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Monday, December 15, 2008
Debt Collectors going bankrupt
Debt collectors are going broke by the droves. Junk debt buyers are especially prone to going broke because they have a heavy investment in debt but debtors are less and less able to pay. That situation will worsen dramatically as America goes into the throes of a deep economic depression that is well underway. As junk debt buyers go belly up throngs of debts will end up being forever uncollectable because there will be no records left to collect on. Many lawfirms who also depended on the collections industry will also go broke for lack of business and income. Lawyers and paralegals alike will have to find other legal fields to go into or go out of business as well.
Another beneficiary of the depression is likely to be our court systems as their workload goes down. Hopefully that will equate to lower taxation needs too. Pensioners will be getting an increase of about 10% starting in January. That coupled with rapidly declining prices at the retail level should put them in good shape which goes to prove the old axiom that every dark cloud has a silver lining.

Debt collector closes down By Jonathan D. Epstein

NEWS BUSINESS REPORTER A Buffalo bill collector has abruptly shut down and laid off all 73 employees, after the company president said cash flow woes left it unable to continue operating.

Elite Recovery Services, located on Great Arrow, closed on Thursday, sending its workers home suddenly without severance pay or any other benefits.

Company president and CEO Richard C. Corica said Elite shut down because of “economic reasons,” although he did not elaborate. He said the company, which buys credit card debt and tries to collect on it, did not file for bankruptcy and is not struggling to pay debts, but its expenses are higher than its revenues.

He said management is negotiating with an unidentified third-party to try to save the company, but would not go into more details about the discussions or the third party. He cited the confidentiality and sensitivity of the talks. “I’m hoping some other solution can take place. I hope something can be recovered,” he said in an interview. “We’re negotiating, trying to save it, to make sure there’s the capital to make sure this thing can work.” He said he hopes to know by early next week whether the effort is successful. If not, he said, he might even be able to pay the severance the workers may be owed. “We’ve always been very fair to our employees and paid them for the hours that they’ve worked,” he said. “Outside of that, there’s nothing I can say until I know the final result.”

Elite is the second locally based debt collection firm to shut down abruptly in recent weeks, after First American Recovery Services in Amherst filed Chapter 11 bankruptcy last month. It cited a slowdown in payments from consumers and the decision by its lender to shut off a credit line.
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