Latest news with #debtcollection
Daily Mail
6 hours ago
- Business
- Daily Mail
States and cities where debt collection calls are surging
American households currently carry a record $18.2 trillion in debt, and delinquencies are rising. An unfortunate consequence is that unpleasant calls from debt collectors are also skyrocketing. Debt collection calls rose by more than 150 percent in the first quarter of the year compared to the same period last year, according to Federal Trade Commission (FTC) complaint data. Individuals may report debt collector calls to the FTC, the Consumer Financial Protection Bureau (CFPB) or their state's attorney general office. Americans living in Georgia have been the most inundated with these calls, with residents filing 80 complaints per 100,000 people, according to NumberBarn analysis . Atlanta was the worst hit city, with 6,500 complaints made for every 100,000 residents. Texas was the second worst hit state, with locals filing more than 18,000 complaints of debt collector calls - 62 for every 100,000 people. Experts claim the recent surge is down to both legitimate debt collectors ramping up efforts to claim back funds amid economic uncertainty , as well as scammers exploiting the situation by impersonating collectors. Dallas was the city flooded with the second most calls adjusted for population, followed by Miami. Although debt collection call complaints have been steadily rising for the last 10 years - averaging between 35,000 and 45,000 per quarter - the recent spike is notable. The biggest chunk of complaints are made by those aged 30 to 39, a group weighed down by more than half of the nation's student loan debt. This leaves Americans in that age bracket open to legitimate and fraudulent debt collection calls, experts warned. 'When it comes to debt collection, we're seeing a perfect storm right now,' Michael Boggiano, managing partner at Wealthcare Financial, told . 'The surge in complaints against collectors reflects both a rise in legitimate frustration and a rise in fraud.' The average American's debt is now $61,660, up $970 from a year ago, according to the New York Federal Reserve. That is more than four times the volume that were described as such in the same period of 2024. Experts from NumberBarn say that aggressive or threatening tactics could be a sign a call is a scam, as official debt collectors must follow certain regulations.
Daily Mail
7 hours ago
- Business
- Daily Mail
The states and cities where debt collection calls are surging
American households currently carry a record $18.2 trillion in debt, and delinquencies are rising. An unfortunate consequence is that unpleasant calls from debt collectors are also skyrocketing. Debt collection calls rose by more than 150 percent in the first quarter of the year compared to the same period last year, according to Federal Trade Commission (FTC) complaint data. Individuals may report debt collector calls to the FTC, the Consumer Financial Protection Bureau (CFPB) or their state's attorney general office. Americans living in Georgia have been the most inundated with these calls, with residents filing 80 complaints per 100,000 people, according to NumberBarn analysis. Atlanta was the worst hit city, with 6,500 complaints made for every 100,000 residents. Texas was the second worst hit state, with locals filing more than 18,000 complaints of debt collector calls - 62 for every 100,000 people. Experts claim the recent surge is down to both legitimate debt collectors ramping up efforts to claim back funds amid economic uncertainty, as well as scammers exploiting the situation by impersonating collectors. Dallas was the city flooded with the second most calls adjusted for population, followed by Miami. Although debt collection call complaints have been steadily rising for the last 10 years - averaging between 35,000 and 45,000 per quarter - the recent spike is notable. The biggest chunk of complaints are made by those aged 30 to 39, a group weighed down by more than half of the nation's student loan debt. This leaves Americans in that age bracket open to legitimate and fraudulent debt collection calls, experts warned. 'When it comes to debt collection, we're seeing a perfect storm right now,' Michael Boggiano, managing partner at Wealthcare Financial, told 'The surge in complaints against collectors reflects both a rise in legitimate frustration and a rise in fraud.' The average American's debt is now $61,660, up $970 from a year ago, according to the New York Federal Reserve. Delinquency is also rising on consumer debt, particularly on auto loans which now account for $1.6 trillion of debt. Michael Boggiano, managing partner at Wealthcare Financial, warned that scams are rising Miami residents have also been inundated with scam calls in the first quarter of the year The recent surge is down to both legitimate debt collectors ramping up efforts to claim back funds amid economic uncertainty, as well as scammers impersonating collectors Almost half of all the call complaints filed in the first quarter of the year were described as 'abusive, threatening or harassing.' That is more than four times the volume that were described as such in the same period of 2024. Experts from NumberBarn say that aggressive or threatening tactics could be a sign a call is a scam, as official debt collectors must follow certain regulations. Debt collectors are barred from using threat or profanity; from calling before 8am or after 9pm; from impersonating law enforcement or a government agency and from attempting to collect debts you do not actually owe. They must also identify themselves. If they evade questions about who their employer is, that could also be a sign the call is a scam.
