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It’s not surprising that the percentage of debt claims has doubled when, as the article notes, consumer debt levels tripled over the same period.
Imagine working for a company that buys up poor people’s debt in order to sue them.
There's actually a good startup opportunity here. Many of these debt collectors are unethical. You could buy these bad debts for pennies on the dollar, settle them for a very modest margin, and help the poor people fix their credit without filing for bankruptcy.
Imagine working for a company that buys up poor people’s debt in order to sue them.
Is there good money in it? There's actually a good startup opportunity here. Many of these debt collectors are unethical. You could buy these bad debts for pennies on the dollar, settle them for a very modest margin, and help the poor people fix their credit without filing for bankruptcy.
The debt collectors' lawyers didn't arrive prepared to win, because most people didn't show up. If you can win 85% of cases just by showing up, why bother.
A court system that allows these dynamics to dominate isn't serving well.
There have been journalists & researchers who covered these debt collectors at court. When defendants showed up, organised, they usually won. The debt collectors' lawyers didn't arrive prepared to win, because most people didn't show up. If you can win 85% of cases just by showing up, why bother. A court system that allows these dynamics to dominate isn't serving well.
Imagine working for a company that buys up poor people’s debt in order to sue them.
The problem everyone has getting their mind around debt collection is that they focus on the after-the-fact situation, instead of the whole picture. If companies cannot collect on debt, they will be less willing to extend credit. When you "help" one person who can't pay their debt, you're hurting several people in the future who won't be extended credit.
Student loans are a good illustration of this. People clamor to make student loans dischargeable in bankruptcy--citing examples of people with hundreds of thousands of dollars in crippling debt. But the median American doesn't have any student debt, and the median debt for people who do is just $30,000. Now as a practical matter, student loan forgiveness would just impact taxpayers, since almost all student debt is owed to the federal government. But if it was a normal debt market, making student loans--which are offered without any security--dischargeable in bankruptcy would cause student loans to dry up for everyone, even the vast majority of people who take on modest, manageable debt.
It’s not surprising that the percentage of debt claims has doubled when, as the article notes, consumer debt levels tripled over the same period.
It's not surprising when you think about it, but it's still an important problem to think about. It has the potential to cause some problems if state courts become seen as a vehicle for debt collectors more than an authority for righting wrongs.
Imagine working for a company that buys up poor people’s debt in order to sue them.
Okay, I'm imagining it. So what? There is a debate to be had about what sorts of protections we want to provide to debtors. But that's separate and apart from the existence of companies that specialize in debt collection. The latter is simply an example of economic specialization. The problem everyone has getting their mind around debt collection is that they focus on the after-the-fact situation, instead of the whol…
Imagine working for a company that buys up poor people’s debt in order to sue them.
Is there good money in it? There's actually a good startup opportunity here. Many of these debt collectors are unethical. You could buy these bad debts for pennies on the dollar, settle them for a very modest margin, and help the poor people fix their credit without filing for bankruptcy.