Consumer Law

Debt Collection & Bankruptcy News Roundup, Week of March 7th, 2011

By Sam Glover

Debt collection and bankruptcy news has been piling up in my queue, and since I can’t hope to give each post the attention it deserves, here is a grand roundup.

• It should be no surprise that a bad economy leads to increased bankruptcy filings, but the economy’s health and bankruptcy filing rates are not inextricably linked. Bankruptcy filings have a lot more to do with debt. And since banks weren’t lending to consumers 2–3 years ago, it makes sense that bankruptcy filings are decreasing. [Credit Slips]
• A federal judge in New York has allowed a RICO lawsuit to go forward against a debt buyer, debt collection law firm, and process server that allegedly faked service in order to get default judgments. The allegations in this lawsuit are closely related to the robo-signing mess that courts across the country are still trying to sort out. [Consumerist, Forbes]
• In Minnesota, the Department of Commerce is threatening a crackdown on debt collectors in the wake of the Star Tribune’s report showing the lack of effective background checks. [Star Tribune]
• Debt collectors hunt down an eight-year-old boy for a $247.15 medical debt. [KETV Omaha via ConsumerESQ]
• While consumer bankruptcies are slowing down, business bankruptcies are picking up. Or at least it appears that way, from the bankruptcy practice beefing-up going on at Dewey & LeBoeuf, a large New York City law firm. [WSJ Law Blog]
• Debtors may die, but the debts often live on, thanks to strong growth in the morally-repugnant deceased collection industry. [Consumerist]
• From the about-effing-time file, the FDIC is leaning on banks to stop making refund anticipation loans, which are like payday loans for tax refunds. [US PIRG]
• In the last debt collection news roundup, we talked about a slew of debt collection abuses, including consumers getting tossed in jail when they don’t properly defend themselves in a debt collection lawsuit. At the time, it looks like the FTC was going to address the problem. It hasn’t, but at least one Washington legislator is taking steps to stop the jailing of consumers in connection with debt collection lawsuits. At least someone is. [Consumerist]

And, finally, your daily dose of harassing debt collection calls, thanks to ConsumerESQ:

Related posts:

• Debt Collection News Roundup, Week of June 12th, 2010
  This week began with a bang, in the form of...


• ABC News Investigates Debt Collection
  In a sensationally-titled report, “Debt Collectors Gone Wild,” ABC News...


• Bankruptcy filings go way up in February
  Unsurprisingly, since many creditors are simply chucking their receivables into...

Full post as published by Caveat Emptor on March 07, 2011 (boomark / email).