ACA proposes changes to debt collection law
Consumers could be required to notify collectors about bankruptcy
By Seamus McAfee
Consumers should bear the responsibility for notifying creditors that they have
filed for bankruptcy, according to a proposal
by a major debt collection trade group.
Responding to a Feb. 26 report
by the Federal
Trade Commission on debt collection reforms, the Association of Credit and Collection Professionals (ACA
International) recommended amending the bankruptcy laws to require consumers filing for
bankruptcy to notify their collectors about their status. Currently, the responsibility for notification lies with the bankruptcy courts. According to ACA, this
would help reduce the number of consumer complaints the FTC handles about debt collectors
who continue to contact consumers about outstanding debt after they have filed
for bankruptcy, which is against the law.
"Both the FDCPA and the bankruptcy code
prohibit communication with consumers once they have filed for bankruptcy.
However, often collectors do not receive notice of this bankruptcy filing. That
is the reason ACA is proposing to amend the bankruptcy code to require
consumers, at the time bankruptcy is filed, to provide notice to debt
collectors known by the consumer to be collecting a debt," according to
amendment to the bankruptcy code would be a very simple solution to what is
obviously a widespread problem for consumers and debt collectors," said Rozanne Andersen, ACA executive vice president and general counsel. "ACA has
met with numerous Congressional offices to seek this fix and continues to seek
champions on this critical issue."
See related: FTC urges changes to the Fair Debt Collection Practices Act, Debt collectors' ethics code
Published: March 4, 2009