Editor’s note: This story was updated February 28, 2014
When you’re trying to put a collection account behind you, the biggest hurdles are coming up with the money to pay the debt and negotiating a payment plan or settlement that you can afford. Once you’ve accomplished that, however, the next question is, “How do you pay the debt collector?”
It may be trickier than you think. Some payment methods are riskier than others. The debt collector is likely to try to get you to pay using a method that’s best for him, but not for you.
“When dealing with the subject of paying debt collectors, many experts will always look to the Fair Debt Collection Practices Act (FDCPA),” warns financial consultant Damon Day. “While I agree it is important to know what collectors can and can’t do, I rely more on Murphy’s Law when advising clients about the best options for paying debt collectors. For those unfamiliar with Murphy’s Law, it is typically stated as: ‘Anything that can go wrong will go wrong’.”
With that in mind, here are the pros and cons of various methods for paying debt collectors…