One in Three Americans Has Debt in Collections, Urban Institute Study Says

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Tampa Attorney Paul Fowkes Says Delinquent Debt An Issue for Many Floridians, But No Reason to Endure Abusive Phone Calls and Illegal Harassment from Debt Collectors

Paul Fowkes

Floridians can stand up to debt collectors and recover damages in some cases. But many people do not know what their rights are. A financially distressed consumer who is being harassed needs a strong advocate.

A new study by the Urban Institute found that 35 percent of Americans with a credit history have at least one account in collections. That’s 77 million people, or more than one in three. The proportion of financially stressed consumers is even higher in some states, including Florida where more than 40 percent have debt in collection. Many of these people find themselves harassed by debt collectors as a result.

“The study shows that delinquent debt is a common issue, affecting millions of Americans,” says Tampa attorney Paul Fowkes, of the Florida Debt Fighters, debt collection lawyers who represent consumers who have been harassed. “It is no reason why anyone should be targeted for threatening phone calls and harassment by debt collectors.”

The study examined both mortgage debt and non-mortgage debt, including credit card bills, car loans, child support payments, medical bills, and unpaid tickets. It found that while individual debt amounts in collections might range from $25 to $125,000, the average debt was about $5,200.

While no part of the country is debt-collection-free, some areas face higher amounts of debt and have higher percentages of debt in collections. Nevada leads the nation with 47 percent of its residents with at least one debt in collections reported in their credit file. Nevada also faces the highest average amount of debt owed, at $7,198. In the Las Vegas metro area, nearly half – 49 percent – of residents had at least one debt in collections. By comparison, in Tampa, 41.6 percent of people with credit files had debt in collections and the average amount was $6,287.

Meanwhile, two other large metropolitan areas in Florida ranked among the five cities with the highest percentage of people with debt in collections: Lakeland (47.3 percent) and Jacksonville (45 percent).

Debt in the Tampa Area: Where Do You Stand?

A related Urban Institute study examined the types and amounts of debt carried by residents in various parts of the country. In Tampa, the average total debt carried by a person with a debt in collections was $47,767. This number included an average of $31,171 in outstanding mortgage balances and about $16,596 in non-mortgage debts. Taking on debt to buy a home or finance a college education can be a constructive use of credit. But excessive debt can lead to foreclosure, damaged credit ratings and in some cases harassment by debt collectors.

According to the study, once a debt ends up in collections, it will typically follow one of three paths:

  •     The creditor will charge the debt off its own books and sell it to a debt buyer,
  •     The creditor will put the account into default,
  •     The creditor will use an in-house collector or third-party debt collector to try to get the debtor to pay, even if the debt is expired and no longer collectible.

Debt collectors often use illegal and unethical practices in an attempt to shame, annoy, or coerce people into paying their debts. Many of the tactics violate Florida’s Consumer Collection Practices Act and the federal Fair Debt Collection Practices Act, Fowkes says. According to the Florida Office of Financial Regulation, the illegal tactics include:

  • Using profane or abusive language with the consumer.
  • Threatening to report negative information about the consumer to a credit agency when the debt is disputed.
  • Pretending to be an attorney or government official.
  • Calling consumers by telephone outside the hours of 8 a.m. and 9 p.m.
  • Threatening to inform a consumer’s employer about a debt.
  • Use of violence or intimidation.
  • Contacting a consumer who is known to be represented by an attorney.

“Many of the tactics used by debt collectors are outrageous,” Fowkes says. “Floridians can stand up to debt collectors and recover damages in some cases. But many people do not know what their rights are. A financially distressed consumer who is being harassed needs a strong advocate.”

If you’re one of the 35 percent of Americans with debt in collections and you’re facing debt collector harassment because of it, it’s important to talk to an experienced debt collection consumer advocate attorney who can help you protect your legal rights.

About the Florida Debt Fighters

The Florida Debt Fighters assist consumers in the Tampa area who have been harassed by third-party debt collectors in violation of the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act. The attorneys serve clients throughout the Florida communities of Tampa, St. Petersburg, Clearwater, New Port Richey, Tarpon Springs, Trinity and Spring Hill and has an office located at 2203 N. Lois, #830, Tampa, FL 33607 (local phone 813-932-2942). To learn more about the Florida Debt Fighters Disparti Law Group, P.A., call (800) 633-4091 or use the firm’s online contact form.

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