carpetbagger

Junk debt buyers are the modern version of a post Civil War carpetbagger as they suck money out of every county in the State of Nebraska without contributing anything in return.  I cannot think of a single positive thing these debt collectors contribute to our state.

Junk debt buyers typically purchase defaulted credit card accounts for about 3 to 7 cents on the dollar.  Common debt buyers include Midland Funding, Portfolio Recovery Associates, Calvary Portfolio Recovery, Cach LLC, Asset Acceptance LLC, and many others.

Debt buyers clog our courts with collection lawsuits.  In a sense, the debt buyer is in a race to recover its investment before the debtor is garnished by another creditor or files bankruptcy, so they are quick to file lawsuits after acquiring the debt.

Most junk debt buyers are located outside the State of Nebraska.  Consider the damage they do to our state:

  • Nebraska courts are clogged with tens of thousand of junk debt buyer lawsuits annually. Our taxpayers are burdened with providing enough judges and court personnel to handle these lawsuits.
  • Debtors lose up to 25% of their paychecks and all of their bank account balances due to garnishments.  Where does all that money go?  To the debt buyers residing in other states.
  • Every dollar garnished by junk debt buyers is a dollar not spent in the Nebraska economy.
  • Junk debt buyers pay no taxes to Nebraska.

So why is Nebraska allowing junk debt buyers to suck money out of our state, to burden our courts with tens of thousand of lawsuits, and to economically damage working families in our state without paying anything back in return?  What is Nebraska getting out of this arrangement?  I honestly cannot see why Nebraska is being so generous to these carpet-bagging outsiders.

Perhaps or legislators should consider a few modest reforms:

  • Debt buyers that file more than 100 lawsuits per year should be required to register with the Nebraska Secretary of State and pay an annual licensing fee.
  • Debt buyers should not be awarded Default Judgments on credit card accounts unless they can provide the courts with a copy of the signed credit agreement.
  • Debt buyers should not be allowed to garnish more than 10% of a debtor’s wage income or bank account balances.
  • Telephone collection calls should be limited to one call per week.
  • Junk debt buyers should pay state income taxes on the revenue they generate from our state.

Debt buyers are certainly entitled to enforcement of the contracts they purchase, but such rights should not cause an undue burden for the taxpayers of our state.  If they want the benefits of our efficient court system, they should pay their fair share of the cost of that system.