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So What If Debt Collectors Are Robosigners?

By Cathy Moran

The same issues of record keeping and proof that plague the mortgage servicing business infest the credit card collection industry.

If they don’t have evidence, they make it up.

Judges in New York  have gotten lots of press recently castigating  collection attorneys for robosigning, ethical violations, and indifference to the rule of law.

The combative me wants to rear up and fight back.

  • Expose credit card collectors for the bad actors they often are.
  • Help consumers fight rotten collection suits.
  • Preserve the confidence of the public in the court system.

But, the client’s best interest may suggest we shrug, and look at the big picture.

What’s the point?

Service of a collection lawsuit delivers a jolt to the debtor.  The sky is falling, they shriek.

But usually, it is just one of many delinquent accounts that files suit. It’s the first volley in the war, but not the last.

It is not as if fighting and winning against a less-than-honest collector will solve the consumer’s  bigger problem:  they have lots of debts they can’t pay.  They are running from brush fire to brush fire, trying to settle.

Take the long view

If you get sued on a genuine debt you can’t pay, use your energy first to assess your over all financial situation.

  • What’s the total you owe on unsecured debt, like credit cards and personal loans?
  • How close to retirement are you?
  • What kind of emergency savings do you have?
  • How many people are dependent on you?

Get input from a reliable credit counseling agency, not a debt settlement outfit.  Talk to an experienced bankruptcy attorney. Look at all the money issues.

Do it soon, so if defending the collection suit is necessary, you can file a timely answer.

If the problem is bigger than the current, robosigned collection suit, don’t waste precious energy fighting about one debt when the financial tsunami approaches.

It can be painful to look at all your financial troubles, but focusing on just one merely lets the problem fester.

 Image courtesy of BadgerGravling

 

 

 

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Filed Under: Managing Money

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

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About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

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Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

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