Debt Collection Spiralling Out of Control

by Marissa on June 19, 2012 · 20 comments

I was watching Gail Vaz Oxlade’s Princess and Till Debt Do Us part over the weekend and it shocked me to see how many people consolidate their debt. While consolidation is a great option for some, it is starting to be sold as the “magic cure” for some. This ends up creating a spiral that most people can not get out of.

american debt collection infographic

Source: http://FrugalDad.com

  • http://www.bluecollarworkman.com TB at BlueCollarWorkman

    Wait, I’m sorry, did that say “threatening the family dog”?? A debt collector would do that for serious? That’s ridiculous. This isn’t “Fear” here people! Of course, I guess back in the day debt collectors chopped off people’s hands and killed family members and stuff, so … I’m just sayin’, at least we don’t have that problem anymore.

    • Marissa

      I know, eh. Its the commission part that makes people crazy.

  • http://add-vodka.com Daisy @ Add Vodka

    Wow.. that’s super scary! I can’t believe that actually happens – what really surprises me is the fact that this is just a job for some debt collectors, its not like they get extra incentive to threaten and bully.

    • Marissa

      They are on commission.

  • http://www.fromshoppingtosaving.com From Shopping to Saving

    My best friend was harassed by debt collectors for student loans. The ridiculous part is that she wasn’t even late – she was trying to come up with a plan to pay it off. She was on unemployment at the time and pregnant, and she said she would give them the $300 payment the next month… they threatened to sue her and kept harassing her. At the time I thought that they were just doing their jobs, but learning that they make money off of commission is no wonder why they are so aggressive.

    Thanks for this…may need to deal with these pesky people in the future. I’m a bit disappointed with Chase though – for selling accounts that were misrepresented. Major fail on their part.

    • Marissa

      A lot of banks so some shady things. Im not surprised at anything these days.

  • http://mymoneycounselor.com Kurt @ Money Counselor

    Debt collectors are a notoriously slimy bunch, though no doubt there are exceptions. Anyone overdue on debt should read the FTC’s Fact Sheet called Fair Debt Collection (just Google it). Just because you’re past due on debt doesn’t mean you have to put up with everything and anything. You still have legal rights, and if you don’t know what they are, no one’s going to tell you. Also, for especially abusive debt collectors, you can hire (on contingency) a consumer law attorney and turn the tables by suing the debt collector and collecting damages. File complaints with the FTC too, the do follow-up.

    • Marissa

      I didn’t know that! Maybe I’ll do a follow up post on that.

  • http://www.mymoneydesign.com MyMoneyDesign

    I love the info-graphic. This is a situation that getting out of hand. Just look at those increases. I’ve seen a lot of publicity on this on TV as well – especially the death threats and illegal methods.

    • Marissa

      The economy is tanking and the collectors are commission. Its a dangerous mix.

  • http://thecollegeinvestor.com Robert @ The College Investor

    Great find with the infographic. I like watching Til Debt Do Us Part on Saturday nights!

    • Marissa

      I watch it everytime its on!

  • http://worksavelive.com Jason @ WSL

    It’s quite amazing what collectors get away with. If the consumer only took a few minutes to find out what the law was they could at least make the collector aware of that fact and the collector would (if they’re semi-intelligent) stop doing the illegal practices.

    With that said, some people completely avoid collectors and that obviously doesn’t work very well. It’s good to have an open line of communication but you also shouldn’t expect any sympathy. They don’t really care what you’re going through or have gone through, they just want their money.

    • Marissa

      Exactly. The avoidance part is what gets most people into trouble.

  • http://femmefrugality.blogspot.com femmefrugality

    That’s so messed up that that agency has collected so much from family members of the deceased. I bought into this myth and stressed about it for a long time. Then I talked to my insurance agent (who does a good deal of financial work) when I was taking out a policy, and she notified me that if the debtor dies, it’s the bank’s fault for lending money out to them. In no way is it the responsibility of family members. THANK GOD.

    • Marissa

      The sad part is that most people dont know and most likely will pay the collection companies.

  • http://www.seedebtrun.com jefferson

    My brother was harassed by bill collectors for a couple of years. They’ve actually called our house before looking for him…and we don’t even live in the same state, but just goes to show how hardcore they are! Debt consolidation is something we never considered because I know that it destroys your credit. I prefer to do things myself.

    • Marissa

      The collectors are on the hunt all the time.

  • http://www.eduzone.co.uk Early Years

    You can try a debt consolidation service. I did and it got me out of debt. These programs usually don’t worry about your income or anything like that, and can usually get your rates lowered and get you back on track.

  • Pingback: Comsumer Debt & Free Credit Scores — WorkSaveLive

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