Federal agencies set to review debt collection policies

Federal agencies set to review debt collection policies

When struggling with debt, Arizona residents may have been on the receiving end of creditor harassment phone calls both at home and at work, and even had their family members field calls from relentless creditors. Because of these practices, the government is now considering whether to overhaul the industry to provide some relief. However, Arizona residents have another option, personal bankruptcy.

The US Consumer Financial Protection Bureau and the Federal Trade Commission may subject the debt collection industry to new restrictions as their debt collection practices come under scrutiny. More than 180,000 consumer complaints were filed to the FTC in 2011 against debt collection agencies, making overhauling the industry a priority.

The industry being scrutinized includes not only debt collection agencies, but also debt buyer agencies. Debt buyers usually buy written off debt from creditors, including credit card companies and pursue recovery. Many companies that buy debt are also facing federal scrutiny for the first time. The CFPB will begin collecting debt collection complaints in the second quarter of this year and then issue their regulations accordingly.

While Arizona residents await the change of federal regulations overlooking debt collection practices, they should consider all options to ease their financial burdens, including filing for bankruptcy. Chapter 7 bankruptcy allows filers to retain possession of some of their assets, including their house, and Chapter 13 allows filers to make court supervised payments according to their income. In either case, creditor harassment and wage garnishment are put to an end, giving filers the relief they rightfully deserve.

Source: Buffalo News, "Debt collectors are going after people on social media" Carter Dougherty, Jan. 28, 2013.

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