Los Angeles Bankruptcy Lawyer Blog

In what is being lauded as a victory for everyone facing Los Angeles bankruptcy, a large consumer debt buyer has been ordered to pay a $2.5 million fine for a number of misrepresentations while trying to go after old debt.

Asset Acceptance is a company that purchases overdue debt from creditors such as banks, credit card companies, fitness clubs and more. Asset Acceptance then hounds those who owe.

Unfortunately, our Los Angeles bankruptcy attorneys know that although Asset Acceptance is one of the largest of its kind, it's not the only company in which agents will misrepresent themselves and their powers in order to bully people into paying up.

In this case, the Federal Trade Commission has alleged that the company told people they would sue them (even when the debt was legally too old to go after in court). They also reportedly failed to investigate claims that the original debt was erroneous - they simply kept on pressing people to pay. In doing so, the FTC says the agency broke the law - the Fair Collection Practices Act an the Fair Credit Reporting Act. In all, there were nine counts against the company, including:

• Insisting that consumers owed money, when that could not be proven;
• Didn't disclose that certain debts were too old to be legally enforceable (called time-barred debt) or that if a consumer made a partial payment on that debt, it would actually hurt the consumer by extending the amount of time the debt could be enforceable;
• Giving false information to credit reporting agencies;
• Not performing an investigation when receiving notice of a dispute from a credit reporting agency;
• Hounding third parties (employers, family members) regarding the debt;
• Informing third parties about debts;
• Using illegal means to obtain debt, such as fudging on the legal status, nature or amount of the debt;
• Not providing proof of the debt and continuing to try to collect it even when the consumer had disputed it.

Under the settlement agreement, Asset Acceptance has to let consumers know if a debt is too old to legally sue them. Once the company makes that disclosure, it is forbidding from going after them in court, even if the person makes a partial payment.

It is also forbidden to make any misrepresentations whatsoever about who they are, the legal power they hold or anything else. It must thoroughly investigate when a consumer insists the information about the debt is wrong. They can't put a debt on a consumer's credit report when it hasn't put that same notice in writing to the consumer. The settlement also underscores the details of the Fair Credit Reporting act and Fair Debt Collection practices - and warns the company from crossing the line again.

The FTC has also issued information to consumers about time-barred debt, and has recommended that consumers talk with an experienced attorney before making any sort of payment on an old debt.

Continue reading "Los Angeles Bankruptcy Attorneys Applaud Sanctions of Debt Collectors" »

A federally created consumer bureau that previously took consumer complaints about credit card issues is now taking complaints about foreclosure and mortgage fraud issues, The New York Times reports.

While this may be a helpful tool for consumers, it can't eliminate the problems caused by foreclosure in Los Angeles. The mounds of foreclosures have led to widespread fraud by bank officials and the companies they hire and has resulted in people losing their homes and being left to deal with unmanageable debt levels. Some have chosen strategic defaults, short sales and other ways to try to avoid problems caused by the real estate market collapse.

What some people don't consider, however, is that Chapter 13 bankruptcy in Los Angeles can help them avoid foreclosure altogether. Our Los Angeles bankruptcy lawyers have been able to help many people through this process.

Chapter 13 bankruptcy has gained popularity in recent years. It is a form of bankruptcy for consumers who may have a desire to keep large assets, such as a house, and still get the protections offered by bankruptcy.

The way it typically works is a consumer is allowed to set up a payment plan, usually with monthly payments, over a period of 3 to 5 years. If all the payments are made on time, at the end of the period, the remaining debt is typically voided.

And filing for bankruptcy immediately stops the foreclosure process. Whether the person is one or two payments behind or negotiating with the bank after half a year or more of missed mortgage payments, bankruptcy halts the process. This allows the homeowner to likely stay in their home during the bankruptcy process and come to a solution after the fact that allows them to continue making payments.

And while the Consumer Financial Protection Bureau will now take complaints via its website, it won't stop a foreclosure from happening. If anything, it may help people who have been victimized by bank actions.

The new filing system allows people to choose from a drop-down list of problems with lenders, such as problems making payments, issues in the loan application process or other issues. People are allowed to list, in their own words, the solution they seek and borrowers can uphold documents.

The agency was just created in July and seeks to take all consumer complaints next year. The complaints are forwarded to lenders with a tracking number so consumers can see what progress has been made on their issue.

It's unclear from the article if this agency has any power or is just in a position to be a voice for consumers. If so, nothing likely will change. If banks are under no obligation to help borrowers, they likely will continue doing what's in their best interests. It's like the federal-backed loan modification programs that failed -- banks aren't required to participate, so they typically didn't.

Yet, bankruptcy will help banks change their tune in dealing with a homeowner. Filing for bankruptcy gets banks officials' attention and allows the borrower to discharge debts, which can help them figure out a plan to pay for their house.

If you are dealing with debt or foreclosure issues, make 2012 the year you take your life back!

Continue reading "New Consumer Bureau Taking Mortgage Complaints; Chapter 13 Bankruptcy in L.A. Stops Foreclosure" »

Wage garnishment is one of the most feared things borrowers deal with when they consider the amount of debt sitting on their credit cards today.

A person who is thankful enough to have a paying job in this difficult economy doesn't want to think about a portion of that money being taken away to pay back debt.

Some people would say their income should be protected, even if they owe money. They ust want a little more time to pay. If their income goes away, their ability to pay for necessities decreases.

But if a company is threatening to garnish wages, filing for bankruptcy in Los Angeles stops it immediately. While creditors may be able to get only a portion of a salary in wage garnishments, that portion may be what is needed to put food on the table and keep the rent paid.

