Bankruptcy Law, Debt Collection

Understanding the Fair Debt Collection Practices Act (FDCPA) 

Facing debt collection is stressful and there are laws in place to protect consumers.  Debt collectors can be persistent, even to the point of becoming harassing and threatening at times. However, it is vital that consumers facing collections actions realize that they do, in fact, have rights, and these rights fall largely under the Fair Debt Collection Practices Act (FDCPA). 

The FDCPA was signed into law in 1978. The law designates what type of behavior is acceptable by debt collectors and what type is considered abusive and unethical.  The law was created to curb tactics that had largely gotten out of control by companies engaging in debt collection.  

The FDCPA is federal law intended to protect consumers against actions by third-party debt collectors that have become harassing, abusive, and threatening. Collectors who are found to have violated the FDCPA can face severe penalties for violating the law. 

This law specifically deals with third-party debt collectors and not necessarily the original creditors on the debt. By the time a debt has been sold to collections, the lender or creditor has already exhausted his or her options at contacting the consumer to see what the amount has not been paid. In order to receive some type of payment on the amount owed, many lenders will hire the services of a third-party debt collection agency to take over efforts to contact the consumer.  

Many times, debt collectors will not receive payment from the lender until they are successful in getting payment from the consumer. When a consumer receives a communication from a debt collector, it is usually recommended that he or she obtain information to validate the debt, which can include the amount owed and the name of the original creditor, as well as information on how the debt can be disputed. Collectors are legally required to provide this information within 30 days when it is requested by the consumer. 

Debt collectors have earned the reputation of being aggressive when communicating with consumers. Many times, they will use any type of techniques possible to convince the consumer to pay, including scaring him or her into believing that his or her property will be repossessed if the person fails to pay or alluding to the fact that legal action will result in the event payment is not made.  Invoking fear in the mind of consumes is a common tactic used by collectors, although in an unethical manner. The FDCPA prohibits collectors from making statements such as these if they do not have the legal authority to do so.  

Collectors will also be persistent in calling continually throughout the day, trying to wear the consumer down into making payment. However, the FDCPA provides specific rules on when collectors can call and when calls are off limits.  

The FDCPA also prohibits debt collectors from providing information to third parties connected to the consumer regarding the debt collection action, other than to inquire as to how to reach the consumer. If a collector is calling the individual to the point where it becomes harassing, he or she has the right to demand the communication cease per the rules of the FDCPA. If the communication continues at that point, the consumer can resort to legal action for damages caused by the harassment under the FDCPA.     

Please click here to read more.  

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.   

Bankruptcy Law, Credit Card Debt, Debt Collection

Important Tips to Know about Credit Card Debt Forgiveness

Credit card debt plagues so many today. Even with the economic stimulus relief, some consumers are having to utilize credit cards to make ends meet. Escaping the load of credit card debt can seem like an impossible feat. Whenever someone offers a way out or credit card debt forgiveness, it can be easy to jump to accept the offer. The problem is credit card debt forgiveness can be more complicated than simply having the debt forgiven.   

Not All Debt Forgiveness Strategies Are Equal  

Credit card debt is forgiven usually from two strategies, namely debt settlement or bankruptcy. Many consumers try a third strategy, which involves ignoring the amount owed until the statute of limitations has passed for collecting on the debt.  However, the damage that can result to the consumer’s credit score as a result of this failed strategy make it often not worth the wait.  

Patience Is Required  

Debt settlement is not an immediate process. The debt settlement process involves working and negotiating with the creditor or collection agency, if the debt collection process has gotten to this point. The longer the consumer waits to work with the creditor, the harder his or her credit will be hit, especially if the account moves from delinquent status to “in default” or “collections.” It can take several months or even longer to work with the creditor or collection agency on negotiating the settled amount. For this reason, many consumers choose to hire a debt relief company, so long as the company is reputable and does not require the consumer to charge fees upfront. 

Credit Score Damage 

Both credit card debt settlement and bankruptcy will affect the consumer’s credit score. By the time the consumer has gotten to the point of settling or forgiving the debt, however, the damage has already been done. Missing payments, having accounts go into default, and being on the receiving end of a collections case will also hurt the consumer’s credit score, just as much if not worse than bankruptcy or debt settlement.  

