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Is there any relief to creditor harassment or debt struggles?

It may take someone in the industry to highlight problem areas. At a minimum, the characterizations offered by former debt collectors provide context to the aggressive tactics that consumers in New Jersey may face when struggling with debt management. 

According to the two professionals, many debt collection agencies buy debts from hospitals, businesses or even other collection agencies that have deemed those debts uncollectible or not worth the effort of collection. Such debts might be sold for pennies on the dollar. According to a 2013 federal study, the nine largest debt collection companies paid only $6.5 billion for approximately $143 billion of consumer debt from 2006 to 2009.

Yet when the debt collection agency comes calling, the debtor must still pay the debt in full, perhaps in addition to late fees or interest. That amount of return creates a huge financial incentive for collection agencies, possibly at the expense of compassion. Unlike other types of creditors or lenders, a debt collection agency may have little incentive to offer debt management options, like installment agreements.

There may be many situations why an individual is confronted with unmanageable debt. An unexpected accident or severe condition that requires expensive treatments or procedures is one example. Someone with a chronic autoimmune disease may have frequent hospitalizations that not only interfere with one's ability to earn income, but also result in a mountain of medical bills. 

For individuals who see no end to their debt struggles, a bankruptcy filing can provide a solution. Whether it is a Chapter 7 or Chapter 13 filing, bankruptcy law creates an automatic stay that requires collection agencies and other creditors to cease their debt collection efforts, at least temporarily. Check out our firm’s website to learn more about how bankruptcy laws might help your situation. 

Source: Yes Magazine, “These Former Debt Collectors Decided to Ditch the Industry, Buy Up Medical Debt, and Forgive It,” Araz Hachadourian, Aug. 17, 2015

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Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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