A recent article by the New York Times reviewed a study of whether medical bills for cancer patients cause more bankruptcies. The researchers found that “cancer patients were twice as likely to file for bankruptcy as people without cancer.” The study was conducted at the Fred Hutchinson Cancer Research Center in Seattle.
The effort determined based on “court records and information from the regional cancer registry” that younger people with cancer experienced the highest bankruptcy rates. In a comparison of all cancer patients versus people without cancer, the cancer patients were 2.65 times more likely to go bankrupt than people without cancer. In addition, there was a significant discrepancy between younger cancer patients and older cancer patients (sixty-five or older). The younger patients had 2-5 times higher bankruptcy rates than the older cancer patients. The study authors believe this discrepancy is due to Medicare and Social Security as a possible mitigating factor that is decreasing the risk for the older group.
Perhaps not surprisingly, nearly 60% of debtors report medical debt at the time of filing for bankruptcy, with medical bills being one of the major causes of people filing for bankruptcy. The report noted that “the financial burden of cancer can be substantial for patients and their families” with as much as “$1.3 billion of the $20.1 billion spent on cancer care” coming directly from the patients. The financial burden worsens if the patient is unable to work during treatment. Research suggests that from 40% to 85% percent of cancer patients stop working during initial treatment.
The fact remains that medical debt is a leading cause of bankruptcies, but whether or not the specific medical condition can be associated with filing for bankruptcy is still being researched. According to ThinkProgress’s evaluation of this study, “Americans who have access to health insurance aren’t necessarily safe from bankruptcy, since high cost of treating cancer can still put an untenable strain their finances.” A majority of people who file for bankruptcy due to medical debt have some type of health insurance. The insurance just does not cover all of the costs of care.
People facing high health care costs should consult with their doctors, hospitals, pharmacists, and community resources about lowering medical bills. For the truly needy, many doctors and hospitals will substantially reduce a medical bill, accept affordable monthly payments, or both. Many drug companies offer expensive medications at a substantial discount for those who could not otherwise afford them.
If medical bills become overwhelming, though, bankruptcy is one way that often works to discharge the debts. Bankruptcy stops bill collectors from trying to collect medical debts. And, medical bills can be included in the bankruptcy discharge so that the patient will never have to pay them.
One precaution though. While hospitals generally have to provide emergency care, they do not have to agree to provide non-emergency care. Doctors, too, do not have to continue to provide medical services. So, if you leave a doctor unpaid, you may expect the doctor to refuse to provide you future medical services after a bankruptcy. For that reason, some bankruptcy debtors work out payment arrangements with their essential doctors and continue to pay them even after the bankruptcy case is filed. Potential bankruptcy filers considering these issues should consult with a qualified bankruptcy attorney.
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Evidence is building that more and more often, medical bills are pushing people into bankruptcy. An article by the Examiner evaluates a study of recent bankruptcy cases, finding that “75% of the entire pool surveyed had some type of health insurance.” Even so, medical bills listed in the bankruptcy case start around $5000 and rise above that. Most expenses are a result of out of pocket medical costs that insurance did not cover. To make matters worse, most of the insurance companies cancel coverage when the employee suffers a disabling illness because they become too sick to work, leaving them with medical bills and no insurance.
One example discussed in an article in Forbes discusses how a woman who is facing skyrocketing medical bills and credit card debt is considering bankruptcy just to get down to an income level low enough to qualify for disability insurance. The most upsetting part is that her situation is not unique. Overwhelming medical bills causes 17-62% of all bankruptcy declarations. She, like most, doesn’t want to file for bankruptcy but it is her safety net.
Many people associate words like: failure, embarrassment, loss, and rock bottom with bankruptcy. However, the truth is, it is none of those things. Bankruptcy allows individuals to both eliminate and reorganize most of their debt. Additionally, most of your assets are protected. Before you go to an extreme like selling, transferring or cashing any of your assets it is imperative that you consult with a bankruptcy attorney.
Should I See an Attorney?
People are finding themselves “under insured” and trying everything they can to get back on top. From running up credit cards just to pay for the medical bills, to maxing them out and falling further into debt, it is no surprise that bankruptcy is lurking just around the corner. What most people don’t realize is that the moment you find yourself with debt concerns, the best choice is to consult with an attorney. An attorney will be able to help you determine if there are other options besides bankruptcy that could get you out of debt.
