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house Bill H.R. 2547

Should Protections for Debt-Holders Be Strengthened?

Argument in favor

Debt collectors are notoriously aggressive with debtors, often using intimidation tactics and harassment to scare debtors. This bill would ensure that collectors can’t use overly aggressive tactics and make certain types of debt not reportable for credit purposes to provide important protections for debt-holders. Additionally, this bill includes important updates, such as adjusting statutory damages available under the federal Fair Debt Collection Practices Act for inflation and indexing them for inflation in the future, to update debt collection practices at the federal level.

Frank-001's Opinion
···
05/13/2021
It seems that only lenders and the usual cast of knee-jerk right-wingers are unhappy with this bill that addresses aggressive debt collection practices. A criticism, also mentioned by others, is that the ridiculously high-interest rates* are not being addressed only debt collector’s aggressive behavior. High-interest rates and predatory lending are far more critical issues. Compounding the lending crime are the pathetically low-interest rates for consumers on savings accounts, etc. The aggressive behavior and intimidation, and scare tactics must cease. At the same time the high interest rates must be drastically reduced. * If you are unfamiliar with the concept of usury, look it up. Many credit and credit card programs are technically usurious. Guess who has been behind that! ADDENDUM @Leslie's wrote: "... this bill does not go far enough as it should protect against predatory interest rates & usury. Also, think consumers need more education on what they are agreeing to and what it will take to pay the money back." That is correct. My understanding is that the basics of Personal Finance are NOT a required part of every high school student's education. It should be. One of my children is a recent college grad; a personal finance course was never offered as an option, apparently. A teacher friend had to get permission to teach personal finance as part of an interdisciplinary experimental program for "at-risk" high school students. He said he had them work backward. First, he had them research apartments and rents. Onto Cellphone costs and utilities. Next Entertainment. Finally food. Then how much they needed to make—ended by researching jobs that made enough money. My friend retired, so I have no way of knowing if it made a difference long term. But he thought that they connected to the project. I imagine it was far more engaging and motivating than many more academic high school curricula.
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jimK's Opinion
···
05/13/2021
Yup, I like Frank-001’s comments. … … … Let me state that the commission driven debt collectors are mostly the scum of the earth. Years back, different members of my immediate family were getting harassing calls regarding someone named Macey, who had somehow skipped out on a big car loan - not a name that any of us knew. The calls were from seemingly different people who started calling asking for Macey and got increasingly aggressive and threatening over time. My Father who was extremely hard of hearing and could not hear people over the phone got these calls as well - and one day got a summons to appear in court regarding Macey’s debt. He said that he called the attorney listed who said it was a mistake and to forget about it. I called the attorney as well, just to ensure that Dad heard what he had said, and the attorney repeated that it was a mistake, he would take care of it and that we should just ignore the summons. About a month later he received a notice that his wages were to be garnished to cover Macey’s debt because he failed to appear in court to challenge the claim. I went ballistic and worked though all the roadblocks to get to the ruling Judge and explained in great detail what had happened. The Judge listened carefully and had a few questions after which he said said forget about it - and he meant it and we did. Years later, at Dad’s funeral, someone no-one had ever met came to the wake and begun asking people if they had seen their old friend Macey. A switch flipped and I turned into a late night greasy bar room bouncer and embarrassed my family by acting like one as I physically ejected this person. I never heard from them again, and I do not think that other family members did either - unless they have been afraid to tell me.
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NoHedges's Opinion
···
05/13/2021
Rhetorical Question: Why is it Republicans are fine with bailing out bank presidents and the entire banking industry BUT against helping their next door neighbors? Note: While Carina still shows signs of an irrational fear of all things Democrats propose, she is beginning to show signs of being able to sympathize with those caught in similar circumstances as she has faced. It is too early to make any conclusions as to whether or not this break through may lead to her developing a sense of empathy and abandoning her irrational fear, but there is hope.
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Argument opposed

While most people would agree that debt-holders should not be harassed or threatened by debt collectors, it is also important to bear in mind that collection of unpaid debt is an important linchpin of ensuring a functioning credit economy. Similarly, accurate credit reporting information is needed for lenders to make accurate judgments about potential borrowers’ creditworthiness. This legislation runs the risk of undermining the economy’s necessary credit extension and debt collection functions.

