20 Nov Debt Collector Drowning
First American Recovery Services filed for bankruptcy. This Amherst, Massachusetts, based debt collector filed for Chapter 11 reorganization on November 6, 2008, in the US Bankruptcy Court for the Western District of New York.
I suppose it makes sense. When the economic situation becomes so dire that people really can not pay their bills, they simply tell the collection agency to go hang. As quoted in the Buffalo News article published today the American Collection Association’s John Nemo says “it is getting harder and harder to collect, because people simply don’t have the money.”
These hard times for collectors may result in ever more desperate tactics. Claims for collection abuses such as harassment, unlawful disclosure of information and threatening behavior are likely to see an upswing in the near future. While this may keep Federal Trade Commission regulators busy, it will be hard on those consumers with even a minimal ability to pay.
It may just be the abuse of consumers that has caused the downfall of First American Recovery Services. Their bankruptcy schedules filed in the pending case show a number of consumer claims filed in various courts around the country.
On the other hand, the $25 million claim by CapitalSource filed in US District Court is more likely the reason for failure of this business and the resulting bankruptcy proceeding.
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