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Collecting consumer debt in America

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  • Robert M. Hunt

Abstract

Why should economic scholars study the consumer debt collection process? First, the cost and effectiveness of the collections process has implications for the pricing and availability of consumer credit. Second, changes in technology and the structure of credit markets have transformed the collections industry. Small, mom-and-pop operations are increasingly being replaced by firms operating nationally, collecting on billions of dollars in bad debt purchased from creditors. In “Collecting Consumer Debt in America,” Bob Hunt explores how creditors and their agents attempt to collect past-due consumer debt, particularly unsecured debt. Creditors have a number of remedies open to them, but their effectiveness is limited by the fact that consumers can file for bankruptcy. Even outside of bankruptcy, consumers enjoy a variety of legal protections, including some they may not be aware of. ; Also issued as Payment Cards Center Discussion Paper No 07-06

Suggested Citation

  • Robert M. Hunt, 2007. "Collecting consumer debt in America," Business Review, Federal Reserve Bank of Philadelphia, issue Q2, pages 11-24.
  • Handle: RePEc:fip:fedpbr:y:2007:i:q2:p:11-24
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    File URL: http://www.philadelphiafed.org/research-and-data/publications/business-review/2007/q2/hunt_collecting-consumer-debt.pdf
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    References listed on IDEAS

    as
    1. Villegas, Daniel J., 1990. "Regulation of creditor practices: An evaluation of the FTC's credit practice rule," Journal of Economics and Business, Elsevier, vol. 42(1), pages 51-67, February.
    2. Richard L. Peterson, 1986. "Creditors' Use Of Collection Remedies," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 9(1), pages 71-86, March.
    3. Karen M. Pence, 2006. "Foreclosing on Opportunity: State Laws and Mortgage Credit," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 177-182, February.
    4. White, M.J., 1998. "Why Don't More Households File for Bankruptcy?," Papers 98-03, Michigan - Center for Research on Economic & Social Theory.
    5. White, Michelle J, 1998. "Why Don't More Households File for Bankruptcy?," Journal of Law, Economics, and Organization, Oxford University Press, vol. 14(2), pages 205-231, October.
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    Citations

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    Cited by:

    1. Viktar Fedaseyeu, 2012. "Debt Collection Agencies and the Supply of Consumer Credit," Working Papers 442, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    2. Gordon, Grey, 2017. "Optimal bankruptcy code: A fresh start for some," Journal of Economic Dynamics and Control, Elsevier, vol. 85(C), pages 123-149.
    3. Fedaseyeu, Viktar & Hunt, Robert M., 2014. "The economics of debt collection: enforcement of consumer credit contracts," Working Papers 14-7, Federal Reserve Bank of Philadelphia.

    More about this item

    Keywords

    Consumer credit ; Debt;

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