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todays question comes from Stephanie in Nevada where do collections fall and baby step two do we pay them first or in the order their balances like everything else if youve got outstanding defaulted bad debt set that aside youre not paying on it anyway and figure and finish your debt snowball and baby step two that is your regular active debts things your paying payments on list your debts smallest to largest pay minimum payments on everything but the little one and work your way right down that list now once all of your active debts are gone then take all of your defaulted in collections that youre not paying payments on debt inactive debt and list its smallest to largest only were not going to pay them payments were going to just pay them off smallest to largest now if it is a small debt under $300 you call them up you get in writing by email or something like that what the balance is not verbal over the phone its an old debt you dont want to send them $275 from a six-month
