<PAGE>  1

                  SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

     /X/  Quarterly report pursuant to Section 13 or 15(d) of 
          the Securities Exchange Act of 1934

          For the quarterly period ended September 30, 1995, or

     / /  Transition report pursuant to Section 13 or 15(d) of 
          the Securities Exchange Act of 1934
          For the transition period from         to
                            ---------------
                      COMMISSION FILE NUMBER 0-5589
                            ---------------

                     PAYCO AMERICAN CORPORATION
          -----------------------------------------------------
          (Exact name of registrant as specified in its charter)

                              WISCONSIN
               ---------------------------------------------
               (State or other jurisdiction of incorporation
                         or organization)

          180 North Executive Drive, Brookfield, Wisconsin
          ------------------------------------------------
            (Address of principal executive offices)

                            39-1133219
               ------------------------------------ 
               (IRS Employer Identification Number)

                              53005
                            ---------
                            (Zip Code)

                          (414) 784-9035
         ----------------------------------------------------
         (Registrant's telephone number, including area code)
        
                         NOT APPLICABLE
     -------------------------------------------------------------
     (former name,former address and former fiscal year, if changed
                     since last report)

     Indicate by check mark whether the registrant (1) has filed all
     reports required to be filed by Section 13 or 15(d) of the Securities
     Exchange Act of 1934 during the preceding 12 months, and (2) has been
     subject to such filing requirements for the past 90 days.
                      Yes  X         No
                          ----         -----
     The number of shares outstanding of each of the issuer's classes of
     common stock was 10,133,478 shares of common stock, par value $0.10,
     outstanding as at September 30, 1995.
===========================================================================



<PAGE> 2
<TABLE>
<CAPTION>
                                         PAYCO AMERICAN CORPORATION

                                         CONSOLIDATED BALANCE SHEETS
                           (In thousands of dollars except share & per share data)
-----------------------------------------------------------------------------------------------------------------
                           SEPTEMBER 30, DECEMBER 31,                                  SEPTEMBER 30, DECEMBER 31,
                               1995          1994                                          1995          1994
-----------------------------------------------------------------------------------------------------------------
<S>                        <C>           <C>           <S>                             <C>           <C>
ASSETS                                                 LIABILITIES & SHAREHOLDERS'
                                                       INVESTMENT
CURRENT ASSETS:                                        CURRENT LIABILITIES:

Cash and Cash Equivalents       $10,400      $10,867   Collections Due to Clients           $21,453      $17,794

Cash and Cash Equivalents                              Accounts Payable                       6,868        5,459
 Held for Clients                21,453       17,794
                                                       Short-Term Borrowings                 13,877        6,200

                                                       Obligations under Capital 
Accounts Receivable-Trade                              Leases                                    57           77
Net of Allowances                20,314       15,541   Accrued Liabilities-
                                                        Salaries and Benefits                 5,908        5,597
Accounts Receivable-                                    Taxes, Other Than Income              1,209        1,101
Purchased                        13,702       13,826    Other                                 1,258        1,698

Prepaid Expenses                  1,600        1,054   Deferred Revenue                         232          192
Accrued Income Taxes             -                23
Deferred Income Taxes               689          743   Accrued Income Taxes                     178       -
                           ------------- ------------                                  ------------- ------------
Total Current Assets             68,158       59,848   Total Current Liabilities             51,040       38,118

PROPERTY AND EQUIPMENT:                                OTHER LONG-TERM LIABILITIES              837          942

Data Processing Equipment        43,433       33,105
Furniture and Equipment          12,113       11,334
Leasehold Improvements            3,380        2,998   LONG-TERM DEBT                           352          334
Property Held under 
Capital Leases                      634          634   OBLIGATIONS UNDER CAPITAL 
                           ------------- ------------  LEASES                                    16           61
                                 59,560       48,071
Less-Accumulated                                       COMMITMENTS AND 
Depreciation and                                       CONTINGENCIES                           -          -
Amortization                     38,109       34,463
                           ------------- ------------  SHAREHOLDERS' INVESTMENT:
Net Property and Equipment       21,451       13,608   Preferred Stock,
                                                        No Par Value-
ACCOUNTS RECEIVABLE-                                    Authorized 500,000 Shares,
PURCHASED                           590        4,164    None Issued                            -          -

