CNNMoney posted an article today by Blake Ellis called "Debt collection horror stories," that mentioned Pennsylvania. A debt collector in PA is accused of setting up a fake courtroom and pretending to have legal authority, holding fake court proceedings (the state Attorney General has filed a lawsuit against the firm). Other stories in the article have debt collectors calling people and saying they will lose their children, threatening to kill their pets, and dig up deceased relatives. Some of the people receiving these calls have already paid their debts.
There is currently legislation in the Pennsylvania State House regarding debt collection agreements (see HB 67 and HB 68). I would review the State House Journals for those days but the most recent issue available online is Oct. 16th. Kimmel & Silverman, a PA law firm that hosts a blog on debt collection, posted an entry on January 29th recounting stories of debt collectors harrassing people on Facebook.
One way people get trapped debt and have trouble getting out is through payday loans, which are short term high interest loans that borrow against a future paycheck. The borrower often can't pay the loan (especially the interest) and roll it over into another loan, which also can't be repaid, and into a spiraling and ever increasing debt. Last year the Pennsylvania legislature considered a bill that would make payday loans easier to obtain. You can read more about that at the Stop Payday Loans in Pennsylvania website.
The Pennsylvania Treasury Dept. website suggests an alternative to payday loans, called Better Choice:
If you have a payday or cash advance loan, you’re probably paying extremely high interest rates and fees. And if you have to roll over your loan and pay even higher fees for that privilege, you may be caught in a never-ending cycle that’s digging you deeper into debt. Developed by the Pennsylvania Credit Union Association and the Pennsylvania Treasury, the Credit Union Better Choice Loan is a smart alternative to payday lending that helps you save more of your hard-earned money—and even start saving for your future.Definitely a better choice.