Questions are growing about a possible bubble in the debt industry.

[sidley]

There is an interesting article in The Times Business section today about a possible debt bubble within the Debt Collection Agencies. Seems ironic!

Search, using your favourite search engine, - The Times with "Questions are growing about a possible bubble in the debt industry"

It claims financial experts are worried about the expansion of the debt purchasing industry is creating a bubble that will soon burst.

They say that most of these 'toxic' debts have scant paperwork; time barred or belong to the poorest sections of our society. Therefore, they will find realising these potential assets will not work. That is they will have difficulty getting the money. Since these DCAs have borrowed heavily to purchase their port folios they will soon run into financial trouble.

It goes on to say that these companies have become more aggressive ( and in a lot of cases illegal) in their activities to collect on these debts. They list some of the complaints inc. spitting in envelopes sent out to people. Yuck!

Cabot, Lidorff, Intrum, Arrow, Hoist, Lowell are amongst some of the names mentioned as having unstable business models.

Hedge fund managers are worried a lot of these companies will go bust.

I wonder what will happen to all the debts purchased?

sidley

[warwick65]

Re: Questions are growing about a possible bubble in the debt industry.

As the Times is behind a paywall i will see if I can find a copy and scan it

[sidley]

Re: Questions are growing about a possible bubble in the debt industry.

Hi Warwick,

I have a copy I can scan, just worried about the copyright laws?

[wales01man]

Re: Questions are growing about a possible bubble in the debt industry.

Will we lose sleep if some of these companies go bust?

[sidley]

Re: Questions are growing about a possible bubble in the debt industry.

The article states that the financial authorities are worried about another sub-prime loan collapse, although not on the scale of Northern Rock or Lehman Bros. The scale of these companies is too small to bring about another financial collapse.

[warwick65]

Re: Questions are growing about a possible bubble in the debt industry.

The Times .pdf

Page 1 is the article and pages 2 and 3 show the 'behind the story'

Sorry for the poor scanning, if anyone can do a better job be my guest

[warwick65]

Re: Questions are growing about a possible bubble in the debt industry.

Interesting though how the Times reports incorrectly about Limitations - it was a view expressed to me several years ago by a DMC.

They say 'If a lender does not contact a company for six years the debt can be deemed unenforceable'

This, as we know is not the case- they can write every week if they so wish but it doesn't stop a dent becoming SB

[Amethyst]

Re: Questions are growing about a possible bubble in the debt industry.

Same old same old...

[sidley]

Re: Questions are growing about a possible bubble in the debt industry.

Thanks Warwick,

What are the exact rules about SB is it just last payment made?

sidley

[warwick65]

Re: Questions are growing about a possible bubble in the debt industry.

Thanks Warwick,

What are the exact rules about SB is it just last payment made?

sidley

Sadly much more complicated than that and we could talk for a month about what is the cause of action.

However it is 6 years from the cause of action, but that is reset by any payment or written acknowledgement of the claim.

Many debt purchasers argue the cause of Action is the default date (or remedy date from the DN) which may or may not be correct

[sidley]

Re: Questions are growing about a possible bubble in the debt industry.

Many debt purchasers argue the cause of Action is the default date (or remedy date from the DN) which may or may not be correct

Presumably, the one from the original creditor? Selling it to a DCA does not restart the clock?

sidley

[beaconsman]

Re: Questions are growing about a possible bubble in the debt industry.

Indeed, one of my discontinued claim, has two dates on it, 2012 and 2013..like plucking things out of thin air. Today I have put together a letter to have the original default removed..see what happens..

[sidley]

Re: Questions are growing about a possible bubble in the debt industry.

@ beaconsman.

Good luck.

[warwick65]

Re: Questions are growing about a possible bubble in the debt industry.

Hi Sidley

No selling it to the creditor, or sending a cca request does not reset the clock

It would take a written acknowledgement or a payment to reset the clock which is always my personal worry about engaging too much with a creditor or trying for misselling with a PDL or reclaiming PPI


Remember that the default date on a credit report does not necessarily correspond with the default date of a DN

[sidley]

Re: Questions are growing about a possible bubble in the debt industry.

Thanks Warwick


sidley