Will a lot of collectors go bust due to Covid-19?
In a recent live Q&A session on our Youtube channel, a viewer asked about debt collectors lasting through the pandemic.
I don’t believe many debt collectors will go out of business.
On average, there are about 100 debt buyer lawsuits filed every day in Alabama. Some days it is less, some days it is more.
They continue to steadily sue consumers.
Will it be harder to get consumers to pay during the pandemic?
But they will often continue to try through any means necessary.
The debt collectors have two options to face.
- Stick with the rules and stay within the confines of the FDCPA
- Decide to be more aggressive and cut corners.
Debt collectors may decide to lie or file suits without proof.
Default judgments can become an even bigger problem because they continue to grow until you are able to pay.
Once you finally have the money, you will end up with a much larger amount to pay.
Debt buyer companies have few expenses.
Some of these companies have few or no employees because they outsource the collection of debt. They can choose to cut back and stop purchasing debt.
Their main expenses are servicing loans to purchase the debt and taking care of lawsuits when they are caught breaking the law.
Generally, people call debt collection the “anti-recession business.”
During a recession, debt buying is a profitable business to be in. They typically make more money during a recession than during good times.
Be sure to know your rights and protect yourself when dealing with these companies.
We hope this is helpful to you!
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You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly.
Thanks for reading, and have a great day!