Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

Florida Sees a Sharp Increase in Foreclosures

Posted on June 21, 2019by Admin

While the nation is seeing a drop in the number of foreclosures, Florida is seeing the opposite. For the 12^th month in a row, Florida has seen a double-digit annual increase in foreclosure filings.

These figures come from a study published by ATTOM Data Solutions, which reviewed foreclosure starts from May 2018, comparing these figures to those reported in May 2019. On a national scale, foreclosure filings were down nine percent when compared to figures from May 2018. Florida, on the other hand, saw an increase in foreclosure starts of 23 percent when compared to the previous year.

As of May 1, 2019, one in every 1,238 homes had a foreclosure filing in Florida. These numbers are the third highest in the country, behind New Jersey and Maryland. Of the metropolitan areas in Florida, Jacksonville reported the second highest foreclosure rate, reporting that one in every 764 homes were involved in some stage of foreclosure proceedings.

Since January 2019, these numbers have been increasing incrementally. One of the contributing factors for these high foreclosure numbers has to do with the fact that while the cost of living in Florida has gone up, wages have stayed stagnant for several years. Not only have the cost of purchasing a home gone up, but so have insurances and taxes that come with owning a home.

Other factors leading to higher foreclosure rates could have to do with natural disasters that hit the sunshine state more than others, namely hurricanes. Depending on the severity of the storm, homeowners could lose their jobs or even their homes after a hurricane. Insurance can also skyrocket following a natural disaster, also making it difficult for the person to maintain payments on the home.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resources:

https://miami.cbslocal.com/2019/06/17/florida-bucks-trend-sees-increases-in-foreclosures/

U.S. Supreme Court Issues Ruling Setting Sanctions for Bankruptcy Debt Collections

Posted on June 20, 2019by Admin

The U.S. Supreme Court issued a ruling this week that would hold creditors in contempt and face serious civil penalties if they attempt to collect on a debt that was canceled in a bankruptcy case. The ruling came out Monday, following an appeal from the U.S. Ninth Circuit Court. The Justices unanimously ruled that a court may hold a creditor in civil contempt if it is found that the creditor’s collection of the old, discharged debt is “objectively unreasonable.”

The fact that this ruling came as a unanimous decision is a win for consumers and provides a set standard for cases in the future. This case was an appeal from a circuit court ruling that found that creditors should be given some amount of leniency, even when it is unreasonable for them to believe that the bankruptcy discharge order is not applicable to the debt they are trying to collect.

The legal standard adopted by the Supreme Court was originally advocated by the U.S. Department of Justice. Justice Stephen Breyer penned the unanimous decision where he wrote that “a court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct.”

Since the Supreme Court sets the standard all lower courts must follow, this rule now provides a test judges can use when facing cases involving debt collectors who are continuing to collect on a debt after it has been discharged in bankruptcy. Therefore, all courts will need to review future claims under the question of whether there exists a “fair ground of doubt’ as to whether the creditor’s conduct might be considered lawful under the bankruptcy discharge order.

Up until this time, courts, including the Ninth Circuit, followed the good-faith standard, which allowed for these types of collections if the creditor was said to be collecting on the debt in “good faith.” The standard was extremely subjective and creditor friendly.

Justice Breyer clearly stated that this standard is meant to be an objective one and not a subjective standard. Courts are to review the facts of the case as to whether the violation was done on an objectively unreasonable understanding of the bankruptcy court’s discharge order.

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.

Related Resources:

https://www.courthousenews.com/supremes-set-sanctions-rule-for-bankruptcy-collections/

Debt Relief, student loan debt, Student Loans, Uncategorized

$5.3 Million in Student Loan Debt Canceled as Part of the ITT Tech National Lawsuit Settlement

Posted on June 19, 2019by Admin

Hundreds of Pennsylvania students who attended the now-bankrupt ITT Technical Institute will receive $5.3 million in student loan debt relief as part of a national settlement. Pennsylvania Attorney General Josh Shaprio said 570 former ITT students will have their student loan debt canceled as part of a multi-state settlement.

“With the private student loan program that ITT and CUSO established, ITT Tech was able to take advantage of thousands of hardworking students who were simply trying to complete their education,” Shapiro said in a statement.

The national settlement provides $168 million for more than 18,000 students harmed by abusive lending practices. ITT Tech targeted “low income” students who could not afford to pay tuition out of pocket and relied on federal loans to pay for school, according the settlement. A coalition of 44 states reached a settlement with Student CU Connect CUSO LLC, which was managing the loans for ITT.

ITT Tech had more than 136 campuses in 38 states when it shut down in September 2016. This $600 million settlement cancels all the student loan debt owed to the school.

