fail.
Facing unpaid rents and legal costs, landlords often choose collections to motivate tenants to pay and limit out-of-pocket losses when other remedies fail.
Landlords must document late rent and give written notice stating past-due amounts and late fees before sending a formal pay-or-quit notice or filing for eviction, then provide collection agency documentation.
Affected tenants face long-term credit harms and harder housing searches, as collections can damage credit reports for up to seven years, and agencies typically deduct commissions, reducing landlords' recovery.
Tenants can dispute debts within 30 days and request validation under the FDCPA, which pauses collection until verification; landlords and tenants can avoid collections by communicating and following state laws.

Insights by Ground AI