FDCPA and Consumer’s Questions

[Note: Some of the contents here are taken from the Federal Trade Commission’s website as contents of general nature and for wider circulation. The writer does not claim this article to be his own creation exclusively.]

FDCPA is enforced by the Federal Trade Commission (FTC). FDCPA prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

Who is a debt collector?

Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.

Following is some of the highlight of consumer areas in debt collection and their rights under the FDCPA.

What types of debts are covered?

The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.

Can a debt collector contact me any time or any place?

No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.

How can I stop a debt collector from contacting me?

If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately, or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that:

Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.

Can a debt collector contact anyone else about my debt?

If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.

What does the debt collector have to tell me about the debt?

Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.

Can a debt collector keep contacting me if I don’t think I owe any money?

If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.

What practices are off limits for debt collectors?

  1.  Debt collectors 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. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

  • falsely claim that they are attorneys or government representatives;
  • falsely claim that you have committed a crime;
  • falsely represent that they operate or work for a credit reporting company;
  • misrepresent the amount you owe;
  • indicate that papers they send you are legal forms if they aren’t; or
  • indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

  • you will be arrested if you don’t pay your debt;
  • they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
  • legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

Debt collectors may not:

  • give false credit information about you to anyone, including a credit reporting company;
  • send you anything that looks like an official document from a court or government agency if it isn’t; or
  • use a false company name.

Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

  • try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
  • deposit a post-dated check early;
  • take or threaten to take your property unless it can be done legally; or
  • contact you by postcard.

Can I control which debts my payments apply to?

Yes. If a debt collector is trying to collect more than one debt from you, the collector must apply any payment you make to the debt you select. Equally important, a debt collector may not apply a payment to a debt you don’t think you owe.

Can a debt collector garnish my bank account or my wages?

If you don’t pay a debt, a creditor or its debt collector generally can sue you to collect. If they win, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.

Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. If you do, you lose the opportunity to fight a wage garnishment.

Can federal benefits be garnished?

Many federal benefits are exempt from garnishment, including:

  • Social Security Benefits
  • Supplemental Security Income (SSI) Benefits
  • Veterans’ Benefits
  • Civil Service and Federal Retirement and Disability Benefits
  • Military Annuities and Survivors’ Benefits
  • Federal Emergency Management Agency Federal Disaster Assistance

Federal benefits may be garnished under certain circumstances, including to pay delinquent taxes, alimony, child support, or student loans.

Do I have any recourse if I think a debt collector has violated the law?

You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can’t prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. A group of people also may sue a debt collector as part of a class action lawsuit and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever amount is lower. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it.

What should I do if a debt collector sues me?

If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.

Where do I report a debt collector for an alleged violation?

Report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau. Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.

What is the new mortgage settlement? Are you included?

Who are these five big banks?

-Ally Financial
-Bank of America,
-Citibank,
-JPMorgan Chase and
-Wells Fargo
How much they are willing to pay? Terms:
-a total of $5 billion in cash.

They will also help homeowners who are underwater on their mortgages by reducing the principal on their loans by a combined $17 billion over the next three years.

How about refinancing?

Borrowers who qualify will get $3 billion in refinancing arrangements.

Improper foreclosure?

Those who were improperly foreclosed on will get a combined $1.5 billion. That probably nets out to less than $2,000 a person.

Impact?

Of course, this would have a sizable impact. Afterall, bank were not the only one to be blamed. The homeowners should except some responsibility (if not a lion’s share) and part of the blame as well. This would rejuvenate the economy but the banks have to be serious with this and not play game as usual and as they had continuously done before. Let the complainants suffers and naysayers should see the light of the day. Pay your mortgages folks on time. Enough is enough, let the good time roll. Everyone is suffering because few of us are not paying their mortgages regardless of the low interest. Lots of us are savings these mortgage payments. The result most of us suffering who are current on their payments and on commitments. It is a contract. Because of many non payers, the economy cannot progress. Like Ross Perot used to say, “if you don’t like the heat in the kitchen, move out”. People who do not like to pay, they would object if this is zero percent interest. Most of them are looking for free money. Yes, it is true. Produce the note was nonsense which was spread by paralegals and crooks. Most of them are languishing in jails. Initially, there was some fiasco when banks were rapidly purchases and notes were not produced. Now, they have solved this ‘storage” problem. Banks have notes, and they can produce. Most of the notes and promissory notes have run out their statutory limitations. We should learn how to be responsible again and accept where the blame lies. The banks have done their job, it is the homeowners who needed to take their part of the responsibility and help improve the economy. Stay in your homes, pays the bills, cut the chase, and be a proud homeowners.

Judgment Enforcement In Nevada: Things to Know

A judgment entered in the court of the State of Nevada generally is enforceable for a period of six (6) years and may be renewed for many times. (NRS 11.190.) It may become a lien on a judgment debtor’s real property once a transcript or abstract of the original judgment is filed with the recorder of the county in which judgment debtor’s real property is located. The lien will continue for a period of six (6) years and may be renewed. (NRS 17.150.)

