Bad Paper: Chasing Debt from Wall Street to the Underworld

By Jake Halpern

(Farrar, Straus and Giroux, $25, 256 pages)

Who is this author?

Jake Halpern, who is a fellow of Morse College at Yale University, writes for The New Yorker and The New York Times Magazine and is  the author of Fame Junkies and Braving Home, as well as co-author of two novels for young adult readers. He is on the list of This American Life’s seven most popular shows for his hour-long radio story “Switched at Birth.”

What is this book about?

If you have ever been targeted — fairly or unfairly – by a greedy, crooked debt collector, you know how deeply unpleasant the situation can be. So does Jake Halpern, who explores that seamy and unseemly world with vigor in Bad Paper. Halpern hangs his nonfiction tale on the exploits of a former banking executive who teams up with a former armed robber: the perfect pair when it comes to getting blood from a stone, it appears, but even these savvy guys get ripped off by their conscienceless employees. He also shares stories of victims of shady debt-collection entrepreneurs, who often wind up paying debts that actually no longer exist, in this mostly horrifying but frequently hilarious account of this dark side of the American economy.

Why you’ll like it:

Halpern has a serious and alarming story to tell here, but he does it with verve and candor, making what in other hands might be a dry treatise on economics gone rogue into a novel-like tale that grips the reader even as it repels. Forgive the pun, but you owe it to yourself to learn about the downside of the American credit dream and those who enthusiastically take unfair advantage of others who have bitten off more than they can pay for. This is a troubling, but important book.

What others are saying:

The Barnes & Noble Review says: “. . . Thirty million of us have debts old enough — over 180 days in arrears — to attract the debt collector. As Jake Halpern makes achingly clear in Bad Paper, this is not going to be fun, this new relationship, but it will throw into sharp relief a system that compounds the troubles of mostly hardworking, or hard-looking-for-work, Americans while permitting banks to loose the junkyard canines. When big banks can’t pay their obligations, they are given capital infusions (a few, mostly smaller fry, will be publicly executed as examples of bad seed). If you, Joe and Jane Doe, can’t pony up for a modest debt — sometimes even a two- figure debt — then you can expect the phone to start ringing in the middle of the night, and keep right on ringing.

“Now, let’s not let the American consumer off the hook. We know what camp Halpern is in — he’s in the right and decent camp — but he also wants to put in perspective the lay of the debt-insanity landscape, and all the nefarious opportunities it presents to those who game the system in one way or another. “There is a vast market for unpaid consumer debt — not just credit card debts but auto loans, medical loans, gym fees, payday loans, overdue cell phone labs, old utility bills, delinquent book club accounts.” . . . . Read it and weep, you 30 million debtors. Collection agencies are good at making you weep. Someone get the phone. . . “

Says Kirkus Reviews: “An investigation of the bottom-feeding underworld of debt collecting and its disreputable cast of rip-off artists. As journalist and novelist Halpern discovered, the world of debt collection is every bit as scummy (and possibly scummier) as its reputation has always suggested. . . . The author delivers a tale of two kinds of lowlifes and their collaboration in a lowest-common-denominator business that makes Wall Street look meek and ethical. Halpern begins with a focus on former banker Aaron Siegel, who moved back to his financially downtrodden hometown of Buffalo, N.Y., rounded up $14 million from chummy investors and opened his own private equity fund specializing in debt collection. After being ripped off by his own shady employees, who stole a huge portfolio of debt out from under his nose and started their own rogue agency, Siegel decided to employ the help of ex-bank robber Brandon Wilson to help strong-arm the debt collection competition into submission. Halpern tracks not only Siegel and Wilson’s quixotic quest for the stolen debt, but also the ugly, everyday inner workings of the business as a whole, much of which is based in crime-ridden, economically destitute Buffalo. The predominantly unethical practice of buying, selling and collecting debt is carried out by just the sort of societal outcasts you’d expect—usually, ex-cons or other desperate, otherwise unemployable screw-ups fill the business’s ranks. Halpern’s story of the debt collection world is also a dramatic rise-and-fall tale that traces the anything-goes heyday of debt collecting businesses in the unregulated early 2000s and how it has changed with the consequential recent Obama-era crackdowns on the shadier practices in the field. As we see in the book, these new regulations make it much harder for miscreants like Siegel and Wilson to survive. Halpern brings unexpected literary heft to the world of debt collection.”

Publishers Weekly’s starred review says: “. . . reports from a “shadowy corner of the economy” — the world of consumer-debt collection, which “remains dysfunctional and largely unsupervised.” . . . Halpern’s narrative follows  . . . the “aboveground economy” (that is, the consumer-debt marketplace) . . . then delves into the inner workings of what he refers to as the “financial underworld.” Here, debt is bought and sold with no questions asked. Halpern also discusses the regulatory climate of the current economy; these details combined with the narrative, a startling picture emerges. By fostering a greater understanding of the workings of debt collection, the book sheds enough light into the shadows to compel readers to push for change.

“[A] wonderful inquiry into the seamy, multilayered world of consumer debt collection . . . both an entertaining sociology of the debt-collecting fraternity and a picaresque romp through the industry’s most unsavory byways,” says The Boston Globe.

Library Journal’s starred review says: “Halpern’s breathtaking exposé takes readers on a deep dive into the debt collection industry. The book proceeds chronologically from 2008 to today, following former Buffalo banker Aaron Siegel and his ex-con partner Brandon Wilson in their quest for money. Three sections relate how Siegel tracked stolen debt-collection files that he bought, how a collection agency operates, and how the industry is largely unregulated and hugely profitable. . . . Halpern succeeds in illustrating how Americans’ appetite for consumer credit and the country’s bank accounting rules have left much “meat on the bone” for collectors. The author also includes interviews with several hapless debtors who thought that they had paid their debts but were tricked by unsavory collectors. He shows that, as with the subprime mortgage crisis, when debt is packaged and resold, there may not be proof of the underlying obligation. Worse yet, the debt may be beyond the legal statute of limitations, and still, naive debtors are cajoled into paying. VERDICT Colorful and chilling, this work is an important peek into the dark corner of consumer finance and recommended for all consumers and true crime aficionados.”

When is it available?

If you borrow this book from the Downtown Hartford Public Library, please return it before overdue fines attract a bill collector.

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