Bankruptcy Questions Answered

Chapter 7 Trustees Offer Debtors Practical Tips Concerning Valuation And Buy-Backs Of Personal Property

The bankruptcy committee of our local Bar association holds monthly luncheons. At the most recent luncheon two Chapter 7 bankruptcy trustees discussed the bankruptcy process from the trustee’s point of view and offered a few good suggestions to debtors’ attorneys. One of there comments concerned the treatment of debtors’ household furnishings. Florida law provides each debtor with a $1,000 total exemption for all personal property including bank accounts and household furnishings. This exemption is small compared to most other state’s laws. In practice, few trustees pursue personal property valued slightly over the exemption nor challenge property valuations in most Chapter 7 petitions unless there is a clear reason to doubt the debtor’s property list.

At the bar meeting the trustees suggested that the Chapter 7 trustees may be taking a closer look at personal property lists and values. They indicated that most trustees may be sending an appraiser to the debtors homes to take an inventory whenever the debtor’s home is valued more than $500,000. It is hard to believe, they said, that a home worth more than a half million dollars in today’s real estate market contains less than $2,000 (joint filing) of furniture and electronic equipment. The trustees stated that bankruptcy debtors whose homes and personal property lists will likely be scrutinized consider hiring their own appraiser to value their property before they file their petition and submit their own personal property appraisal to the trustee.

It costs only two or three hundred dollars for an appraisal of household property. In the past, when my clients’ income or house size implied expensive furnishings I have suggested the client retain one of the appraisal firms used by the Chapter 7 trustees so that the trustee would not challenge the appraiser’s credentials.

Whenever a debtor suspects that his personal property schedules will be questioned by the bankruptcy trustee it is a very good ideal to get a preemptive appraisal. When you hire the appraisal you schedule the date and time of the appraisal. You’ll know well in advance when this appraiser will be going through your home to inspect your belongings. Your own appraisal is not binding, and you don’t have to use the results on your petitions is you disagree in good faith with the appraiser’s report.

The trustee speakers offered debtors another practical suggestion when the debtors know they have non-exempt personal property including furniture or automobiles. Typically, trustees and bankruptcy debtors negotiate the amount and terms of the debtor’s "buy-back" of non-exempt cars and personal property at or after the trustee meeting. These trustees suggested that debtors decide what they would like to offer the trustee in payment and then bring a cashiers check for the amount of their offer to the trustee meeting. In other words, make your offer an literally put the cash on the table. The trustees said they are usually willing to accept significantly lower valuations and buy-back offers when the offer is accompanied by certified funds.

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Shortcomings of Credit CARD Act

This week saw the much-anticipated date (February 22) on which the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) took full effect. And, while it theoretically introduces many new consumer protections, it leaves plenty room for “creativity” from card issuers.

Center for Responsibility Lending Responds

The Center for Responsible Lending released a humorous (though cynical) animated video that highlights some of the areas not addressed by the new act—and illustrates ways in which credit card issuers have adapted their policies to maintain profit levels. These include:

• Interest rate hikes: To compensate for lost revenue, some card issuers have already raised users’ interest rates. Even users in good standing may be “forcibly eligible” for this, as the video claims.
• Over-limit fees: If you accidentally exceed your credit limit, your cardholder likely charges a fee. And, with new restrictions in place on other charges they can assess, you might see this fee jump.
• Inactivity fees: On the other hand, if you use your card too infrequently, you might see a fee for that, as well, because that means you’re less profitable for the company.
• Increased minimum payments: Another technique some card issuers are using is to up the minimum amount you can pay each month. This could be profitable for those who won’t be able to afford the increased payments and can be charged an under-payment fee.

The Regulation-Creativity Relationship

As the video illustrates with a graph, more consumer protection may seem like a good thing, but in practice, it often means that card issuers just get more “creative” with fees they charge reasons they charge them.

If you’re thinking now is a good time to get out of credit cards altogether, you’re not alone, but, before you cancel your cards, consider this:

• Your credit score: Part of your credit score is based on age of accounts (older ones are better); another part is based on diversity of credit (so eliminating one type entirely would hurt you).
• Your reentry: If, at some future time, you decide you want a credit card again, you’ll likely have to contend with uber-high interest rates (above 70 percent) because you won’t have any recent credit card history.

The video exaggerates a little (by mentioning, for example, a “legibility fee” for left-handed users), but by doing so draws attention to the more serious matter of how significantly your credit card could change.

Be sure to read all correspondence from your card issuer, even mailings that seem like junk: some of them might contain important details about the new rates and fees you may have to pay. These statements will also come in handy if mounting fees and interest force you into bankruptcy.

Additional Resources

Credit CARD Act

Posted in Credit, Credit Cards, Credit and Bankruptcy, credit CARD act | Comments Off

Filing for Bankruptcy - These Things Are OK

Bankruptcy is filled with land-mines. Therefore, if you are thinking about filing for Bankruptcy, you must be careful. We previously listed this a list of Bankruptcy Don'ts. Here is a list of Bankruptcy Do's that we give to our clients.

· Do take the bankruptcy court seriously, and avoid making any financial decisions that may make your creditors suspect you of filing in bad faith.

· Do seek bankruptcy court counsel before you file any papers, and learn your rights and options under the United States bankruptcy code.

· Do maintain timely payments on any collateralized loans that you wish to keep the collateral for. In other words, if you have a mortgage or car payment and you intend to keep the house or car, you must remain current on the payment. (Please alert us if you are not current on a collateralized loan at the time we are preparing your case for filing.)

· Do file your tax returns. Even if you know that you owe the IRS a lot of money, it is still important to file your taxes in a timely fashion. Not filing will only exacerbate the problem.

· Do reduce the amount of future income tax refunds. Refunds are routinely taken in Chapter 7 cases, and may affect plan payments in Chapter 13. If you expect to get an income tax refund , reduce your withholding so that you do not get a refund . If much of the refund id from the Earned Income Tax Credit, apply to get that available at www.irs.gov/pub.irs-fill/fw5.pdf or through your employer. For more information, see the IRS web page. Caution: Do not reduce the withholding for tax so much that you will have a big tax bill to pay.