- Credit counseling
- Payment plans
- Obtaining loan extensions
Those are some of the many alternatives to bankruptcy that people don’t realize exist. However, when you know you are in trouble, or you receive medical bills that you know are going to pose financial problems, that is when it is essential to talk with an attorney. Attorneys can put your finances into perspective and either point you in the right direction and get you set up with a bankruptcy alternative, or if necessary help you file.
There are several different types of bankruptcy: Chapter 7, Chapter 11, and Chapter 13 are the most common. Chapter 7 bankruptcy is the most common filed by individuals. With the rising costs of medical care and the increase of individuals struggling to stay on top, filing for bankruptcy may help relieve some of that debt. After consulting an attorney you will be able to get a better idea of what disclosures are required, and what debts will be discharged. Typically, chapter 7 bankruptcies are resolved within six months unless it is a complicated case.
If you are feeling overwhelmed with medical bills and struggling with finances, your best bet is to contact an attorney. Attorneys will help you understand a realistic view of your circumstances, while also relieving some of the stress that is associated with debt and bankruptcy.
Evidence is building that more and more often, medical bills are pushing people into bankruptcy. An article by the Examiner evaluates a study of recent bankruptcy cases, finding that “75% of the entire pool surveyed had some type of health insurance.” Even so, medical bills listed in the bankruptcy case start around $5000 and rise [...] The post Medical Bills Pushing People to Bankruptcy appeared first on AKB.
The worst thing you can do for your credit is to allow inaccurate or out of date information to remain on your credit report. By simply checking your credit report, you can stay apprised of all suspicious action.
Remaining on top of your credit is the best way to avoid having to repair your credit. For example, as discussed in one recent helpful article, the best way to find errors are to check your credit report regularly. The story breaks down the five most common credit reporting errors that you need to look out for:
- Identification that does not belong to you.
- Accounts that don’t belong to you.
- Incorrect payment status.
- Public records that are not yours.
- Inquiries for credit you never applied for.
- Identification that does not belong to you.
The most common of these mistakes are due to variations in name spelling, wrong social security numbers, or entry mistakes. This can be a sign of identity theft. Staying on top of your credit report and in contact with the credit reporting agency can help you correct the mistakes before any damage is done to your credit.
Accounts That Don’t Belong to You
The worst feeling is seeing an account that says was opened in your name and with your social security number, yet you never opened an account. In this instance, it is most likely a sign of fraud that requires your immediate attention.
Incorrect Payment Status
If you see that one of your accounts reported you were delinquent or making late payments and you can show that they are mistaken, it is crucial that you contact the credit reporting agency immediately. Late payments can hurt your credit score more than people realize, so staying on top of your report is necessary.
Public Records That are Not Yours
The most common thing to look out for is civil judgments, tax liens, or bankruptcies that are not yours. Credit is affected from these public records, so it is crucial that you keep these off of your credit report.
Inquiries For credit that You Never Sought
Every time you apply for an account, or look to secure a line of credit, inquiries are made into your accounts. If there are inquiries that you did not authorize or do not recognize, fraud is likely involved. It is suggested at this point that you contact an attorney or contact the credit reporting agency.
How Can an Attorney Help Me?
Attorneys are well equipped to help dispute errors on credit reports. More importantly, the best attorneys are honest with you, and suggest that you write your own credit dispute letter before you go spending thousands of dollars paying a “credit-fixing” attorney.
We have a complete guide to credit repair and suggest that you review it and follow the steps set forth there before seeking help from an attorney.
Attorneys are well versed and are aware of the most of the common credit reporting mistakes. You can contact them and show them your credit report with your concerns. They will help you along the way, whether it is disputing a report or simply understanding anomalies. Not only can they help you negotiate settlements on outstanding debts, but they can counsel you on improving your credit. Consider contacting an attorney if you need help or need assistance with any information that is either incomplete or inaccurate.
How do you know if you are suffering collection harassment, and when is it time to seek an attorney? If you are constantly harassed, embarrassed, or threatened by collection agencies, it is likely you are a victim. According to an article by ABC News, the Federal Trade Commission (“FTC”) received more than 150,000 complaints about collection agency debt collectors in 2012. The most common complaints are due to profane language, violent and abusive threats, and calls multiple times of the day.
