When a person runs up a sizable debt with a creditor, the creditor may not even try to collect the debt itself. Instead, it will send the debt to a collection agency. The agency will either be paid a portion of the money it recovers or it will buy the debt outright. Therefore, in some cases, the debtor will make payments to the creditor, while in other cases he'll pay the collection agency.
Collection Notices
In many cases, a collection agency will inform a person that it is seeking repayment of her debt by contacting her through e-mail or a written letter. Often, these collection notices will include an address to which the person can make payment. Before the debtor attempts to send a check in, she should check these notices for the appropriate address.
Paying the Collection Agency
Many times, a debtor will be asked to make payment to the collection agency. This will always be the case if the collection agency has purchased the debt from the creditor. Generally, the older the debt, the more likely that a collection agency has purchased it outright -- usually at a price much smaller than the debt. Always contact the collection agency before sending it a check.
Contacting the Company
Before a person sends a check to the collection agency, he should first contact the company to whom he originally incurred the debt. Although he may have to make payment to the company, he will want to make sure he can send it to the right department. Many companies will have a billing, accounts receivable or collections department, which should be able to provide a correct address.
Following Up
Before a debtor sends in a check, she should always make a copy of it. After sending in the check, she should allow some time for the company to cash the check, and then she should check her credit report to make sure that it reflects payment of the debt. If it does not, she should contact the party to whom she sent the check, whether it is the company or the collection agency.
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