The biggest single commodity in our country is no longer oil or gold. It’s debt. There is a seemingly never-ending market for debt.
For those of you who are not familiar with this, let’s go over just a few facts to support my observation. Mortgages are “debt instruments”, i.e. ultimately these are security for paying a debt. Mortgage brokers who initially get approval for loans are never the ones who actually hold the mortgages and service them. The brokers pass mortgages off to banks and other big lenders, which in turn “securitize” them into big pools of mortgage loans which in turn are traded amongst the Wall Street giants like blocks of stock in any major corporation.
That’s just mortgage debt. Essentially the same activity can occur with credit card debt, car loans, student loans, medical debts or any other kind of debt out there. Debt equals cash flow, or, in other words, stream of income. The ability to collect a debt equals the ability to raise cash and increase the value of a portfolio of debt.
Obviously, debt has different “grades”, and Wall Street recognizes this. First mortgages would have a higher “grade” to a potential investor than, say, old medical bills. At the very least, a mortgage is secured by the collateral of real property somewhere, so there’s a far greater chance that the owner of the property will continue to pay on the debt, i.e. continue to create that cash flow for the owner of the debt instrument. For an old medical debt, the owner of the debt faces the possibility that the consumer will declare bankruptcy and either discharge the debt (eliminate or cancel it in bankruptcy proceedings) or have it reduced substantially under a “Chapter 13” debt repayment arrangement.
The competition for debt has become one of the biggest financial features of our current economy. So-called “junk debt buyers” will buy absolutely anything out there. Thus, we are getting more and more calls from persons being subjected to debt collection efforts by debt collectors who have purchased 20-year old debt, as outrageous as this seems.
However, the truly outrageous situation is where the junk debt buyers buy debt which has been discharged in bankruptcy. I know, that’s against the law. However, it is not stopping the junk debt buyers from buying this debt and attempting to collect it. They’re even credit-reporting it. After all, the consumer frequently declares bankruptcy only as a last resort, after years of financial stress and struggle, and with the specific intention of finally buying some peace and “starting over”. Well, with the new Bush-backed bankruptcy bill coupled with junk debt buyers buying up any debt they can lay their hands on, there is no more “starting over” in this economy, unless you’re a big corporation.
IF YOU ARE A CONSUMER WHO HAS DISCHARGED A DEBT IN BANKRUPTCY PROCEEDINGS AND A DEBT COLLECTOR IS NOW ATTEMPTING TO COLLECT ON THAT DEBT, WE ARE INTERESTED IN REPRESENTING YOU. First things first: provide the debt collector with a copy of the bankruptcy schedule, showing that the debt is discharged. If that does not stop collection proceedings, or if they continue to credit-report the debt on you, then call us promptly. Not only will we put an end to the collection proceedings but we’re also pretty confident we’ll be able to get you a judgment or settlement for your damages as well, plus our fees would be paid by the debt collector.
Thanks for reading. Pass this article around to your friends.
Bob Brennan