The Consumer Financial Protection Bureau is tasked to supervise the large collection agencies to make sure they are not using harassing or threatening tactics in pursuing collection actions. Further they are cracking down on collection agencies and making sure they are only using accurate data to pursue debts. The main goal is to police agencies and make sure larger agencies start leading by example. The FTC suggests that if you are a victim of improper collection agency actions you should file a complaint on their website.
The FTC states that no debt collector can call you at any inconvenient times or places. For example; contacting you before 8:00 A.M. or after 9:00 P.M is impermissible. More importantly, any time you are contacted by a collection agency and you wish for them to stop contacting you, you can tell the collector in writing to stop contacting you. Once they receive their notice in writing they are not to contact you again unless to tell you they intend to file a lawsuit, in which case contacting an attorney is advisable.
Coercion through intimidation is never a proper collection agency tactic, but is becoming one of the most common approaches collection agencies are taking. Speaking with an attorney will allow you to fight back against these agencies that are going too far. The FTC specifically state that harassment and false statements are always prohibited. If at any time a debt collector uses threats of violence, uses profane language, or calls respectively solely to annoy it is likely you were “harassed.” If the agency falsely claims that you committed a crime, misrepresent how much you owe, or falsely state their identity, they made false statements.
Debt collectors are always prohibited from stating that they will arrest you, threaten legal action (unless they plan on taking legal action), or that they will sell your property or garnish your wages (when not legally obligated to do so). The longer collection agencies are allowed to blatantly violate FTC rules, the more people will become victims.
The most important thing to do is take notes of every call or statements made to you over the phone by collection agencies. This will help you keep track and also give you a record to show an attorney so they can better evaluate your case. The notes you take are critical in filing a claim because it tracks the behavior of the collection agency. If a debt collector brings suit against you, you must respond to the lawsuit either by yourself or through your attorney otherwise you may waive your rights. Don’t let collection agencies go too far, speak with an attorney to stop them from making you a victim of their abuse. By staying informed on what behaviors are inappropriate, you will protect yourself from being taken advantage of.
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The Basics – Fair Debt Collection Practices Act: Who and What
You hear and see ads all over the place. “We will stop your foreclosure!” “9 out of 10 customers keep their homes!” “Modify your loan with us, guaranteed!” You might have even received personalized letters in the mail that make similar claims. If it sounds too good to be true, it probably is.
Scammers are all too eager to go after those who need help the most. Consumers want desperately to keep their homes, reduce their mortgage payments, and just be more financially stable. When companies offer them a light at the end of the tunnel, many are willing to travel down that path. Hopefully you will able to see through the false promises these companies make and avoid becoming another victim of their all-too-common scams.
Scam Warning Signs
Look for some of these telltale signs that you may be dealing with a scammer:
- Scammers often guarantee they can get the lender to modify your loan or stop foreclosure. No one but your lender can guarantee this—period. They may claim they have an outstanding relationship to work these things out. Do not believe them.
- If you hear a lot of incredible statistics, like 99% of customers get their loans modified, be highly skeptical. If they are shouting these kinds of “results” from the rooftops, run for the hills.
- No trustworthy company will tell you to avoid talking with your lender, attorney, or a counselor. You have to ask yourself, “Why would they not want me to speak with my lender or attorney?” They are up to no good, and they want to take your money.
- Fees are always a suspicious topic. First, know that a mortgage relief service provider may not legally charge you an advance fee, unless it is an attorney. (In which case, make sure the provider actually is an attorney. Many scammers falsely claim to be associated with a law firm!) If they are willing to violate the law, they are willing to steal your money. Second, do not pay for any services or any “initial fee” by wire transfer, or by sending cash or a cashier’s check. If you are dealing with a scammer, you will never see that money again.
Seeking Real Relief
It is unfortunate that so many are so willing to prey on distressed homeowners. Fortunately, there are a lot of resources offering legitimate help, and there are a lot of alternatives to foreclosure.
You may consider contacting HUD approved housing counseling agencies near you, or the Homeownership Preservation Foundation, which is a nonprofit organization that may be able to help you with loan modification and foreclosure prevention.
