The current state of the economy has led to an overall hardship in almost every industry, including for debt collectors.  Debt collectors are entities trying to collect the debts for an original creditor.  For instance, since a hospital specializes in medical services, it may hire a third-party debt collector to attempt to collect unpaid hospital bills from consumers.  This is an important distinction, because the practices of such third-party debt collectors must not be out of line with the federal laws of the Fair Debt Collection Practices Act (FDCPA).  The FDCPA creates statutory liability for debt collectors who use abusive tactics in their attempts to collect debts.  As can be anticipated, in a rough economy, collecting debts can become especially difficult.  With the pressure to collect debts remaining, debt collectors may use increasingly aggressive tactics, which may cross the line of acceptable conduct under the FDCPA.  Recent lawsuit filings concerning debt collector abuses in Indiana’s federal district courts seem to support this predictable trend of greater violations.  As released in Indiana Lawyer, vol. 20, No. 3, “Abusive Tactics Increase,” in the first few months of 2009, there have already been 28 cases filed regarding the FDCPA, in sharp contrast to the 12 that were filed during all of 2008.

It is important that consumers are aware of the protections they receive from the FDCPA.  Of course, many individuals would probably assume that if they could not afford to pay their debts, then they would not be able to afford an attorney to help stop the abusive practices.  However, where FDCPA violations exist, it is the debt collectors that will be forced to cover the plaintiff’s attorney’s fees and costs.  Some individuals are under the impression that bankruptcy is their only option to stop the harassing activity from a particular debt collector, when in reality avoiding bankruptcy and filing a claim under the Fair Debt Collection Practices Act may the appropriate solution.

Nearly 1.2 million debtors filed for bankruptcy in the past 12 months, according to federal court records collected and analyzed by the AP. Last month, 130,831 sought bankruptcy protection — an increase of 46 percent over March 2008 and 81 percent over the same month in 2007.

Delaware, home to many large corporations, was the hardest-hit state, with a 127 percent increase.

via Indiana bankruptcies soar 41% in year | IndyStar.com | The Indianapolis Star.