· Do be honest and forthcoming on your bankruptcy petition. Even if it is embarrassing, it is important that your attorney knows. Any creditors not listed on your petition may not be discharged.

· Do keep our office up to date with your contact information. Mailing address, phone and email.

· Do consider increasing your 401K contribution if you have excess income and you are filing a Chapter 13.

This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.

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Filing for Bankruptcy - Don’t Do These Things

If you are going to file for Bankruptcy or are thinking of filing for bankruptcy, you have to be careful because you don't want to take any action which may come back to bite you in the end. Here is a list of Bankruptcy Don'ts that we give to our clients.

· Don’t pay your relatives or friends in favor of your other creditors, and don’t try to transfer property out of your name and into theirs. If you do, the bankruptcy trustee may sue them on behalf of your creditors to get the money back.

· Don’t transfer any property to a relative within one year of filing your case. The Trustee may even go back five (5) years from filing the case if the transfer was for a fraudulent purpose such as avoiding paying your creditors.

· Don’t take a loan against your real estate in an effort to reduce the equity. You can often file a bankruptcy and not lose this valuable asset. If you take out a second mortgage to pay a credit card debt, you may be putting your house at risk.

· Don’t pay ahead or pay off balances early on secured loans (loans for which there is collateral).

· Don’t pay ahead or pay off balances early on unsecured loans (personal loans, medical bills, credit cards or store cards, etc.).

· Don’t attempt to sell your property for less than what it’s worth. This will not reduce the amount you eventually have to repay – and you or whoever you sold it to may end up stuck with the difference.

· Don’t run up your credit card debt prior to filing a bankruptcy. The court may view this as an attempt to exploit the bankruptcy system, and the judge may treat it accordingly.

· Don’t buy any luxury items prior to filing for bankruptcy. Any luxury items purchased within 70 days of filing for bankruptcy are viewed as non-dischargeable debt.

· Don’t take any major cash advances off of credit cards prior to filing for bankruptcy. The court may suspect that you are acting in bad faith and may refuse to discharge the debt.

· Don’t borrow, withdraw from or cash out your 401K, IRA, or ERISA qualified savings and retirement plans to pay bills. If you do, you may be liable for penalties and taxes that are not protected by the bankruptcy filing. If you don’t use these funds, you are very likely to have them to draw on after bankruptcy.

· Don’t file if you are about to receive a tax refund or inheritance. Discuss the timing with your attorney.

· Don’t transfer money in to your kid’s bank accounts. They have you as a co-signer and are subject to the same review as your bank accounts.

· Don’t get married just before filing if your spouse has high income.

· Don’t misrepresent facts to your attorney we are working to help you.

· Don’t wait until after filing to purchase a vehicle, if you know you will need a more dependable car please take care of that before filing your case. Each case is different if you need to do this please contact the attorney first.

· Don’t assume that the bankruptcy will get rid of all your debts. Some tax liabilities are non-dischargeable (basically, all tax liability accrued in the three tax years prior to filing are non-dischargeable in most circumstances). Student loans are now non-dischargeable except in cases of extreme hardship.

· Don’t tell your attorney that certain items of personal property do not belong to you if they really do belong to you.

· Don’t expect your Attorney to help you defraud the Bankruptcy Court and your creditors, it won’t happen.

· Don’t lie you will be signing the bankruptcy papers under penalty of perjury.

This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.

Posted in Bankruptcy News, Consumer Protection | Comments Off

More Mortgage Relief in Proposed Changes to Obama Plan

FOX Business recently reported that it obtained a document leaked from the federal Treasury Department that outlines proposed changes to the Making Home Affordable program - also known as the Home Affordable Modification Program, or HAMP. The plan is part of the Obama Administration’s attempt to provide some home foreclosure help.

Some experts suggest the rules are unlikely to pass because they would mean more work, and potentially less income, for many mortgage lenders and loan servicers. This issue, according to some, highlights the core problems with that industry.

The Proposed Mortgage Rule Changes

Here’s a look at what alterations have allegedly been suggested and what they reveal about the way HAMP and the mortgage lending system in general is currently working, and how it could better work to help people avoid bankruptcy and stay in their homes:

1. Introduction of a 30-day “borrower response period.” This period would begin after a borrower was denied a mortgage modification; during the 30 days, mortgage lenders would be prohibited from foreclosing on properties. The aim is to provide a window in which borrowers can determine whether their denial resulted from mistakes in their application.

Those in the know suggest that this proposed change is necessary because a number of borrowers are being denied modifications because of mistakes in their application – not because they don’t actually qualify.

2. Prohibition of foreclosures for borrowers who have not been proven ineligible for modifications. In other words, banks would be required to offer borrowers an alternative to foreclosure (namely, modification) and would not be permitted to foreclose on a home if a borrower proved eligible for that modification.

According to sources, this type of language already exists in some form in HAMP – in fact, that’s part of the whole purpose of the program. The inclusion of this as a proposed modification suggests that mortgage lenders are not taking adequate steps to avoid foreclosing on properties.

3. Suspension of all foreclosure action once a borrower has been approved for a 90-day trial modification. HAMP requires a trial period. In this 90-day window, approved borrowers make payments under a modified mortgage plan. If they adhere to the terms, they should qualify for a permanent modification.

The fact that a new rule expressly prohibiting foreclosure action during the trial period has been proposed suggests that lenders are disregarding modification agreements and proceeding to foreclose regardless of a borrower’s status.

4. Written verification (from a trustee or lawyer) that a borrower does not qualify for HAMP before foreclosure can proceed. In other words, this rule would require banks to have proof that they can go ahead and foreclose.

This suggests that mortgage lenders have not been following this rule on their own, and have perhaps been foreclosing on properties even when a borrower qualified for a modification.

Bottom Line For Anyone Needing Mortgage Relief

If you are at risk of losing your home to foreclosure, you may want to contact a bankruptcy attorney. These proposed rules suggest the cards may be stacked against you.