Of course, your servicer can discuss some of your options with you, including a possible loan modification, repayment plan, reinstatement, forbearance, short sale, or deed in lieu of foreclosure. Foreclosure is not in their best interest so they may work with you.
You may want to contact an attorney who can explain other alternatives, such as Chapter 7 or Chapter 13 bankruptcy. Also, an attorney can explain all of your options in a way that you can understand. An attorney can also help you determine which option is right for you, help you prepare for and execute your course of action, and explain any possible effects of each of your options.
If you are struggling with your mortgage, act quickly. The longer you wait, the fewer options you have.
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The FTC has been busy cracking down on mortgage relief scams. Just this year, the FTC has obtained settlements from over 20 individuals and companies involved with scamming distressed homeowners.
Most recently, two individuals and seven companies settled FTC charges that they victimized over a thousand people through “mass joinder lawsuits” and “forensic loan audits.” These defendants allegedly violated the Mortgage Assistance Relief Services (MARS) Rule, which aims to curb deceptive and unfair practices related to such services.
Mass Joinder Lawsuit Scam
The FTC alleges that Sameer Lakhany, Brian Pacios, Precision Law Center, Inc., Precision Law Center LLC, National Legal Network, Inc., and Assurity Law Group, Inc. targeted consumers with a mass joinder scam. The defendants allegedly promised homeowners that they could stop their foreclosures or obtain some other mortgage relief if they joined together to sue their lenders. The defendants represented themselves as a law firm called Precision Law Center and charged between $6,000 and $10,000 in up-front fees. Unfortunately for the victims, every suit was dismissed soon after being filed.
Forensic Loan Audit Scam
Lakhany was also involved in a “forensic loan audit” scam, along with The Credit Shop, LLC, Titanium Realty, Inc., and Fidelity Legal Services LLC; but the defendants allegedly held themselves out as nonprofit organizations with the domain names “FreeFedLoanMod.org,” “HouseholdRelief.org,” and “MyHomeSupport.org.” The forensic loan audit scam sells consumers an auditing service, which supposedly finds lender violations in mortgage documents. In this case, the defendants generally charged nearly $800 up to nearly $1,600 for this service. According to the complaint, the defendants told consumers that lender violations would force lenders to favorably modify their loans and that violations are found at least 90 percent of the time. Allegedly, the audits may have never actually led to a single favorable loan modification for the victims.
As part of the settlements, the defendants are required to surrender many assets and pay $4.75 million redress in total. All but Assurity Law Group, Inc. are banned from mortgage relief and debt relief services, through Assurity will be required to surrender $100,000 in funds and has been ordered to cease any deceptive practices.
Other FTC Settlements
In February, the Ryan Zimmerman, Consumer Advocates Group Experts, LLC, Paramount Asset Management Corporation, and Advocates for Consumer Affairs Expert, LLC settled with the FTC for allegedly preying on consumers using the forensic loan audit scam. The defendants charged nearly $2,000 or more for the audits, but they of course failed to make good on their false claims, allegedly. In addition to a receiving a $3.5 million judgment against them, the defendants have been banned from marketing relief services or products, as well as from making any misleading claims about any other type of product or service.
In January, eight defendants settled with the FTC over charges that they sold fake relief services to distressed Spanish-speaking homeowners over the phone. The defendants include David F. Preiner, Daniel Hungria, Freedom Companies Marketing, Inc., Freedom Companies Lending, Inc., Freedom Companies, Inc., Grupo Marketing Dominicana, Freedom Information Services, Inc., and Haiti Management, Inc. The defendants allegedly collected over $2 million from consumers over three years, but simply did not provide the services they falsely claimed they could provide. As part of the settlement, the defendants received a $2.39 million judgment, are banned from marketing relief products or services, and are prohibited from making misleading claims about anything they may advertise.
You Have Options
There are many options available to struggling homeowners. You can always speak with your servicer, a credit counselor, or an attorney about those options. Any company that offers its mortgage relief services and instructs you to avoid speaking with any of the above is breaking the law. Stop business with them immediately and contact an attorney who can help you with your situation.
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If you are behind in your mortgage or facing foreclosure, you may have been contacted by one or more companies promising to get your loan modified or your foreclosure stopped. Unsurprisingly, all you have to do is pay a hefty, up-front fee. Blanket guarantees such as these—especially with a large advanced sum—smack of dishonesty and should set off your scam alarm. Do not trust these companies, and certainly do not give them any of your money. Read on to learn about two common scams and your rights.