                                                       Common Stock,
OTHER LONG-TERM                                         $.10 Par Value-Authorized
RECEIVABLES                         599          839    50,000,000 Shares, Issued &
                                                        Outstanding, 10,133,478 &
NON-COMPETE COVENANTS, NET        1,534        2,691    10,128,503 Shares, Respectively       1,013        1,013

GOODWILL, NET                    11,565        5,939   Additional Paid-In Capital             1,622        1,586

DEFERRED INCOME TAXES               492          287   Stock Options Issuable                   704          704

OTHER ASSETS                        397          122   Retained Earnings                     49,202       44,740
                                                                                       ------------- ------------
                                                       Total Shareholders' Investment        52,541       48,043
                           ------------- ------------                                  ------------- ------------
                               $104,786      $87,498                                       $104,786      $87,498
                           ============= ============                                  ============= ============
<FN>
=================================================================================================================
The accompanying notes are an integral part of these consolidated balance sheets.
</TABLE>
                                                     2




<PAGE> 3
<TABLE>
<CAPTION>
                           PAYCO AMERICAN CORPORATION
                       CONSOLIDATED STATEMENTS OF INCOME 
             (In thousands of dollars except share & per share data)
----------------------------------------------------------------------
For the three month period 
ended September 30,                             1995          1994
----------------------------------------------------------------------
<S>                                       <C><C>        <C><C>
OPERATING REVENUE                          $     44,818  $     38,368

OPERATING EXPENSES:

Salaries and Benefits                            25,537        20,695

Telephone                                         2,645         2,907

Postage and Supplies                              2,700         2,268

Occupancy Costs                                   2,216         2,143

Data Processing Equipment                         2,256         1,883

Amortization of Acquisition Costs                 4,287         3,973

Other Operating Costs                             2,881         2,989
                                             -----------   -----------
Total Operating Expenses                         42,522        36,858
                                             -----------   -----------
Income from Operations                            2,296         1,510
OTHER INCOME, Primarily from
 Short-Term Investments                              51            21
INTEREST EXPENSE                                    216            38
                                             -----------   -----------
Income before Income Taxes                        2,131         1,493

PROVISION FOR INCOME TAXES                          928           679
                                             -----------   -----------
NET INCOME                                 $      1,203  $        814
                                             ===========   ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING                                  10,133,478    10,077,945

NET INCOME PER SHARE                              $0.12         $0.08
<FN>
======================================================================
The accompanying notes are an integral part of these consolidated
statements.
</TABLE>                                3








<PAGE> 4
<TABLE>
<CAPTION>
                        PAYCO AMERICAN CORPORATION

                    CONSOLIDATED STATEMENTS OF INCOME 
             (In thousands of dollars except share & per share data)
----------------------------------------------------------------------
For the nine month period 
ended September 30,                             1995          1994
----------------------------------------------------------------------
<S>                                       <C><C>        <C><C>
OPERATING REVENUE                          $    130,559  $    112,804

OPERATING EXPENSES:

Salaries and Benefits                            73,696        61,687

Telephone                                         7,862         8,182

Postage and Supplies                              7,969         6,799

Occupancy Costs                                   6,807         6,442

Data Processing Equipment                         6,008         5,417

Amortization of Acquisition Costs                11,533         9,440

Other Operating Costs                             8,339         8,256
                                             -----------   -----------
Total Operating Expenses                        122,214       106,223
                                             -----------   -----------
Income from Operations                            8,345         6,581
                                             -----------   -----------
OTHER INCOME, Primarily from
 Short-Term Investments                             168            46
INTEREST EXPENSE                                    531            72
                                             -----------   -----------
Income before Income Taxes                        7,982         6,555

