Disturbing Debt Collection Trends

: Reese Baker & Associates

  Filed under: Debt

courtThe debt collection industry has never been a pleasant one for anyone on the receiving end of the phone call. In recent years the aggressiveness of collectors and their methods are revealing some disturbing trends. While some consumers are fighting to repay debts they owe, many other are facing consequences of debt collections on debts they don’t even own.

Lawsuits

Debt collectors are not the passive phone callers they once were. Yes they still repeatedly call and send collection letters, but they are now running to court to file lawsuits much faster than before. Even missing a payment by 30 days can land a debtors in the hot seat in court. There has been a growing trend in lawsuits attempting to garnish wages, put a lien on the debtor’s home, and even freeze bank accounts; sometimes over a small debt such as a delinquent phone bill.

These lawsuits are proving more successful for many collectors, while leaving debtors with far more problems than before. A recent study reported that 200,000 lawsuits were filed by debt collectors in 2011 alone, where only 20% of those sued actually responded to the lawsuits. Luckily, many debtors are finding help in Houston bankruptcy courts to combat these lawsuits and resolve their debts.

Another growing problem for consumers is the filing of unverified lawsuits, meaning debt collectors are filing suits against consumers over alleged debts that they do not actually own. Many consumers have been served with litigation papers over debts that do not belong to them. Further complications arise when consumers aren’t even aware of these lawsuits and are forced to find out the hard way when their wages are garnished or attempts are made to seize assets. By this time it can be too late to do anything about the alleged debt, and some are even losing their homes over these mistaken lawsuits.