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Some companies experience limits on loan collection efforts

The majority of people who work in the field of collections most likely don't share that information with just anyone, since many have a negative connotation toward such a the job. That feeling may be justified in some situations since some involved in loan collection efforts have been known to engage in harassment and verbal abuse. There may be many residents in Washington who have suffered similar abuse from nagging and relentless calls for payment.

The creditors behind the collections are frequently the third-party holder of the debt. Many lending institutions will take uncollected debts off their books and then sell the note to a collection agency. These agencies will then attempt to recoup their expenditures by attempting to guilt or harass debtors to pay regardless of their ability to do so.

Many of these groups will suggest that those who already owe should take on more debt to pay off their bill. However, some states are now shutting down these agencies in their tracks. One state has flat out disallowed any collection attempts on millions of dollars of unpaid debt because the outstanding amounts are too old for collection activity. There are now some companies that, ironically, may be facing too much of their own debt and may have to get out of the debt business.

After years of engaging in abusive and even illegal loan collection efforts, these companies are now facing some repercussions in the form of their own financial difficulty. At some point, one of these companies may receive their own demands for payment. In the meantime, Washington residents can educate themselves as to what legal protections exists for them from aggressive collection efforts. For the families who may be dealing with a higher debt load than they can ever hope to manage, there is also information available concerning the possibility of filing for bankruptcy protection. This legal option will stop collection activity, at least for a time, and possibly provide for the opportunity to achieve financial peace.

Source: The Wall Street Journal, "The Collection Racket", Al Lewis, May 12, 2014

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