Martin wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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“Dear Steve,

I’m ready to fix my bad credit.

What is the best way to pay collection agencys, should i go through a debt management program or pay them myself?

Martin”

The Answer:

Dear Martin,

If you can afford to pay the collection companies for the past debt in full with one payment, then it would be better to pay the collection company. But, make sure that you send your payment by some traceable means so you have proof that they got it. Also I would suggest that you ask the collection company for some sort of statement that provides you with correspondence showing the exact amount that is owed, before you make your payment. I don’t want the collector coming back latter and saying you still owe money.

If you are not able to pay the collector in full with one payment, a debt management company might be a consideration but I don’t see a need for it. Instead, if the collector isn’t hassling you, just save them money up in a savings account until you can pay the collector in full.

My concern over sending monthly payments to the collector is that accounts shift from a collector to the debt owner and out to another debt collection company. If this happens as you are making payments on a debt, I’ve seen it get screwed up time and time again. The payments are being sent to one place, not properly credited to your account and another place is contacting you.

Does that make sense?

Steve