A judgment creditor may execute against all goods, chattels, moneys and other property, real and personal, of the judgment debtor, not exempt by law, and all property and rights of property seized and held under attachment in the action. (NRS 21.080.) A judgment debtor’s wages may also be garnished. However, 75% of the disposable earnings of a judgment debtor during any pay period, or 30 times the minimum hourly wage prescribed by section 6(a)(1) of the federal Fair Labor Standards Act of 1938, are exempt from execution of a judgment. (NRS 21.090(g)

What is a confession of judgment?
Nevada laws permits judgment by confession for debt due or contingent liability. A debtor may confess judgment, without action, either for money due or to become due or to secure any person against contingent liability, by filing a written statement with the court. The written statement must be signed and verified under oath by the debtor, and must contain the amount authorized to be entered in the judgment, concise facts out of which the obligation arose and the actual amount due. The clerk’s fee for filing and entering the judgment and affidavit is $24.00 (Check for latest fee raised) (NRS 17.110.)

Does Nevada Adopts and Recognizes Foreign Judgment?

The State of Nevada generally adopts the Uniform Enforcement of Foreign Judgments Act. (NRS 17.330-17.400.) Any judgment, decree or order of a court of the United States or of any other court is entitled to full faith and credit in the State of Nevada. (NRS 17.340.)

A judgment creditor seeking to enforce a foreign judgment may file with the appropriate court, an exemplified copy of the foreign judgment and an affidavit showing the name and last known post office address of the judgment debtor and the judgment creditor. The affidavit must also include a statement that the foreign judgment is valid and enforceable, and the extent to which it has been satisfied. (NRS 17.360.) A judgment so filed has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of a court in the State of Nevada and may be enforced or satisfied in like manner. (NRS 17.350.)

Upon the filing of the foreign judgment and affidavit, the judgment creditor or someone on his behalf is required to mail a notice of the filing of the judgment and affidavit, attaching a copy of each to the notice, to the judgment debtor and to his attorney of record, if any, each at his last known address, by certified mail, return receipt requested. The notice must include the name and post office address of the judgment creditor and judgment creditor’s attorney, if any, in the State of Nevada. The judgment creditor is also required to file an affidavit with the clerk of the court setting forth the date the notice was mailed. No execution or other process for enforcement of a foreign judgment may issue until 30 days after the date of mailing the notice of filing. (NRS 17.360.)

Interest:

Legal rate: Interest on transactions where there is no written contract may be charged a rate equal to the prime rate at the largest bank in Nevada, as ascertained by the commissioner of financial institutions, on January 1 or July 1, as the
case may be, immediately preceding the date of the transaction, plus 2 percent. (NRS 99.040.)

Written Contract rate: Any rate which the parties to a written contract may agree. (NRS 99.050.)

Judgment rate: Either the rate specified by contract or a rate equal to the prime rate at the largest bank in Nevada as ascertained by the commissioner of financial institutions on January 1 or July 1, as the case may be, immediately preceding the date of judgment, plus 2 percent. The rate must be adjusted accordingly on each January 1 and July 1 thereafter until the judgment is satisfied. (NRS 17.130.)

Exemptions:

In general, a debtor may claim exemption of his homestead and certain personal property from attachment and execution of a judgment, or in a bankruptcy proceeding. ($550,000)

In general, the equity in the homestead of a judgment debtor may be exempt from sale on execution and from process of court to the extent of $550,000.00 in value. (NRS 115.010.) Homestead may include a quantity of land, together with the dwelling house thereon and its appurtenances, a mobile home whether or not the underlying land is owned by the debtor, or a unit or real or personal property, with any appurtenant limited common elements, or its interest in the common elements of the common-interest community, selected by the debtor or his spouse, or either of them, or a single person. (NRS 115.005.)

Under NRS 21.090 some of the personal property of a judgment debtor which may be exempt from execution may include private libraries not to exceed $1,500 in value (check recent increase), and all family pictures and keepsake, necessary household goods and yard equipment not to exceed $3,000 in value, farm trucks, farm stock, farm tools, farm equipment, supplies and seed not to exceed $4,500 in value, professional libraries, office equipment, office supplies and the tools, instruments and materials used to carry on the trade of the judgment debtor for the support of himself and his family not to exceed $4,500 in value, the cabin or dwelling of a miner or prospector, his cars, implements and appliances necessary for carrying on any mining operations and his mining claim actually worked by the debtor, not exceeding $4,500 in total value, one vehicle if the judgment debtor’s equity does not exceed $4,500 (check recent increase), all money, benefits, privileges or immunities accruing or in any manner growing out of any life insurance, if the
annual premium paid does not exceed $1,000, any prosthesis or equipment prescribed by a physician or dentist, money, not to exceed $500,000 in present value held in qualified retirement plans, employee pension plan or profit sharing plans, money or other benefits held pursuant to the order of a competent jurisdiction for child or spousal support, education and maintenance.

In a bankruptcy action, residents of the State of Nevada are not allowed those exemptions specified in subsection (d) of section 522 of the Bankruptcy Act of 1978 (92 Stat. 2586). (NRS 21.090(3).)

