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Credit Card Applications » News » Other » Delinquent creditors have a hard time in court

Delinquent creditors have a hard time in court

August 29, 2010 | Updated on August 29, 2010
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The content is accurate at the time of publication and is subject to change.

Delinquent accounts are being let off as debt collectors find it difficult to collect without proof for their cases.

The numbers of credit card loans that are delinquent have been at an all-time peak in the current year according to experience, consumer credit, and default indices. The debtor`s financial problem becomes a larger burden as late fees, penalties and interest rates are added on.

With a large number of credit card cases pending in the court, delinquencies are on the rise. The changes in how credit card issuers are collecting are a large reason for it. The fact that credit card agencies are selling off delinquent debts at very low prices is doing nothing to help the situation.

More and more debts are being turned over to collection mills as debtors find it difficult with the usual routine of threatening letters and phone calls. These firms which collect on behalf of the debtors quickly prepare the documents with low paid clerical workers. The courts are flooded with collection cases and a lot of law suits are being filed annually.

A large majority of the delinquent consumers do not show up in court when sued. The court gives a default judgement when the debtor does not come to challenge the suit. This gives the creditor a chance to collect through property garnishment or wages.

When the debt collector has to deal with a claim being contested, then things become complicated. Providing proof becomes difficult in many cases as the debtor has to show documentation and other necessary details at every level. There should be proper agreements signed between the debtor and creditor in order to prove the case. With so many complications involved, the case often gets pushed out on account of not having credible grounds for a law suit.

The bigger problems are due to the fact that the debts have been sold and resold and the records are varied through the sales. Credit collection lawyers thus fail to have any documentation in place to support them.

The law suits tend to be filed against wrong consumers with incorrect amounts being claimed. The penalties, fees and interest rates are also wrongly calculated.

Judges have clogged up calendars with the lack of proper evidence and are rebelling against the cases coming in. Without adequate information, cases are being dismissed. This additional pressure is making it difficult for debt collectors to have any sort of leeway in the proceedings.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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