The Attorney General of Mississippi has filed a lawsuit against Experian, which, along with Transunion and Equifax, make up the three largest credit reporting companies. These companies collect information about consumers and then sell it back to lenders, insurance companies and others. What Was The Problem? The problem is that these reports on consumers are frequently full of mistakes and misinformation. According to investigators with the Mississippi Attorney General’s office, Experian: mixed up reports of consumers with the same orRead more
Is This Debt Yours?
According to the Federal Reserve, one in seven Americans is being contacted by a debt collector. This is up from one in twelve just ten years ago. Where Is My Debt? With 4,500 debt collection agencies in the United States, people find it hard to keep track of who is collecting which debt. Debts are bought and sold so many times that in the bankruptcy schedules we prepare we often list multiple debt collection agencies for one debt just toRead more
What Makes Up Your Credit Score?
Prospective clients often ask how their actions will impact their credit score. Much of what makes up the credit score is deliberately kept secret by the privately held corporation that developed credit scores. The three credit bureaus (Equifax, Experian, TransUnion) and individual creditors may also have different scores. Mainly, because they use a different credit score model or because not all creditors report to the same bureaus. But we know generally that the FICO score created by Fair Isaac is madeRead more
The Sallie Mae Empire
With over $1 trillion in debt, federal student loan debt now exceeds credit card debt and over $120 billion of that student loan debt is delinquent. A January 2014 report from the National Consumer Law Center (NCLC) called “ The Sallie Mae Saga: A Government-Created, Student Debt Fueled Profit Machine,” details the extensive role Sallie Mae plays in the student loan industry. What Is Sallie Mae? Sallie Mae was created in 1972 as a government-sponsored enterprise that could use publicRead more
Colorado Sues Debt Buyer
A lawsuit brought by the state of Colorado late last year sheds light on the world of buying charged-off consumer debt. What was the lawsuit about? In a lawsuit against several debt collectors and debt buyers, Colorado said the companies had purchased thousands of charged off debts from U.S. Bank and Wells Fargo for likely just pennies on the dollar. But even though the banks transferred the debts to the companies, no documents related to the debts were also transferred.Read more
Escaping the Debt Machine
Over one billion contacts are made each year by debt collectors to consumers. The contingency fees raked in by third-party debt collectors exceeds many billions of dollars. The largest debt collector, NCO Financial which is owned by JPMorgan Chase, earns nearly $2 billion annually. A report describes both the enormous profits in the debt collection industry and the flaws in the legal system. Judges in Iowa estimate 85% to 90% of all collection lawsuits result in a default judgment becauseRead more
Credit Report Mistakes
The Fair Credit Reporting Act (FCRA) prohibits credit bureaus from reporting accounts that have been placed for collection or charged off for more than seven years. What Does This Mean For You? The creditor (known as a “furnisher” under the FCRA) is required to tell the credit bureau the date of the first delinquency because the seven years actually begins to run 180 days following that date. After the seven years expires, the debt’s “trade line” is supposed to ageRead more
Think That Pro Athletes Immune to Financial Trouble? Think Again.
Now that the Super Bowl is over (let’s not discuss the final score), high school and college athletes everywhere are dreaming of making it big in pro sports. Contracts worth millions of dollars are possible even for athletes not selected high in any pro draft. But, just like you and me and all of our clients, money problems aren’t foreign to even some of the wealthiest of pro sports players. In fact, there’s some evidence to suggest these wealthy playersRead more
Payday Loan Company on Reservation Subject to Iowa Law
An important September 2013 ruling from the Iowa Department of Inspections and Appeals said that Western Sky Financial is subject to Iowa consumer laws. Western Sky sells the loans it makes to WS Funding, a subsidiary of CashCall, which services all the loans made in Iowa by Western Sky. The payday loans made by Western Sky can carry interest rates in excess of 135%. Western Sky and CashCall had argued that since it was owned by a tribal member andRead more
National Collegiate Student Loan Trust Dismisses Lawsuits
Four lawsuits against two of my clients were dismissed last month after the National Collegiate Student Loan Trust (NCSLT) was unable to prove it was entitled to collect the private student loans my clients allegedly owed. After filing motions to dismiss in each of the lawsuits I argued NCSLT had failed to prove how it was the “real party in interest” when the original loans had been with JPMorgan Chase. What Did The Judge Propose? The judges gave NCSLT threeRead more
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