Bankruptcy clients frequently ask what their credit reports should say following the filing of bankruptcy. I generally recommend that clients check their credit reports a few months after their bankruptcy discharge. In 2008 a national injunction on how credit bureaus are to report debts included in bankruptcy was put into place because of litigation originating in California. That injunction (known as the “White Order”) requires credit bureaus, within sixty days of receiving notification of a bankruptcy discharge, to update creditRead more
Avoid Foreclosure Relief Scams
With pandemic-related moratoriums on home foreclosures ending soon, scam foreclosure relief companies will also start taking advantage of desperate homeowners again. Both federal and state law limit what companies can do for people struggling to pay their mortgage. “Foreclosure consultants” are regulated by state law and federal regulations apply to companies claiming to offer mortgage assistance relief services. Here are some of the rules applying to these companies: Foreclosure relief companies must provide detailed notices explaining a homeowner’s rights, includingRead more
Avoiding Debt Relief Scams
The federal Consumer Financial Protection Bureau (CFPB) has released important advice on avoiding the debt consolidation and debt relief programs many people use to deal with debt. According to the CFPB, debtors should avoid doing business with a company that promises to settle debt if it: Charges fees before it settles debt (this may be an illegal practice) see Freedom Debt Relief Ordered to Repay Millions; Makes representations that it can settle all the debt for a promised percentage reductionRead more
Debt Collection Complaints in Iowa
Using data from the Federal Trade Commission (FTC), the National Consumer Law Center (NCLC) has compiled an analysis of the complaints made by Iowans about debt collection agencies. According to the data, 813 Iowans filed complaints with the FTC in 2017. Most of the complaints claimed that the debt collection agencies called repeatedly or called after getting a notice from the debtor to stop calling. Other complaints were that the debt collectors made false representations about the debt, threatened toRead more
Collection of Medical Debt
One of the best places to get good information about debt collection and other consumer issues is the website of the National Consumer Law Center. Found at https://www.nclc.org, the website contains links to a variety of articles about financial and legal problems faced by consumers. NCLC recently published an article on how consumers should deal with medical debt. Some of the highlights of the advice offered by NCLC include: Medical debt should usually be the lowest priority in repaying. UnlikeRead more
Bankruptcy’s Impact on Credit Scores
One of the questions I get most often is how filing bankruptcy will impact someone’s credit score. I generally think making decisions based on how your credit score will be affected is a bad idea. But I understand concerns about the issue. Two studies from the Federal Reserve Bank of New York tries to shed some light on the question. A 2015 study found that while people who file bankruptcy generally start with lower credit scores than people who don’t,Read more
What debt collectors CAN’T Do!
What practices are off limits for debt collectors? Harassment They may not harass, oppress, or abuse you or any third parties they contact. For example, they may not: use threats of violence or harm; publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies); use obscene or profane language; or repeatedly use the phone to annoy someone. False statements Collectors may not lie when they areRead more
Paying Off Credit Card Debt
When trying to decide between filing bankruptcy or paying off credit cards outside of bankruptcy, it’s important to consider how difficult it can be to pay off credit card debt where the balance owed has grown significantly. For example, if you owe $10,000 on credit cards with an interest rate of 15% and pay only a minimum payment of 4% of the balance each month, it will take nearly twenty (20) years to have the debt repaid. And that’s assuming you’reRead more
Foreclosure in Iowa
Foreclosure is a scary word. The prospect of losing your home and having to find somewhere else to live can create a lot of stress. Foreclosure doesn’t have to be as frightening as it sounds if you understand how it works and how Chapter 13 bankruptcy can be used to stop the foreclosure and put you back on the road to keeping your home. Foreclosure Without Redemption The most common method of foreclosure in Iowa is called “foreclosure without redemption.”Read more
Credit Card Collectors Need Evidence of Debt
The Iowa Court of Appeals has laid out some important rules for anyone trying to collect on a credit card debt. The ruling came after Capital One sued two Iowans in small claims court. The cases had been dismissed because Capital One failed to provide documentation showing transactions on the credit cards starting with a zero balance. On appeal, the Iowa Court of Appeals said it wasn’t necessary for there to be documentation going back to a zero balance butRead more
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