Posted in Bankruptcy Lawyers, Mortgage Foreclosure, home foreclosure help, mortgage info | Comments Off

Debtors’ Revenge: Debtor Can Seek Sanction Against Creditors That Fail to Dissolve Bank Garnishment Following Bankruptcy Filing

As soon as you file bankruptcy an "automatic stay" legally goes into effect which prohibits creditors from taking any action to collect a debt. If a creditor has served a writ of garnishment against your bank account the garnishment action and collection of money from your bank account is stayed by the bankruptcy. In the past, creditors would stop taking additional action to seize bank money pursuant to a garnishment upon the debtor filing bankruptcy but the creditor also would do nothing on its own initiative to cancel or dissolve the garnishment. If the account had money exempt in the bankruptcy the debtor would have to pursue legal action within his bankruptcy case to dissolve the creditor’s garnishment.

Bankruptcies filed after bank garnishment is common because the garnishment of the debtor’s accounts often precipitates bankruptcy. There have been some bankruptcy cases which have placed upon the creditor an obligation to take affirmative steps to release any garnishments on accounts, or levies on automobiles(not repossessions), upon the debtor’s filing a bankruptcy petition. The cases state that if the creditor fails to take such affirmative action against its own garnishment the bankruptcy court can and will impose sanctions against the creditor.

Bankruptcy debtors can hold accountable creditors that fail to immediately dissolve pending garnishments and levies after the debtor files bankruptcy. If you file bankruptcy when a bank has already garnished your bank account your lawyer can send an email and letter to the bank attorney who served the garnishment in which your lawyer can notify the attorney of the garnishment and demand that the attorney and his client dissolve the garnishment within a short time such as two or three days. If the bank’s attorney ignores the demand the your attorney can file a motion for monetary sanctions and attorneys fees to be levied upon the creditor.

Posted in Dealing With Creditors | Comments Off

Your Car in Bankruptcy

For many people considering filing for bankruptcy, it’s important to know whether they’ll be able to get on with their lives afterward—and for many, that will be determined by whether or not they have a car.

And, with car issues in the news pretty often these days, they’re certainly on our minds. Here’s a little crash course on what you can expect to happen to your car if you file for bankruptcy.

Chapter 7 & Chapter 13 Bankruptcy

Whether you file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code, you can expect an automatic stay to take effect. This stay prevents debt collection, wage garnishment, lawsuits related to your finances, foreclosure and repossession.

The automatic stay remains effective until the court discharges your case.

Cars in Chapter 7 Bankruptcy

Chapter 7 bankruptcy offers filers a complete discharge of many unsecured debts. Your car loan, though, is a secured debt (it’s attached to property—your car). If you file a Chapter 7 case, you’ll have three options for your car loan:

• Redeem: This option involves one lump sum payment to your creditor for the car’s current fair market value. If you can afford to do this, it may make life easier in the future, since you’ll have eliminated car payments. But because most people file for bankruptcy at a time when cash is not handy, it may not be a viable option for many filers.
• Reaffirm: This option allows you to essentially continue making payments on your lease or loan as you did before you filed for bankruptcy. In reaffirming your debt, you agree a second time to continue making payments according to a schedule agreed upon by both you and your creditor.
• Surrender: If neither continuing payments nor redeeming the car will work for you financially (for example, if you owe more on the car than it’s currently worth), you can also choose to surrender your vehicle to your creditor and have the remainder of your debt discharged.

Cars in Chapter 13 Bankruptcy

If you file under Chapter 13 bankruptcy, your car’s future will depend on when you bought it.

• Newer cars: If you bought your car within 910 days of your bankruptcy filing, you’re required to pay the full value of the car loan, though your interest rate may be reduced.
• Older cars: If you purchased your car more than 910 days before filing for bankruptcy, you’re only required to repay the car’s current fair market value.

Additional Resources

Understanding Vehicle Financing (PDF)

Understanding Vehicle Repossession (PDF)

Posted in Bankruptcy Laws, Legal Info, cars in bankruptcy, repossession | Comments Off

New Consumer Credit Card Rules Take Effect

Good news for credit card holders—the final set of provisions under the Credit Card Act of 2009 take effect today, offering some important consumer protections.

For those who use credit cards responsibly, the new laws will provide more time to pay bills and less likelihood for fees, penalties and interest rate changes. For those struggling with credit cards or facing bankruptcy, the laws may prevent fees from adding up and provide a little breathing room.

Here's a look at some of the key provisions that are now in effect:

• Expanded Statements: Your monthly card statement will have a few new features, including broken down fees and penalties and a chart showing how long it will take to pay off the charges making only the minimum payment (and how much it will cost). Your statement will also arrive at least 21 days before the due date, a full week earlier.
• 45 Day Notices: Your credit card issuer must give advance warning of any changes to your account, particularly interest rate changes. This will give you more time to consider the changes, negotiate with the credit card company, or, if necessary, pay off the balance and close the account.
• No Rate Increases for 1 Year: The new law prohibits "arbitrary" rate increases for the first year you hold an account. Lawmakers hope this will curb "universal defaults", in which one card issuer raises interest rates due to late payment on a card issued by a different bank. Some actions could still trigger a rate increase, such as being more than 60 days delinquent.
• Over-Limit Opt-in: You will only be charged over-limit fees if you agree to it. While this may seem like a blessing, it also means more transactions may be declined.

While these changes went into effect, many cardholders have seen changes to their account over the past year, since the law was introduced. Credit card companies have been preparing for the law to go into effect, and in many cases have not been acting in consumers' best interest.

Many credit card companies have been raising interest rates and introducing new annual fess (which are permitted in the new law) in order to prepare for the revenue losses that could come under the Credit CARD Act.

For more information, visit the Federal Reserve's credit card site.

