Home > Managing Debt > The Dos and Don’ts of Paying a Debt Collector

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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…


Bank Account Draft/ACH

Most debt collectors ask you to provide information about your checking account so the payment can be taken right out of your account. It’s convenient, and often costs you nothing. But is it safe? That depends on how well you trust the debt collector.

“Never [pay this way],” says Mike Arman, a retired mortgage broker. “Autodebit is permission to access your account whenever they feel like it and then say ‘Oh, we made a mistake’—and do you think you’re getting any money back? They can also come back later for more, whether by ‘accident’ or design.”

Even if the debt collector does what he says he will, there’s another potential problem with this method. If you agree to pay off your debt in installments and your financial situation changes, or if there’s not enough money in your account to cover the payment when it’s due, you may find yourself on the hook for both the debt to the collector, as well as a new debt to your financial institution for overdraft fees.

In addition, this method “may be difficult to stop at the last minute because of processing cycles,” warns Bill Bartmann, President and CEO of CFS II and a veteran of the collection industry.

An alternative? Open a second checking account just to pay the collector. “Setting up a new checking account will allow a consumer to set up an auto draft or write a personal check to a debt collector without putting the rest of their finances at risk,” says Day. Of course, if you only have a single debt to resolve, that approach may prove to be an expensive hassle. If so, you may want to consider another method.

The general consensus? Avoid giving your bank account information to a debt collector unless you’ve set up a separate account for this purpose.

Personal Check

Mailing a personal check is fairly cheap: it only costs you the price of postage, plus certified mail fees if you want confirmation that your check was received. (That’s recommended, of course). You’ll also have your cancelled check as proof of payment. It’s not terribly fast, though, and for that reason it may not be at the top of the debt collector’s list of preferred payment methods. Plus, you’re providing the collector with information about your checking account.

A safer alternative is to use your financial institution’s online bill pay service. Gregory B. Meyer Community Relations Manager at Meriwest Credit Union explains, “Your online banking will send them a check that is basically guaranteed funds like a cashier’s check, but your personal info, like your account number, does not show on it.” Ask your credit union or bank for details.

Tip: If you haven’t already set up online bill pay through your financial institution, it can take a few days to get started. So don’t wait until you’ve struck a deal to sign up.

What about postdated checks? Under the Fair Debt Collection Practices Act, debt collectors are not supposed to deposit postdated checks before the date on the check (or even threaten to do so). And if the collection agency accepts a postdated check that’s dated for more than five days in the future, it is supposed to notify the consumer in writing 3-10 business days before depositing it. However, not all debt collectors play by these rules.

“Collectors will say that (sending postdated checks) is part of the terms. It is not true and you can negotiate that,” says Leslie Tayne, a New York attorney who specializes in consumer debt resolution.

The general consensus? Avoid postdated checks. Use a personal check only if it comes from a separate account you’ve set up to pay the collector, or use your financial institution’s online bill pay service.

Debit Card

Debit cards access funds in the checking account to which they are tied. So the same warnings that apply to bank account drafts/ACH apply here. If the amount charged to your debit card is wrong, or if there are multiple withdrawals when you only agreed upon one, you’ll be fighting the collector to get that money back in your account. While consumers generally are protected against unauthorized withdrawals under the Electronic Funds Transfer Act, it may be difficult to prove the amount wasn’t approved since you gave the debt collector your debit card information.

The general consensus? Avoid giving a debt collector your debit card number.

Credit Card

Paying a debt collector with a credit card won’t make the debt go away. Instead, you will have new debt—and additional finance charges. “Paying one debt off while racking up new debt is an oxymoron in itself,” warns Howard Dvorkin, founder of Consolidated Credit Counseling Services. “If a person truly finds themselves in a financial situation where they are borrowing from Paul to pay Peter they need to reach out for help.” If you cannot pay a debt collector without taking on new debt, seek help from a credit counselor or bankruptcy attorney.

The general consensus? Don’t use a credit card to pay a debt collector.

Prepaid Card

Any collection agency that accepts debit or credit cards can accept a prepaid card. With a prepaid card, you simply load money onto the card and then give the collector your card number.

All prepaid card issuers charge fees. Some some have relatively few fees, others charge a lot of different fees. Give yourself time to shop for the right card if you choose this option.

On the plus side, with most prepaid cards you can only spend the money you’ve loaded onto the card, so if you get a card solely for this purpose you don’t have to worry about overdraft charges if the debt collector overbills you. And your personal financial information remains private.

However, your statement may be the only “proof” of payment you’ll get so make sure you keep a copy of that for your records.

Another trap: Debt collection scammers will instruct their targets to load money onto a prepaid card then mail the card to them. This allows them to be paid with virtually untraceable funds. Refunds are also impossible. Never send a debt collector a prepaid card as payment.

The general consensus? A prepaid card used solely to pay the debt collector can be a relatively safe payment method, but be sure to look for a low-fee card and keep a record of your payment.

