Local Governments and Debt Collection Practices
Can local governments play a role in stopping harmful debt collection practices to help lower income families? According to a recent article in American Banker , correcting some of the present problems with the debt-collection system in the U.S. may involve local governments. More specifically, according to the article, “consumer advocates are urging local governments and courts to improve their debt-collection systems to take into account the ability of low-income households to pay fines or court costs related to traffic violations or other infractions.” While certain fines are unlikely on their own to lead a family to seek protection by filing for consumer bankruptcy , even small debts can add up quickly. If local governments could find a way to account for the financial difficulties faced by lower income families when assessing certain fines and fees, more families may be able to deal with their debts. In the event that debt does become too difficult to manage, an Oak ...