Posted in Bankruptcy and Predatory Lending, Consumer Credit, Credit Card, Credit Cards, Credit and Bankruptcy, Interest Rates | Comments Off

Chapter 13 Debt Limits Set To Rise: Many People Still Denied 13 Relief By High Mortgage Debts

The 2005 bankruptcy law was supposed to encourage, or require, many debtors to file a Chapter 13 repayment bankruptcy instead of a Chapter 7 "wipe out" bankruptcy. People who make too much money relative to expenses usually fail the Chapter 7 means test and are forced into Chapter 13. Not exactly. The problem is that Chapter 13 has debt ceilings. Regardless of how badly you flunk the means test you are ineligible to file Chapter 13 if your secured debts total more than approximately $1,000,000 or if your unsecured debts total more than approximately $350,000.

These debt limits frequently close people out of Chapter 13 even if they are willing to pay what they can afford to creditors. Blame it on the housing bubble. The great housing inflation not only raised prices, but it also increased mortgage amounts. Liberal issuance of second mortgages took peoples total mortgages even higher. Many people now filing bankruptcy became insolvent because of the depreciation of investment real estate- more mortgages. All homestead mortgages and all investment property mortgages count as secured debts to the extent they remain secured by property value. Upside down mortgages are secured debts to extent of current property value and are unsecured debts to the extent of the deficiency. The sum of this mortgage debt is throwing many people out of Chapter 13.

If you don’t qualify for Chapter 7 or Chapter 13 you have two alternatives. One is Chapter 11 bankruptcy, but Chapter 11 is a very complicated procedure and involves legal fees- mostly over $20,000, which few individual debtors can afford. Chapter 11 procedures are appropriate for large corporate bankruptcy. The only other alternative for people who cannot file 7 or 13 is to face creditor lawsuits without any bankruptcy protection.

The Chapter 13 debt limits increase effective April 1, 2010. The increase is only 3%. The debt ceilings will not significantly rise. The April, 2010, increase will not solve the problem.

If a debt is contingent or unliquidated that debt does not count toward Chapter 13 debt limits. A debt is contingent if the debtor will owe them only if something happens in the future. A purchaser’s debt to a seller may be contingent upon the seller delivering the product at a future date. An unliquidated debt is owed now, but the debtor does not know the amount and cannot determine the amount. If a debtor has been sued, and the court found the debtor liable but the damage award is undecided then the debtor is facing an unliquidated claim.

If you think your debts exceed Chapter 13 limits check with an attorney to see if the attorney believes that some of your debts may be either legally contingent or unliquidated.

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Consumer Protection Alert: Scammers Using BBB Name

The Better Business Bureau (BBB) is a private company that works to promote honesty in the marketplace so that both buyers and sellers can conduct business in a trusting environment. The various branches of the BBB assess businesses on their dependability and warn consumers about scams.

Unfortunately, according to msnbc.com, a new scam cropping up has been using the BBB’s logo to swindle people out of money. Here’s what you need to know to protect yourself and your money.

• It starts with an email or phone call. Like many similar scams, the one using the BBB’s logo reportedly involves a scammer contacting you and indicating that you’ve won a lottery or contest.
• It pays attention to detail. Some victims have noted that scammers used names of real BBB employees and even included in their emails links to bios on real BBB websites.
• A check will arrive. When it does, the scammers will ask that you deposit it and wire them a certain amount of money to cover taxes or fees or some other imaginary cost associated with the imaginary contest.

If you deposit the check, it may clear, but that doesn’t mean the scam is legitimate. If you wire away money, consider it gone forever—this is a classic maneuver some scammers make.

Protect Yourself: Know the Facts

While this scam can be devastating for those who lose money, it’s entirely avoidable. The following are classic warning signs that what you’re being offered is a scam:

• Unknown contest: If you’ve been told you’ve won something you don’t remember entering, ignore it. Hang up the phone, delete the email and walk away. Consider filing a complaint with the FTC.
• Money wires: Any time you have to pay to collect your winnings, know that something is up. Federal law prohibits charging to join sweepstakes and any legitimate organization would take out taxes and fees before sending you a check – how do they know you’d send the money back?
• High emotions: Many scammers rely on drumming up excitement or fear in their victims because when we’re in elevated emotional states, even the savviest among us can make poor financial decisions.

Be on the lookout for any of these signs or anything else that strikes you as off. Sources indicate that some scammers have gotten very sophisticated and use realistic-looking seals, watermarks and color printing, but remember: legitimate offers will still be good after you review them with a trustworthy source.

Be sure to check out businesses on the BBB web site. Legitimate businesses will also let you know their BBB rating. Total Bankruptcy has a BBB A+ rating, its highest rating.

Posted in BBB scam, Better Business Bureau, Financial Literacy, scams | Comments Off

Medical Bills: Beware of Discount Health Coverage Scams

As healthcare costs continue to skyrocket in comparison to household earnings, many Americans are looking for ways to save on medical bills. However, not every deal is worth pursuing, and the Coalition Against Insurance Fraud reports some healthcare scams currently plaguing the nation.

Background

Because health insurance in the U.S. is most commonly linked to jobs, a high rate of unemployment means higher numbers of people are going without health coverage. And, thanks to lowered income for many households, affording healthcare can be a huge stumbling block.

According to sources, some companies are apparently taking advantage of vulnerable Americans by offering discount health products, which may not be a very good bargain.

Discount Plans vs. Health Insurance

Health insurance, as many people know, works like this: you pay a certain amount of money each month (called a premium) and when you need access to medical care, you only pay a portion of the price (called a deductible) because you’ve insured yourself against doing so.

Discount plans, on the other hand, offer discounts on the normal full price of medical services. They are usually restricted to specific caregivers and specific medical facilities. After receiving consumer complaints about some discount plans, investigators reportedly found that discount plans tended to:

• Overstate benefits: Advertisements for some plans misled consumers with claims about potential savings. For example, a plan might advertise itself as offering savings up to 60 percent, but provide a 60 percent discount on only one service.
• Offer insufficient savings: Those with chronic health problems or who make frequent doctor’s visits may see little or no financial benefits from these plans.
• Provide incorrect information: Some plans apparently guaranteed access to medical professionals who were no longer affiliated with the plan.

Making the Decision

If you don’t have access to or cannot afford health insurance, you may benefit from signing up for a discount plan – the important thing to do is research the plan before committing to it.

