Before bankruptcy: Do debt collectors tell the truth?
Before I became a bankruptcy lawyer, I thought that successful companies were generally pretty honest. I would have guessed they were more honest than most people–otherwise why were they so successful. Or at least, they’d be honest because they had more to lose.
Before I became a bankruptcy lawyer, I thought big companies were honest.
Now I know better. I can’t compare the honesty of the average company, with the honesty of the average person. But I do know that being big and successful does not make a company honest.
When a debt buyer sues a consumer on a charged off debt, they have to prove the amount of they debt. And they have to prove that they now own the debt.
Portfolio Recovery is one of the biggest and most profitable debt buyers in America. Their website tells you they have been often named one of the best, and fastest growing, small businesses in America. They sue thousands of people every year. And up through 2008, they did it thousands of times based on sworn statements by Martha Kunkle.
Sworn statements by Martha Kunkle that she carefully checked the records; sworn statements by Martha Kunkle that she knew the amount of the debt; sworn statements that she knew who had the legal right to collect that debt. There was a big problem with that. Martha Kunkle died in 1995!
This problem did not originate with Portfolio. The people signing Ms Kunkle’s name were employees of Washington Mutual–and one of them was Ms Kunkle’s daughter.
Still multiple people, with very different handwriting, were signing a name that didn’t belong to any of them. And Portfolio, without any investigation at all, was suing people based on those fraudulent signatures.
Lots of people file bankruptcy because they are being hounded by debt collectors. (And for most of those people, filing bankruptcy is the smart thing to do. )
But, if you start to feel bad about having to file bankruptcy, remember this. As long as you put your own name on your bankruptcy court papers, you are more honest than a lot of those debt collectors.