| by Michael H. Schwartz, P.C. in Bankruptcy

A Behind-the-Scenes Peek at What Really Takes Place in Debt Collection

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The U.S. has 50 states, about 320 million people – and about 369,000 debt collectors, according to the Bureau of Labor Statistics (BLS). That’s an average of about one debt collector for every 870 people, and the number of debt collectors is only expected to grow, according to the BLS.

For the 1 in 3 Americans who are currently struggling to pay some or all of their debts, being on the receiving end of calls from debt collectors is a familiar experience. But what happens on the other end – in the offices of the 9,677 debt collection agencies that currently operate in the United States?

Writer Jake Halpern decided to find out. In a recent article in the New York Times, Halpern joined a small debt collection agency to discover how they operate, what tricks they use and what the stakes are for debt collectors.

“There is a perverse logic at play here,” Halpern writes in the Times. “In a stagnant economy, we can barely pay our debts, but we can still pay people to collect on them.”

Here are just a few of the tools and tricks Halpern discovered during his time “behind-the-scenes” at a debt collection agency:

  • If they can’t find you, they’ll find those who know you. When debt collectors buy old debts, they often receive whatever contact information the original creditor has. These names and phone numbers might be outdated, or they might belong to estranged family members or former partners. This means that debt collectors will search for anyone who might know where the debtor is now – even if they have to call up your family, friends or exes to do it.
  • Debt collectors practice ways of convincing you to pay. A debt collection agency doesn’t get paid unless you pay on the debt. Their primary goal is to convince to you send them something. While federal laws are designed to prohibit the most overt forms of harassment, debt collectors can try persuasive tactics like setting deadlines or playing on your emotions. In his New York Times column, Halpern recalls being advised to say, “I got 90-year-old ladies on oxygen who are sending $25 a month, as a show of good faith.” Such statements are meant to make debtors feel guilty or ashamed.
  • Collection agencies often hire people who are in debt themselves. Debt collection, Halpern notes, pays poorly – which means that collectors are driven by necessity to pressure debtors into paying. Often, collectors are unable to make ends meet or are paying on old debts themselves, making them more intent on securing payments. “This is a battle for scraps,” Halpern writes. “It is middle-class and poor people, being pitted against even poorer people, to the benefit of much richer people.”

If you’re facing debt collectors, you may feel as though you have no options left. In fact, you have more rights than you may realize. Filing for bankruptcy is one option. Working with a bankruptcy lawyer can enable you to stop debt collection calls while you determine whether bankruptcy or another option is right for you.

At the White Plains bankruptcy law firm of Michael H. Schwartz, P.C., we know how debt can turn someone’s life upside-down. That’s why we’re committed to helping each of our clients find the right options for getting back on track.

Mr. Schwartz has assisted clients with more than 4,000 filings. As one of the top-rated bankruptcy lawyers in New York, Mr. Schwartz can help you stop annoying debt collection calls and preserve your future financial well-being. To learn more through a free case review, call (800) 666-9743 or send us a message.