Debt Collectors and Their New Tactics
Debt collection is never a fun process, often filled with endless phone calls, intimidating visits, and other forms of harassment. Now, debt collectors have found a new way to harass those whose debt they wish to collect: filing a lawsuit against the debtor.
A recent study from Maryland found that collectors who file in court often go unchallenged. This has led many to conclude that this new tactic for filing lawsuits in based on the theory that the debtor will not show up in court to defend the case. Data from the study supports this theory, showing that in 2010 fewer than two out of 10 debtors responded to their court summons.
This new tactic has worked well for some debt collection agencies, causing lawsuits against debtors to rise at a speedy rate. Another study from 2011 shows that in New York alone, 200,000 cases were filed against debtors.
Proving a Debt Case: Is It Necessary?
To make matters worse, many claim that the collectors file suits in error, often with insufficient or inaccurate documentation. The result is that the creditor is unable to prove that the debts it is suing over are valid. However, when the debtor does not show up in court, it becomes difficult for their case to be looked at fully or fairly. When a case is ruled against a debtor, the judge can put a lien on the home, garnish wages, and even freeze bank accounts until the debt is settled.
The FTC recently revealed that out of all industries, it receives the most consumer complaints about debt collectors. The Fair Debt Collection Practices Act, a federal law which outlaws certain kinds of abusive and deceptive debt collection practices, does not seem to cover this particular tactic. Further regulation is also currently being drafted by the Consumer Financial Protection Bureau, which will add another layer to the issue.
If you or a loved one is in a tough situation with a debt collection agency, it is important to know your rights and options. If you are tired of endless phone calls and stress-filled days, contact the team of experienced lawyers at Amerio Law Firm in Sacramento, who specialize in bankruptcy and debt law. Using their expert knowledge, the law team can help you discover your debt relief options. By exploring options that might work for your particular situation, including completely discharge your debts or entering into a negotiated, structured payment plan, the team can assist you in your debt relief. Contact the Amerio Law Firm in Sacramento today for more information on starting your debt relief plan.