Statutes of Limitation:

Civil actions generally can be commenced only within certain time limitations. The time generally runs from the date from the last transaction or the last item charged or last credit given; and whenever any payment on principal or interest has been or shall be made upon an existing contract, whether it be a bill of exchange, promissory note or other evidence of indebtedness if such payment be made after the same have become due, the limitation generally commences from the time the last payment was made. (NRS 11.200.)

What is the proper venue for a bankruptcy case?

Under section 1408 of the title 28 of the United States Code, a debtor may commence a bankruptcy case in any federal district in which the domicile, residence, principal place of business, or principal assets of the debtor have been located for 180 days than any other district. Here, the language clearly describes “the longest portion of the 180 days than any other district”. However, there can be more than one venue. For example, if the debtor’s residence and principal place of business have been in two different districts for 180 days.

What happened when incorrect venue is selected?

An incorrect selection of venue does not deprive bankruptcy jurisdiction, however, it may be transferred to the correct venue over the case. The court may transfer a case from a proper venue to a different venue in the interest of justice or for the convenience of the parties.

What is the role of a Bankruptcy Trustee?

As we know that in every case of chapter 7 or chapter 13, a trustee is appointed by the US trustee. If there is an estate, there shall be a trustee. The trustee’s basic role is to represent the interests of the unsecured creditors. The trustee’s duties in carrying out this role are provided in the statutes. Invariably, they include collecting property of the estate, invaliding certain transfers made from the estate by the debtors, objection to exemptions, objection to discharge, liquidating any nonexempt property and distributing it to creditors with valid claims. Finally, trustee makes a final accounting of all of the estate and its distribution to the United States trustee. The trustee also sends claims for domestic supports obligations.

The trustee duties are limited in a typical chapter 7 case as there may not be many assets. However, trustee evaluates schedules, statements, and exemption claims.

The trustee also participates and presides over meetings of creditors and determines whether to file objections or discharge. Both chapter 13 and chapter 7 trustees are accountable for the performance of their statutory duties and may generally be held liable for failure to perform them. Bankruptcy trustees are not judicial officers and they cannot resolve disputed issues. The trustee cannot be your friend or a foe, as he is impartial and should decide according to the merits of each case.

Which Reaffirmation Are Binding?

We had discussed the definition of ‘surrender’ and ‘reaffirmation’. In this post, we would only discuss reaffirmation. Some time creditors lure the debtors to sign reaffirmation with various tactics like lowering the interest rate, shortening time period etc. The Code does not completely bar reaffirmation, it however, restricts them significantly. Section 524(c) and (k) sets forth a number of requirements that must be followed before a reaffirmation is binding. First, there must be an agreement between the debtor and the creditor which is enforceable under applicable nonbankruptcy law. that agreement in most cases is essentially a contract to reaffirm. Simply speaking,without any agreement there can be no reaffirmation. As you know, the reaffirmation agreement alters the original agreement. Any reaffirmation has to pass through a series of filtration process and must be approved by the judge and the parties.

1. The reaffirmation agreement must be made prior to the discharge.
2. The attorney has informed his parties not to enter into any reaffirmation.
3. Once the discharge is entered, no reaffirmation is possible
4. The reaffirmation agreement must contain the disclosures described in section 524(k).
5. The disclosure must be clear and conspicuous.

Part B of the of the agreement must include a brief description of the credit agreement, a task that may not be easy in light of the complicated agreements utilized by consumer creditors. The agreement must be filed by the court. If an attorney ahs negotiated the reaffirmation, the agreement filed with the court must be accompanied by the attorney’s affidavit.

Student Loan and Chapter 7

We face this question many times, and still continuously if filing for bankruptcy protection will help discharge student loans. Unfortunately, there is no such provision for each discharge of student loans.

Hardship Test:
However, student loans are difficult, but not impossible, to discharge in bankruptcy. To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.”

Brunner Test:
Courts use different tests to evaluate whether a particular borrower has shown an undue hardship. A common test is the Brunner test which requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v.New York State Higher Educ. Servs.Corp., 831 F. 2d 395 (2d Cir. 1987). Not all courts use this test. Some courts will be more flexible, some less.

Although this does not appear to be a difficult standard to meet, for the most part, most debtors are unable to get their student loans discharged. The same standards apply to both private and federal or state student loans.

Adversary Proceeding:
Additionally, in order to obtain a bankruptcy discharge of student loans, the bankrupt debtor has to file an adversary preceding (or a lawsuit)against the student loan creditor and have a court determine if the student loan debtor/borrower meets the criteria for discharge. Since the adversarial process is usually expensive and time consuming, debtors who may meet the criteria can find themselves barred from exercising their rights due to financial limitations.

Reorganization under Chapter 13:

Some student loan borrowers find that Chapter 13 reorganization is useful as it may stop future interest and penalties from accruing so long as the student loan is paid in full through the Chapter 13 plan of reorganization. To do this, debtors must have sufficient income to meet their regular monthly obligations plus have sufficient additional income to make their Chapter 13 plan payment. Each case is different and if you are interested in exploring if a Chapter 13 bankruptcy is right for your situation, please contact our office for a free bankruptcy consultation.