Business closed, had a 3 year contract what happens?

Question

I had a 3 year service contract with a business and signed a contract with a debt collection agency to charge my credit card each month. The business I was obtaining the service has closed what happens next? I called the debt collection agency to have them stop charging me each month, but will it hurt my credit?

Answer 1

not as long as you start making payments on your own!!!

Answer 2

You were paying monthly for this service?  The contract becomes null and void on the dissolution of the company, and/or stoppage of the service.  If they stop the service, you can stop paying.

HOWEVER, if the company sold your contract (it's called factoring) to the debt collectors, then the collectors have already paid to receive your payment.  In that case, they can insist on you continuing to pay.  That will hurt your credit if you refuse.   Your only recourse then is to sue the original company for the loss of the service you are paying for.