In the end, the entire issue boils down to 1.) Who owes what to whom? 2.) Can that debt be resolved? 3.) Are both parties working in good faith.
To the first question, due diligence is a must. Even if collectors are allowed to continue litigation (which I do not see going away,) there must be a penalty for the collector if false claim is made. If a collector starts litigation and it is found to be against the wrong person, compensation and additional penalty should be paid by the entity initiating the litigation in the form of a reasonable fee to the victim and an additional (and substantial) fee to the governing authority to help cover oversight expenses.
To the second question, I believe an overwhelmingly large portion of consumer debt can be repaid. However, there are always going to be exceptions to this. In cases where debt can not be collected for whatever reason, it should be written off as truly not collectable and no not be allow to be sold again as debt to be collected. Fine tuning and definitions of “Not Collectable” will have to be worked out by the appropriate oversight bureau or agency.
To the third question, both party's must be measured. There are currently established credit reporting agencies to monitor the consumer side of this issue and an additional, numerical evaluation score can be added to the consumer's already established credit report. That would be a starting point that can be expanded on as the system is fine tuned. The collector, on the other hand, would require a new measuring system that would not only score the company as a whole, but the individuals taking part in any debt resolution activities. For successful examples of such a system I would direct you to the Department of Transportation, Federal Motor Carrier Safety Administration and their Compliance-Safety-Accountability system. Admittedly, their system is much more complex and dives much deeper than would be required for the debt industry. However, their point system is valid and flexible for future change. It would also allow for measurement of the initial creditor. Such measurement would give the government and investors a better idea of a given business' risk level.
Add to this mix, the recommendations from Mr. Bartmann and you have a system whereby collectors and financial institutions will better regulate themselves to achieve an ethical and responsible outcome and not hide behind the “what I did was legal” defense. It would be a Win-Win for both sides and bring many consumers out of the debt death spiral.
Lastly, the federal government could implement this system with a minimal impact on state autonomy. It would reduce the number of litigation in state and local courts, thereby motivating the states to take part.
Thank you for the welcome. Regarding my experience, I did file bankruptcy about eighteen years ago and have regretted it every since. About two years after the bankruptcy, I started working on the operations side of a collections company. It was an eye opening experience to say the least. Had I known two years earlier what I learned in that company, I would never have done the bankruptcy. The company I worked for kept detailed hard copy files on every single case. Even though I saw all these documents, I was not aware at the time of the exact impact each document had on the case it was connected to. As a result, I feel the documents required would be an escalating burden of proof for the collector as would be the case for any other litigation. Start with the loan/credit/service/purchase contract with signatures and progress from there. Include payment documentation in the form of checks or ACH records used to pay said debt including dates, locations and account numbers to confirm said debt was historically paid by an account owned by the defendant. Each step of the process would be utilized only to the degree of the court asking the defendant “Is this your debt?” To this end, what documents would be needed would only be limited by the degree to which the collector wishes to actually prove their case.
Even so, the more I study Mr. Bartmann's proposal, the more I am convinced litigation should not even be allowed until all other avenues of resolution have been exhausted including, but not limited to arbitration, consolidation and counseling. We are working on the basis of “the least sophisticated consumer.” Should an individual with a 9th grade education, who is issued a credit card with a credit line of $500, be held responsible in a court of law for failing to properly manage his finances? Should this same person have his financial weakness used to prevent him from advancing his quality of life? As I said before, this only puts the debtor in a “debt death spiral” initiated by a credit issuing entity and exasperated by an over zealous, cold and non-empathetic group of legalized bounty hunters.
I saw another post where someone mentioned the “check box” options. I interpret that to mean, “have you, as a collector, taken the steps needed to identify the debtor, contact the debtor and offer solutions to said debt?” What solutions are being offered other than “pay up or I'll sue you?” Has the debtor been offered job counseling, financial counseling and assistance from other organizations who would assist the debtor, but just don't know he exists yet?
While I don't believe in a free ride, I also don't believe in kicking a person when they are down. This is what the current legal framework not only allows, but encourages. If you are going to encourage something, encourage the creditors to limit how a third party collects on the initial creditor's decision to issue a person credit. Once a reasonable effort is made to collect, don't allow credit to be sold off from one Bounty Hunter to another. This “tag team” allowance is part of the problem. Limiting the sale of debt to one collector will encourage the collector to work WITH the debtor. Will this cut into the profits for the collectors? I believe a strong case has already been made showing the opposite to be the case.