Money Transfers

Money transfers include services like Western Union or MoneyGram, as well as wire transfers directly from your bank or credit union account to the collector’s account. Debt collectors like this method because they can get paid quickly. Fees can be expensive, though.

On February 28, 2014, I researched fees for sending $750 to a debt collector in the U.S:

Western Union: I used the “pay bills” tab on their website to research how much it would cost to pay NCO Financial from Florida. Fees ranged from $24 to $49, depending on whether I planned to go in person to a Western Union office or pay by phone or online.

MoneyGram: The website “Pay Bills” page says “competitive pricing starting at only $1.49” however I could not find a detailed fee schedule. When I called customer service they stated the fee would be $10.99 to pay NCO. For a recipient not set up under their Pay Bills option, the website indicates a $62 fee for a transfer from a MoneyGram location, $75 for an instant transfer online using a debit or credit card, or $20 for an economy transfer from a bank account (requires 3 days).

Several sources raised concerns about the ability to confirm that a debt collector has received payment by one of these methods. Western Union says on its website that “guarantees to provide a transaction identification number that can be used for bill payment tracking purposes or your fee will be refunded.” Remember to ask about tracking information before paying this way, and and keep a copy for your records.

And watch out: money transfers are the preferred payment method for scammers, warns the Federal Trade Commission. In a consumer guide, it says:

Why do scammers insist that people use money transfers? Because it’s like sending cash: the scammers get the money quickly, and you can’t get it back. Typically, there’s no way to reverse a transfer or trace the money, and money wired to another country can be picked up at multiple locations, so it’s just about impossible to identify or track someone down.

The general consensus? Money transfers can be expensive, and potentially risky. Before paying a debt collector via money transfer, make sure you understand exactly what kind of proof of payment you will receive and make certain you the collection agency is legitimate.

Money Orders

Money orders are relatively inexpensive and can be purchased at a post office, bank or credit union and most convenience stores, grocery stores, etc.

Fees are usually quite low. At Wal-mart they are sixty cents. If you buy one at the Post Office, it will cost $1.10 to send up to $500, and $1.55 to send $501-$1000. You’ll have to mail the money order, so plan to add fees for postage and proof of delivery.

Cons? It’s “damnably frustrating in the event the money order is lost—replacement can take 90 days or longer,” warns Bartmann. Western Union, for example, charges a $15 fee to replace a money order if the customer has the receipt and $30 if the receipt has been lost.

It’s also difficult, if not impossible, to prove the collection agency cashed the money order you sent. You will generally have to rely on your money order receipt and proof of delivery if the collector says you didn’t pay. The U.S. Postal Service warns on its website that you can’t stop payment on postal money orders, and that you can’t “track or trace a money order in the mailstream.”

The general consensus? Money orders are cheap and help you maintain financial privacy, but it may be difficult to prove you paid the debt.


Most of the sources I spoke with had not heard of debt collectors using Paypal to collect. Bartmann observed, “Not many collection agencies can receive remittances by PayPal but I am hard put to think of a reason why a collection agency should not allow that payment method. Our agency has used PayPal for both payments to others and payments from others. We have been pretty happy with it.”

You can send money for free from your Paypal balance or your bank account. If you want to use a debit or credit card, the fee is 2.9% + $0.30. And “you just KNOW they are going to ask you to cover their fee to receive money in addition to what they claim you owe,” says Arman.

The amount you can transfer to the collector may be limited by a “sending limit”—check your account. Also keep in mind that it can take several days to get set up on Paypal to send money.

On the other hand, the debt collector won’t have information about your bank account, and if you set up a payment plan, Paypal states you can stop a recurring (“Preapproved”) payment anytime up to three business days before it is scheduled to debit from your account.

The general consensus? Paypal may be safer than letting the collector take money from your bank account. But determine whether fees will be charged, and if so, who pays them.

More Tips for Paying Debt Collectors

Verify First, Pay Second. Make sure you actually owe the debt, and that it’s not outside the statute of limitations. “Paying any portion of the debt is generally considered an admission of the debt and will typically restart statutes of limitations,” says Rob Drury, Executive Director, Association of Christian Financial Advisors.

And in this era of debt collection scams, it’s a good idea to verify that the collection agency actually exists and you’re not being targeted by a scam. Ask for verification of the debt in writing, then check with your state attorney general’s office to find out if the agency must be licensed in your state, and if so, that it is. If licensing is not required, try checking with the Better Business Bureau to find out if the agency is registered there.

Don’t Cave In To Pressure. A collector may tell you that you must use the payment method he prefers. Or he may use a high-pressure tactic such as telling you the offer expires very quickly, or threatening to mark you down as “refusing to pay” if you don’t use the payment method he prefers. If you need time to figure out how to pay, stand firm. Refusing to use one of the payment methods listed in this article is not illegal. Take notes of what the debt collector says in case you need to consult a consumer law attorney.

Get It In Writing. If you decide to allow a bill collector to take money directly from your account, make sure you have a written agreement from them first. “It must be in writing with clear terms signed by both parties,” says Daniel Gershburg, a New York bankruptcy attorney.