The Independent
8 hours ago
- Business
- The Independent
Martin Lewis shares important council tax payment update on live TV
Martin Lewis announced that the government is launching a consultation into council tax payments, which will affect over three million people. The Money Saving Expert founder criticised the current council tax debt collection process as "so rapid and aggressive it would make banks blush". Mr Lewis said that forcing individuals to pay for a year when they cannot afford a month is "destroying lives". The consultation will consider slowing down the debt collection process to allow people more time to pay before further action is taken. Watch the video in full above.
The Independent
11 hours ago
- Business
- The Independent
Martin Lewis makes major council tax payment announcement affecting three million people
announced on live TV that the government is launching a consultation into council tax payments which will affect over three million people. Appearing on Good Morning Britain on Friday (20 June), the Money Saving Expert founder said he is 'grateful' that the government is listening to concerns on council tax debt collection, which Lewis described as 'so rapid and aggressive it would make banks blush'. He said that 'forcing someone to pay for a year when they can't pay for a month' is 'destroying lives'. Lewis announced that the consultation will consider slowing down this process so people have longer to pay the debt before action is taken.
Yahoo
3 days ago
- Business
- Yahoo
How to protect your paycheck from federal student loan garnishment
The federal government has strong collection powers for defaulted federal student loans, such as Administrative Wage Garnishment. Borrowers have rights to appeal wage garnishment and protection against employer retaliation. Borrowers should update their contact information and explore options for getting out of default by contacting the Default Resolution Group. The U.S. Department of Education announced on April 21, 2025, that it would restart enforced collection of defaulted federal student loans on May 5, 2025, for the first time in five years. During the pandemic, the Coronavirus Aid, Relief and Economic Security (CARES) Act not only paused payments and waived interest on federal student loans, but also suspended involuntary collection of defaulted federal student loans. These provisions were extended multiple times, and then followed by a 12-month on-ramp that retroactively placed delinquent loans into a series of 3-month administrative forbearances. This ended on September 30, 2024. Of the 7.7 million borrowers who were in default prior to the pandemic, 5.3 million remain in default. If you are among them, you should know that the U.S. Department of Education has very strong powers to compel repayment of defaulted federal student loans. These include Administrative Wage Garnishment and the offset of income tax refunds and Social Security disability and retirement benefit payments. Make sure you understand how wage garnishment works and what you should do if you receive a notice. Administrative Wage Garnishment typically begins after a 30-day notice to the borrower. If you have a serious delinquency or are in default on your federal student loans, update your contact information with the U.S. Department of Education and your loan servicer to ensure you receive any notices concerning your debt. The wage garnishment notice will be mailed to the borrower's last known address. The U.S. Department of Education does not need the borrower's current contact information to start wage garnishment, as they can get the name of the borrower's employer through tax records. The wage garnishment order will be sent to the borrower's employer. Once AWG begins, the U.S. Department of Education can require employers to withhold up to 15 percent of a borrower's disposable pay to repay defaulted federal student loans, without needing a court order. Disposable pay refers to what's left of the borrower's wages after deducting health insurance premiums and any amounts required by law, such as taxes. After garnishment, the borrower must be left with at least 30 times the federal minimum wage per week (currently $217.50). This is intended to ensure that the borrower can pay for basic living expenses. If the borrower is already subject to garnishment for other reasons, the combined garnishment amount can exceed 25 percent of disposable pay. Can I be fired for having my wages garnished? Federal law protects borrowers from employer retaliation. An employer cannot terminate or take disciplinary action against an employee solely because of Administrative Wage Garnishment. Should an employer retaliate, the borrower can file a lawsuit seeking attorneys' fees, back pay, reinstatement and punitive damages. Garnished amounts are applied first to collection costs, then to interest and finally to the principal balance of the defaulted loans. Wage garnishment continues until the entire amount owed by the borrower, including interest, penalties and collection costs, is paid in full. If any excess amounts are garnished, they will be refunded to the borrower. However, the ED does not pay interest on such refunds. Borrowers have options for avoiding Administrative Wage Garnishment if they act quickly. Look out for collections scams Borrowers who are