Freethinker's Opinion
···
05/13/2021
What is it with these dem bills that sound good on the surface but once you dig a little more they actually harm those in the lower socioeconomic brackets? It’s like they want to keep people on welfare and make it impossible for low income citizens to get a loan. This disproportionately will impact minorities again. Just like most dem policies. Just horrible how they treat the lower class and minorities through their hidden bureaucracy. Wake up these policies are so disingenuous! And Maxine Waters has no idea about financing or loans. She didn’t even know that student loans were federalize and made a fool of herself 2019. It’s pretty funny you can look it up if you’re in for a good laugh.
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B.R.'s Opinion
···
05/13/2021
I would not support this bill as written. While some of the recommended changes have merit, others do not.
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Carina's Opinion
···
05/13/2021
Certainly debt collectors should not threaten individuals about debt. Many people are responsible and want to pay the debt they owe. Certainly there are those who will max out cards or incur other debt that they ultimately can’t and won’t pay. There is a big problem when people incur debt and a bigger problem when credit card companies exact very high interest rates making it even harder if not impossible for some people to pay down. Nobody likes something unexpected to occur but those things put people at a disadvantage to pay down debt. Sometimes this kind of debt may force people into bankruptcy. While my husband and I avoided bankruptcy, we found ourselves in such a position when I fell and broke my leg and shattered my ankle. That accident was not on my ‘to do’ list. I had just gotten laid off from my job six months before, but would not have been able to work since I was down for 5 months and couldn’t drive. I made payment arrangements with the hospital and was diligent to pay the agreed amount. Someone decided to send my account into collections and the individual who called put the squeeze on me to increase the payment amount and I told her that I could not afford it. Her response was shocking, “Well if you couldn’t afford to pay your medical bill you shouldn’t have sought treatment!” This fool makes such a remark about someone who has had a major break requiring a several hour surgery and extensive recovery to be able to walk again, but I shouldn’t have sought treatment.🤔 I still hope she was fired! I did call the hospital and the Chief of Staff checked into my account and someone made a mistake and my account should have never been sent to collections. Life happens and it isn’t always fair. I encourage people to be responsible to pay their bills and don’t get in heavy debt, especially now more than ever if possible. Save!! This application doesn’t just apply to everyone in this country but applies to our State and Federal Governments. America is no longer a rich country when the country is almost $30 trillion in debt. FYI, the debt of the federal government is ultimately our debt. Before government starts giving advice to Americans regarding debt they should assess the finances and STOP SPENDING AT THE EXPENSE OF TAXPAYERS!! NO, I DON’T SUPPORT THIS BILL BECAUSE IT WILL ULTIMATELY AFFECT TAXPAYERS ADVERSELY!!
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What is House Bill H.R. 2547?

This bill, the Comprehensive Debt Collection Improvement Act, would strengthen protections for small business lending, ensure fair debt collection, advocate on behalf of consumers with student and medical debt, end debt collection harassment and abuse, and create guardrails for consumers against private debt collectors. A breakdown of its various provisions can be found below.

This bill’s provisions include language from multiple bills, each of which is listed below with its provisions: 