“Have them email, fax, or mail a letter to you stating the amount they are accepting and how that money will be used: payoff in full, paid off for a lesser amount, or completely removed from your credit report. Take a copy of this letter and attach your check to the letter so there is no question of what should be done once it is received at the collection agency,” suggests Meyer.

Keep Good Records. “Regardless of payment method, consumers should always keep documentation of their payment (i.e., bank records, receipt, statements, etc.),” says Mark Schiffman, Director of Public Affairs for the credit and collection industry trade group ACA International. Keep these records in a place where you can access them easily, and indefinitely. Debts sometimes resurface years later.

Negotiate Fees. “Watch for fees related to payments,” says Tayne. Find out of there is a check by phone fee or other fees related to a particular payment method. If so ask for it to be waived.” Often it can be.

Follow Up. “I cannot stress this more, make sure the payment was entered correctly or received,” says Tayne. “There are so many times when the person taking the payment makes a mistake and the payment does not go through. You want to make sure all payments are received and applied and that the settlement is still valid.”

Make It Official. Want to be extra safe? “Pay your attorney and have your attorney send them a law office check,” suggests Arman. “Even the dumbest bill collector knows better than to screw around with a check drawn on “The Law Office of . . . “. There is also an unassailable audit trail, and the bill collector never gets ANY of your account information.” Of course, that’s assuming you can afford to pay a lawyer, which may not always be the case if you are struggling to pay your bills.

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  • DMC

    I’d love to read this but you don’t have a view as a single page option. Fail.

    • RST

      I agree. Whenever I see that an article is broken into slides without a single page view available, I close the tab on my browser.

      • Kevin

        I can third this sentiment. I came here to read this article, as I thought it’d be interesting, but when I saw there was no single page option, I simply left this comment and closed the page without reading a word.

        Intentionally forcing your customers (readers) to jump through ridiculous hoops for a few extra cents in ad revenue is insulting, and I’ll be no part of it.

        • Steve

          Wow, it seems making a comment on here is more of a pain than just simply clicking a single link to go to the next slide at the bottom. But some people will complain about anything I suppose.

    • Jay

      The reason most sites use this type of navigation is to increase the number of hits on their site. I don’t find it takes more than a few extra seconds to read a review like this, and this one was especially worth it.

      • denko

        Anything at all to do with ANY credit bureau is BOGUS and NOT good for your financial health. If you just stay away from all cr/bureaus BALONEY and their B/SHT you will no doubt be better off. They all lie and distort the truth anyway.
        I no a person w100 Plus K a year, no bills, no real estate loans, no car loans never ever had ANY money problems of ANY kind but according to 3 CR/B they ain worth a POOP creditwise. Now then, tell me how GOOD/GREAT/WUNDRA-FUL the big three FOOLS are then?
        Yaah thats what we think too.

  • question

    I have a debt collector calling me, but won’t tell me what the debt is regarding. They ask me to verify my name and address, to verify I am who I say I am (when they call, and when I call them back).

    Should I provide this information to them, or should I stand ground and refuse to offer any personal information unless they can tell me what it is regarding?

    • http://www.Credit.com Gerri Detweiler

      It’s probably OK to give your name to them – they are probably trying to make sure they don’t discuss the debt with someone else, which would be illegal. But I wouldn’t provide them with any personal information (like Social Security number). Especially with the payday loan debt collection scam that’s sweeping the country, you want to be very careful.

      Insist that they send you something in writing. If the debt belongs to you, their notification should reach you. You can probably verify your zip and that should be enough to confirm they have the right address. (Unless you’ve moved recently.)

      You are entitled to written notification of the debt under federal law. Tell them you won’t discuss the debt until you receive the written notice to which you are entitled.

      I recently discussed this specific scenario on my radio show with attorney Michael Forbes. You can download the podcast here:


      Good luck!

    • dog lover

      In my personal experience, DO NOT give anyone any personal information over the phone.
      If they have your phone number and the numbr is listed in your name then they should already have this information.
      2—You know if you have debts that are outstanding, so they can, without breaching confidentiality laws give you at least the account of which they are inquiring about, without revealing the nature of the call. You then will know right away if you had a past relationship with the institution or company in question. If not then hang up immediately.

      • Wayne

        Thats fine and dandy, but so many will sit there on the phone and play the game of, “Well if you have my info then you tell me what it is”. If a debt collector were to do that without knowing who in fact answered the phone, then that would be the first step to a lawsuit. Debt collectors have no clue who answered the phone, anyone can say they are the person the call was intended for. Playing games like that is something people use to end the call to get away from paying on a debt. ( I would know, I’m a debt collector )

    • Wayne

      I’m a debt collector and we use verification like date of birth, address, and even the last four digits only of a social. We do this so we do not get sued for disclosing information to any other person claiming to be the debtor. It is very important to keep information confidential because noone should know other peoples business in matters like this, so that is why we ask for two types of verification.

