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Dave Says: Does Payment to Collectors End Debt?

Dear Dave,

One of my husband’s credit card bills was turned over to a collection agency. They’ve offered three different payment options. If we accept one of the options, does this mean the original creditor accepts the agreement as well?

Cheryl

Dear Cheryl,

In a situation like this, the collection agency either owns the debt outright or they’re directly representing the credit card company. This is pretty much standard operating procedure when someone has defaulted on a loan.

I’d go ahead with the deal they’ve offered that makes the most sense for you guys. You’ll have a ding on your credit report, showing settlement on a defaulted credit card, but it’s really no big deal since you’ve already got a mark against you for having it turned over to collections.

Want another piece of advice? Never use credit cards again!

—Dave

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