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Networked Blogs
Jan
20
Debt collection firm fails
Filed Under law
A debt collection firm with 24 offices has closed, according to news reports. Is it a sign of a bad business plan that failed in the case of a large law firm, or is it the sign of a deeper problem with assigned debt?
Writes the Baltimore Sun’s Jay Hancock:
In a tawdry coda to the financial crash, one of the nation’s biggest debt-collection law firms has gone belly-up, just like many of the people it had been dunning. Rockville-based Mann Bracken has ceased operation. Maryland judges are tossing out tens of thousands of collection cases the firm was handling.
It’s a tougher environment for debt collectors these days.
Debtors do not have as much money as they did during the boom days. And, the legal environment has shifted in a way that places more scrutiny on assigned debt than in the past.
Judges and attorneys in Indiana (and elsewhere) have been to continuing education seminars about the mortgage crisis. These legal professionals have been alerted to need to check the chain of title in assigned-debt cases since there often is not a clear chain of title because assignments from original creditor to the current owner might not be available. If an assignment is available, documentation from the original creditor might not be available.
This is not to say that debt collectors will be going out of business across the country. But, as the Mann Bracken situation shows, the financial collapse and the continued sluggish economy has not helped the debt collection business.