PROVISION FOR INCOME TAXES                        3,520         2,931
                                             -----------   -----------
NET INCOME                                 $      4,462  $      3,624
                                             ===========   ===========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING                                  10,133,478    10,077,945

NET INCOME PER SHARE                              $0.44         $0.36
<FN>
======================================================================
The accompanying notes are an integral part of these consolidated
statements.
</TABLE>                                4
<PAGE> 5 
<TABLE>
<CAPTION>
                           PAYCO AMERICAN CORPORATION
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (In thousands of dollars)
----------------------------------------------------------------------
For the nine month period 
ended September 30,                             1995          1994
----------------------------------------------------------------------
<S>                                       <C><C>        <C><C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income                                 $      4,462  $      3,624

Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:

Amortization of Acquisition Costs                11,533         9,440
Depreciation and Amortization                     4,008         3,386
Benefit of Deferred Income Taxes                   (151)         (453)

Changes in Assets and Liabilities:
  Accounts Receivable                            (4,773)       (1,405)
  Prepaid Expenses                                 (434)         (130)
  Accounts Payable                                1,409           312
  Accrued Liabilities                              (126)          190
  Deferred Revenue                                   40            73
  Accrued Income Taxes                              201          (831)
                                             -----------   -----------
Net Cash Provided by Operations                  16,169        14,206
                                             -----------   -----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Capital Expenditures, Net of Retirements        (10,676)       (3,531)
Purchase of Accounts Receivable                  (5,891)      (11,304)
Purchase of Other Businesses                     (7,975)       (4,267)
Long-Term Notes Receivable                          240          (354)
                                             -----------   -----------
Net Cash Used In Investing Activities           (24,302)      (19,456)
                                             -----------   -----------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Net Proceeds Under Line of Credit                 7,677         3,000
Payments Under Capital Lease Obligations            (65)          (94)
Other Long-Term Debt                                 18            25
Proceeds from Exercise of Stock Options              36            15
                                             -----------   -----------
Net Cash Provided by Financing Activities         7,666         2,946
                                             -----------   -----------
Net Increase (Decrease) in Cash and
   Cash Equivalents                                (467)       (2,304)
Cash and Cash Equivalents at 
   Beginning of Period                           10,867        14,014
                                             -----------   -----------
Cash and Cash Equivalents at End of Period $     10,400  $     11,710
                                             ===========   ===========
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash Paid For:
     Income Taxes, Net of Refunds          $      3,471  $      4,216
     Interest                                       472            54
<FN>
======================================================================
The accompanying notes are an integral part of these consolidated 
statements.
</TABLE>                                5
<PAGE> 6

PAYCO AMERICAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED September 30, 1995


I.  ACCOUNTING POLICIES

    The information furnished in this report reflects all normal and
recurring adjustments which are, in the opinion of management, necessary
to form a fair statement of the results of the interim periods.  This
report should be read in conjunction with the 1994 Annual Report and
Form 10-K.

          A.  STATEMENT OF CASH FLOWS

     The following paragraph provides additional disclosure regarding cash
flow as required under the indirect method of reporting.

     For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with a maturity of less than 90 days to be cash
equivalents.

          B.   TRADE ACCOUNTS RECEIVABLE            

     Accounts Receivable-Trade is presented net of an allowance for
doubtful accounts.  The allowance was $403,000 and $555,000 for the period
ended September 30, 1995 and December 31, 1994, respectively.

          C.SHORT TERM BORROWINGS

     The Company maintains a short-term borrowing agreement with the
Bank which provides the Company with an option to borrow  under a line
of credit or issue commercial paper up to $25.0 million.  At September
30, 1995, the interest rate on borrowed funds was 6.0%.

