  • The Small Business Lending Fairness Act: would amend the Truth in Lending Act (TILA) to restrict the use of confessions of judgment for small business owners and to extend protections that currently exist in consumer lending.
  • The Fair Debt Collection Practices for Servicemembers Act: would amend the Fair Debt Collection Practices Act (FDCPA) to prohibit debt collectors from threatening a servicemembers with reducing their rank, having their security clearance revoked, prosecuting them under the Uniform Code of Military Justice, or otherwise communicating with a commanding officer or other senior officer in the chain of command above a servicemember regarding an outstanding debt.
  • The Private Loan Disability Discharge Act: would amend the TILA to require the discharge of private student loans if the borrower becomes permanently disabled. This would provide rights that already exist for federal student loan borrowers to private borrowers.
  • The Consumer Protections for Medical Debt Collections Act: would bar entities from collecting medical debt or reporting it to a consumer reporting agency without giving a consumer notice about their rights under the FDCPA and Fair Credit Reporting Act (FCRA) related to that debt. These rights include a minimum one-year delay before adverse information is reported to a credit reporting agency and barring the reporting of adverse information relating to medical debt due to medically necessary procedures.
  • The Ending Debt Collection Harassment Act: would amend the FDCPA to prohibit debt collectors from contacting consumers via email or text message without the consumer’s consent to be contacted electronically.
  • The Stop Debt Collection Abuse Act: would extend FDCPA protections as it relates to debt owed to a federal agency and limit the fees debt collectors can charge. Additionally, this section of the bill would require the Government Accountability Office (GAO) to conduct a study on government agencies’ use of third-party debt collectors.
  • The Debt Collection Practices Harmonization Act: would expand the definition of debt covered under the FDCPA to include money owed to a state or local government, clarifying that private debt collectors who pursue debts such as municipal utility bills, tolls, traffic tickets, and court debts are subject to the FDCPA. It would also update monetary penalties for inflation and clarify that courts can reward injunctive relief and add protections to consumers affected by national disasters.
  • The Non-Judicial Foreclosure Debt Collection Clarification Act: would reverse the recent Supreme Court decision in Obduskey v. McCarthy and Holthus LLP by amending FDCPA to clarify that entities in non-judicial foreclosure proceedings are covered by the statute. 

Impact

Individual, business, and servicemember holders of debt; debt collectors; protections for debt-holders; Truth in Lending Act (TILA); and Fair Debt Collection Practices Act (FDCPA).

Cost of House Bill H.R. 2547

A CBO cost estimate for this legislation is unavailable.

More Information

In-DepthSponsoring Rep. Maxine Waters (D-CA) introduced this bill to strengthen protections for debt-holding business owners, consumers, and servicemembers. At April 21, 2021 full committee markup at which this bill was considered, Rep. Waters said:

“In the midst of the pandemic crisis, predatory debt collectors have made record profits while continuing with their abusive, harassing tactics while consumers struggle to make ends meet through no fault of their own. At this mark up, we will consider my bill, H.R. 2547, the Comprehensive Debt Collection Improvement Act, which includes several measures by Representatives Velázquez, Meeks, Cleaver, Dean, Tlaib, Pressley, and Auchincloss to protect consumers from abuses by debt collectors.”

The National Association of Consumer Advocates (NACA) supports this legislative package. In an April 20, 2021 press release, NACA legislative director Christine Hines said:

“We welcome the bill’s proposal to finally adjust statutory damages available under the federal Fair Debt Collection Practices Act (FDCPA) for inflation and index them for inflation in the future -- for the first time since the law passed nearly 44 years ago. While statutory remedies for victims of debt collection violations have stayed stagnant since 1977, the average price of a home has increased by 988% and the cost of a one-night hospital stay has gone up 286%. We also hope the committee will pass the other much-needed protections this package would bring to the 68 million Americans with debts in collections. Prohibiting certain abusive practices directed at servicemembers, including threats to reduce rank or revoke security clearance; stopping collection of medical debt for the first two years and credit reporting of debt arising from any medically necessary procedures; extending FDCPA coverage for all federal, state, and local debts collected by debt collectors; and other proposals, are necessary additions to the consumer protection landscape, especially now during a global pandemic that has jeopardized household finances across the country.”

The Credit Union National Association (CUNA) expressed concerns about this bill’s proposal to block the inclusion of medical debt in credit reporting. In a letter dated April 20, 2021, CUNA President and CEO Jim Nussle wrote:

“Restrictions on the reporting or consideration of certain debt prevents lenders from seeing borrowers’ complete debt circumstances and clouds lenders’ ability to fairly assess borrowers’ creditworthiness. An incomplete view of borrowers’ credit history reduces lender confidence in credit reports and scores, impacting pricing decisions and credit availability.”