These precautionary steps to anyone considering such a plan:

• Read everything. Look at the forms you’d be required to fill out and scrutinize the fine print. Make sure you know exactly what the plan includes – and leaves out.
• Don’t jump the gun. Before opting out of another insurance plan, make sure the new plan you’re looking into will offer the kind of protection you need.
• Make some calls. Ask for the list of physicians that you’d have access to and call to make sure they’re still participating.

Remember: commercials tell you only what they want you to know so do a little digging before choosing any new medical product.

Additional Resources

Medical Bills and Bankruptcy

Posted in Financial Literacy, health insurance, medical bankruptcy, medical debt, medical scams | Comments Off

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Equitable Subordination of a Creditor’s Secured Claim when such Secured Creditor is, itself, in Bankruptcy

In a majority opinion dated December 15, 2009, the Ninth Circuit Bankruptcy Appellate Panel held that a chapter 11 debtor may not equitably subordinate a creditor's claim and transfer the lien securing that claim, when such creditor is, itself, in bankruptcy, before first obtaining relief from the automatic stay under section 362 of the U.S. Bankruptcy Code in such creditor's bankruptcy case. Lehman Commercial Paper v. Palmdale Hills Prop. (In re Palmdale Hills Prop., LLC), 2009 Bankr. LEXIS 4294 (B.A.P. 9th Cir. Dec. 15, 2009).  

It is well established that a bankruptcy court has the power to reorder the priority of allowed claims based on equitable grounds. Indeed, under section 510(c) of the Bankruptcy Code, if the principles of equity so dictate and after appropriate notice and a hearing, the bankruptcy court may subordinate all or part of an allowed claim, and transfer any lien securing such subordinated claim to the bankruptcy estate.  The decision in the Palmdale Hills case adds a wrinkle to this process when the creditor is in bankruptcy. According to Palmdale Hills, if the subject creditor happens to be in bankruptcy, relief from the automatic stay applied in such creditor's case upon filing must first be obtained before such creditor's secured claim can be equitably subordinated. 

The debtors in the Palmdale Hills case were integrated companies formed as part of a joint venture to develop residential real estate projects with affiliates of Lehman Brothers, Inc. Lehman and its affiliates, including Lehman ALI, Inc. ("Lehman ALI") and Lehman Commercial Paper Inc. ("Lehman Commercial"), provided the financing for the projects through a series of loan agreements and equity arrangements on the debtors' projects. The debtors contended that the structure of these financing arrangements constituted manipulative lending practices and fraudulent conveyances, and that Lehman's complete control over the use of the funds created their significant debt burdens and eventually forced them to file bankruptcy.

Soon after filing bankruptcy in California, the debtors sought blanket relief from the automatic stay in Lehman Commercial's bankruptcy case pending in New York. The purpose of this relief was to allow the Palmdale Hills debtors to administer their California bankruptcy cases without the need to file repeated motions for relief from the automatic stay in Lehman Commercial's New York bankruptcy cases.  However, the New York bankruptcy court denied the broad relief requested by the debtors without prejudice to the debtors' rights to refile specific requests for stay relief.

Eventually, the debtors proposed a chapter 11 plan based principally on equitably subordinating the claims of Lehman ALI (an entity not in bankruptcy) and Lehman Commercial (who is in bankruptcy, together with Lehman ALI, the "Lehman Lenders"). The debtors also filed an adversary proceeding against Lehman ALI to equitably subordinate its claim, which they later proposed to amend to include a request to equitably subordinate Lehman Commercial's claim and transfer its lien to the estate if the California bankruptcy court determined that such action would not violate the automatic stay applicable in Lehman Commercial's bankruptcy case.

The Lehman Lenders filed a motion for relief from stay in the debtors' California case arguing that they were owed more than $649 million on their loans to the debtors, and that the properties securing these loans lacked equity and were declining in value. The Lehman Lenders also argued that the debtors' reorganization would fail because it was based on equitably subordinating Lehman Commercial's claim, which Lehman Commercial argued violated the automatic stay applicable in its bankruptcy case.

The California bankruptcy court did not, however, grant the Lehman Lenders' stay relief motion, and instead treated it as an informal proof of claim. The court also ruled that the debtors could pursue equitable subordination, through either an adversary proceeding or a plan, as a defense to Lehman Commercial's stay relief motion without violating the automatic stay imposed in Lehman Commercial's bankruptcy case. Lehman Commercial appealed, challenging the California bankruptcy court's decision regarding the scope and application of Lehman Commercial's automatic stay.

The BAP reversed, holding that the California bankruptcy court erred in finding that the debtors could pursue equitable subordination of the Lehman Commercial's claim and transfer its lien to the estate without first obtaining relief from the automatic stay in Lehman Commercial's New York bankruptcy case. While the BAP agreed that equitable subordination could be asserted as a defense to a motion seeking relief from the automatic stay without the necessity for seeking relief from the automatic stay, the BAP concluded that, under the facts of the case, equitable subordination was not merely a defense to the relief from stay motion. According to the BAP, when the California bankruptcy court permitted the debtors to pursue equitable subordination of Lehman Commercial's claim, it conflated equitable subordination as a defense to a relief from stay motion with equitable subordination as an objection to a claim. Because the adjudication of the debtors' equitable subordination of Lehman Commercial's claim sought affirmative relief and was not merely a defense, it rose to the level of violating Lehman Commercial's stay. 

The BAP also rejected the debtors' contention that, because a complete disallowance of a claim through a claim objection could be achieved without a stay violation, their "lesser defensive remedy" of claim subordination could not possibly violate the automatic stay. The BAP noted that when a claim is disallowed, the creditor effectively never had the right to payment under that claim and the debtor did not recover any property from the creditor; whereas under equitable subordination, the creditor has a right to payment, but that right is modified based on equitable grounds and, if the claim is secured by a lien, that lien is transferred to the estate. According to the BAP, it was this key difference that transformed the debtors' claim of equitable subordination from a proper defense to Lehman Commercial's stay relief motion into an offensive action against Lehman Commercial's estate.