                                    6



<PAGE> 7

PAYCO AMERICAN CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATIONS

Effective May 1, 1995, The Company purchased certain assets of Grable,
Greiner and Wolff (GGW).  GGW is a leading provider of collection services
to commercial credit grantors and is located in Beachwood, Ohio.  
Effective January 1, 1995, the Company purchased certain assets of Furst
and Furst (F&F).  F&F provides accounts receivable management services
primarily to commercial clients through offices in Illinois, New Jersey
and California.  Effective February 1, 1995 the Company purchased the
collection business of Continental Credit Adjustors (CCA).  CCA is located
in Houston, Texas and provides primarily medical and retail collection
services to Texas clients.

Accounts received for collection were $2.99 billion and $2.50 billion for
the nine months ended September 30, 1995 and 1994, respectively, or a
19.6 % increase.  Excluding placements from the 1995 acquisition of CCA,
F&F and GGW accounts received for collection increased $333 million or
13.3 %. 

Operating revenue for the period ended September 30, 1995 and 1994 is
summarized below.
<TABLE>
<CAPTION>
----------------------------------------------------------------------
                               Three Months Ended    Nine Months Ended
                                 September 30,           September 30,
                                1995        1994      1995      1994
                                       (in thousands)        
----------------------------------------------------------------------
<S>                             <C>                  <C>
Revenue:                                                   
Collection                      $34,628   $28,204  $101,768  $ 85,895
Accounts Receivable-Purchased     4,802     4,145    12,055     9,651
Student Loan Billing              1,821     1,730     5,399     5,145
Medicaid Billing                  1,809     1,683     5,004     4,413
Telemarketing                     1,104     1,674     4,118     4,887
Other                               654       932     2,215     2,813
---------------------------------------------------------------------
Total Operating Revenue         $44,818   $38,368  $130,559  $112,804
=====================================================================
</TABLE>
     Total operating revenue for the three and nine month period ended
September 30, 1995 increased  16.8% and 15.7% respectively.  Collection 
revenue for the three and nine month period ended September 30, 1995
increased 22.8% and 18.5%   Excluding the 1995 acquisitions, collection
revenue increased 12.7% and 9.6% for the three and nine month period ended
September 30, 1995 compared to the same periods in 1994.  These increases
were accomplished as a result of new client business and growth in
business volume from existing clients, despite an operating environment
with continued competitive pressure on prices.  The Company has been
selected by HBO & Company (HBOC) to be the lead subcontractor in
performing the business management for Maricopa County Health Care Systems
(MCHCS).  MCHCS, located in Phoenix, Arizona has signed a five year
contract with HBOC to outsource its entire business service function.
This contract has the potential to provide the Company with approximately
$20 million in revenue during its five year term.  The contract began
September 1, 1995.
                                7
<PAGE> 8
Revenue from purchased accounts receivable portfolios increased
24.9% to $12.1 million in the first nine months of 1995.  During the first
nine months of 1995 portfolios were purchased at a cost of $5.9 million
compared to $11.3 million in the first nine months of 1994.

Billing revenue, including Student Loan billing, Medicaid billing
and Other billing increased 2.0% to $12.6 million during the first nine
months of 1995 compared to $12.4 million during the first nine months of
1994.  However, Billing revenue during the quarter ended September 30,
1995 compared to the quarter ended September 30, 1994 decreased primarily
as a result of a decline in Other billing revenue from a single client in
this category.  Telemarketing revenue declined 34.0 % and 15.7% for the
three and nine month periods ended September 30, 1995 compared to the same
periods in 1994.  A decline in business volume negatively impacted
revenue. 

Operating expenses increased 15.0% to $122.2 million for the first
nine months of 1995 compared to the first nine months of 1994.  Operating
expenses exclusive of the acquisition of CCA, F&F & GGW increased 8.1%.