The FTC has been cracking down on many mortgage relief scams, which prey on vulnerable homeowners in financial distress. These relief scams violate the Mortgage Assistance Relief Services (MARS) Rule. Under the MARS Rule, mortgage assistance relief services must comply with the following:
- The company may not collect advance fees
- The company must disclose the amount of the fee
- The company may not tell the consumer to stop communicating with her lender or servicer
- The company may not make false, misleading, or unsubstantiated claims about its services
The company must also disclose up-front that:
- It is not associated with the government or the lender
- The lender may not agree to change the terms of the loan
- The consumer can stop doing business with the company at any time
- The consumer can accept or reject any offer from the lender
- If the consumer rejects the offer, she does not have to pay the company’s fee
These are just some highlights of the MARS Rule. While not every organization and person is bound by the MARS Rule (for example, some attorneys and non-profit organizations are exempt), companies that do not comply with the above requirements are prevalent. Two of the most common scams used by these companies are Forensic Loan Audits and Mass Joinder Lawsuits.
Forensic Loan Audits
Forensic Loan Auditors (also called Mortgage Loan Auditors, Foreclosure Prevention Auditors, Forensic Mortgage Loan Auditors, or some other variation) promise relief for distressed homeowners by auditing their mortgage documents. The companies say that your lender may not have complied with mortgage lending laws, and if that is the case, then you can use their report to avoid foreclosure, modify your loan, cancel your loan, and so on.
Do not believe these companies! There is no guarantee that an audit will do anything for you. Even if there is an error in your loan documents, and even if you sue your lender and win, your lender might not modify your loan. Scammers will lie about what an audit can or will do for you to sell you their services.
Mass Joinder Lawsuits
Many scammers lead homeowners to think that a “mass joinder lawsuit” is the answer to their mortgage difficulties. The homeowners are told that if they join others in suing the mortgage lender, they could stop their foreclosure, get money, or even get the title to their homes. The scammers collect a large advance fee for their “attorney” to review and pursue your case; but the advice, experience, and results are often sorely lacking.
Sometimes, suing your mortgage servicer does make sense, whether suing as an individual or as part of a class action. If you believe you are a victim of mortgage servicing fraud or abuse, a lawsuit may be appropriate. There is a proper way to consider this course of action, and there is a proper way to see it through. These mass joinder lawsuit scams are not the answer. A qualified, experienced attorney can evaluate your specific circumstance and help you make the best decision for you.
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If you are behind in your mortgage or facing foreclosure, you may have been contacted by one or more companies promising to get your loan modified or your foreclosure stopped. Unsurprisingly, all you have to do is pay a hefty, up-front fee. Blanket guarantees such as these—especially with a large advanced sum—smack of dishonesty and [...] The post Protecting Yourself From Mortgage Relief Scams appeared first on AKB.
What the FDCPA is and to Whom It Applies
Are you being contacted by a debt collector? Whether you are behind on payments, or a creditor wrongly thinks you are, you have rights under the Fair Debt Collection Practices Act (FDCPA). Enforced by the Federal Trade Commission, the FDCPA prohibits third-party debt collectors from using particular kinds of collection practices, such as abusive, unfair, or deceptive collection conduct. The Texas Debt Collection Act is similar in many ways to the FDCPA and applies to anyone trying to collect a consumer debt.
Debt collectors may be contacting you about a credit card debt, a car loan, medical bill, mortgage, or any other debt you may have. The FDCPA covers all personal or household debts, but it does not apply to business debts.
Who Are Debt Collectors?
Under the FDCPA, a debt collector is someone, other than the original creditor, who regularly collects unpaid debts. A debt collector could be a lawyer, collection agency, or a company that buys debts and tries to collect them. The FDCPA does not apply to original creditors seeking to collect on their own accounts. But, as mentioned above, many of the protections provided by the FDCPA are also provided by the Texas Debt Collection Act, which does apply to original creditors.
Some examples of debt collectors include:
- Advantage Assets
- Arrow Financial Services, LLC
- Asta Funding Inc.
