Using data from the Federal Trade Commission (FTC), the National Consumer Law Center (NCLC) has compiled an analysis of the complaints made by Iowans about debt collection agencies. According to the data, 813 Iowans filed complaints with the FTC in 2017. Most of the complaints claimed that the debt collection agencies called repeatedly or called after getting a notice from the debtor to stop calling.
Other complaints were that the debt collectors made false representations about the debt, threatened to use illegal debt collection tactics or failed to identify the caller as a debt collector. If proven, each of those complaints can raise a claim for unfair debt collection and could lead to the debtor collecting damages. See https://thompsonlawoffice.net/510/debt-collectors/ for more information about what debt collectors can’t do.
Debtors might also have defenses to a debt collection lawsuit, especially with debt buyers who might not have the ability to prove their case against a debtor. See https://thompsonlawoffice.net/fair-debt-collection/. The debt collection agency receiving the most number of complaints from Iowans was Portfolio Recovery Associates, followed by Capital One Bank, Convergent Outsourcing, Inc. and Enhanced Recovery Company, LLC.
The NCLC report also said that one-quarter of all Iowans have debt in collection, meaning they’ve defaulted on payments and are facing some kind of debt collection activity. This percentage doubles to almost half of Iowans living in predominantly nonwhite areas. About 13% of Iowans (16% of Iowans living in predominantly nonwhite areas) have medical debt in collection.
The median amount of debt in collection in Iowa in 2016 was $1265. The median amount of medical debt in collections was $513. Neither of those numbers seem high but when debtors let debt collection progress to the point where judgments are entered, the difficulties can increase. Garnishment of wages and bank accounts can occur and it becomes harder and harder to get out of debt. Don’t wait until judgments are being entered before talking to someone about your options, including whether bankruptcy is a good debt relief strategy.