    • P.J.

      Article was very informative. You all just kill me, (lol). Reading others comment’s is a good way to start your day with a laugh. Could you put a little cream and sugar in my coffee please? Thanks.

      • JK

        I second that P.J. Life is too short to be negative, rude and complain about the simplest things..let’s all be grateful for the little things such as this blog for instance..very informative and a good resource for people who are facing such situation.
        Instead of whining about going on page 2 or 3 or whatever..just lift your little finger and do it already.
        It takes the same if not more amount of time, effort and energy to complain, whine and be negative than just going to the next page! People! change starts from one’s self before we can change the world.
        I am not a lawyer nor a debt collector.
        I’m just an average normal citizen.
        Thanks .

  • Dennis

    I agree word for word with the person who said “I’d love to read this but you don’t have a view as a single page option. Fail.”

    Slideshows are a nuisance.

  • Sanjay

    I’d love to read this but you don’t have a view as a single page option.

  • Pingback: Good Debt Versus Bad Debt()

  • Michael

    Personally, I always use U.S.P.S. Money Orders. Primarily because you are not giving a collector any information regarding your bank relationship(s), i.e. name, account number(s) routing number(s). Of course, photocopy the money order and keep the stub safe.
    Moreover, do not admit to a collector that you even have a bank account. They will most certainly attempt to garnish it once they find out your institution.

  • diamondsmiles

    What’s the big deal with reading one page at a time? Are you all that impatient or so important? You obviously don’t want to read it that badly. It was interesting.

    • Nick

      Amen, seems like folks are getting lazier and lazier. I have absolutely no problem with going through a slideshow. It’s not too hard!

      • ShortTime

        On the contrary, I stay kind of busy. I think slide shows are typically designed to advertise. Some elements of this article may be of a tutorial nature but I don’t think I need to see pictures to grasp the concepts being presented. I used to read slide shows but after comparing it to the time I spent reading one-page articles, I refuse to do so.

        • denko

          ST, … those folks no thaa= Monkey see, monkey du! You are not a monkey, but there are TONZ of um in the usa, or meximerica here and that is one easy way to capitalize on the people from thaa zoo.

  • Jim Myers

    …I worked in the collection department of a major retailer for a decade. It was an honest company that followed the law as written for collection agencies even though it did not apply to the original company.
    …A tip that I wanted to leave is not to try to “buy time” by mailing in an unsigned check. We had a rubber stamp and would mark the check… words to the effect that we would guarantee any refunds if it turned out that the customer did not write the check. *Most* banks accepted this and we would get frantic phone calls from customers because their rent check just bounced…
    …One other warning… If we got a check returned to us for NSF and we figured that it was deliberate… we had a couple of options. We could deposit it again, but if it were again to prove NSF the bank would puch a hole in it and we could not deposit it again… we were left with what amounted to a promissory note.
    …The second option was (for a small fee) to place it with the bank for collection… which meant that the moment enough funds were in the account we would get payment… and again rent checks would bounce…
    …Above all, never write a check that you have reason to know has been written on an account that has been closed. In most states that is a crime and judges take it far more seriously than NSF…

    • Gerri Detweiler

      Good tips Jim! Thanks for weighing in.

  • Rhonda

    I loved reading this article. I just received an offer on a credit card that they will relieve half the debt if I pay the other half in three months. I will receive a 1099c on the hald relieve. Glad I read these payment senerios before I agree. I’m curious what the 1099c inmpact would be on my taxes and is there a penalty with the IRS. Also will this debt write off linger on my credit report.

    • bobbywo


      The 1099 that is sent to you will be for the amount not paid in your settlement–in your case half of the credit card’s total balance. So if you settled a $5000 credit card debt for $2500, you will receive a 1099 for the remaining $2500. All of this money is considered income and taxable at whatever your tax rate is. There is no “penalty”–this “income” is just taxable. Generally a credit card company will report this on your credit reports as “paid in full for less than amount due.” This is generally considered a negative mark on your credit, and can remain there for up to 7 years. Another note–do not accept a settlement agreement over the phone–ask for the settlement agreement in writing so that you may have a record that this was in fact the agreement. You don’t want to scrape together money only to have a creditor tell you months later that you still owe on a debt you thought was settled. They should also send you a letter acknowleding they have received your payment and noting that the debt has been settled.

  • http://www.myestateguide.com Mike Fisher

    By a phone with a voice disguiser and have some fun… also caller ID! We get calls that do not belong to us over and over. We have told them we have had our number for 5 years and no one by that name lives here. They say they will do something adn dont. So nothing else to do then say let me get them and push your voice disguiser and get a good laugh. Its just some poor sap trying to make a living and at least I am not cursing him or her out and losing it… LOL

    • bob

      this is just as bad as cursing them out. in fact worse. at least if you curse them out and hang up you dont waste their time. time is money. the time they waste dealing with you messing with them they could be talking to someone who actually wants to pay their bill and therefore they can make their goal so they can keep their job. its not their fault the number is wrong so why dont you do the right thing and tell them and if it doesnt get fixed then contact the right people if it doesnt get taken out. why do people always have to mess with people.

