U.S. Accused of Ruthless Debt Collection Practices

The Educational Credit Management Corporation is the main private entity hired by the Department of Education to fight student debtors who file for bankruptcy on federal loans. The ECM has been accused of overly aggressive tactics and other abuses.

As reported by the New York Times:

A panel of bankruptcy appeal judges in 2012 denounced what it called Educational Credit’s “waste of judicial resources,” and said that the agency’s collection activities “constituted an abuse of the bankruptcy process and defiance of the court’s authority.”

In the case in question, the ECM relentlessly pursued a debtor who had paid her student loans in full. This takes the concept of zombie debts to a whole new level.

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