The practice of putting people in prison for not paying their debts ended in the United States more than a century ago. What is a debtor’s prison? Some state constitutions include provisions banning these “debtors’ prisons.” But some creditors are increasingly using a little known tactic that, to the people they target, feels a lot like being sent to jail for not paying their debts. In Iowa, as in many states, a creditor who gets a judgment against a debtorRead more
Eleven Reasons to Choose Filing Chapter 13
11 Reasons for Chapter 13 Catch up on back mortgage payments at 0% interest. Catch up on car loan payments and repay vehicles loans at low interest rates. “Cram down” the loan on a vehicle or other property purchased more than two and 1/2 years ago to its fair market value. Recover recently repossessed vehicles and repay the loan at low interest rates over time. Strip off your underwater 2nd or 3rd mortgages. Discharge property settlement obligations from a divorceRead more
Judge Sanctions Credit Union
One of my Chapter 13 clients came to me with complaints that a credit union listed in his bankruptcy as a creditor was sending him letters demanding payment of a debt already being paid through his Chapter 13 plan. The credit union certainly knew of the bankruptcy because it had filed a proof of claim and had received monthly payments from the trustee for over three years. We advised the client to wait until the credit union had sent multipleRead more
Telephone Consumer Protection Act
The Telephone Consumer Protection Act (TCPA) prohibits debt collectors from calling a cell phone number using an automatic telephone dialing system without the debtor’s prior express consent. Automatic telephone dialing systems include “predictive dialers” and any equipment that has the capacity to store or produce telephone numbers using a random or sequential number generator and to dial the numbers automatically. You can often recognize calls made with these systems because of the brief delay between when the call is answeredRead more
Discharging Student Loans in Bankruptcy
Increasingly, one of the most common questions we’re asked is whether you can discharge student loans in bankruptcy. Until 1998 student loan debtors were able to discharge some loans if they were old enough. But in 1998 Congress changed the law to make it harder to for student loan debtors to get relief. Restrictions on the discharge of student loans were first applied just to federal loans but in 2005 they were extended to private loans as well. This hasRead more
Student Loan Debt Collector Misleading Debtors
Although the ability to discharge student loans in bankruptcy is limited, it’s not completely impossible. So a debt collector who told a debtor that her student loan debts couldn’t be discharged in bankruptcy violated the federal Fair Debt Collection Practices Act, according to 2nd Circuit Court of Appeals. Since the ability to discharge student loans is very dependent on the facts of each case, the debt collector’s blanket statement to the debtor was misleading and deceptive. An unsophisticated debtor mightRead more
Financing a Vehicle
The National Association of Consumer Advocates, of which I am a member, suggests the following tips when you’re financing the purchase of a new vehicle. Keep your current vehicle until the amount you owe on the loan is less than the resale value of the vehicle. It’s best to wait until the entire loan has been paid off before trading it in. Before you shop for a car, get prequalified for a loan at a credit union or bank. TakeRead more
Delinquent Property Taxes Put Homeowners At Risk
A new report (The Other Foreclosure Crisis) by the National Consumer Law Center (NCLC) sheds light on the growing risk to homeowners of delinquent property taxes. According to the report, annual property tax delinquencies now reach almost $15 billion nationally and the number of homeowners at risk of losing their homes to tax sales is growing. The report cites studies showing one in four households have an underwater mortgage and nearly 40% of families have recently experienced unemployment, foreclosure, mortgageRead more
Restrictions on Credit Card Fees
Rules issued by the Federal Reserve Board place several limitations on the ability of credit card companies to charge fees and issue credit cards. These restrictions, which went into affect two years ago, impose more fairness on credit card billing. A summary of some of these limitations is following: Interest rates cannot generally increase in the first year after a credit card account is opened and increases to the interest rate on new transactions after the first year can onlyRead more
Signs of a Debt Collection Scam
Credit and debt collection scams are becoming more and more sophisticated. It’s hard to tell the difference between legitimate debt collection efforts and scammers waiting to take your money. The Federal Trade Commission offers these signs of a scam: The caller claims to be with a government agency or law enforcement. Law enforcement never gets involved in private debt collection and the circumstances under which they might be involved after a judgment has been entered are rare. Don’t make paymentRead more