Can you consolidate debts that are in collection already?

Hi Sparkles - welcome to the forums! We're glad you were able to find some helpful information here.

In a word, yes - you can consolidate debts that are in collection. Whether the collection agency will work with the consolidation company is up to the collection agency - but I would say 99% of them will. A collection agency understands the fact that this debt has been uncollectible up to the point it was turned over to them by the original creditor...therefore, if the creditor hasn't been able to collect..and the collection agency hasn't been able to collect up to this point, then the fact that you are getting help through a debt consolidation company means they will at least get SOME money on the account, even if it's not all at once, and not the entire amount they want. Some is better than none.

That's not to say you won't run into a collection agency that outright refuses to work with a consolidation company. It's possible.

It's also possible that your creditors might work with you if you discuss the fact that you're looking into debt consolidation with them. They may offer you a settlement or payment plan that you can afford. A word of caution about settlements & payment plans, though - get everything in writing. There have been cases of creditors or collection agencies settling for a lesser amount than is actually owed...then selling the balance to another collection agency, who then pursues the debtor for that amount (which the debtor thought was forgiven)!

Hi SueBee!
Thanks for the great advice, I am going to try to contact a credit counseling agency tomorrow and I'll keep you guys posted.

that's great news, sparkles - keep us posted! :-)