In the same letter, CUNA also expressed concerns about the expansion of FDCPA coverage of non-judicial mortgage foreclosures:

“This provision will expose mortgage servicers to increased FDCPA liability, and produce regulatory compliance challenges for entities enforcing security interests. Again, for consumers, the impact will be seen in pricing and credit availability; for financial institutions, resources will be wasted complying with and defending against judicial action associated with this provision. We would strongly urge the Committee to first conduct a thorough fact-finding into the increase in lending and servicing costs before considering this measure.”

House Financial Services Committee Republicans opposed this bill when it was considered in committee. In their minority views, the Republicans argued that while consumers should not be subject to harmful debt collection practices, “recouping a loss is necessary for a credit-based economy to function properly.” They wrote: 

“H.R. 2547 is a progressive retread of several bills from the 116th Congress. If enacted, this bill will fundamentally restructure the consumer credit market as well as how businesses, most of whom are small businesses, are paid for their services. As a result, credit will be more expensive for all borrowers and may exclude the lowest income borrowers entirely.”

In addition to criticizing this bill’s individual provisions for weakening various aspects of the debt collection process and credit reporting system, Financial Services Committee Republicans also took issue with the rejection, on a party-line vote of 23-30, of Ranking Member Patrick McHenry’s (R-NC) amendment to replace the underlying bill with several targeted attempts to improve and strengthen the debt collection and credit reporting framework.

This legislation passed the House Financial Services Committee by a party-line 31-23 vote with the support of seven Democratic House cosponsors. A collection of consumer groups, including Americans for Financial Reform, the Center for Responsible Lending, Consumer Action, the Consumer Federation of America, Consumer Reports, Public Citizen, and the National Consumer Law Center (on behalf of its low-income clients) supports this legislation.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / Olivier Le Moal)

AKA

Comprehensive Debt Collection Improvement Act

Official Title

To expand and enhance consumer, student, servicemember, and small business protections with respect to debt collection practices, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed May 13th, 2021
    Roll Call Vote 215 Yea / 207 Nay
      house Committees
      Committee on Financial Services
    IntroducedApril 15th, 2021