Salaries and benefits, the Company's most significant expense was $73.7
million for the nine month period ended September 30, 1995 compared to
$61.7 million in 1994 or a 19.5% increase. Salary and benefits exclusive
of 1995 acquisitions increased 11.7% primarily as a result of an increase
in number of collectors required to handle larger business volume.  The
Company does not provide post-retirement health or life insurance
benefits or significant post-employment benefits to employees.

Telephone expense decreased 3.9% to $7.9 million for the nine months ended
September 30, 1995 compared to the same period in 1994. Included in
telephone expense are costs associated with dedicated communication
datalines, local and long distance service, and depreciation and
maintenance on telephone equipment.  Telephone expense, exclusive of
acquisitions, decreased by 7.9% primarily as a result of the decline 
in telemarketing telephone usage and lower long-distance rates negotiated
at the end of 1994. Depreciation expense increased between years
primarily as a result of the Company's upgrade to its telephone systems
in certain locations during the second quarter of 1994.

Postage and supplies increased 17.2% to $8.0 million for the nine month
period ended September 30, 1995 as compared to the same period in 1994.
Postage expense alone increased 17.6% compared to the first nine months
of 1994.  The new U.S. postal rate, which became effective January 1,
1995 along with increased business volume accounted for the increase in
postage costs.  Exclusive of acquisitions, postage and supplies increased
9.4%.  Postage and supplies expense historically fluctuates with the
number of accounts received for collection.

Occupancy costs which includes leased office space, depreciation of
furniture and fixtures, amortization of leasehold improvements and rental
and repair of office equipment increased 5.7% to $6.8 million.  Occupancy
costs exclusive of acquisitions decreased 4.3% for the first nine months
of 1995 compared to the first nine months of 1994 as a result of a decline
in space rent.
                               8


<PAGE> 9
Data processing equipment costs increased by 10.9% to $6.0 million for
the period ended September 30, 1995 when compared to the same period in
1994.  Work continues to proceed on the World-class Integrated Network
(WIN).  WIN is the Company's new receivable management system which will
replace PACS [registered trade mark] (Payco Automated Collection System).
During the third quarter, WIN was successfully installed in the Westlake
and Pleasanton, California offices and the Aurora, Colorado office.  This
brought to seven the number of locations using WIN.  Depreciation expense
as a result of the purchases of WIN related equipment and software will
increase in the fourth quarter of 1995 and through 1996 as the system
installation process continues. Total capital expenditures to install
the Company's entire collection operation on the WIN system are now
estimated to be between $19 and $21 million as compared to the initial
estimate of approximately $15 million.  The cost of the WIN system
is dependent on a variety of items including the configuration of power 
dialing stations, the final configuration of the communications network,
cabling requirements in each office location, the number of acquired non-
PACS offices that are installed on WIN and the amount of staff training
required to efficiently use WIN.  The cost of the system will vary
directly with the number of users installed.  Original estimates have
been increased in part due to the growth in collection personnel and
increased costs in the areas of communication network, cabling and
training. Through October 31, 1995 the Company has invested approximately
$7.3 million in the WIN system.

Work proceeds on the development of the new student loan billing system
which is expected to be completed in the second half of 1996.

Amortization of acquisition costs was $11.5 million for the first nine
months of 1995 compared to $9.4 million for the same period in 1994.  This
expense category includes the amortization of non-compete agreements,
debtor account inventory, goodwill and purchase accounts receivable
portfolios.  Amortization expense associated with purchased accounts
receivable portfolios increased by $1.9 million between years to $9.6
million.  This increase is due to the increase in the volume of
collections on purchased receivables.

Other operating costs increased by $83,000 or 1.0% to  $8.3 million in the
first nine months of 1995 compared to the first nine months of 1994
primarily as a result of 1995 acquisitions.  Other operating costs
includes, among other costs, business insurance, legal expense, skip
tracing costs and travel and entertainment costs.

Other income, consisting primarily of interest income, increased $ 122,000
while interest expense increased $459,000 in the first nine months of 1995
compared to the first nine months of 1994.  The increase in interest
expense is due primarily to the increase in short-term borrowings. 
                                   