The consumer’s credit score can rebound with good financial habits after the matter is finalized. Eventually, the bankruptcy case or debt settlement will fall off the person’s credit report, too. Debt settlement will stay on the consumer’s credit history for seven years while bankruptcy cases will stay for ten years.  

Legal Assistance May Be Needed 

Many consumers do not feel equipped to handle the negotiation process alone, especially if they decide to pursue bankruptcy. Whether it be a Chapter 7 or Chapter 13 case, an experienced Miami bankruptcy attorney can guide the consumer as to the wisest choice for him or her.

Alternative Methods

If the consumer does not want to pursue debt settlement or bankruptcy, other methods can be used to pay down the debt, including the snowball and avalanche methods.  Both accomplish the same goal of eventually paying down the debt through prioritizing certain debts over others.  The snowball method focuses on paying off the consumer’s smallest balance first before paying down the one with the next smallest balance until all credit cards are paid in full. Alternatively, the avalanche method starts with paying off the credit card with the highest interest rate first and continuing this trend with other cards until all are paid in full.   

Please click here to read more.  

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.   

Bankruptcy Law, Kingcade Garcia McMaken

What to Look for When Choosing a Bankruptcy Lawyer

Making the decision to file for bankruptcy can be a difficult one, but having the right bankruptcy attorney in your corner can make the process a seamless one. It helps to do your research, not only online but in person, too. The following tips can help someone who is considering filing for bankruptcy choose the best attorney for the job.

Experience Matters

Many people will start their search on the Internet, looking online to find a bankruptcy attorney. Experience is one factor that should always be considered when choosing an attorney. Experience does not just mean years practicing law. It is important to find someone who has filed cases in bankruptcy court and handles bankruptcy matters regularly. It helps a great deal to find someone who focuses his or her practice solely on bankruptcy law and who handles the specific type of bankruptcy the filer is pursuing instead of a general practice attorney who handles a little bit of everything. Many attorneys will handle only Chapter 7 bankruptcy cases, while others will handle corporate bankruptcies, restructuring and reorganization.

Bankruptcy Law, Debt Collection

Can a Debt Collector Try To Collect on Debts Discharged in Bankruptcy?

A bankruptcy discharge gives a person a fresh financial start, freeing him or her from the stress of collection calls and aggressive debt collection practices. However, the fact that a debt has been discharged successfully in a bankruptcy case does not necessarily mean debt collectors will still not try and attempt to pursue collection of the debt. What happens in these situations?  

Under the U.S. Bankruptcy Code, a discharge is a permanent court order that prohibits creditors from pursuing any type of collection on discharged debts. These prohibited actions include filing legal cases to collect on the debt, as well as communications with the consumer via personal contacts, letters, and phone calls. Essentially, the discharge in a Chapter 7 or Chapter 13 bankruptcy case relieves the filer from any personal responsibility to pay off the debt.  

Not all consumer debts are dischargeable in a bankruptcy caseCertain debts are prohibited as a matter of public policy from being discharged, including government-backed student loans, child support, alimony, tax debt, and any debts incurred because of improper or illegal behavior.  Creditors for these debts can continue collecting on them even after the bankruptcy case is finalized.  

Once the bankruptcy discharge is granted, any creditors on debts that were a part of the final order are notified by the court that the debts owed to them have officially been discharged and that they will be in contempt of court if the creditor continues to collect on them. Even if, for some reason, a creditor is left out of the notice and never receives the paperwork from the court, he or she is still bound by the discharge order.  

Some debt collectors can be persistent and may continue to contact the consumer. Other creditors may argue they are not bound by the court’s order even though they are, making false claims in hopes they will fool the consumer. 

If this happens, it is best to report the debt collector to the bankruptcy court.  Depending on the communications, the collector could face sanctions from the court for violating the discharge order. These sanctions could involve payment of damages to the consumer, as well as attorney fees.   

Please click here to read more. 

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.   

Bankruptcy Law, Credit Score

When Can I Apply for a Credit Card after Bankruptcy?

The type of bankruptcy can affect how soon someone can apply for a credit card after bankruptcy. A Chapter 7 bankruptcy case allows the consumer’s debts to be discharged fairly quickly, within a few months, after non-exempt assets are liquidated and used to pay off the filer’s debts.

A Chapter 13 bankruptcy case takes longer than a Chapter 7 case since it involves a three-to-five-year long repayment plan where the consumer works with the bankruptcy trustee on paying down qualifying debts while discharging what is left at the end of the repayment period.

