This is probably the most asked question i’ve seen and since i’ve experienced this several times on several different occasions, I will provide detailed information on what to do, how to do it and what to expect from personal experience.
What causes my account go become negative?
There can be 2 ways for your account to go negative. The most common way is when someone sends you money and you end up spending that money. The person who sends you money then chargesback and causes PayPal to ‘hold’ the funds he sent you causing your account to go negative (assuming you didn’t have money on your account to start with).
Another way would be a subscription re-billing you and causing your account to go negative. Most of the time PayPal will decline the transaction, but there are cases on were they allow it assuming you have a back up funding source, such as a credit card or bank account.
How do I restore my balance?
The only way to restore your balance is to add funds to your account. Yes, you can have someone SEND you money to restore your balance, but you will NOT be able to SEND money until your balance is back at 0.00.
What happends if I don’t pay my negative balance?
This is the MOST asked question i’ve answered. Several things can happen here, so read carefully.
If you choose to leave your account negative, in 90 days PayPal will turn your account over to IQOR, a debt collection agency to try and get the money you owe back. I can almost guarantee that this is a automated process and this company is just a branch off PayPal to specifically handle debts. If you used your real address, you will be received letters stating the balance you owe and how to pay it. You will also receive non-stop calling from IQOR trying to get you to pay the debt you owe. A simple fix for that is to change the last 4 digits of your phone number on your PayPal before IQOR handles your debt.
IF YOU ENTERED YOUR SOCIAL SECURITY NUMBER OR APPLIED FOR A CREDIT CARD THROUGH PAYPAL, PAY THE DEBT OR IT WILL SHOW UP ON YOUR CREDIT HISTORY.
If you haven’t, then you have nothing else to worry about besides annoying letters and calls. They CANNOT prove your identity so they cannot take legal action against you (and they wouldn’t anyways unless you owe them like $10,000+).
I’ve personally been through 4 PayPal accounts and all of them closed/frozen for being negative. I probably owe PayPal a sum of $6,000 because of people charging back on me using hacked PayPal’s. I’m currently 21 and I opened my first PayPal account when I was 14. My credit history is a clean as a whistle because I wasn’t dumb enough to give PayPal my social security.
Why does PayPal ask for your Social Security number if it’s not required?
If you don’t withdraw money often, then you don’t need to worry about it. If you don’t enter your social security, your limited to withdrawing a maximum of $500 a month. If you wish to withdraw more you MUST enter a social security number.
PayPal Information, Questions & Problems 