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Angela is Worried After Working With a Debt Service Organization

“Dear Steve,

I have been working with a debt service for about 4 months now. I am currently over $13,000.00 in debt. I received a letter from a collection agency and i’m worried.

Should I have contacted the credit card company before working with the debt service organization? Would it help if i contact the card company now and told them i was working with the debt service company?


Dear Angela,

There are two types of companies that could be labeled as offering debt services. I assume that you are talking about a company that offers either debt management (credit counseling) or debt settlement services.

It is important to know that no credit counseling or debt settlement company has any authority at all to alter your legally binding agreement with your creditors for the credit extended to you. So you can’t simply rest easy thinking that a debt service company is going to wave a magic wand and make things all better.

If you are now being contacted by a collection company regarding a debt that you included in a program offered by a debt service company, there are a few reasons why this can happen.

  • The original creditor was notified but failed to note it in their computer system.
  • The original creditor was not notified.
  • The original creditor was already in the process of sending your account out to a collection company when you enrolled with the debt service company.
  • The original creditor no longer owns the debt and has sold it off to a collection company.
  • The original creditor refuses to work with a debt service company.

The reason why you were contacted is not as critical as it is for you to contact your debt services company and let them know that you are being contacted by this collection company. The debt service company should be able to help you understand exactly why.

While it does not hurt to contact your creditors to tell them you are working with a debt management or credit counseling company, it isn’t all that helpful either. The chances of it getting noted in the system so the right folks see it, is slim. You are better off telling the creditor when they call.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

See also  Double Standard For Debt Settlement. Not So Sleazy Now, Ask Hilary Clinton, John Glenn and the FEC.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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