Finally, the BAP also noted that if the debtors were allowed to subordinate Lehman Commercial's claim in the California bankruptcy court without first moving for a stay relief in Lehman Commercial's New York bankruptcy case, Lehman Commercial's creditors would be deprived of notice and the chance to challenge the subordination action even though their rights would be affected.

One judge dissented in the Palmdale Hills case and disagreed with the majority's principal holding (as characterized by the dissent) that a debtor may not, in its own bankruptcy, unilaterally defend against a lender's inequitable claim if that lender is also a bankruptcy debtor. According to the dissent, the majority's distinction between claim disallowance and claim subordination is a distinction without a difference and does not constitute a good reason to require a debtor to seek permission of its creditor's bankruptcy court to avoid an equitable result in its own case. Alternatively, according to the dissent, Lehman Commercial waived its right to raise automatic stay issues once it filed its proof of claim. 

Ultimately, the Palmdale Hills decision represents a warning sign for a debtor in bankruptcy to tread carefully when dealing with claims filed in its own case. In light of the large number of bankruptcy filings in recent months, it may behoove such a debtor intending to equitably subordinate a creditor's claim, to first check the bankruptcy status, if any, of such creditor and avoid violating the creditor's automatic stay if it happens to be in bankruptcy itself.

Authored By:

Robert Sahyan
(415) 774-3146
rsahyan@sheppardmullin.com 

Posted in 9th Circuit Caselaw | Comments Off

Bankruptcy Can Cure Real Estate Sickness

As a Consumer Bankruptcy Attorney, I hear and read about what is going on with consumers who are on the front lines of economic issues. The latest twist on the Foreclosure Crisis is that inventory is hurting the real estate market. I don't know about your neck of the woods, but right here in Southwest Florida our real estate market has taken a beating. As a homeowner, I'm not too happy with the drop in prices, but I am more concerned about others who are facing multiple issues. For example, it is estimated that over 7 million homes in the United States are in trouble.

Likewise, it is estimated that we will see another 3.5 to 5.5 million foreclosures. Florida is expected to be one of the hardest hit areas. Why? My answer is that Loan Modifications are not working. Even if a person is able to get a loan modification and stay in their home, it may not be enough to deal with all of their debt problems.

On a daily basis I see people who are maxed out with debt. A loan modification for them would be the equivalent of putting a band aid on a broken arm. These are good people who have lost their jobs or have had their hours cut back, etc, etc. They are good, honest and hardworking people were not able to foresee this economic nightmare. Now, they are having to make very hard choices.

If Congress changed the Bankruptcy Laws to allow people to modify their first mortgages in the Bankruptcy Court, people would have an opportunity to save their homes, cut down their debts, modify their payments schedules and pay their debts in a fair and equitable manner.

Bankruptcy is an option for many people, yet for some reason, the bankruptcy process is still shunned by the many people.

This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.

Posted in Bankruptcy News, Consumer Protection, Life After Bankruptcy, Mortgage Foreclosures | Comments Off

Bankruptcy Can Cure Real Estate Sickness

As a Consumer Bankruptcy Attorney, I hear and read about what is going on with consumers who are on the front lines of economic issues. The latest twist on the Foreclosure Crisis is that inventory is hurting the real estate market. I don't know about your neck of the woods, but right here in Southwest Florida our real estate market has taken a beating. As a homeowner, I'm not too happy with the drop in prices, but I am more concerned about others who are facing multiple issues. For example, it is estimated that over 7 million homes in the United States are in trouble.

Likewise, it is estimated that we will see another 3.5 to 5.5 million foreclosures. Florida is expected to be one of the hardest hit areas. Why? My answer is that Loan Modifications are not working. Even if a person is able to get a loan modification and stay in their home, it may not be enough to deal with all of their debt problems.

On a daily basis I see people who are maxed out with debt. A loan modification for them would be the equivalent of putting a band aid on a broken arm. These are good people who have lost their jobs or have had their hours cut back, etc, etc. They are good, honest and hardworking people were not able to foresee this economic nightmare. Now, they are having to make very hard choices.

If Congress changed the Bankruptcy Laws to allow people to modify their first mortgages in the Bankruptcy Court, people would have an opportunity to save their homes, cut down their debts, modify their payments schedules and pay their debts in a fair and equitable manner.

Bankruptcy is an option for many people, yet for some reason, the bankruptcy process is still shunned by the many people.

This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.

Posted in Bankruptcy News, Consumer Protection, Life After Bankruptcy, Mortgage Foreclosures | Comments Off

Online Scams on Reputable Web Sites?

If you're committed to managing your finances, you likely know how to spot questionable offers. However, simply shopping at trustworthy web sites may not stop you from seeing surprise charges.

A recent press release from the office of New York Attorney General Andrew Cuomo details an online scam that seems to be shockingly widespread among big name, well respected online retailers.

According to the press release, Cuomo has subpoenaed 22 companies for information about their relationship with companies executing the scam. Here’s the deal.

The Scam: Sharing Your Card Info

The online scam reportedly works like this:

• You make an online purchase. You buy something at one of your favorite web sites. As part of the transaction, you enter the number of either a debit or credit card.
• You proceed to checkout. Once you’ve completed your purchase, you’re offered a promotional or discount deal for future purchases.
• You follow a link. In order to redeem the offered "deal," you must navigate away from the web site of the company with whom you just did business.
• Things get murky. Once you’ve clicked a link that takes you away from the initial shopping site, you don't have to enter any more information. You may only have to click an "accept" button, or do nothing at all.
• Your bill has unexpected charges. Next time you receive your bill or statement, you may notice charges on it that you don’t recognize.

What has apparently happened during the "murky" stage is this: trusted retailers sell your card information to third party sites, which offer you a membership or subscription to something you probably don’t want.

Because you never have to re-enter your credit card details, you likely will not realize you ever signed up for anything. And the details about the terms and costs of the service or product are likely hidden in fine print on the third party website.

What's Being Done

Luckily, Cuomo’s office has taken steps to address these practices (though, according to sources, no law currently exists that prevents retailers from selling your card information to others).

