You’ve seen the commercials and heard them on the radio: “don’t pay your debt, don’t go into bankruptcy, eliminate your debt!”
Eliminate your debt without bankruptcy? Really? What the hell am I advising my clients then?
So I did some poking around… which is big fancy lawyer talk for “legal research.” And I think I was able to put my finger on what some of these companies are actually selling.
Way back in 2005, I wrote about a need to reform our state rules on returns of service. You’ll find that article here. In August of 2006, then Mass. Bar Association President Warren Fitzgerald wrote a column in the Boston Globe also calling for reform based on the failure of small claims defendants to get any meaningful notice of a suit being filed against them. Today we’re learning that in New York, Attorney General Anthony Cuomo has filed suit to vacate over 100,000 judgments that were entered against consumers who were not properly served. (more…)
Today, as I found myself on the phone repeating myself – a lot. It then occurred to me that I could probably explain how our consult process works here on the website. In other words, how do you get from reading this website and digesting the information to getting some face-time with a lawyer (i.e., me).
Here’s how.
Today, my Bankruptcy Colleague and fellow-blogger Jonathan Ginsberg wrote about The Psychology of Debt Collection: Avoid the Manipulation.
The Boston Globe reports that the Massachusetts Attorney General has filed a bill to slow down foreclosures. But the legislation would only protect those in “risky” loans. And if people keep losing their jobs, homeowners with “risky” loans will not be the only ones facing the possibility of losing their home.
Meanwhile, in Washington, a bill that would let some homeowners in Chapter 13 modify the mortgage on their principal residence has cleared the House Judiciary Committee.
While homeowners might be getting a break, recent graduates are finding it tougher and tougher to pay off student loans. An opinion piece in the Minneapolis Star Tribune suggests that a good way to stimulate the economy may be to forgive student loan debt.
The Federal Reserve however, seems to have another idea, although I am not convinced it’s a better idea. From CNNMoney.com:
The Federal Reserve is getting ready to launch a new program that should make it easier for consumers to get credit-card and auto loans — though not necessarily at lower interest rates.
Yikes.
This week’s Newsweek has a great article on the abusive tactics debt collectors are increasingly using. The article is called “A New Shakedown” and it’s worth the read – especially in light of the shakedown a creditor recently pulled in a Nebraska bankruptcy case. The collector ended up violating the stay.
The debtors’ chapter 13 bankruptcy case was filed on February 13, 2008 and listed Geneva Roth Companies as a claim in the amount of $170. On May 21, a collector working on behalf of the creditor GRC (Sherman and Roman) called one of the debtors and started “to verbally abuse the debtor and coerced a payment from the debtor threatening criminal sanctions.”
According to a signed statement, despite being informed of the bankruptcy filing and the pending bankruptcy case the collector told the debtor that she “was a key element in an investigation of fraud and bank theft….that they will be forced to have me identified as a felon. [The debtor went on to tell her that [she] was not going to talk to her about this at work and that I would call her back. [It] was then I had to call her back within minutes or my husband and I would be identified at our work by cops if I didn’t and it would be embarrassing.” The debtor was ultimately compelled to use a debit card to pay $300. She was left shaken.
I also have a bone to pick with the firm they have retained for collections. I’m not going to name them – for now. But I am compelled to share what happened to a former client.
This client filed chapter 13 in 2000. The credit union didn’t file a proof of claim on time. Instead, it filed a proof of claim along with a motion asking the court’s permission to file the proof of claim late. The credit union claimed it did not get notice, even though the creditor matrix (the list of creditors that get notice in a bankruptcy matter) had both its local address along with an address in Florida (which was the address also appearing on the billing statement). The court set the matter for a hearing for December 5, 2000.
Credit union’s attorney appeared along with me on that date over 7 years ago. After the hearing, the court denied the motion to file the proof of claim late. Thus, it did not get paid in the chapter 13. In 2003, the client successfully completed the chapter 13 plan and received a discharge.
Today I received a call from the client who tells me that a letter was received from an attorney on behalf of the credit union seeking payment of the debt.
Houston-based LTD Financial Services got slapped with $1.3 million in civil penalties to settle FDCPA violation charges.
Washington Mutual issued a press release in response to the action filed by the NY Attorney General. We reported on that action earlier this week.
An astute observation on the passage of BAPCPA: “Be careful what you wish for.”
Yesterday, the First Circuit Court of Appeals affirmed a lower court’s ruling that slashed a request for legal fees sought by counsel representing plaintiffs in a Fair Debt Collection Practices Act matter. The FDCPA allows attorney fees on successful claims, and the plaintiffs in this case were successful, but for a variety of reasons, attorneys fee award ended up being a little more than 10% of what was sought. The case should serve as a wake-up call for consumers, attorneys and Congress.
The plaintiffs, a married couple, sued Corporate Receivables, Inc. and one of its employees for abusive debt collection practices (the husband owed the debt). They took their case to a jury and presumably did so with the hopes of getting a significant award of actual damages.
From the Houston Chronicle:
Collection agencies are using abusive phone tactics more frequently and the consumer’s best defense may be to secretly record the abuse, a panel of Nevada lawmakers was told Friday.A proposed bill would allow Nevada consumers to record phone conversations initiated by debt collection agencies without notifying the agency. The Nevada Supreme Court ruled in 1998 that recording telephone conversations without the consent of both parties is barred under state law.
KCEN-TV out of Texas reports that aggressive debt collectors are bullying our troops overseas. An attorney tells them:
I hate to say it, but they’re easy targets. They’re in Iraq. They’re in Afghanistan. They’re at bases across the world and the collectors realize that. They start going after spouses, they start calling commanding officers..
The report suggests that debt collectors “hope military members will quickly fold and hand over money, before they know their rights and realize they’re being violated.”
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