If you have received a notice that a company intends to garnish your wages, you must act immediately. Consult with an experienced Los Angeles bankruptcy lawyer as soon as possible. Even if the notice you receive in the mail has a scheduled court date, it's possible the creditors could begin taking money immediately.

That's what happened to a woman recently who wrote into creditcards.com. The woman stated that she received a summons and complaint from a company. Rather than doing anything, the woman and her husband, who had gotten behind on their bills, waited for the court date.

When they looked at a recent paycheck, they noticed money had been taken out of the check from the company.

Many people are under the impression that credit card companies must wait for a court order in order to garnish a person's wages. In fact, they can get up to 25 percent of the wages even before they appear before you in court.

That's what happened in this case. If you don't read the paperwork carefully or respond to the lawsuit, with an answer, a cross complaint or some type of legal notice, you may be opened up to wage garnishments immediately. And that doesn't bode well if the court system is overburdened and the court date is scheduled for months in advance. That means a person could be losing money and the judge's calendar is too full to move the date up.

There may be an opportunity to adjust the garnishment if you petition the judge, if the garnishment is making living difficult. But the smart move is to consult with an experienced Los Angeles bankruptcy lawyer as soon as possible.

This is a complex area of law and there are ways to avoid major garnishments. Rather than watch your money trickle away, stop it on the spot. Filing for bankruptcy in Los Angeles accomplishes this. Wiping away the debt gets creditors off your back and allows you a fresh start toward financial freedom.

Continue reading "Wage Garnishment Is Lenders' Favored Tool, But Los Angeles Bankruptcy Stops It" »

We hear on the news or read in the newspaper scams all the time that target older Americans and those who may be more apt to trust people who intend only to rip them off.

Reverse mortgages, credit card fees and hidden interest as well as housing scams lead to older adults losing millions each year. And much of that money was likely intended to be used for retirement purposes. And losing cash in a scam can lead the elderly to rely heavily on loans or credit cards, which can lead to debt problems. Bankruptcy in Los Angeles, however, will protect retirement funds, pensions and 401(k) accounts and still discharge built-up debt that is making life difficult for our oldest Americans.

Consulting with an experienced Los Angeles Bankruptcy Attorney for those who have been the victim of a scam can help fix these types of financial problems.

A recent CNNMoney article states that one out of every five older Americans have been sold a bad investment, paid fees above the norm for a financial service or product or have been defrauded, according to a survey conducted by the Investor Production Trust, in 2010. The survey found about $2.9 billion in collective losses last year alone.

The story focuses on a 79-year-old California man whose local insurance agent convinced him to move $113,000 in savings held in annuities into deferred annuities that tied up the money for up to 16 years. He paid $11,000 in penalties and had to pay big surrender fees if he wanted to get it, requiring him to rely on his children to pay living expenses at the end of his life.

The article states 44 percent of complaints from investors come from seniors and one out of every three fraud cases involve the elderly. Many older Americans have spent years saving; their houses are paid off and their net worth on average is $638,000.

Some other reasons seniors are targeted by scams -- they have time to listen to pitches because they're retired, they are less able to make complex and difficult financial decisions on their own. They can be trusting.

Here are some typical sales pitch tactics that are used with older adults:

• An invitation for a free lunch that leads to a high-pressure sales pitch or not serving the meal until the person agrees to an in-house consultation.
• Sales calls will use nice voices and an easing tone to get older Americans to give in and agree to a meeting.
• Agents will attempt to comfort and be friends with the senior, especially if they sense they are lonely.
• Sales pitches promising an exceedingly high return on the investment.
• It's a limited-time offer and the person must act now or lose out.

All of these scams and high-pressure situations can lead to big financial problems for older adults. Many times, these economic difficulties can lead to high amounts of debt for people who are unable to work and bring in more money than monthly pension payments and Social Security.

But filing for bankruptcy can clear debt and allow the remaining years of a person's life to be less stressful. And bankruptcy laws protect retirement accounts, pensions and other exempt funds.

Continue reading "Los Angeles Bankruptcy Protects Retirement Funds, Can Aid The Elderly" »

Have debt collectors gotten authorization to start garnishing your wages, making it difficult to pay the bills and feed your family?

If so, a Los Angeles bankruptcy filing will immediately stop the debt collectors from garnishing your wages. Consult with Los Angeles Bankruptcy Attorneys and discuss the options you have to recover from debt.

A recent Fox News story says that wage garnishment is usually a last ditch effort for debt collectors. The authors of the article suggest speaking with creditors and agreeing to a payment plan. That is often sound advice.

There are some good options to help you avoid bankruptcy, as bankruptcy might not be the best option for you. Some alternatives to bankruptcy in California include credit counseling services, debt consolidation and debt negotiation and settlement. However, many of these services have costs and fees of their own. Often, they will result in a damaged credit score and long repayment plans. In some cases, they may only be delaying a consumer's bankruptcy filing and his or her ability to make a fresh start.

Call for a consultation.

• Credit counseling can put you in a position to negotiate with creditors because it shows you are serious about working out your debt problems. Sometimes, credit card companies will work with you pay off your debt in a manner than can help you, but they are not obligated to do it and may not. The counselors will also charge you fees for their work, so be careful.
• Debt consolidation can help you if you can get a lower interest loan to pay your high-interest debt, but this may not be feasible if you already have a lot of debt. You may also have to use your home as collateral, putting that at risk in the process.
• Debt negotiation and settlement means making an offer to immediately pay off a debt with a lump sum that is less than what you actually owe instead of making continued payments month after month. But as is the case with most people in debt, if you don't have a large sum of cash available to pay the debt, negotiation and settlement may not work.

Continue reading "California Wage Garnishment Can Be Stopped By Bankruptcy Filing" »