The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

Recession Sends Debt Collector To Bankruptcy, Will More Follow Their Lead?

Posted By admin || 23-Sep-2010

Recession Sends Debt Collector To Bankruptcy, Will More Follow Their Lead?Hudson & Keyse, LLC was supposedly in track for 1,000-plus percent growth just a few years ago, but the debt collection company astonished many by recently filing bankruptcy with more than 200 creditors and $63 million in unpaid debt.  The Chapter 11 bankruptcy company only has $288,000 in assets according to their bankruptcy petition.

"A major event was the implosion of the real estate market in '08," Carroll said. "Hudson derived quite a bit of revenue from the refinancing of real estate, which created a lot of opportunities for people to pay past due accounts. When the market for refinancing fell, their revenue streams took a hit, and it changed the nature of that particular business.

A lot of people were refinancing their homes to pay debt collection companies such as Hudson, something that we have repeatedly warned them against doing.  But since the credit market has frozen and the equity in homes has shrunk, access to cash has completely evaporated for debtors hoping to pay their bills with home equity loans.  And debt collectors such as Hudson, who depended on the ready availability of credit to fund their own business, are facing bankruptcy. It is feasible that billions of dollars in debt will never be repaid simply because debtors do not have access to the excess cash needed to catch up and to sustain at least a minimal lifestyle necessary.  As the recession presses on and more individuals default on their loans and/or choose to file bankruptcy, more debt collectors may also find themselves seeking the protection of Chapter 7 and Chapter 11 bankruptcy.

Blog Home