- B-Line, LLC
- Bluebonnet Financial Assets
- Bureaus Investment Group
- CACH, LLC
- Dan Young
- Ecast Settlement Corp.
- Encore Capital Group
- Equable Ascent Financial
- Global Acceptance Credit Company
- Midland Funding
- NCO Portfolio Management Inc.
- Portfolio Recovery Associates, LLC
- Sherman Financial Group, LLC
- Unifund CCR Partners
A few examples of original creditors are:
- Ally Financial
- American Express
- Bank of America
- Capital One Bank
- Discover Bank
- FIA Card Services
- Ford Motor Credit
- JPMorgan Chase
- Target National Bank
Enforcement of the FDCPA
FDCPA violations are fairly widespread and largely go unreported. If you know your rights, you can fight back when debt collectors violate them. You can sue violators in state or federal court, individually or as part of a class action. You may also file a complaint with the Federal Trade Commission (FTC).
As of February, the FTC brought or resolved seven large debt collection cases within the last year. Four of those involved companies who allegedly used deceptive or abusive collection practices to bully consumers into paying their debts. Three of the seven cases involved collectors who allegedly tried to collect on non-existent debts or debts consumers did not owe to them.
The companies involved in the four cases mentioned include Forensic Case Management Services, Inc./Rumson, Bolling & Associates; Luebke Baker; Goldman Schwartz; and AMG Services, Inc. The alleged activities of these operations are deplorable but unfortunately not uncommon. Just some of the claims include:
- Threatening bodily harm
- Threatening desecration of deceased family members
- Threatening death to pets
- Falsely threatening to garnish wages
- Falsely threatening imprisonment
- Falsely claiming affiliation with law firms
- Using insults
- Charging unauthorized fees
- Masking collector agency identity
Some of these cases continue in litigation, but the FTC has won a $1.1 million dollar judgment and an order banning one collection agency from future debt collection activity.
The other three cases involved American Credit Crunchers, Pro Credit Group, LLC, and Broadway Global Master. In these cases, the defendants allegedly defrauded consumers and collected money that was either not owed or not applied to actual debts. Litigation continues in two of the cases, and the FTC has won a $170,000 judgment in the other.
Additionally, the FTC closed an investigation of RJM Acquisitions, which was collecting on legally unenforceable debt. RJM continues to attempt to collect on the debt, but now the collector discloses to consumers that they cannot be sued on the debt.
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When You Can Be Contacted
Unless you agree to it, debt collectors cannot contact you at inconvenient times, like prior to 8am or after 9pm. If you tell them, in writing, to stop contacting you, they generally must stop contacting you altogether. Also, if they are told they cannot call you at work, they may not contact you in that way.
Who May Be Contacted
Generally, a debt collector cannot discuss your debt with anyone other than you, your spouse, co-signer, executor, administrator, guardian, parent of a minor, or your attorney. However, if you are represented by an attorney for your debt, the debt collector may not contact you, and instead must contact your attorney. They may contact others (usually only once) to obtain information about where you are located, what your phone number is, and where you work. They cannot reveal that you owe a debt or discuss details of the debt, aside from identifying the name of the collection agency, but they may only do that if asked.
Debt collectors are not allowed to harass you. This means they cannot threaten to harm you, use profanity, call you repeatedly to annoy you, publish your name as someone who refuses to pay her debt, or harass you in any other way.
Debt collectors may not make false statements. They may not claim they are an attorney when they are not, use a fake company name, accuse you of committing a crime, lie about the amount of your debt, falsely claim that documents they send you are or are not legal forms, or make any other false statements. Furthermore, they may not send you a document that looks like it is from a court or government agency. They are also prohibited from giving false credit information to credit reporting companies or anyone else.
Debt collectors cannot falsely claim they are going to take legal action against you, like telling you that they will have you arrested. They might claim that they will seize your property, garnish your wages, or take other legal action against you unless you pay your debt. They may not say these things unless they are permitted by law to take those actions and they intend to do so.
Debt collectors must not use unfair practices when trying to collect. They cannot deposit post-dated checks early, contact you by postcard, or try to collect additional charges (such as fees or interest) over your owed amount unless your contract or state law allows it.
A debt collector cannot disregard your payment choices; you have the right to choose which debt you make a payment on. A debt collector cannot apply payment for one debt to another debt that you did not choose to pay. Additionally, the collector cannot apply your payment to a debt you do not believe you owe.
