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Debt collection practices criticzed in government report

The activities of debt collection companies in South Carolina and around the country have been harshly criticized in a report the Consumer Financial Protection Bureau released on Jan. 12. According to the CFPB, debt collectors routinely ignore regulations that require them to cease communicating with consumers after receiving a written request to do so, and more than half of the debts in question are either not the responsibility of the individuals being targeted by debt collection agencies or for the amount being sought.

The CFPB came to their conclusions after receiving 2,000 responses to a debt collection survey that was sent to 10,800 consumers in 2014 and 2015. An alarming one in four of the consumers who responded said that they have felt threatened by debt collectors despite strict rules forbidding collection agencies from employing tactics that abuse or harass debtors. The survey responses also indicate that only about 25 percent of debt collectors stop calling consumers after receiving a letter asking them to cease contact.

The CFPB report also described collection efforts that border on harassment. Federal regulations require collection agencies to only contact consumers between 8 a.m. and 9 p.m., but many of the survey respondents said that they were called at all hours of the day and night. Proposed changes to the rules would cap how many calls can be made each week concerning an overdue debt and give the families of deceased debtors a 30-day mourning period before debt collectors would be able to contact them. Debt collection is now a $13.7 billion industry in the United States.

Individuals who are struggling to make ends meet are sometimes reluctant to pursue debt relief because of myths and misinformation about the consequences of filing a Chapter 7 or Chapter 13 bankruptcy. Attorneys with experience in this area could explain how pursuing a personal bankruptcy puts an immediate end to creditor harassment and may allow consumers to rebuild their credit ratings and enjoy a fresh financial start.

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