Bankruptcy Law, Credit Score

Tips for Rebuilding Credit After Bankruptcy

Sometimes people hold off filing for bankruptcy for fear of what it will do to their credit and financial future. While filing for bankruptcy will impact a person’s credit score, this damage is not irreparable. In fact, with good financial habits a consumer can rebuild his or her credit to better than it was before filing for bankruptcy. 

After the consumer’s debts are discharged at the end of a bankruptcy case, it is recommended that the consumer monitor his or her credit report to ensure that any outstanding or past-due balances are reported as zero if they have been successfully discharged. If any discrepancies are found, these errors should be reported right away to the credit bureaus via a formal dispute.  

Bankruptcy Law, COVID-19, Medical Debt, student loan debt

Bankruptcy Reform Bill Proposed that will Discharge Student Loans and Medical Debt

The Medical Bankruptcy Fairness Act of 2021 was unveiled by Democratic Senators this week in response to the economic impact of the Covid-19 pandemic. The bill would make substantial reforms to the current bankruptcy code, making it easier for those struggling with student loan debt and medical debt to discharge the same in bankruptcy.

Currently, the bankruptcy code treats student loan debt differently from other types of consumer debt. Borrowers must show they meet the ‘undue hardship’ requirement in order to discharge their student loan debt in bankruptcy.

Bankruptcy Law

How Often Can a Person File for Bankruptcy?

If you have filed for bankruptcy protection in the past and have found yourself facing financial trouble again, it is possible to file for bankruptcy a second time.  In fact, approximately eight percent of bankruptcy filers end up needing to file again at some point. Ultimately, how often someone can file for bankruptcy protection depends on the type of case he or she filed initially, as well as how much time has passed since that first case.  

One of the more commonly used forms of consumer bankruptcy is the Chapter 7 bankruptcy also known as a “liquidation” bankruptcy. This form of bankruptcy lasts a few months, allowing the filer to work closely with the bankruptcy trustee to sell any nonexempt assets to pay off qualifying debts. At the end of the case, the remainder of the filer’s debts, which are usually credit cards or other unsecured debts, are discharged. A Chapter 13 bankruptcy is another form of consumer bankruptcy, also known as a repayment or reorganization bankruptcy. In a Chapter 13 bankruptcy, the filer works with the bankruptcy trustee on a repayment plan, which lasts anywhere from three to five years, where the person pays off his or her debts, liquidating what is left at the end of the case.  

Bankruptcy Law

How Will Filing For Bankruptcy Affect My Spouse?

Filing for bankruptcy when someone is married can be a joint process, or it can be done by only one spouse proceeding with the case. Ultimately, it depends on the type of debt and the financial situations for both spouses. For example, if one only spouse owes a specific debt or debts, then that spouse may be able to proceed on a bankruptcy alone, especially if the other spouse has good credit and very few other debts. Proceeding with a single bankruptcy case while married can be complicated, and in certain situations, it can adversely affect the non-filing spouse, but not always 

Joint Debts

In any marriage, parties bring in their own, individual debts, and debts are almost always incurred during the marriage, as well. One spouse may choose to take out a loan, not naming the other spouse on the debt, which means only the spouse whose name is on the debt is responsible for what is owed. If that spouse is not able to continue making payments on the debt, he or she can proceed with a bankruptcy to discharge that debt. If the debts listed in that bankruptcy case belong to the filing spouse alone and not the non-filing spouse, discharging the filer’s debts and liabilities should be a straightforward process. It becomes more complicated if any of the debts listed in the bankruptcy case belong to the non-filing spouse. In these situations, these joint debts will normally remain with the non-filing spouse. 

Bankruptcy Law

How to Know which Type of Bankruptcy is Right for You

Making the choice to file for bankruptcy is not an easy decision to make, but it is the first step towards a financial fresh start. However, choosing which type of bankruptcy to pursue can be a difficult decision to make.  

Typically, consumers choose between a Chapter 7 “liquidation” bankruptcy or a Chapter 13 “reorganization” bankruptcy. Both forms of bankruptcy have their positive attributes, as well as their negative ones, and it ultimately depends on the consumer’s financial situation and the goals he or she wants to achieve as to which type of consumer bankruptcy will be best for him or her.