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    It seems that only lenders and the usual cast of knee-jerk right-wingers are unhappy with this bill that addresses aggressive debt collection practices. A criticism, also mentioned by others, is that the ridiculously high-interest rates* are not being addressed only debt collector’s aggressive behavior. High-interest rates and predatory lending are far more critical issues. Compounding the lending crime are the pathetically low-interest rates for consumers on savings accounts, etc. The aggressive behavior and intimidation, and scare tactics must cease. At the same time the high interest rates must be drastically reduced. * If you are unfamiliar with the concept of usury, look it up. Many credit and credit card programs are technically usurious. Guess who has been behind that! ADDENDUM @Leslie's wrote: "... this bill does not go far enough as it should protect against predatory interest rates & usury. Also, think consumers need more education on what they are agreeing to and what it will take to pay the money back." That is correct. My understanding is that the basics of Personal Finance are NOT a required part of every high school student's education. It should be. One of my children is a recent college grad; a personal finance course was never offered as an option, apparently. A teacher friend had to get permission to teach personal finance as part of an interdisciplinary experimental program for "at-risk" high school students. He said he had them work backward. First, he had them research apartments and rents. Onto Cellphone costs and utilities. Next Entertainment. Finally food. Then how much they needed to make—ended by researching jobs that made enough money. My friend retired, so I have no way of knowing if it made a difference long term. But he thought that they connected to the project. I imagine it was far more engaging and motivating than many more academic high school curricula.
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    What is it with these dem bills that sound good on the surface but once you dig a little more they actually harm those in the lower socioeconomic brackets? It’s like they want to keep people on welfare and make it impossible for low income citizens to get a loan. This disproportionately will impact minorities again. Just like most dem policies. Just horrible how they treat the lower class and minorities through their hidden bureaucracy. Wake up these policies are so disingenuous! And Maxine Waters has no idea about financing or loans. She didn’t even know that student loans were federalize and made a fool of herself 2019. It’s pretty funny you can look it up if you’re in for a good laugh.
    Like (23)
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    Yup, I like Frank-001’s comments. … … … Let me state that the commission driven debt collectors are mostly the scum of the earth. Years back, different members of my immediate family were getting harassing calls regarding someone named Macey, who had somehow skipped out on a big car loan - not a name that any of us knew. The calls were from seemingly different people who started calling asking for Macey and got increasingly aggressive and threatening over time. My Father who was extremely hard of hearing and could not hear people over the phone got these calls as well - and one day got a summons to appear in court regarding Macey’s debt. He said that he called the attorney listed who said it was a mistake and to forget about it. I called the attorney as well, just to ensure that Dad heard what he had said, and the attorney repeated that it was a mistake, he would take care of it and that we should just ignore the summons. About a month later he received a notice that his wages were to be garnished to cover Macey’s debt because he failed to appear in court to challenge the claim. I went ballistic and worked though all the roadblocks to get to the ruling Judge and explained in great detail what had happened. The Judge listened carefully and had a few questions after which he said said forget about it - and he meant it and we did. Years later, at Dad’s funeral, someone no-one had ever met came to the wake and begun asking people if they had seen their old friend Macey. A switch flipped and I turned into a late night greasy bar room bouncer and embarrassed my family by acting like one as I physically ejected this person. I never heard from them again, and I do not think that other family members did either - unless they have been afraid to tell me.
    Like (53)
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    Rhetorical Question: Why is it Republicans are fine with bailing out bank presidents and the entire banking industry BUT against helping their next door neighbors? Note: While Carina still shows signs of an irrational fear of all things Democrats propose, she is beginning to show signs of being able to sympathize with those caught in similar circumstances as she has faced. It is too early to make any conclusions as to whether or not this break through may lead to her developing a sense of empathy and abandoning her irrational fear, but there is hope.
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    @Frank-001: Agree his bill does not go far enough as it should protect against predatory interest rates & usury. Also think consumers need more education on what they are agreeing to and what it will take to pay the money back.
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    Everyone hates usurers and debt collectors. There once were laws which strictly limited interest rates. Anything above those limits was illegal usury. The Payday lenders charge way over those old reasonable limits. Once in debt many debtors cannot ever get back out of debt. And then, there is the Elephant in the Room. Student Loan Debt. The numbers are huge and some think that mass defaults will trigger the next Great Recession/Depression.
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    With Predator lending and the change in bankruptcy, that only favor the wealthy and corporations and punishes the middle class, plus the poor, making it easier to still property and goods by misleading and complicated contracts. You need a lawyer just to read the disclaimer!
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    Predatory practices impact seniors and marginalized citizens who already have fear and distress over their circumstances. I’m in favor and also support increased consumer education and mandatory transparency by debt creditors to help consumers often targeted for their lack of information with clear language of their pending debt.