The agreement specifically deals with student borrowers who attended ITT Tech between the years 2006 and 2016. The settlement also returns $3 million to students who made payments on their loan to the school after the school’s parent company, ITT Educational declared bankruptcy in 2016.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all 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, Debt Relief, Timothy Kingcade Posts

What to Do if Your Medical Bill Gets Sent to Collections

Posted on June 18, 2019by Admin

Medical debt is an issue that plagues many Americans. It only takes one major medical crisis to set a person back hundreds, even thousands of dollars. According to the Kaiser Family Foundation, one in every three Americans report having difficulty paying their medical bills. As a result, a number of these individuals end up having their medical bills go into collections.

If you are one of the millions of Americans struggling with medical debt, remember you are not alone, and you do have options.

Negotiating a Settlement with Service Provider or Debt Collector.

If the debt has not been officially sent to a third-party debt collector but is being collected by the original service provider, the consumer can often work directly with that company to negotiate either a payment plan or settlement of the debt owed. The same could be said for if the debt has been sent to a third-party debt collector, although the entity contacted to negotiate on the debt will be different. This settlement can be done through three different possible methods including:

Reduced lump sum payment;
Percentage of debt payment;
Payment plans.

A lump sum payment is a common method used so long as the person has enough money to pay a large amount. The debt collector often would rather have some level of payment rather than nothing at all, so they will often take a lump sum payment to close the account, although the amount owed may be slightly less than what is paid. Many times, this method is preferred because the creditor or debt collector would rather receive a large lump sum of money immediately instead of keeping the negative account on the books or having the consumer file for bankruptcy where the debt would be discharged.

While very similar to a lump sum payment, some creditors will accept a specific percentage to pay off the debt, such as 25 to 30 percent, while forgiving the remainder owed. However, this type of settlement depends heavily on the balance. If someone owes a small balance, the percentage the creditor will accept may be much higher than the percentage of a large balance. Additionally, if the person is suffering from a financial hardship, the creditor may be more willing to work with that person on a percentage payment. Also, if there is a strong threat of bankruptcy, the creditor may accept a lower payment rather than get nothing through a bankruptcy discharge.

Many medical providers will work with the account holder on payment plans if they are not able to pay the bill off in full right away. However, these agreements need to be worked out timely and not after missing several payments, causing the account to go into default. Both parties must agree on an amount and the terms of the payment plan.

Get any Agreement in Writing.

Whatever settlement is worked out between the creditor/collector and consumer, it is important that this agreement be documented in writing. Without a firm commitment on the amount agreed upon, the consumer will have nothing to hold the collector to in the event they dispute the arrangement. It also gives the consumer something legally enforceable in the event the agreement falls through.

Payments Made but Still Sent to Collections.

The unfortunate fact is even if the consumer is making payments on the debt, the unpaid balance can still be sent to collections. Ultimately, it is a business decision that is made by the medical provider (i.e. – doctor’s office, hospital or dentist). How they handle the account depends on many factors, including how large the balance is, how much is being paid monthly, and how long it will take to finally pay off the amount owed. For example, if the individual owes $15,000 and is only making $10 per month payments, the provider may ultimately find that this is not going to work and could send the claim to collections, even though the $10 monthly payments are being made. This action can be much harder to accomplish if the parties have a written payment agreement, which is why it is extremely important that the payment arrangement be in writing.

Refusal of a Payment Plan.

It is always possible that a medical provider will refuse a payment plan. They are not legally obligated to work with the customer on a payment arrangement. For the most part, medical providers will work out payment arrangements out of goodwill, but if the person asking for the payment plan has failed several times before, they are not legally obligated to work out an agreement. The same goes for a collection agency. However, collectors do often work on commission, and because of this, they will often accept a payment plan that will pay off the obligation quickly, closing the account, and getting them paid.

How Medical Debt is Handled in Bankruptcy.

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing. Making the decision to file for bankruptcy is never an easy one. It can be difficult to get past some of the myths associated with filing for bankruptcy. Sometimes by waiting, an individual facing a lot of debt can find himself or herself in an even worse situation. Filing for bankruptcy can help protect valuable assets, including your home, car, IRA and social security. It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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, P.A. 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.

Related Resources:

https://www.inquirer.com/health/consumer/challenge-medical-bill-debt-collection-tips-20190610.html

https://www.growingfamilybenefits.com/negotiate-medical-bills-settle/

Foreclosures

How to Purchase a Home After Foreclosure

Posted on June 17, 2019by Admin

One of the biggest fears people have after going through a foreclosure is how it will hurt their chances of purchasing a home again in the future. While the effects of foreclosure can be far-reaching, it does not mean that all hope is lost for that person ever owning a home, again.

