Broken System of Debt Collection

If I have heard it once I have heard it a thousand times, “No one will talk to me about working out my debt.” This frustration comes regularly from clients who are facing judgment from a Debt Collection law suit.

It had been my thought that until you had money on the table able to pay a lump sum settlement to the debt collectors you would always be faced with the “all or nothing demand.” It turns out that this perception may not be all that incorrect. It appears that most debt collection in the U.S. is conducted by computer programs. Communicating with a computer is never easy.

In a story titled, “Automatic Debt-Collection Lawsuits Engulf Courts” New York Times reporter Andrew Martin reports on the status of debt collection in America. The story chronicles the flood of lawsuits that are engulfing a New York Judge. Judge Noach Dear has been regularly forcing debt collectors to provide more support for their claims that an account statement and the debtor’s social security number.

In North Carolina the legislature has enacted laws which require debt collectors to have supporting documentation prior to filing suit. These new standards are causing push back in the debt collection industry. North Carolina Attorney Pedro Zabala states, “In actuality, it (the new law) is impossible to comply with.”

The Federal Trade Commission is encouraging all states make modifications to their debt collection statutes to promote involvement by the alleged debt collector. In a report titled, “Repairing a Broken System“, the Commission addresses the numerous problems with debt collection. The primary path to success in credit card lawsuits is to plan on the debtor not appearing. Consumer involvement helps prevent judgments that are not based in law and helps prevent judgments that unearned fees and charges.

The basis of many defenses to these “suits without merit” is based in the Fair Debt Collection Practices Act. When a creditor files a lawsuit where there is not basis for the action this is already a violation of the law.

When the deputy sheriff of the certified mail comes to the house PLEASE do not ignore it. Many times consumers have valid defenses to make the just fail to assert their rights under the law.

There is absolutely nothing wrong with you taking control of your finances– and your future.

Clip from 2001: A Space Odyssey. This is the future of Debt Collection!