As I mentioned I have been to court for a debt collection.

Before you go to court the debt collector has to send you proof they served you papers for your debt. They have to send you proof of the chain of debt from the original creditor on down. For a $3,000 debt I was sent a packet of at least 80 pages with tabbed chapters and detailed photos confirming service before I had to go to court. I did not request this information, they were required by law to send it to me.

These are not optional. These records are necessary to get a judgement.

Debtors ARE at a disadvantage in the courts if they do not have the money for a lawyer to fight or they don't have the time to show up on their own. This is an injustice. But saying that debt collection is being illegally enforced in the courts I believe is just untrue. If you do not owe a debt and contest it in court you prevail. But if you do owe a debt and through neglect or ignorance you end up with a default judgment or negative consequences that is on you.

Exactly the point. To win, they need to cross all the Ts you mention. OTOH, they can also win if the defendant no-shows.

At the bottom end of the debt collection pool, one strategy is to buy debt with a high chance of no-show and win cases that way... no need for meticulous and expensive lawyering. If people aren't answering their phones or opening any official looking mail...

It's not the only strategy, but it is one.

I think it's a mistake to look at these things too moralistically though. At an individual case level, maybe you're right. It is on you.

What we're looking at here though is an industry. It is built on knowledge about how certain people behave under stress of debt and exploits it. It's also dirty all the way down. Mostly, by the time these go to court the debt has been resold multiple times at small fractions of face value. Crazy interest has been applied.

Economically, it is really going for the last drop. Companies selling off bad debt... it's a pretty marginal income. On the other side, these collection agency debts basically eject a decent portion of the population from good standing in society. It's harmful, and it is happening in a court.

Scale, circumstance... when it gets this big we need to look at it systemically.

In order to have a default judgment against a person they must be served (aware of the situation). If you're being told "show up to court or face a negative outcome" and you do nothing then whose fault is that?

You took on the debt. You decided not to show up in court. Are debtors just never accountable for their actions?

Also to quote a comment by a lawyer in this thread

>I am licensed in California and Texas, and in both states one must "prove-up" a default before judgment is entered by presenting a "prima facie" case. In other words, you must prove your case before a judgment is entered, even if the defendant does not show up.

So in some circumstances even if you don't show up the debt collector must fight to get a judgment as if you were there. I really suggest you look into the resources available to low income debtors in most states. In my state there are entire systems set up to support people who feel beset by debt collections.

> You took on the debt. You decided not to show up in court. Are debtors just never accountable for their actions?

And what happens when that debt is $117 from Comcast because you "didn't return their cable modem" and they lost a class-action lawsuit about this?

Did I document that I returned their cable modem 4 years earlier because I used my own? Probably. Did I bother keeping that record for 4 years after it didn't appear on any of my bills? No.

So, when I moved and I didn't have a cable modem to return and they charged me for it and then turned it over to debt collectors (and magically never notified me before it went to debt), I wound up with a stupid-ass $117 judgement that I'm going to have to hire a lawyer for, force Comcast to disgorge 4 years of records, and put it on a docket.

And then Comcast will finally not show up and I'll win. After spending WAY more that $117 of resource and time.

Or I can ignore it for 3 years and file to drop it with the credit agencies and then they'll get rid of it.

People default all the time because they don't really appreciate what can happen if they ignore a court summons.

And, often people mistakenly rely on the advice of friends or family who suggest the debtor wasn't served properly, the debt is too old, they spelled your middle name wrong, or whatever.

There are tons of legal myths out there, such as, non-competes can't be enforced, it takes months to evict someone, I can pay my rent after the three-day pay or vacate date passes, or the like.

Also, in my experience people unfamiliar with law seem to be susceptible to spinning a story in their head that they think will exonerate them only to find out too late that their imagination doesn't carry much weight in court.

> There are tons of legal myths out there, such as, non-competes can't be enforced

At the risk of going off-topic: would you happen to have more reading on this?

Non-compete law is dependant on the state (it various a lot). In many states non-competes are very enforceable.

Search for non-compete enforcement in the states you are interested in. You should find plenty of articles put out by law firms.

Oh, that's all you meant. I thought it was always mentioned under the context of it being unenforceable in a particular state, so that's what I was confused. Didn't even realize there are people who thought they're unenforceable everywhere!

You would be surprised. I think people confuse rarely enforced with unenforceable.

What if you don't owe the debt, however you are hit with dozens of summons to show up to different courts for different supposed debts? How is it fair to force a totally innocent person to take time off of work, possibly hire a lawyer, in order to not have a default judgement against them from a shady debt collector?

Sure that aspect of debt collection can be improved and is a clear injustice. How many debt collections are of that nature vs people with real lapsed unsecured debt though? If i had to guess not nearly as many.

I'm mostly taking issue with people who are threatened with a default judgment for a real debt but pretend it isn't happening and then turn around and cry abuse by the system.

I contend that the debt, after being sold, is not “real” any longer, and therefore the debtor has no moral obligation to repay it. Legal? Definitely.

The original lender has written the debt off, probably gotten a tax break from the government, and moved on.

People and companies break contracts all the time. Moralizing over it is just a distraction from the economic and juridical forces at play.

To be fair, it's completely legitimate to issue debt that the original lender can sell for liquidity, although it should probably be difficult or impossible for institutional lenders (eg credit card or mortgage) to originate those. The real problem is the combination of interest and inablity to default onto some concrete piece of collateral, which in the creditor-preferred case of making incremental payments without net reduction in the principle, amounts to fractional ownership (like owning stock in a corporation) of a person, ie slavery.

You can break your contract too by declaring bankruptcy and screwing over the debtors.

Your debt might not be real or moral but you still legally have to pay it so what does that change.

Why would selling debt make you morally not responsible for it? My mortgage has been sold multiple times. IMO, I still 100% have a moral (and obviously legal) obligation to pay it.

Unlike secured loans like mortgages, the cost of default for unsecured loans is already priced in to the interest rate of the debt. Once it gets sold a third party, that's just a bet by that company that they can strong arm you into paying them something above what they paid for it by exploiting your anxiety or misplaced sense of duty. They didn't earn anything -- they didn't create a service or good that you found valuable, didn't invent something that saves you time, didn't make you life easier or more comfortable. They are scavengers. There is no moral obligation to enrich scavengers.

> Unlike secured loans like mortgages, the cost of default for unsecured loans is already priced in to the interest rate of the debt.

That cost likely also takes into account the money they can get for selling the debt of defaulters. Otherwise the bank down the street that does this more accurate calculation would be able to undercut them by offering a lower rate and take all their business. There's no free lunches.

The existence of a secondary market for debt affects the price of primary issuance of debt (in a way that benefits borrowers).

Your argument could be applied equally to say that anyone who buys a share of stock in the open market (not during an IPO or secondary offering) hasn't actually made an investment in the company because the company didn't get those exact dollars.

With identity theft these days, while I’d agree that it’s certainly _less_, I’d contend that it’s not an insignificant number either.

When a company sells a debt at discount, can they write off the rest of the loss?

Rules vary from state to state, and even court to court. It sounds like your experience happened in a jurisdiction with rules that are unusually protective of debtors' rights. Maybe this was New York City?

The vast majority of jurisdictions do not require creditors to provide this information in most cases.

NYC's rules came into place within the last decade, after patterns of serious abuses by creditors.