What Are the Consequences of a Foreclosure?

A foreclosure can affect different aspects of a person’s life. It can make finding and purchasing a new home more difficult. Many consumers also suffer from the hit their credit scores take from a foreclosure. Some can be hit with a surprise tax bill following a foreclosure. Even more pervasive are the emotional effects that come with a foreclosure. Our Miami foreclosure defense attorneys fight for homeowner rights, help alleviate these concerns and get you back on track financially.

Rebuilding Credit

Following a foreclosure, a consumer should expect to see his or her credit take a significant hit. If that person wishes to purchase a home or car in the future, it is important that he or she works to rebuild his or her credit so that the consumer can get loans with decent interest rates in the future. Credit can be rebuilt, although it takes time and effort. The first step is to review your credit report. Consumers can get free copies of their credit reports from each of the three major credit bureaus annually. Reviewing your credit report gives you a chance to monitor your progress when it comes to improving your credit score. It can also help with making sure that no mistakes exist on the report that could hurt the consumer later.

It may seem counter intuitive, but credit can be rebuilt through using a credit card. Many consumers find success in using a secured card initially after a bankruptcy or foreclosure, which requires a deposit be paid by the cardholder. Many banks offer secured credit cards for their customers. The deposit for the card usually limits how much the person can charge on the account, but secured cards are not normally meant for the long-term. They can help a person establish a credit base before transferring to a regular credit card with a lower interest rate. If the consumer uses a credit card, it is important to ensure that the balance does not get out of control. Make sure payments are made on time. Many financial experts recommend that consumers pay their balances off in full every month to boost their credit scores.

Financing a Home

Lenders normally require a certain period of time pass after a consumer goes through a foreclosure. A mandatory waiting period for a conventional mortgage is usually seven years. However, a consumer may be able to get a mortgage sooner than seven years, depending on that person’s life circumstances and the type of mortgage he or she wants. Fannie Mae does allow a shortened waiting period of three years if the purchaser can show that the foreclosure was due to circumstances beyond his or her control, such as a sudden job loss, death in the family resulting in loss of income, or major medical crisis. The requirements for obtaining a three-year waiting period are much stricter and do require a larger down payment.

Another option is an FHA loan for consumers wishing to purchase a home after foreclosure or bankruptcy. The minimum time period between foreclosure completion to purchasing a home is three years. If extenuating circumstances exist, it is possible to request an even shorter waiting period, although these situations are rare. FHA borrowers do need to show that they have been exercising good financial habits since foreclosure to qualify for the loan, demonstrating that they are not a financial risk to the lender.

If the borrower had his or her mortgage discharged through bankruptcy instead of foreclosure, the waiting period is shorter. Fannie Mae guidelines allow a lender to approve a new mortgage for someone who had their mortgage discharged in bankruptcy to receive a new loan after four years or two, with extenuating circumstances.

Related Resources:

https://www.bankrate.com/mortgage/life-after-foreclosure/

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

What You Can Do if a Creditor Is Harassing You

Posted on June 14, 2019by Admin

The business of debt collection can be intense and stressful for the person on the receiving end of the call. Debt collectors can be relentless and will stop at nothing to reach the person owing the debt. However, consumers do have rights, and it is important that they be aware of what those rights are in the event they are on the receiving end of creditor harassment.

Fair Debt Collection Practices Act

Consumers are protected from abusive and unfair debt collection practices through the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides rules that third-party debt collectors must follow when they contact consumers to collect upon the debt.

The following acts are specifically prohibited under the FDCPA:

Repetitive phone calls from the debt collector with the intent to annoy, harass or abuse the person answering the phone;
Using profane or obscene language when communicating to collect the debt;
Threatening physical violence against the person answering the phone;
Using deception or misleading collection practices, including lying about how much is owed and that the person calling is an attorney when he or she is not; and
Making any threats to do something that either the debt collector has no intention of doing or does not have the legal right to do.

The consumer has the right to send a letter to the debt collector informing them that they must cease and desist communication with the consumer due to their violations of the FDCPA.

Depending on how extensive the abusive tactics and harassment are, the consumer can sue the debt collector under the FDCPA. This lawsuit can include damages, as well as the consumer’s attorney’s fees for having to file the case. Damages can be even more extensive if the debt collector ignores the consumer’s written cease and desist letter and continues the abusive tactics.

Tactics to Keep in Mind

Keep in mind that these debt collectors are highly skilled at antagonizing the person on the other end of the phone. Do not fall prey to their tactics of intimidation and fear. They usually record these conversations in hopes that they can get the person to say something that will incriminate them or tie them to the debt. Whatever you do, stay calm but firm, and keep the communication brief.