in default should beware of student loan scams. Some scams will pretend to be debt collection agencies and demand hundreds of dollars from the borrowers' wages. Wage garnishment orders are sent by the federal government to the borrower's employer, not the borrower. You can verify suspicious demands for payment by contacting the Default Resolution Group at the U.S. Department of Education. Borrowers who receive a notice of Administrative Wage Garnishment should ask to see records relating to their debt, to ensure that the balance due is accurate. They should also evaluate whether they have grounds for an appeal and promptly file a request for a hearing before an administrative law judge if so. If this request is filed within 30 days of receiving the garnishment notice, the hearing must occur before the wage garnishment order is issued. For requests filed after the 30-day window, the hearing may take place after the garnishment begins. The hearing official is required to issue a final written decision within 60 days of the petition's filing date. Common grounds for appeal Job loss. If a borrower was involuntarily separated from their employer, Administrative Wage Garnishment cannot be imposed until they have been continuously employed for at least 12 months. Financial hardship. Borrowers can challenge Administrative Wage Garnishment if it will result in financial hardship, which is defined as 'an inability to meet basic living expenses for goods and services necessary for the survival of the debtor and his or her spouse and dependents.' Basic living expenses include essential expenses like food, rent, utilities, clothing and medical bills. Borrowers may be required to provide documentation of income and basic living expenses, which will be compared with the IRS Allowable Living Expense (ALE) for families of the same size and income. If the borrower's basic living expenses are higher, they must prove that the higher amounts are reasonable and necessary. Documentation of eviction or foreclosure, utility disconnection and homelessness can be helpful. A successful appeal based on financial hardship may result in a reduced wage garnishment amount or a temporary suspension. Bankruptcy. Administrative Wage Garnishment is suspended when a borrower files for bankruptcy and remains suspended until the bankruptcy proceedings have concluded. Rehabilitation. If a borrower has successfully made five qualifying monthly payments under a loan rehabilitation agreement, the Administrative Wage Garnishment will be suspended. Debt paid in full or discharged. Garnishment will end if the borrower provides proof that the debt has been paid in full or discharged. Incorrect amount of debt. Borrowers can dispute the amount of the debt by presenting evidence of a different amount that is owed. Non-existence of the debt. Borrowers can dispute the existence of the debt by providing proof that no debt exists or that the debt is not their responsibility. Not delinquent. A borrower can challenge the wage garnishment by proving that the borrower is not delinquent or in default on the debt. If an appeal is granted, it usually results in a temporary suspension of the wage garnishment, so the borrower may need to submit an appeal annually. If the borrower has Direct Loans, the borrower can enter into a loan repayment agreement or loan rehabilitation agreement with the U.S. Department of Education's Default Resolution Group. If the borrower has FFEL program loans, the borrower can make arrangements with the guarantee agency that holds the borrower's defaulted loans. Keep in mind: Entering an agreement and making your first payment within 30 days of the date listed on your notice will prevent wage garnishment. You can return the loans to a current status by rehabilitating them. Entering a rehabilitation agreement and making your first payment within 30 days of the date listed on your AWG notice will prevent wage garnishment. Keep in mind: If garnishment has already begun, it will continue until you complete loan rehabilitation. There are two methods of rehabilitating defaulted federal student loans. One involves making 9 out of 10 consecutive, on-time, full, voluntary, reasonable and affordable payments as part of a loan rehabilitation agreement. This type of rehabilitation removes the default from the borrower's credit history. Removing the default from the borrower's credit history will make it easier for them to get a credit card, auto loan or mortgage. A quicker method to remove loans from a defaulted status is to include them in a Federal Direct Consolidation Loan. Consolidating your defaulted student loans restores them to a current status immediately and stops wage garnishment. However, this method has a few drawbacks: Consolidation adds the interest and collection costs to the loan balance. Consolidation does not remove the default from the borrower's credit history. The borrower may be required to repay their loans under an income-driven repayment plan. If you have questions about your student loans, you can call the Federal Student Aid Info Center (FSAIC) at 1-800-433-3243. If your loans are in default, contact the Default Resolution Group at the U.S. Department of Education at 1-800-621-3115 or visit for guidance about getting out of default, rehabilitating federal student loans and wage garnishment.
