Non-Judicial Debt Collection and the Consumer's Choice Among Repayment, Bankruptcy and Informal Bankruptcy

One of the most commonly researched questions in consumer finance is whether the differences in state laws can explain the differences in bankruptcy filing rates. This question has taken on greater immediacy and drawn greater academic and political attention in the face of rapidly increasing bankruptcy filing rates in recent years. The cost of informal bankruptcy is particularly affected by laws regulating the pressure creditors can apply to defaulting borrowers, and the effect of such laws has been relatively unexplored. Non -judicial debt collection is a large and rapidly growing industry. The growth in debt collections has been matched by a corresponding growth in complaints. The FTC received more complaints about debt collection practices than complaints about any other industry (almost twenty percent of all complaints in 2010), and there is no reason to expect any substantial immediate change as the CFPB assumes much of the FTC's authority.