Dealing With Debt Collectors

My fellow bankruptcy attorney and new blogger, Elaine Dowling, claims that MarketWatch is playing with her world view.

Elaine gives a hint of the kind of thing we bankruptcy lawyers deal with all the time:

The FTC also alleges that debt collectors who obtain authorization to do automatic debts from checking accounts sometimes take more than the amount authorized. Some have even given debtors an incorrect address so letters disputing debts won’t be received. That’s almost clever, actually.

And then there's the problem with multiple debt collectors on a single original debt. It is also not unusual to have a debt collector try to collect on a debt that has been discharged in bankruptcy years after the fact. Being able to get people's credit reports directly has helped some, but the debts get sold so often that it is virtually impossible to track all the agencies down to notify them of a pending or filed bankruptcy or to try to negotiate a settlement on the debt.

Then there is the issue of the credit reporting agencies not noting all the debts that have been discharged in the bankruptcy. That means an old client will call me years later asking for a copy of the bankruptcy papers to prove the debt was listed. That is always a hassle to deal with.

Basically, what these stories show is how the collection agencies are overreaching in many instances. I realize there are abuses on both sides. There are some people who are just plain deadbeats, and they don't deserve to get credit at any interest rate. "Cash with ID," as we'd say. But at this time in history, most of the abuses are taking place on the side of the credit industry because of their increased bargaining power due to the 2005 BAPCPA changes in the bankruptcy code.