cherokee316's Blog

http://budhibbs.com/am_worst_collection.htm

Actually, there is another fly in the ointment that was not even mentioned in the ABC news story. President Bush (W.) pushed for and got a revision of the Federal Bankruptcy laws which now makes it much more difficult for someone to simply "skip out" on credit accounts. What most of the advertisements on television do not tell you are that unless you own practically nothing, are so far in credit card debt that you owe more than double your annual income, and are willing to live without good credit for ten years, you will not benefit from Chapter 7 or 13 Bankruptcy. The majority of the people now are forced into what is called an earner's program. The bankruptcy court takes your income, gives you an allowance to live on, and then pays the rest to your creditors. Depending upon the bankruptcy court judge you might have to repay all of your debts in as little as 5 years. The one positive thing is that the bankruptcy court "fixes" your interest at 9%, much better than most credit cards, but worse than what most mortgages are set at. It is not uncommon for many people going through bankruptcy to have less than half of thier incomes available for living expenses. In most cases people do not run up credit accounts to a level where they can not pay them off, and the ones that do normally have some sort of problem which caused them to rely upon the credit extended to them for expenses they would have paid off out of pocket.

The reason why the Federal Fair Debt Collections Practices Act was established was to force the debt collection companies into practicing in a more legitimate and legal manner. (Read that, sue them, get a judgement, then either garnish thier wages or place a lien upon thier property.) It was intended to stop the harrassing phone calls after 8PM, threatening to put you in jail, taking away your property, giving out confidential information to your neighbors, co-workers and employer. And worst of all, them attempting to either collect a debt which is not yours or that is in error.

Currently a friend of mine's wife is being sued for a back medical bill. She was contacted by the debt collector (not the hospital) about paying off her bill. She explained that due to the amount she owed that she would not be able to pay the full amount and offered to make payments. They refused to accept payments, unless they were large enough to pay at least half of her bill. So, when she told them that she couldn't do that, they filed in court and are going to attempt to get a judgement and garnishment. Unfortunately there is very little she can do, unless she is able to work out some sort arrangement with the Hospital.

The thing you have to remember is that most credit card companies and other creditors do not hold onto the pass due accounts for very long anymore. They sell them off to a third party company, for pennies on the dollar, who then engages in bottom feeding. They do everything they can to get as big a profit off of these accounts as they can. If they collect on 50%

You are very correct Originalmo!

What I don't understand is by law, how can someone sue you if the debt was NOT thiers originally? When you enter a contract with someone it is with THAT company, not anyone else!! That should be against the law. In your friends case the hospital should be the only company that can sue her! Does not seem fair!

If everyone got busy and paid their debt , there would be any collection agencies.

purdygirl, unfortunately many people do not realize that almost every contract you enter into has a clause allowing "reassignment of the debt", in other words the original company you enter into a contract with can sell your contract to another company. In the mortgage business this is the norm. (Your bank or S&L makes a number of mortgages to people purchasing homes, using money that they borrowed. These loans then all get bundled up and sold in a block to another company, who then services the loan and makes thier profits from the interest paid, fees/charges and interest off of escrow accounts. Your original lender made his profit off of the closing costs charged at the time you "closed" on your home mortgage. In some cases home loans are sold and re-sold several times during the life of the loan.)

collectors. By doing this the debt collection business will be forced into performing within prescribed manners, and end the abuse that has been going on.

The other thing that will help is for the Federal government to finally enact some legislation controlling the credit card industry. Since the finding of Wachovia v. Waters the states have been restricted from making laws or controlling the business activities of the majority of the credit card industry. (Wachovia v. Waters holds that since credit cards are interstate, and not intrastate business the states may not enact any legislation or restrict the business practices of any business involved in providing credit in interstate transactions. This decision was based upon the Interstate Commerce Clause of the U.S. Constitution.)