  • Anna

    If a creditor turned a debt over to collections and then a consumer filed for bankruptcy, can the debt still be collected on? Due to circumstances beyond my control, I had to file Chapter 7. I tried working out payment plans but most creditors were not willing to budge. I went to a credit conseling service and they were unsuccessful as well. Now, I have a collector calling about a debt that my credit report shows is closed and charged off. I told the collector that but they continue to call.

    • Felicia

      You need to tell that debtor that you filed for bankruptcy and it was discharged on such and such a date (if it has already been discharged) and send them a copy of that page. Then you need to contact the attorney who handled your bankruptcy becauce sometimes it might take a letter from them to make it stop. I believe in most states it is illegal for a debtor to have ANY contact with you once you have filed bankruptcy. So refer it to your attorney. That is part of the fee you pay them for filing.

      • Gerri Detweiler

        Felicia is right. If you included this debt in your bankruptcy the debt collector must leave you alone.

  • Charlie

    For those who are visually impaired and use screen readers, having to flip through page after page IS A HASSLE. There is =no= justified reason why this can’t be merged into one page of information. @Nick: lazy my ass. When you’re going blind (from glaucoma, diabetes, old age, or whatever), get back to me and we’ll compare notes about “lazy” …. Until then, shut your ignorant pie hole.

  • Charlie

    To the moderator: If you delete my message, then what you’re saying is: disabled people don’t deserve fair consideration. I’m documenting any changes (every 10 minutes) and will file suit if I believe you’re taking such actions.

    • Steve

      Apparently because you’re disabled means you can come on here and be a complete douche…WOW. Talk about someone needing to shut their ignorant pie hole.

  • donna

    Is it not illegal for a debt collector to contact my sisters with different last names or my brother or my my parents everyday and leave harrassing messages with them or on thier machine
    I would like to know how to stop this Its not fair to my family and I want to resolve this

    • Gerri Detweiler

      Have you found out if this is a real collection agency trying to collect a debt you owe? Or do you suspect this is one of the fake payday loan debt collectors?

      Generally, unless your relatives cosigned the debt, these frequent calls are likely illegal. (And if the debt collector knows how to find you then they definitely should not be calling your relatives.) If this is a real debt collection agency, then you should contact a consumer law attorney right away. If you think it’s one of the scams coming from overseas, then you should report them to the Consumer Financial Protection Bureau.

  • John Martin

    Watch out for Banks such as Discover Card. if you miss the payment a three times or more they will turn you into a law firm, who is nothing but a parasite debt collector. They will charge their own interest rate, jack up fraudelent fees, and then ask you to stop feeding your family and paythem. You can pay them for years to come, but the principal hardly moves. then they send you more and more letters using legal language to scare you. these parasites are poping up all over the place. The law does nothing to stop them. Minnesota is the worst State, when it comes to debt collectors. Attorney General’s office is swampt will residents calling in but very little has been done to curb their advances…

  • http://credt.com Chris Hitesman

    I hasve a sister who used to worl for a collection agency years ago but gave me a form for when a debt collecter called or sent me collection notices called the THE FAIR DEBT COLLECTION ACTcease and desist any and all attempts to collect the above debt. It is a Federal law that protects those that are not able to repay a debt. Is a provisions of Public Law 95 – 109; Section 805-XC I hope this will help those who have deby collectiors hounding to repay a debt. You will still have to make arrangements with the originaal company you owe the debt but by the time it goes to collections the debt has been written off but will re,ain on your credity report for 7-10 yrs. I know I am talking rom personal experience

  • http://credt.com Chris Hitesman

    in my previous comment I stated it was Public Law 95-109 Section 805-XC. It should read Public Lsaw 95-109, Section 805-C

  • DoughBoy

    Slides are a pain… Why is this done like this? To show different ads on each slide?

    • mrsshya

      Replying to a 4 yr old question…Because blogs get paid for clicks and they should be if the content, like this one, is useful

  • rick

    one word…….RELAX!

  • Terrence Urbanis

    I sent for one of the annual free credit reports and the form I got back to fill out required more information than I had to give in the navy to get an ultra top secret clearance. I don’t think congress had this in mind when they passed the “freebie” law.
    Also, I let the phone use the “leave a message” option. These people are like the Nazis who wanted to know if your grandparents were Jewish. The people who lived in my apartment get a lot of calls but the amusing thing is when I playback the recordings and they say “press one” or “press two”, etc. Never hear on the phone who is calling for the individual and I don’t care to let them know they are being recorded. You are not authorized to give any person or company any of the above information.

  • Mary Riley

    I have AT&T as my internet provider, so you know it is slow and I hate to call them because I worked for a sub of AT&T and know Customer Assistance is the worst. So my new laptop is getting very slow service. That means it takes several minutes for these pages to download. I don’t want to be stretched out to 17 screens not to mention the rest. This is a waste of my time and has does not have anything of importance.


