Selling Debts

01 Jul Selling Debts

Some interesting facts are mentioned “Collecting Consumer Debt in America” by Robert M.Hunt in the Federal Reserve Bank of Philadelphia’s Second Quarter 2007 Economic Research. In no particular order:

– Our federal government began the debt-selling business as we now know it when the FDIC started selling off the unsecured loans of failed savings and loan institutions in the early 1990’s. However, large-scaled collection efforts by the debt buyers failed back then because of inadequate technology, primarily the absence of sophisticated telephone calling systems, databases, and the Internet for locating debtors.

– Debts sold for an average of 4.5 cents on the dollar in 2005.

– Collection of five year old debts can pay off because borrowers’ incomes may have improved.

– High interest and fees at the first sniff of default are tools to encourage prompt payment from limited resources by making nonpayment more painful. (There’s actually a rationale for them, besides simple greed. Well, maybe.)

– Abusive practices are a another tool to increase the pain of continued defaults.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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