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New rules proposed for debt collections

Are you inundated by calls from debt collectors? Their efforts may be about to expand to other methods of communication if new rule proposals are implemented. The Consumer Financial Protection Bureau (CFPB) has proposed changing the rules for contacting debtors.

To catch up with 21st-century modes of communication, the agency wants to allow debt collectors to email and text debtors in their pursuit of overdue payments.

The premise behind the idea is that most people in this day and age are familiar with and use both email and cellphones. In fact, millennials are likelier to respond to emails or texts than they would snail mail letters or phone calls.

But that doesn't mean that there might not be possible abuses if the new rules are implemented. For instance, what would constitute debtor harassment by email or text? Could debtors who are reluctant or unable to pay be deluged with texts during waking hours or find their email inboxes overflowing with requests for payment?

It's a possibility, and under the business-friendly current administration, consumers could conceivably lose ground in any confrontation with debt collectors.

The proposal also might adversely affect older individuals and those with lower or fixed incomes who may rely on government-subsidized cellphone plans with limited texting capabilities. They could discover that all or most of their monthly text allotments have been taken up by debt collectors trying to reach them for payment arrangements on old debts.

Some consumer advocates say they worry updated rules for debt collectors may lead to an unwelcome flurry of texts, emails and calls to consumers who owe money.

Regardless of the changes, small business debtors may want to look at options like filing a Chapter 11 bankruptcy in order to eliminate their debt load once and for all.

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