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The 2023 Debt Buyer Trends to Watch
If you are in debt, you are likely familiar with who your creditors are. However, sometimes those creditors sell the debt you owe them to another party. And you probably never heard of these companies before they call to collect. They are called “debt buyers,” and they’re known to aggressively pursue their investments.
Some of the leading debt buyers operating in Ohio are still Midland Credit Management, Portfolio Recovery, Cavalry, and LVNV. But some other buyers are also popping up. They include names like Credit Corp. Solutions, Forsyth Financial, and Velocity Investments.
You may receive communication from one or more of these companies, but remember, even though you owe a debt, you still have rights.
Our Ohio Consumer law attorneys have seen some recent trends regarding debt buyers and their collection tactics. Many of them are unethical or illegal. If creditors or debt buyers are hounding you and violating your consumer rights, you may have cause to sue them for damages.
What’s a Debt Buyer?
A debt buyer purchases outstanding debt accounts from creditors at a significantly discounted rate. Sometimes they pay as little as pennies on the dollar.
The debt buyer business is a multi-billion-dollar industry with many participants. Debt buyers purchase delinquent debt from past-due accounts, including credit cards, medical bills, mortgages, car loans, utilities, and retail accounts.
Debt buyers may also be called “collection agencies” or “debt collectors.” A debt collector may be a small, privately owned business or a large publicly-traded company. If they collect the debt, they are considered “active”; however, if they resell the debt, they are “passive” debt buyers.
What Debts Get Bought?
Debt buyers often buy a lot of accounts at once and pursue the debtors who owe money for the entire amount owed. Notoriously, these companies use aggressive and unsavory tactics that may be illegal.
Debt buyers may also resell a portion of the debt for a profit or use a debt collection agency to get the money owed to the original creditor.
How Do Debt Buyers Make Money?
Debt buyers pay a low percentage of the face value of the actual debt. Then, they try to collect all or a large enough percentage to make a profit. Even if they only recover a portion of your total debt under a collection arraignment or by garnishing your wages, it can still be a significant profit.
Tactics Used By Debt Buyers
Debt buyers often use unethical and sometimes unlawful collection methods to recover a debt. They may make empty threats about lawsuits or even a pending arrest. Debt buyers and collection agencies have been known to pose as lawyers and police officers when they call debtors to get money.
Common unfair debt collections practices currently being used by debt buyers include:
- Calling debtors repeatedly after being asked to stop
- Contacting debtors at work after being asked not to
- Calling at all hours of the day and night
- Making harassing phone calls
- Calling repeatedly when they’ve been asked not to
Debt buyers may pressure you into entering a new agreement to repay old debt. You should never sign anything or agree to anything from a debt buyer or collection agency before you speak with a debtor defense lawyer.
Debt Buyer Trends & To Look Out For
Junk debt buyers like Credit Corp. Solutions, Forsythe Financial, and Velocity Investments sometimes file lawsuits against debtors who cannot pay. They count on debtors to avoid the situation and not go to court. They often seek default judgments to garnish wages and charge unsubstantiated fees while using abusive tactics to collect.
Debtors Are Fighting Back in 2023
Debtors across the country are fighting back. In California, the Bay Area Legal Aid is taking one debt collector – Achievable Solutions, Inc. – to court because of abusive and illegal debt collection practices. They have alleged that the debt buyer manipulates the court system to abuse debtors and get a quick payday.
What to Expect from Debt Collectors in 2023
Some things you should look out for if a debt collector is hounding you:
- Threats of garnished wages
- Abusive collection tactics
- Unsubstantiated fees are being added to your account
- Threats that they are going to file a lawsuit
If you receive official court documentation stating a lawsuit has been filed, or a default judgment has been entered, you should immediately contact a debtor defense attorney.
Trends in the Junk Debt Buying Industry
Some key trends that you should be aware of in the debt-buying industry include:
- There is a decrease in contingency fee-based debt collectors.
- Between 2018 and 2022, the total number of collectors declined by 33%.
- Medical collections are the majority (57%) of collection accounts.
- Bankruptcy debtors will find it easier to obtain undue hardship discharges on student loans.
Your Rights & Debt Options
Even if you owe money on past-due credit cards, car loans, and retail accounts, you have rights. Creditors and debt buyers cannot harass you in an attempt to collect money. If they do, you might be able to file a lawsuit against them for violation of your consumer rights.
They may have to pay you a statutory amount and damages for attorney fees, court costs, and more.
You might be confused about what to do if you’re in debt, but you have options. You may be able to settle your accounts with the debt buyers for less than you actually owe. However, that’s not the best option for many people. Filing Chapter 7 or Chapter 13 bankruptcy can bring much-needed relief. A bankruptcy attorney can help you determine what’s right for you.
Contact a Debt Collection Lawyer For Advice
It’s essential to act fast when debt buyers start contacting you. They may file a lawsuit and seek a default judgment, allowing them to garnish your wages or collect money from you. You can prevent that by working with a skilled debtor defense lawyer to create a comprehensive debt management plan.
Contact Luftman, Heck & Associates today at 888-726-3181 for a free, no-obligation debt assessment.