It helps to keep records of these conversations and contacts in the event the consumer does wish to file an FDCPA claim. The more letters, text messages, emails and phone calls that are made and recorded, the stronger the consumer’s case will be. When talking with a collector, be sure to get that person’s name, the name of the company for whom he or she works, and a call back number.

One recommendation that could also help the consumer’s case is to ask for written verification of the debt. Never assume that the collector is providing accurate information. Once this information is requested, the collector has five days from the initial contact to provide this verification including the following information:

The amount of the debt;
The name of the original creditor;
Information showing that the person has 30 days to dispute the validity of the debt.

If any inaccurate information is provided by the debt collector, this could be used as further proof that they are exercising unethical debt collection practices under the FDCPA.

Related Resources:

https://www.thebalance.com/how-to-stop-debt-collector-harassment-4107936

https://www.consumerfinance.gov/ask-cfpb/what-is-harassment-by-a-debt-collector-en-336/

Bankruptcy Law, Debt Relief

Sky-High Insurance Deductibles and Drug Prices Leave Sick Americans with No Recourse

Posted on June 13, 2019by Admin

As more employers lean towards offering their employees high deductible medical insurance plans, the cost of medical care is quickly becoming something many Americans cannot afford.

Insurance deductibles are not the only aspect of medical care that has skyrocketed in recent years. Drug prices have more than tripled in the last 12 years. Americans spend an average of $1,350 a year on prescription medication alone. If a patient is suffering from a chronic medical condition, such as diabetes, that cost is even more.

According to a recent study by Callaghan, Americans who took multiple sclerosis medications for their condition paid an average of $3,708 per year out of pocket for their medication. This same medication only cost $244 on average 15 years ago, which goes to show how much costs have gone up over the years.

The fact of the matter is being sick in America is more expensive now than ever before. Another study by Milliman, a national healthcare consulting firm, found that the average patient fighting lymphoma paid $3,700 in the 12 months immediately following the diagnosis. If the diagnosis was acute leukemia, the cost was more than $5,100 for medication treatment.

Someone can be financially stable and relatively healthy, only to receive a devastating cancer diagnosis, something that will not just hurt him or her physically and emotionally but financially, as well. According to the Hutchinson Institute for Cancer Outcomes Research in Seattle, cancer patients were twice as likely to file for bankruptcy. That diagnosis can easily set a person back hundreds of thousands of dollars, depending on their insurance coverage and the types of treatment required.

High deductible health insurance plans often put the patient in a tough financial spot, even if the person has basic health needs to meet, let alone a chronic condition that requires the person to regularly take medication. In some Western European countries, such as France and Britain, they have national healthcare systems that limit cost sharing for patients with certain chronic conditions. These systems make these prescription drugs available at no cost to the patients. However, the U.S., which has a federal law that prohibits high deductible insurance plans from exempting payment for these services. Patients have no choice but to pay for them in full until they reach their deductibles, which can be thousands of dollars later.

The result is many patients who have serious chronic medical conditions will not follow medical advice and will delay or even refuse treatment for fear of the cost that comes along with it. If someone is seriously injured and needs to receive emergency treatment, he or she may decide not to call 911 if that person has a high deductible plan. No matter how deep the savings may be in the patient’s health savings account, that one medical crisis could completely deplete that account, forcing the patient to charge these services or default on them in the event he or she cannot pay for them.

A recent national poll conducted by The Times found that American consumers who live in a household where someone has a chronic medical condition are twice as likely to have to cut spending on household expenses to pay for medical care. In fact, one in eight American workers who lived in a household where someone was chronically sick had to declare bankruptcy due to their medical bills. This same study showed that sick Americans were more likely to use less healthcare when their insurance plans required them to pay more out-of-pocket.

How is Medical Debt Handled in Bankruptcy?

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing. Making the decision to file for bankruptcy is never an easy one. It can be difficult to get past some of the myths associated with filing for bankruptcy. Sometimes by waiting, an individual facing a lot of debt can find himself or herself in an even worse situation. Filing for bankruptcy can help protect valuable assets, including your home, pension, IRA and social security. It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.

Related Resource:

https://www.latimes.com/politics/la-na-pol-health-insurance-sick-patients-high-bills-20190606-story.html

Bankruptcy Law

Miami Bankruptcy Attorney Timothy S. Kingcade Named a Florida Super Lawyer 6 Consecutive Years

Posted on June 11, 2019by Admin

Managing Shareholder, Timothy S. Kingcade of the Miami-based bankruptcy and foreclosure defense law firm of Kingcade Garcia McMaken has been selected for inclusion in Florida Super Lawyers 2019, in the practice area of consumer bankruptcy. This is the sixth consecutive year Kingcade has been selected to the Florida Super Lawyers list (2014-2019). The prestigious honor is awarded to only five percent of lawyers in the state.

