Why Are Debt Collectors Calling on Discharged Debts?
By Carmen Dellutri, Attorney at Law on Aug 25, 2007 in Bankruptcy Practice and Procedure, Debts Not Dischargeable, Florida, General Bankruptcy Information
The Bankruptcy Discharge Order discharges all dischargeable debts. This usually includes all unsecured debts like; credit cards, personal loans and medical bills. So, why after several years or months after you receive your bankruptcy discharge, do the debt collectors continue to call and try to collect on your discharged debts. Well, that’s because collecting on old debts is a big business, and is rapidly expanding at this time. New debt collection companies, using very aggressive tactics, are purchasing junk debt from the either the original collector or another debt collector for pennies on the dollar.
This new wave of debt collectors are actually quite sophisticated. They use credit scoring models and other new technologies to predict which individual will pay faster than others. I know this sounds ridiculous, but it’s true. If you think about the dynamics of the industry for a few minutes, it will make quite a bit of sense. Let’s say you purchase $100 worth of bad debt for a quarter, and you get one of the debtors to pay you $1. You have an excellent return on investment, and you have more people to collect from.
Now extrapolate that amount into the billions of dollars, like a hundred billion dollars, and then you add Wall Street into the mix. Wall Street has a hand in this activity. Several years ago, Asset Acceptance had a $150 million dollar IPO. Now they are everywhere attempting to collect on debts. With this much money on the line, of course, there will be abuses. People will be abused verbally, harrassed endlessly, and may even pay some money to these guys on debts that either discharged or beyond the statute of limitations.
If you are being abused, harassed or threatened with collection of a discharged debt, this is a very serious violation of the bankruptcy code which needs to be dealt with. Contact your bankruptcy attorney immediately and provide him or her with all the information that you can about the collector, collection agency, debt in question, and the type of abuse suffered.
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