  • no name

    In texas you can tell debt collecters to go where the sun don’t shine…They cannot collect unless you want them to…also, if it’s a very old debt and you make one payment, then it becomes a new debt and you are in deap poopoo…dtheonly ones that can legally collect in tx is the IRS, homemortgage holders, cars, ………the collecters can ruin your credit but which is bad anyhow………..lot easier to rebuild your credit than to pay those leaches off

    • Gerri Detweiler

      I am not sure where you are getting your information but it is not true that collectors cannot collect unless you want them to. While it’s true you can send them a cease and desist letter, they can still take legal action to collect.

      There is a statute of limitations, which is four years for most consumer debts in Texas, so it’s a good idea to find out if the statute of limitations has expired before you pay an old debt. You are correct in your warning that making a payment on an old debt can revive the statute of limitations.

      Overall, my personal philosophy is that you should try to pay off debts you’ve incurred if possible. But there are situations where that no longer is possible, and that is what our bankruptcy laws are for.

  • http://msn Judy Prange

    Thank you for your article. I found it very informative and useful. Those who didn’t read it because you didn’t have it all on one page, well, it’s their loss!

    • Gerri Detweiler

      Thanks for the kind words Judy. That’s what we are here for!

      • Lee Wik

        Gerrie, I’ve always had a pretty fair fico score (730 – 780 range). However, four years ago, I became permanently disabled (worked in the trades for 50 years) and since then, I’ve been hit with several events that have drained all my savings and put me so far in the hole, it almost seems hopeless. I’ve incurred debt that now exceeds $30,000. My one out is the equity in my home which should amount to approx. $400,000 (Mortgage=$145,000, estimated value=$550,000). My wife is also disabled and our combined income is around $3,000 a month. All my debts are legitimate and I believe in paying what I owe.
        The problem is, my credit is falling like a rock (I had a guy check it as he was offering to refinance my loan from 5.625 to 3.75 and he said it came back at 675). He has since stopped calling which tells me that the numbers are still dropping. I might add that I’ve got a couple of collection agencys after a small amount ($200.00 and $150.00). Sadly, due to an injury I had 5 weeks ago, I haven’t contacted them yet, although I plan to the next business day. Our monthly expenses eat up most of our income, but I could probably put aside a few hundred. Of course, that doesn’t begin to pay the juice on the credit cards alone. Do I have an out? (I’m afraid that if I wait any longer, I won’t be able to get those low points – oh also, one of the collection debts is bogus. My insurance plan has double billed me before and I have statements to back myself up). I’d appreciate any advice.

        • Gerri Detweiler


          I am sorry to hear about all the difficulties you are going through. I am not sure what you mean by an out…? It sounds to me like this would be a good time for you to meet with a couple of financial professionals to find out what options you have for stopping the credit problems from getting worse and then trying to get your credit back on track. You need someone to go over your situation in detail to help you figure out what your options are.

          I’d suggest you talk with a credit counseling firm and a bankruptcy attorney. You may also consider debt settlement if the major portion of your debt is unsecured debt like credit cards. I know you don’t even want to consider bankruptcy, but you need to find out what you own (including your home equity) is safe from creditors and what’s at risk if you continue to fall behind.

          As for the medical collection accounts, that’s a whole other can of worms. I wrote about that medical billing problems here.

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  • Vin

    Don’t EVER pay ant debts! Accept your mistakes and move on. Even if you pay, the money will just go into a money pit. Your credit will still be ruined. You will be no better off after 7 years than if you just stiffed them. By not paying, you can keep ALL your money and set it aside for when you will need it, since you won’t have any money if you pay them. Every dollar you pay creditor is one dollar less in your pocket. You made some mistakes. Don’t compound them NEVER PAY BACK!

    • ArtAlli

      That’s ridiculous. If the information is correct on your report, you owe someone money for services that you never paid. For example I had to rush my pug for emergency eye surgery. I was out of a job at the time and paid what I could, but eventually my funds ran dry. I feel absolutely horrible that the vet wasn’t compensated. She had even reduced the cost by 50% and I couldn’t afford it. Now it’s on my credit report, as it should be. Now I’m in a position to pay, and I will pay every dime. I owe it. There are situations where a company purposely deceives or tries to confuse you, such as a cell phone bill. The next thing you know you owe $500 and you don’t know how, and can’t pay it. It would be tempting to write that off, but again, it’s my fault for not reading the fine print. If you can’t afford something, don’t get it, or at least make a good hearted attempt at paying your bills. It’s just decent. Closed accounts stay on your report too, even if they were written off as a loss. Then I’m not sure if you can even pay it back at that point, and it’s still there for all to see.

  • JK

    People! Stop the negativity, the whining, the complaints! Geesh! Just go to the next page…it takes more time, effort and energy to whine than actually going to the next page…
    Just be grateful for this good, informative resource.
    And move on with your lives…by doing something positive like appreciating life itself.