RoyceSharp
1
In the end, the entire issue boils down to 1.) Who owes what to whom? 2.) Can that debt be resolved? 3.) Are both parties working in good faith. To the first question, due diligence is a must. Even if collectors are allowed to continue litigation (which I do not see going away,) there must be a penalty for the collector if false claim is made. If a collector starts litigation and it is found to be against the wrong person, compensation and additional penalty should be paid by the entity initiating the litigation in the form of a reasonable fee to the victim and an additional (and substantial) fee to the governing authority to help cover oversight expenses. To the second question, I believe an overwhelmingly large portion of consumer debt can be repaid. However, there are always going to be exceptions to this. In cases where debt can not be collected for whatever reason, it should be written off as truly not collectable and no not be allow to be sold again as debt to be collected. Fine tuning and definitions of “Not Collectable” will have to be worked out by the appropriate oversight bureau or agency. To the third question, both party's must be measured. There are currently established credit reporting agencies to monitor the consumer side of this issue and an additional, numerical evaluation score can be added to the consumer's already established credit report. That would be a starting point that can be expanded on as the system is fine tuned. The collector, on the other hand, would require a new measuring system that would not only score the company as a whole, but the individuals taking part in any debt resolution activities. For successful examples of such a system I would direct you to the Department of Transportation, Federal Motor Carrier Safety Administration and their Compliance-Safety-Accountability system. Admittedly, their system is much more complex and dives much deeper than would be required for the debt industry. However, their point system is valid and flexible for future change. It would also allow for measurement of the initial creditor. Such measurement would give the government and investors a better idea of a given business' risk level. Add to this mix, the recommendations from Mr. Bartmann and you have a system whereby collectors and financial institutions will better regulate themselves to achieve an ethical and responsible outcome and not hide behind the “what I did was legal” defense. It would be a Win-Win for both sides and bring many consumers out of the debt death spiral. Lastly, the federal government could implement this system with a minimal impact on state autonomy. It would reduce the number of litigation in state and local courts, thereby motivating the states to take part.
View this comment in the discussion thread
RoyceSharp
2
Thank you for the welcome. Regarding my experience, I did file bankruptcy about eighteen years ago and have regretted it every since. About two years after the bankruptcy, I started working on the operations side of a collections company. It was an eye opening experience to say the least. Had I known two years earlier what I learned in that company, I would never have done the bankruptcy. The company I worked for kept detailed hard copy files on every single case. Even though I saw all these documents, I was not aware at the time of the exact impact each document had on the case it was connected to. As a result, I feel the documents required would be an escalating burden of proof for the collector as would be the case for any other litigation. Start with the loan/credit/service/purchase contract with signatures and progress from there. Include payment documentation in the form of checks or ACH records used to pay said debt including dates, locations and account numbers to confirm said debt was historically paid by an account owned by the defendant. Each step of the process would be utilized only to the degree of the court asking the defendant “Is this your debt?” To this end, what documents would be needed would only be limited by the degree to which the collector wishes to actually prove their case. Even so, the more I study Mr. Bartmann's proposal, the more I am convinced litigation should not even be allowed until all other avenues of resolution have been exhausted including, but not limited to arbitration, consolidation and counseling. We are working on the basis of “the least sophisticated consumer.” Should an individual with a 9th grade education, who is issued a credit card with a credit line of $500, be held responsible in a court of law for failing to properly manage his finances? Should this same person have his financial weakness used to prevent him from advancing his quality of life? As I said before, this only puts the debtor in a “debt death spiral” initiated by a credit issuing entity and exasperated by an over zealous, cold and non-empathetic group of legalized bounty hunters. I saw another post where someone mentioned the “check box” options. I interpret that to mean, “have you, as a collector, taken the steps needed to identify the debtor, contact the debtor and offer solutions to said debt?” What solutions are being offered other than “pay up or I'll sue you?” Has the debtor been offered job counseling, financial counseling and assistance from other organizations who would assist the debtor, but just don't know he exists yet? While I don't believe in a free ride, I also don't believe in kicking a person when they are down. This is what the current legal framework not only allows, but encourages. If you are going to encourage something, encourage the creditors to limit how a third party collects on the initial creditor's decision to issue a person credit. Once a reasonable effort is made to collect, don't allow credit to be sold off from one Bounty Hunter to another. This “tag team” allowance is part of the problem. Limiting the sale of debt to one collector will encourage the collector to work WITH the debtor. Will this cut into the profits for the collectors? I believe a strong case has already been made showing the opposite to be the case.
View this comment in the discussion thread