The New York AG’s office reports that the following companies have been contacted for information related to this scam (though they have not been charged with anything): Barnes & Noble, Orbitz.com, Buy.com, Ticketmaster.com, MovieTickets.com, FTD.com, Shutterfly.com, 1-800Flowers.com, Avon.com, Budget, Staples.com, Priceline.com and more (see site).

Bottom line: Proceed with caution when shopping online. When in doubt, don’t click on any link, especially those offered at checkout. And if you suspect foul play, file a complaint with the FTC.

Additional Resources

Online Identity Theft: Changing the Game (PDF)

Types of Scams (PDF)

Posted in Financial Literacy, credit card fraud, ecommerce, online scams | Comments Off

Recession Causes Bankruptcy Boom

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Protecting Your Best Financial Interests

Part of becoming truly financially responsible and independent involves accepting responsibility for your financial situation. Not only do you have the power to improve your finances, you’re the only person who can (and will) consistently watch out for your rights as a consumer.

This point was driven home once again in this post from CreditBloggers.com, in which the author examines one aspect of banking that people probably don’t realize can cost them serious money.

Understanding Overages

Here's a look at how you could end up losing a couple thousand dollars in a few minutes (without even realizing it):

• You go into your bank to apply for a mortgage loan. A loan officer presents some numbers to you and offers you a loan, which comes with an interest rate that is determined largely by your credit score.
• If you’re lucky, you were offered the lowest interest rate that your credit status qualified you for.
• If you’re unlucky (as many thousands of Americans are), you were offered an interest rate with an "overage"—an interest rate slightly higher than the best rate your credit score allowed.

Why would lenders even offer such loans? Because it can be profitable for them:

• A higher interest rate equals a more profitable loan (because you, the borrower, pay more in interest).
• A more profitable loan is more attractive to investors (because they can collect more money on it).
• The bank gets a higher price for the loan, some of which goes to the loan officer as a reward.

According to the post, issuing loans with overages is fairly common, even at some large, well-established banks, which is why you must act as your own advocate when investigating significant purchases.

Protecting Yourself and Your Money

If you aren’t already monitoring your credit report, consider doing so. At the web site annualcreditreport.com, you can view a free copy of your credit report from each of the Big Three reporting bureaus once per year.

And, if you’re getting ready to apply for a mortgage, you may want to pay to view your actual credit score (visit MyFico.com). To determine what mortgage rate you’re likely to get, do some online research or speak with a financial guru you know before hitting the banks.

Additional Resources

Choosing the Mortgage that’s Right for You (PDF)

Posted in Financial Literacy, Interest Rates, Loans, Mortgage | Comments Off

What Could You Cut in a Pinch?

With unemployment levels still high, many people are looking for ways to trim their household budgets. Dealing with a sudden loss of income can be difficult, especially if you're used to a certain lifestyle. Whether you're dealing with unemployment, recovering from filing bankruptcy or just trying to create a nest egg, where you spend your money can make a big difference.

A recent post from DarwinsFinance.com encourages readers to explore the financial cutbacks they could make if they were laid off. The author crunched numbers and found that his household could save about a thousand dollars per month.

This concept is useful for a couple of reasons. First, it gives you an idea of what kind of emergency fund you ought to have, and second, it opens the door to potential ways to start saving that money more quickly. Here’s a look at some areas where you might be able to save.

• Television: If you currently get a lot of channels, you could drop to a package with fewer frills. If you already have a fairly minimal setup, you could call your company and indicate that you're considering canceling your television service altogether unless they can offer a lower rate.
• Internet and phone: Downshifting to a slower online connection may work if you don't use the Internet much, and there's a good chance you could trim your cell phone package. And remember: negotiating with your provider (or trying to) is always an option.
• Subscriptions: Whether you receive newspapers, magazines or a cheese of the month, chances are your subscription isn't a bare essential. The good news is that if your subscriptions are mostly for reading material, you can likely find much of the content online.
• "Cheap" out food: Cups of coffee, breakfast sandwiches or lunches out may seem inexpensive (especially compared with restaurant dinners), but when purchased regularly, they add up. Packing lunch and brewing coffee are both easy to do—although, if you do lose your job, you'll probably be less likely to be tempted by on-the-go food, since you won't be at work.
• Clubs and activities: If you have children in extracurricular activities or you yourself have an expensive gym membership (or similar), you could always cut them in a pinch.
• Groceries: If you haven't already explored the glorious world of generic food, now is a great time to start. Many store-brand grocery items are actually produced at the same factories as the name brands—and come at a significant discount.
• Clothing: Dry cleaning can eat up serious funds, and so can shopping too often. And if you have difficulty resisting sales (or non-sales), consider avoiding your favorite shopping spots a bit more often.

Additional Resources

Should Households Establish Emergency Funds? (PDF)

The Decline in the U.S. Personal Savings Rate (PDF)

Posted in Budget, Finance, Financial Literacy, Job Loss | Comments Off

Is going bankrupt the best way to clear my debts?

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My First Nomination For The Bankruptcy Debtor’s Honor Roll

Creditors, their attorneys, and some bankruptcy trustees have a negative opinion about bankruptcy debtors. I’ve read comments in the media by laymen that refer to bankruptcy debtors as either dishonest or immoral for avoiding debts they are legally and morally obligated to pay. The stereotype does not apply to the debtor who consulted with me today.

This man had already filed Chapter 7 bankruptcy pro-se (without an attorney). He had no non-exempt assets at the time he filed. There were no issues in his case. The bankruptcy court issued a discharge on schedule. The trustee closed his case four months after it was filed. Done and gone in four months. Then, the story got interesting.

He explained to me that about a month after his case was closed, but within six months of his filing date, his mother died unexpectedly and left him a large inheritance. Its enough money to pay all his unsecured debts discharged in bankruptcy. Inheritances within six months after a Chapter 7 bankruptcy filing are part of the bankruptcy estate. However, none of his creditors nor the trustee knows about his windfall. He asked me if he should let the Trustee know about the inheritance.  His legal question for me was whether he is obligated to initiate a motion to reopen his bankruptcy case so that he can amend his schedules and turn over his inheritance.