The effective tax rate decreased to 44.1% for the first nine months of
1995 from 44.7% for the same period in 1994.  The Company's provision for
income taxes changes with the levels of pre-tax income, levels of
nondeductible expenses, changes in tax law and the mix of state income tax
rates.

Net income per share for the first nine months of 1995 was $0.44
compared to $0.36 for the same period in 1994.  The increase is primarily
the result of the improvement of the pre-tax profit margin from 5.8% to
6.1% for the nine month period ended September 30, 1995 compared to the
same period in 1994.


                                   9
<PAGE> 10

 LIQUIDITY AND CAPITAL RESOURCES

The Company has a $25.0 million short-term borrowing agreement with the
Bank. The agreement allows the Company to borrow funds under a line of
credit agreement or through the issuance of commercial paper.  All loans
made to the Company by the bank under the line of credit are payable upon
demand and are evidenced by a single promissory note.  The Company is not
required to maintain compensating balances, and there are no restrictive
covenants under the agreement.  As of September 30, 1995, the Company had
$11.1 million available to borrow.  Funds borrowed were used primarily to
fund the Company's acquisition program and the development of new computer
systems.  The interest rate on outstanding borrowings at September 30,
1995 was 6.0%.

The capital expenditure associated with the WIN project is estimated to
be between $19.0 and $21.0 million.  Plans are to complete the installation
during the second half of 1996.  The Company also expects to invest
approximately $4.0 million over 1995 and 1996 in order to upgrade its
automated student loan billing system.  The Company considers the short-
term borrowing agreement to be its primary liquidity resource.  As of
September 30, 1995 the Company had $17.1 million in working capital which
compares to $21.7 million as of December 31, 1994.  This represents a
decrease of $4.6 million in working capital during the first nine months
of 1995.  In addition to the investment in the WIN project and the upgrade
to the automated student loan billing system, the Company will continue to
actively pursue the accounts receivable purchase program and the
acquisition of certain collection and related businesses.

The Company has reviewed its liquidity in relation to planned capital
expenditures, growth in working capital to support increased business, and
its acquisition program.  To the extent internal funding may not be
sufficient to meet its future cash requirements, the Company plans to
continue to utilize its line of credit, which it considers to be adequate
to meet its needs.

                                 10  
<PAGE>  11
ITEM 1.

LEGAL PROCEEDINGS
       
     As previously reported on the Registrant's Form 10-Q for the period
ended March 31, 1995, on March 8, 1995 the Registrant reached a settlement
in its litigation with the Federal Trade Commission which  was based on a
complaint filed in August of 1993 alleging that the Company had violated
the Federal Fair Debt Collection Practices Act.  The case was resolved
with a consent decree in which the Company did not admit any liability.
The consent decree further provided that the Registrant pay a civil
penalty of $500,000 and take additional steps to ensure compliance with
the Act.  The Company had previously established a reserve adequate to
cover the cost of the consent decree. The Company further believes that
compliance with the provisions of the consent decree will not materially
affect its financial condition or ongoing operations.

     The Company is defendant in various legal proceedings involving
claims for damages which constitute ordinary routine litigation incidental
to its business.  The Registrant has provided for the estimated defense
costs and liability associated with pending litigation through charges to
operations.

ITEM 2.  CHANGES IN SECURITIES

         NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         NONE

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         NONE

ITEM 5.  OTHER INFORMATION

         NONE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         NONE













                                  11

<PAGE> 12
SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                                  PAYCO AMERICAN CORPORATION
                                     (Registrant)

Date:  November 14, 1995         By:   DAVID S. PATTERSON
       -----------------               ------------------
                                     David S. Patterson
                                     Principal Operating Officer
                            
Date:  November 14, 1995         By:   JOHN P. STETZENBACH
       -----------------               -------------------
                                     John P. Stetzenbach
                                     Principal Financial and Accounting
                                     Officer






















                                  12