What if debts were all perfectly organized? If you miss a payment, the collector would email you an electronic copy of the contract, and the parts in breach would be highlighted. Further assume that the contract itself is simple and understandable, and the debtors knew they were in breach of fairly obvious clauses (e.g. send this payment by this date). And let's also assume all collectors act in good faith and warn you of upcoming obligations.
And then let's say there was an efficient and fair legal process, and if the debtor still doesn't pay for an extended time, it would be economical to sue individual debtors, and get judgements, and enforce them as prescribed by law.
Is that better?
My guess is probably not. Small debts are in a weird optional world and if you don't pay the main problem is that you have trouble borrowing more, or need to borrow at bad rates (maybe check cashing instead of formal credit). The collectors are some weird outgrowth of this model, and they don't really serve any useful purpose. But it might be better than actually enforcing small debts against people as the current laws allow.
Of course, ideally, we'd just be honest and call it an optional system. To be in good standing with lenders, pay your debts. If you don't care, then don't, and maybe be locked out of borrowing in the future. And larger debts would be handled separately, with collateral, etc.
What if debts were all perfectly organized? If you miss a payment, the collector would email you an electronic copy of the contract, and the parts in breach would be highlighted. Further assume that the contract itself is simple and understandable, and the debtors knew they were in breach of fairly obvious clauses (e.g. send this payment by this date). And let's also assume all collectors act in good faith and warn you of upcoming obligations.
And then let's say there was an efficient and fair legal process, and if the debtor still doesn't pay for an extended time, it would be economical to sue individual debtors, and get judgements, and enforce them as prescribed by law.
Is that better?
My guess is probably not. Small debts are in a weird optional world and if you don't pay the main problem is that you have trouble borrowing more, or need to borrow at bad rates (maybe check cashing instead of formal credit). The collectors are some weird outgrowth of this model, and they don't really serve any useful purpose. But it might be better than actually enforcing small debts against people as the current laws allow.
Of course, ideally, we'd just be honest and call it an optional system. To be in good standing with lenders, pay your debts. If you don't care, then don't, and maybe be locked out of borrowing in the future. And larger debts would be handled separately, with collateral, etc.