  • http://QuestiontoGerri JK

    Hi Gerri,

    A debt collector faxed a debt settlement offer to my office fax that my co-workers saw.
    Is this breach of confidentiality law? What can i do? I feel so embarassed that my co-workers now know about my debt. Please advise. Thank you!

    • Gerri Detweiler

      JK – Yes it very well could be a violation of the federal Fair Debt Collection Practices Act. In that case, you would likely have no problem finding an attorney who would represent you for free. That’s because the attorney’s fees would be paid by the other party.

      Do you know if this is a legitimate debt collector? I say that because so many of our readers have been contacted by overseas scam debt collectors. If it’s the scammers who are trying to collect from you, then you are going to run into difficulties because they don’t care if they break the law.

      Have you done any research to find out whether this collection agency is a real collection agency?

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  • CSA

    What happens when you pay a bill collecter money and stop when you find out they arent licensed to do business in our state,you write to them to validate the debt and themselves BUT they fail to do so and its turned over to another collection agency 18 months later.Does that last payment start the statue of limitations for suit all over again? It’s 3 years for openended credit.

    • http://www.Credit.com Gerri

      What happens is you call a consumer law attorney who regularly represents consumers in lawsuits against collection agencies to find out what your rights are here. :) Normally the statute of limitations does start when you last paid on the debt but in this case you may have additional options.

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  • http://www.coralseamercantile.com.au Coral Mercintile

    Nice article. There are 7 things which debt collectors cannot do

    They cannot threat you
    They cannot harm you and your family
    They cannot pretend to be bailiffs
    They cannot mislead you about your debt
    They cannot pressurize your friends for the debt repayment
    They cannot tease you by calling again and again
    They cannot call you on your work without your permission

    Hope these things will help you in understanding of debt collectors

  • http://www.credit.com/ Credit.com Credit Experts

    Can you afford to pay it off? Paying it off won’t improve your credit score in most scoring models, but it will eliminate the threat of being sued and having a judgment against you. And a judgment will hurt your score even more than a collection.

  • disqus_aw4XhYWCj9

    Can someone help me.paid a old debt to a collector in ga.. Now I can’t get them to return calls to send a paper saying I paid in full..what do I do?

    • http://www.credit.com/ Credit.com Credit Experts

      Have you tried contacting them via certified mail? It’s possible that request will work. The other thing you’ll want to do is to check your free annual credit reports. There, the account should be reported as closed. If it is not, dispute it. Here’s more information:
      A Step-By-Step Guide to Disputing Credit Report Mistakes

      • disqus_aw4XhYWCj9

        They are trying to tell me during the payment procces of 3 payments it was pulled back to original debt collector. So the last payment wasn’t received… But my account shows ALL payment have been withdrawn. They have me # to other agency and I spoke with them … They have no idea who other people are.. Both are legit firms..I did the research before I agreed to pay on first firm. I have ALL reciets and payment agreement contract.

        • http://www.Credit.com/ Gerri Detweiler

          If I understand your question, you paid in full and your credit report doesn’t reflect that. Is that right? You need to dispute the incorrect information on your credit reports directly with the credit reporting agencies in order to protect your rights. It sounds like you are good about keeping documentation; do so after you file your dispute. Then if it’s not corrected you can either file a complaint with the CFPB or get a consumer law attorney involved, as you may have a case for credit damage. (And your attorney’s fees may be covered by the collector if they are breaking the law.)

  • Audrey Muzingo

    How can you send a payment via Paypal if the collector doesn’t offer it as a payment option? For normal payment of goods/services, you need the email address or mobile phone number of the “seller.” –Don’t see how you could just voluntarily send money to a debtor as if they were a person selling things.

    • http://www.Credit.com/ Gerri Detweiler

      You can send money with Paypal to anyone who has an email address or mobile phone number. But I wouldn’t recommend sending money to a debt collector until you verify that they accept payments that way. And always keep a record for your payments just in case.

  • Dedra Tate

    So which one is better for student loans? A consolidation company? Or pay directly to the debt collector?

    • http://www.Credit.com/ Gerri Detweiler

      What kind of loans do you have? Federal or private? If federal then you likely want to rehabilitate the loans to get them out of default. This article describes the process of rehabilitate student loans.

      If they are private loans then I think you will have a hard time finding anyone willing to refinance (consolidate) them unfortunately.

  • Joel Hawes

    i plan on paying debit, a one time transaction, lump sum to a student loan collector via telephone. ive requested the settlement be in a statement on their letterhead, saying i would be here on out paid in full. they said a verified mail cashiers check can take weeks to process, which may exceed the 90 days i havr once a settlement is made. if im vigilant withvmy records would you say id be safek? or chance it with the snail mailk?

    • http://www.Credit.com/ Gerri Detweiler

      I have no idea why a bank cashier’s check would take “weeks” to process. If you have the letter on letterhead, proof of payment and you document everything it sounds like you should be OK. Can you record the phone conversation, or if that’s not possible have a witness on the phone with you (let them know of course).