I was really interested to hear his reaction. I think that most of my clients (and maybe many readers) would keep all the money and their mouths shut. The chances of this guy getting caught are really small. What would you do?

The man said that he is going to contact the trustee and disclose the inheritance because it’s the right thing to do and he wants to do whatever he is legally obligated to do. I think he means it. He seemed sincere and he really did not consider hiding the inheritance even though he said he felt he probably could get away with it.

It was nice to hear a client insist on doing the morally (and legally) correct thing. I deal with many people who try to stretch the limits of bankruptcy to get away with things without regard to morality. It shows that there are truly honest bankruptcy debtors who really would pay back all their creditors if they had the money. The bankruptcy court should have a debtor honor roll for people like this.

Posted in True Stories | Comments Off

The Right Time to File Bankruptcy?

A refreshing article published recently in the Kalamazoo (Mich.) News underscores the role bankruptcy plays in helping filers overcome debt and draws attention to the oft-neglected question of when is the best time to file.

The article points out that too many people try to avoid filing bankruptcy at all costs and wait until they are financially desperate to file. Unfortunately, this is not always a good plan, as it may mean that filers use up retirement accounts (which are often exempt from creditors in bankruptcy court) and set themselves back for their post-bankruptcy life.

The article provides a helpful list of warning signs that filing for bankruptcy may be a good option sooner rather than later:

• Borrowing money to pay debts: Whether you're using one credit card to pay another, relying on payday loans or hitting up family and friends for cash, this is a bad sign.
• Dipping into retirement funds to pay debts: Again, your qualified retirement savings will likely be safe in bankruptcy court and heavily taxed if you take it out early. And once you spend that money, it's gone.
• Falling short of minimum payments: If you cannot make even a minimum credit card payment each month, bankruptcy may be a good option.
• Selling your goods to pay debt: If this is a one-time thing and you're shedding appliances you can do without, you may be fine. But if you're consistently scouring the house for stuff to trade for cash, you may be in trouble.
• Getting contacted by bill collectors: Phone calls and mailings from your creditors, especially when they start to add up, can be halted by bankruptcy's automatic stay.
• Having your wages garnished: If creditors are going straight to your employer to collect on debt, take it as a warning sign.
• Dealing with increased tension or stress: Money can be tough on your home life. Whether you're having trouble sleeping, fighting more or just generally stressed out, you may need a serious solution for your debt.

A New Beginning

It's important to understand that filing for bankruptcy does not mean admitting defeat or failure. Rather, it is a proactive and difficult decision you must make to save your financial future. Filing for bankruptcy can:

• Help you save your retirement fund so that you’re not destitute or a burden on taxpayers in your golden years.
• Give you a chance to start over financially and the knowledge you need to make better decisions in the future.
• Stop stressful contact from creditors.

Of course everyone's financial situation is different, and this post is not meant as advice for any one situation. If your finances are at their breaking point, considering contacting a local bankruptcy attorney for an evaluation.

Posted in Filing Bankruptcy, Setting the Record Straight about Bankruptcy, automatic stay, retirement accounts, when to file bankruptcy | Comments Off

Double Standards in Bankruptcy

I was really bothered by something that I heard on the news last night, and this morning I couldn't help but voice my opinion on Bankruptcy Law Network. I know that I shouldn't listen to the news before bed, but I heard the talking head make a comment about why people file for bankruptcy and why businesses file. The joker said that when a business files for bankruptcy, it is done for one reason, and that is because it is in the best interests of the business. When an individual files for bankruptcy protection, it is because they have made bad decisions. Nothing could be further from the truth in my opinion.

So, I wrote a blog this morning titled: Bankruptcy Double Standard ? : Businesses and Individuals

Please take a look at the blog and see if I came close to hitting the issues.

This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.

Posted in Bankruptcy Myths, Bankruptcy News, Consumer Protection, Life After Bankruptcy, Sign of the Times | Comments Off

Debtor Collects from Creditor Harassment

Anyone who has ever been hounded by a debt collector has probably fantasized about giving the collector a taste of his or her own medicine. That fantasy may be much easier to realize than most people imagine, as the story of a Dallas debtor shows.

Background: Your Rights as a Consumer

Laws are in place at both the federal and the state level to protect all Americans from overly aggressive debt collection practices. In fact, between the Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the Telephone Consumer Protection Act, a lot of behaviors typical of debt collectors are prohibited.

In addition to other things, debt collectors cannot:

• Lie about their ability to take legal action to collect on a debt
• Call you repeatedly with intent to annoy or harass
• Call you outside of 8 am and 9 pm local time
• Contact you directly when you have indicated that you have legal representation
• Contact you by any embarrassing media (like postcards)

Unfortunately, many consumers are not aware of their rights and so do not take legal action against collectors who break these laws.

A Man with a Plan

According to the Dallas Observer, a man named Craig Cunningham has taken it upon himself to stand up for his consumer rights.

The Observer reports that Cunningham made some poor investment choices when credit was easy and ended up with more than $100,000 worth of debt. But, when collectors began contacting him and asking him to pay up, he decided to fight back.

Essentially, here’s how Cunningham has managed to make the most out of a bad situation:

• He hired a lawyer to represent him and help him understand the intricacies of the consumer protection laws that were relevant to his case.
• He began recording calls from his creditors and saving all forms of contact he received.
• With the help of his attorney, he filed lawsuits whenever a debt collector violated a national or state consumer protection law.
• He began receiving court settlements from successful cases.

Most collection agencies, it seems, prefer out-of-court settlements (which often involve a statutory fine) to taking a case to trial, since settlements save them money. The Observer notes that Cunningham has thus far earned $20,000 from suits against law-breaking collectors.

If you think your rights have been violated by a debt collector, consider contacting an attorney to determine whether you could take steps to receive compensation for the violations.

Additional Resources

Fair Debt Collection Practices Act (PDF)

Posted in Creditors, Financial Literacy, consumer rights, debt collectors | Comments Off