Debt Buyers Purchase Debt From Banks and Hunt You Down: “Pay Up or Will Eat Your Dog”
Hope to ever get out of debt in your lifetime? Hope that these guys don’t find you first.
They are the bounty hunters in the American wasteland debt collection.
Many Americans have had unfortunate dealings with a relatively new practice that involves predatory ‘investors’ who buy up delinquent consumer debt and pester and intimidate bad debtors to pay up.
Often, the debtors are sued in court, and default judges and wage garnishment are the typical end result.
Their tactics and the legality of their methods of collection are shady, but still enough to hold struggling Americans hostage for everything they have, as comedian John Oliver discusses in this segment from Last Week Tonight:
With many of these cases involving huge amounts of unpaid medical debt, it represents a major factor in explaining why Americans are falling so far behind and becoming completely consumed by debt.
John Oliver ends the segment with a feel-good gesture of purchasing debt for pennies on the dollar and then forgiving some $15 million in debt that cost only $60,000 to buy up.
On last night’s episode, Oliver pulled back the curtain on the debt-buying industry, revealing how banks holding the reported $12 trillion in outstanding consumer debt will often write off the debt (for tax purposes!), before selling the obligation for pennies on the dollar to a collection agency, who will then do their best to collect the full face value of the debt from the owing party. Should the collection agency fail to collect the debt, it will in turn write off its purchase price of the debt for tax purposes, before selling it again for even fewer pennies to another collection agency. Inevitably, the debt ends up in the hands of the lowest common denominator of collection agencies, who will assign the process to often-unscrupulous independent debt collectors, who will then harass the debtor into paying up, even threatening to eat their dog.
Oliver used the opportunity to demonstrate that a minimum amount of money could purchase back magnitudes of debt that are swamping the middle, working and working poor classes – though it must be done through a proper tax free organization or else even debt forgiveness could trigger significant tax liabilities as if it were earned income. Via the Huffington Post:
An organization known as Debt Collective has been buying and cancelling people’s debt for years, as part of a program known as Rolling Jubilee.
It has raised US$700,000 to wipe out more than $30 million in tuition and medical debt. It worked with “Last Week Tonight” ahead of Sunday night’s broadcast.
The John Oliver stunt makes a good point. But more and more Americans who become caught up in mountains of debt are left with moneys due that they have no way of paying for.
Thousands of Americans are now getting caught up in modern day debtors’ prisons as private collectors drag people into the courts where they are ill-prepared to clear their name or get off the hook. Instead, from time served, to fees, penalties , interest, liens, and lasting debt, if you become too poor to pay up, the judicial and consumer industries often consider you fair game for their version of justice – truly the most dangerous game.
Article reposted with permission from SHTF Plan