      • Jools

        Gerry, I was assisting clients to buy a house, the husband had a little glip from years ago on his credit he needed to clear up, he paid immediately by phone (he was in my office) and it has taken 3 months for the Satisfaction of payment to be recorded in the courthouse in another state, to have the debt legally removed from his credit. A total nightmare for the young couple. We had a receipt from the collection agency, but it has to be legally removed at the courthouse, and the lawyer for the agency kept losing the paperwork. Or the wrong paperwork would be notarized, and so on. Moral of the story is, if you want to buy a house, get your credit checked, before you write an offer. Once you receive the Letter of Satisfaction, then go ahead and buy…. not before….

  • z man

    Artalli ” Vin is Sooooo correct … most of the credit that’s extended to you is given with the hopes of getting you hooked in the repayment cycle ” you Pay and Borrow more cause your to broke to live on what’s left after you PAY ” before you know it you owe thousands and you’ve payed thousands . until you realize you have to stop STOP BORROWING , STOP SPENDING, AND MOST OF ALL STOP PAYING

  • Blip dude

    Ugh, I’ve definitely learned my lesson. I feel really bad, but I thought that my mistakes in the past would haunt me this bad. What was once is $2000 debt that I was managing is now up to $12,500. I don’t own my own home and I don’t own a car. This is mostly from me being an idiot using almost all my credit cards to keep my head above water will in college and looking for a job that was flexible. Now I’m really at the point where filling for bankruptcy at 28 may be my only choice. I want to take responsibility and pay what I owe, every penny of it. But at this point I feel like I’m being punished just for even trying to pay for my mistakes.

    • http://www.Credit.com/ Gerri Detweiler

      Not an easy decision I am sure. If you’re thinking of going down that route, I suggest you talk with both a counseling agency and a bankruptcy attorney. That way you’ll know what your options are. More info here. 6 Places to Get Free Help With Your Credit Problem

  • marilyn diaz

    I recently made a settlement for 400 i told them i can pay 50 today and possibly pay the another next week today my bank called me because the collection comp tried to collect all at once with out me authorizing it. Can i sue them?

    • http://www.Credit.com/ Gerri Detweiler

      You can certainly consult a consumer law attorney to see if they think you have a case. If you need help finding one visit the website of the National Association of Consumer Advocates. If the attorney can’t help you, then you can file a complaint with the CFPB.

  • Rose

    Even If Said yes to a payment plan offered by an attorney debt collector, can I still re- establish that Payment plan if I no longer agree with the amount the debt collector offered me? I only said yes because I understood that I was being sued so I got stressed out and was under pressure… However now that I have done my research I understand that I am not being sued or taken to court; the creditors just transferred my unpaid medical bill to this type of debt collector agency, even though it is a law firm all they are doing is collecting debt nothing else. Wish I would’ve been aware then. I need help, what should I say to the debt collector? I didn’t sign anything or gave him any personal information for payment, but when he gave me a monthly amount to pay I said yes because I was scared and intimidated. What should I do?
    Thank you in advance.

    • Jeanine Skowronski

      Hi, Rose,

      You may want to consult a consumer attorney to learn what your legal options are. You can find tips for negotiating with creditors here:

      Ten Tips for Negotiating With Creditors

      Thank you,


  • http://www.credit.com/ Credit.com Credit Experts

    Asking for payment on a prepaid card is a telltale sign of a debt collection scam.

  • Jeanine Skowronski

    Before turning over any bank account information, ask the collector for written verification of the debt. They are required to provide this by law — and requesting it is a good first step to determining whether you are dealing with a legitimate debt collector. Your daughter can also try pulling her credit reports to see if the accounts are appearing on her reports. There should also be some sort of contact information on there for the firm, but if there isn’t, you can try searching online for the firm by it’s formal name and address. You can also consider consulting a consumer attorney to see if you have a claim or best recourse.



  • LizGizmo

    This article is full of HORRIBLE information. Disregard everything. I would go through every bad point but I don’t have two hours to do that.

  • C.

    It may be too late to ask…not sure if anyone is still responding. My question is, if I have about 6 different collectors showing up on my credit report, all for relatively small debts. How do I go about paying them all off, in whole, either together or individually? I ask because it’s a small enough amount altogether that I should have enough to pay it come tax time. I just haven’t seen anything online stating the best and fastest way to get this done.

    • Jeanine Skowronski

      There should be contact information for the collection agency that holds each debt on your credit report. If there isn’t, there should at least be a name that you could use to search for the company’s contact info online. Also, you could contact the original creditor to find out what agency they sold you debts to.

      You can find more here:




  • Clark Willingham

    Hi Gerri, I was (am) paying a debt collection attorney monthly payments to pay off a debt. After paying the agreed amount faithfully agreed upon in the Consent of Judgement for 6 months, a new attorney is now contacting me for the same debt because the former firm in no longer in business. Is it legal for a new company to try and recover the same debt after a judgement & agreement was issued by the Magistrate Court?

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