Although the general consensus is that the recession is technically over, there is a substantial amount of debt that is keeping many Americans from taking that breath of relief. Owing money is a miserable experience; so naturally, the people who are in the business of collecting are amongst the most loathed in society.
As a result of feeling victimized, there seem to be lawsuits against debt collectors in almost every state. But some states, like Louisiana for example, are behind the rest of the nation as a result of unresolved debts, so it’s in the best interest of state leaders to find more effective ways to collect from its residents. In short, this is a fascinating time to observe the debt collection industry.
From the media’s point of view, almost any story about an alleged victim of debt collection practices that fights back in court is a good story. And indeed, one can learn a lot about various state laws that regulate debt collection agencies as well as the rules listed in the Fair Debt Collection Practices Act by following these events. The media, however, often depicts the industry inaccurately in sympathy of the debtors, according to sources like Forbes. While many sources like the New York Times or ABC News point to the fact that the Federal Trade Commission noted a 73 percent increase in complaints against the industry since 2008, Forbes claimed that many of these statistics were misinterpreted.
A recent story in the New York Times suggests that the publication is sympathetic towards debtors. The magazine—which covered many of the scandalous events surrounding Accretive Health in Michigan— recently covered a story that is on a much smaller scale though potentially consequential to a large population. The story is about student loans.
Student loans are debts that almost never go away by declaring bankruptcy, but that doesn’t mean that proving “undue hardship” in court is completely impossible. However, that is what the debt collection firm Collecto told Berlincia Easterling of Buffalo. The article states that there are 181 other debtors who were also notified in a letter that their student loans could not be discharged in bankruptcy and therefore, they must pay. Because Collecto took it upon itself to offer inaccurate legal advice, it was slapped with a lawsuit.
Even local media likes to highlight the litigation that is based on debt collection. A news sources in Texas revealed that there was another case when a debt collection agency spewed false legal information that landed the firm in court. After collection firm, AHN Regent threatened to sue Christy Galan for not paying her debts, she in turn filed litigation against them—but this one was real. Although the article stuck to basic facts, there was a lot said about the significance of this event by publishing the article without having many details.
The Associated Press recently featured an article called, “State leaders weighing debt-collecting ideas,” about the current situation in Louisiana.
Apparently, Louisiana is 1.4. billion in debt due to delinquent accounts. The tone of the article was set in the second paragraph with, “No decisions were made about what, if anything, state leaders will do to beef up debt-collection efforts.” This statement not only demonstrates the lack of sympathy for debt collectors, but seems to imply that residents of Louisiana need not to fret over their debt, as the state is feckless as a debt collector.
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Edited by Brooke Neuman