In their letter, the Texas attorneys and law professors noted that about “44 percent of adult Texans have a debt in collections, and that three counties in Texas 15th district have rates nearly 20 percentage points higher than other Texas counties and rank among the top 20 nationwide (among those for which they have data) for rates of adults with debt in collection.”
Additionally, if HR 4550 were to become law, the legal experts expect that it would likely lead to more lawsuits as attorneys rush to litigation to immunize their conduct in an already over-burdened court system. In 2017 alone, attorneys filed more than 166,000 debt collection cases in the Texas Justice Courts, continuing a trend of yearly increases. The majority of cases were filed on behalf of debt buyers — businesses that buy delinquent debts for pennies on the dollar. Many of the debts cannot be verified, yet consumers rarely have resources to contest them, and even fewer resources are available to consumers once a collection case is filed. Approximately 30 percent of the cases closed last year resulted in a default judgment for the collector.The harm resulting from judgments obtained through abusive litigation practices can have long-lasting effects, making it more difficult for consumers to obtain housing, a loan, find a job, or secure insurance. Also, it could lead to greater use of unfair methods to collect judgments, such as pressuring consumers to sign over their Social Security or other protected government benefits.