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    Frank-001, that was awesome! Liked the part about the pathetic amounts in interest we are getting on our savings accounts. Used to be, we could actually grow our savings. Not these days. Banks need to be regulated better and anyone who charges such outrageous interest on debts should be hogtied, tarred and taken to jail!
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    Who made the loan, to an individual that should have never been allowed that credit card or expensive loan? The GREEDY bank or lending institution. Who pays savers the worse interest rates? The GREEDY banks. There is ample credit information on everyone when it comes to lending money. Yes this Bill needs to be enacted. People who make a mistake with lending agencies are screwed from the get go. Most generally it used to be the poorest individual, but today it happens to ALL. I moved to a new town to retire. I received a new telephone number and for five years I received the most nasty phones calls from a Collector company. They would not believe i was a new customer to the phone number. Unless you ever heard them, you have no idea how their tactics are. Yes pass this Bill and lending agencies learn to educate instead of steal.
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    I would not support this bill as written. While some of the recommended changes have merit, others do not.
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    I snorted when I read the sentence about hoe “accurate credit reporting” was sooo important. How many thousands of people find errors on their credit reports? And what kind of accountability exists for the credit bureaus for incorrect information? When incorrect information is identified, on whose shoulders does it fall to get it corrected or removed? Okay, I don’t know the answer to the first question. The answers to the next two are “none” and “you, the consumer.” Personally, I would like to see provisions in this bill, or a bill introduced” that holds the credit bureaus to a standard of accuracy with consequences set forth and a requirement that the bureaus do the investigation and proof gathering when a person notifies the bureaus that an error exists. I’d also like to see limits on the uses of credit information. I see no reason that prospective future employers or insurers should have access to credit reports for hiring, determining pay rates, or insurance coverage purposes or that credit histories should be used for these purposes. As for the exclusion of medical debt, I’m not sure how that helps. It is still debt that bears on income to debt ratios. I’d prefer to see our health care system fixed or replaced. Actually, I don’t think it’s actually fixable, given lobbies and rich political donors and universal health care should be put in place. Let’s create conditions where people don’t get pushed into bankruptcy, lose homes, and/or spend their life savings to get decent health care.
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    Anything to reduce the burden of debt on Americans, should be considered
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    Awesome 👏🏿 Bill!!
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    Cancel ALL student loan debt.
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    We have incredibly predatory lending policies in this country, and our wealth gap is monumental. We need to take aggressive measures to deal with these issues
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    Debt collectors should not be allowed to intimidate and harass those who owe money to companies. Debt collection should be done in a way that is humaine rather than ruthless.
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    There are too many provisions here that will have negative implications on the consumer and availability of credit, particularly to lower income individuals, which will beholden them even more to poverty. Once again the Democrats don’t seem to care at all about people and working class citizens, only their elitist lobbyist special interests, lies packaged and sold as the opposite of what it actually is. The Democrats, particularly Maxine Waters, are the devil’s servants.
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    Certainly debt collectors should not threaten individuals about debt. Many people are responsible and want to pay the debt they owe. Certainly there are those who will max out cards or incur other debt that they ultimately can’t and won’t pay. There is a big problem when people incur debt and a bigger problem when credit card companies exact very high interest rates making it even harder if not impossible for some people to pay down. Nobody likes something unexpected to occur but those things put people at a disadvantage to pay down debt. Sometimes this kind of debt may force people into bankruptcy. While my husband and I avoided bankruptcy, we found ourselves in such a position when I fell and broke my leg and shattered my ankle. That accident was not on my ‘to do’ list. I had just gotten laid off from my job six months before, but would not have been able to work since I was down for 5 months and couldn’t drive. I made payment arrangements with the hospital and was diligent to pay the agreed amount. Someone decided to send my account into collections and the individual who called put the squeeze on me to increase the payment amount and I told her that I could not afford it. Her response was shocking, “Well if you couldn’t afford to pay your medical bill you shouldn’t have sought treatment!” This fool makes such a remark about someone who has had a major break requiring a several hour surgery and extensive recovery to be able to walk again, but I shouldn’t have sought treatment.🤔 I still hope she was fired! I did call the hospital and the Chief of Staff checked into my account and someone made a mistake and my account should have never been sent to collections. Life happens and it isn’t always fair. I encourage people to be responsible to pay their bills and don’t get in heavy debt, especially now more than ever if possible. Save!! This application doesn’t just apply to everyone in this country but applies to our State and Federal Governments. America is no longer a rich country when the country is almost $30 trillion in debt. FYI, the debt of the federal government is ultimately our debt. Before government starts giving advice to Americans regarding debt they should assess the finances and STOP SPENDING AT THE EXPENSE OF TAXPAYERS!! NO, I DON’T SUPPORT THIS BILL BECAUSE IT WILL ULTIMATELY AFFECT TAXPAYERS ADVERSELY!!
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    Yes, Far too many American Citizens are struggling with debt due to the Republicans VOTING NO to raising minimum wage for years. Now, with the Pandemic, the 99% of We The People are even worse off financially.
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