Attorney Kingcade practices exclusively in the field of bankruptcy law, handling Chapter 7 and Chapter 13 filings for the Southern District of Florida. As an experienced CPA and proven bankruptcy attorney, Timothy Kingcade knows how to help clients take full advantage of their rights under the bankruptcy laws to restart, rebuild and recover.

Super Lawyers is a listing of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement, representing the top 5 percent of Florida lawyers. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

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Miami-based Kingcade Garcia McMaken, P.A. was established by managing partner and bankruptcy attorney, Timothy S. Kingcade in 1996. The firm represents clients throughout the State of Florida in Chapter 7 bankruptcy and foreclosure defense cases. The firm is committed to providing personalized service to each and every client, clearly explaining the options according to the unique circumstances of his or her life. The office environment and the service provided are centered on a culture of superior client care for the financially disenfranchised. All partners and associates at Kingcade Garcia McMaken, P.A. specialize in consumer bankruptcy and foreclosure and have dedicated their practices to this area of the law. Additionally, all attorneys and staff members at the firm are bilingual speaking Spanish.

Bankruptcy Law

Kristina Gonzalez of Kingcade Garcia McMaken Named a 2019 “Rising Star” by Florida Super Lawyers

Posted on June 11, 2019by Admin

Attorney Kristina Gonzalez of the Miami-based bankruptcy and foreclosure defense law firm of Kingcade Garcia McMaken has been selected for inclusion in Florida Super Lawyers 2019 as a Rising Star in the practice area of consumer bankruptcy.

The list recognizes the top up-and-coming attorneys in the State of Florida, who are 40 years of age or younger, or those who have been practicing law for 10 years or less. A select group of 2.5 percent of attorneys are named to the prestigious Rising Stars list.

Gonzalez has been licensed to practice law in the State of Florida since 2011. She is a graduate of the University of Florida Levin College of Law and practices exclusively in the field of consumer bankruptcy law, handling Chapter 7 and Chapter 13 filings for the Southern District of Florida.

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Debt Relief

Senators Take Action Against the New FDCPA Proposal

Posted on June 11, 2019by Admin

A number of United States Senators are calling on the Consumer Financial Protection Bureau (CFPB) to reconsider a recent proposal made that would allow debt collectors to contact consumers via unlimited texts and emails, as well as increasing the amount of times they can call consumers per week.

More than 20 senators signed a letter issued to the CFPB, specifically expressing concerns they had to the proposed update issued to the Fair Debt Collections Practices Act (FDCPA), which would give debt collectors additional ways to reach consumers who owe on a debt.

The letter was penned by Senators Bob Menendez, D-NJ, and Sherrod Brown, D-Ohio, as well as 19 Democratic and two Independent lawmakers. Several 2020 presidential candidates signed the letter, including Senators Kamala Harris, Kristin Gillibrand, Cory Booker, Bernie Sanders, and Elizabeth Warren.

The letter was specifically directed to the current CFPB Director, Kathleen Kraninger.

The main concern has to do with the fact that these changes seem to divert the FDCPA away from what it was originally intended to do, which was to protect consumers from harassment and unfair debt collection practices by third-party debt collectors. The FDCPA includes provisions to limit the time of day a debt collector may call a consumer, as well as the content expressed by the collector in the communications. Specifically, the FDCPA prohibits the following behavior from debt collectors:

Calling you prior to 8 a.m. or after 9 p.m.;
Calling you at work once you tell them not to;
Calling your family, friends and neighbors;
Threatening you with possible debt collection lawsuits;
Threatening you with criminal prosecution or immigration actions;
Talking to you abusively or profanely.

However, this new proposal was made with the mindset that consumers are reachable more easily through email or text messaging. Since these types of communications could be done at any time of the day or night and could be unlimited per the proposal, this could allow collectors to overwhelm consumers with communications. The senators expressed concern with the fact that not all consumers have unlimited text messaging, which means these communications could come at a high cost.

The new proposal does limit the time in between calls made by debt collectors. While the emails and text messages can be unlimited, collectors are limited to seven calls a week per debt. If they reach a consumer once, they must wait at least a week to call the consumer again. Click here to read the proposed changes in full.

Related Resources:

https://www.usatoday.com/story/tech/2019/06/06/debt-collection-senators-write-cfpb-letter-objecting-proposal/1361365001/