CFPB Summoning Zombie Debt Back to Life

The consumer agency is finalizing new rules on debt collectors that would enable them to get judgments on illegitimate debts.

News Story (NATIONAL)

Alexander Sammon
American Prospect, The
September 18, 2019
READ THE FULL STORY HERE

Tags: Debt Collection

Organizations mentioned/involved: National Consumer Law Center (NCLC)


DETAILS

Currently, large debt-buying corporations file huge numbers of cases in civil courts, often despite holding limited information on the claim, against defendants who often can’t afford the legal help to defend themselves. This can effectively legitimize what are fundamentally illegitimate claims. Less than 10 percent of people sued on a debt are represented by an attorney, which means that most debt buyers win default judgments, even if they don’t provide sufficient evidence that the defendant actually owes the debt or that the deadline to sue has not passed. For unsuspecting debtors, that can result in punishment ranging from wage garnishments to even jail time.