Getting behind on payments is stressful enough without receiving constant reminders about it everywhere -- at home, at the office and even at friend's and family member's homes. Unfortunately, in this day and age, creditor harassment has become part and parcel of owing debt, and this creditor harassment often crosses the line into illegality.
Arizona residents may not be aware that the federal watchdog, the Consumer Financial Protection Bureau is trying to crack down on debt collection abuse. The debt collection industry has grown considerably in the last twenty years and is being scrutinized for filing suits against vulnerable borrowers.
The most recent lawsuit comes against a collection agency that was operating like a factory, signing off on more than 350,000 lawsuits since 2009. The complaint against this agency alleges that a single lawyer signed off on around 1,300 lawsuits a week and was advised to spend less than a minute to go over the paperwork. The result was that often these lawsuits ended in default judgments against the debtor as they didn't show up for the court hearing and creditors could seize property or place liens on property. This could be because debtors were not informed of their court date properly in the first place.
Collectors do not always try their best to properly track down debtors or even verify if the debts are valid, as they are hired by businesses to collect delinquent debts and receive a percentage for successfully collecting a debt. This may be why they aggressively target debtors.
Arizona residents may not be aware that not all debt collection practices are legal and they have rights against debt collection agencies. In addition to this, those who are unable to make their payments and are struggling to make ends meet may be able to file for personal bankruptcy, either Chapter 7 or 13, to wipe out most of their bills and put an end to creditor harassment.
Source: Huffington Post, "Debt collection 'factory' preyed on broke Americans: Lawsuit," Hunter Stuart, July 15, 2014