Generally, you may be sued by a creditor or debt collector to collect a delinquent debt. If you lose your case, the court will enter a judgment stating how much you owe and may allow the creditor or collector to secure a garnishment order. This means the creditor or debt collector will be able to direct a third party, such as your bank or employer, to turn over your funds. If your wages are garnished, your employer will withhold part of your pay to satisfy your debts.
Whether your wages can actually be garnished in Texas is a complicated matter. While it is generally the case that wage garnishment is not allowed in Texas, several factors and exceptions need to be considered. Factors include whom the creditor is, who you work for if you have moved, your financial obligations, and how you are paid. Do not trust that your wages are automatically safe in Texas.
While wage garnishment is one possibility, there are many federal benefits that generally cannot be garnished:
- Social Security Benefits
- Supplemental Security Income Benefits
- Veteran’s Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Service Members’ Pay
- Military Annuities and Survivors’ Benefits
- Student Assistance
- Railroad Retirement Benefits
- Merchant Seamen Wages
- Longshoremen’s and Harbor Workers’ Death and Disability Benefits
- Foreign Service Retirement and Disability Benefits
- Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
- Federal Emergency Management Agency Federal Disaster Assistance
Not all federal benefits are immune from garnishment in all circumstances. For example, if you are delinquent on your child support, alimony, student loans, or taxes, your benefits may be garnished.
Garnishment is a serious matter, so contact an attorney immediately if you are facing garnishment. Immediately stopping wage garnishment is possible through bankruptcy. An attorney will help you consider all of your options.
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The post The Basics – Fair Debt Collection Practices Act: Your Rights appeared first on AKB.
Stopping Debt Collection Contact
If you want a debt collector to stop contacting you, you must write a letter to the collector telling them to stop. It is a good idea to send the letter certified mail, return receipt requested and make a copy of the letter. Once you make that request in writing, the collector cannot contact you except to inform you that they are ceasing contact or to inform you that they are going to do something specific, like turn the file over to an attorney or file a lawsuit. While the contact should stop, the collector or creditor can still sue you to collect the debt.
Knowing Your Debt
Debt collectors must inform you, in writing, of how much money you owe within five days after first contacting you. This “validation notice” must list the name of the creditor you owe and inform you what to do if you do not believe you owe that money. If you send a letter denying you owe some or all of the money, or if you ask for a verification of the debt, the collector may not contact you again (except to inform you of the actions listed in the section above). This letter must be sent within 30 days of receiving the validation notice, and it is effective until the collector responds with written verification of the amount you owe.
Can You Sue?
If you believe debt collectors have violated your rights under the FDCPA, you may sue them in state or federal court within one year from when the violation occurred. If you win, you may recover actual damages you can prove you suffered. Even if you cannot prove damages, you may be awarded up to $1,000. You might also recover attorney fees and court costs. Know that winning a suit for a collector’s violation of the FDCPA has no affect on your debt if you owe it.
In Texas, if anyone trying to collect a consumer debt has harassed or deceived you, they have not only violated the FDCPA and the Texas Debt Collection Act, but they have also violated the Texas Deceptive Trade Practices/Consumer Protection Act. This allows the Attorney General to take action in the public interest.
You can and should also report debt collection violators to the FTC and the Attorney General of Texas. Whether you should sue should be a decision you make after consulting with an experienced attorney.
Will You Be Sued?
Under Texas law, a creditor or debt collector cannot sue you for debts over four years old; it is ten years under the FDCPA. However, they can still contact you to attempt to collect it. So, if you are threatened with a lawsuit over “time-barred” debt, or if you are in fact sued over such debt, talk to an attorney about your options. Obviously, you will want to defend yourself in a lawsuit with an experienced attorney. If you are simply being contacted about time-barred debt, still consider talking to an attorney. You have options, and an attorney can explain the pros and cons of each of them, and help you decide what is best for you in your situation.
If you are sued to collect on a debt you allegedly owe, make sure you respond to the lawsuit, no matter what. You will lose the opportunity to fight for your rights if you do not respond on time. You do not want your wages garnished simply because you failed to respond. An attorney is best able to evaluate your situation, explain your options, and help you follow through with the best course of action.
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