Thursday, September 20, 2018

Using Apps to Manage Consumer Debt

If you are currently struggling with debt and are looking for innovative ways to manage your finances, or if you recently received a bankruptcy discharge and want to ensure that you stay on track financially, could smartphone apps help? In general, managing finances can be difficult, especially if you are living beyond your means in any capacity. While it may be nearly impossible to catch up on debt you owe without filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy in certain cases, there are ways in which technology can help you to stay within your means and to get your bills paid on time.
A recent article in The Balance discusses the best personal finance apps that are currently on the market, which can help consumers with recent bankruptcy discharges to begin their fresh financial starts on strong footing. We want to say more about these apps and how they may be able to help consumers to manage debt.
Mint: The “Best Overall” Personal Finance App by Intuit
The article in the Balance rates this personal finance app as the “best overall” product for managing personal finances. It is made by Intuit, and it is “one of the most well-known personal finance apps that provides your complete financial picture in one place.” Consumers can link their credit card accounts and debit card accounts to the app, and it keeps track of how the consumer is spending his or her money. In addition to this kind of tracking, the app also allows consumers to retain information about bills and their due dates, as well as a weekly or monthly budget. The app also allows consumers to send utility payments, to track their credit scores, and to get email reminders about any bills that need to be paid manually.
In addition, unlike other apps, Mint is available both on a consumer’s smartphone as well as on his or her computer.
You Need a Budget (YNAB): The Best Personal Finance App for Budgeting Your Money
This app is designed for consumers how need help to “gain control of [their] spending.” It allows consumers to make different budget categories, to see specific places where they spend their money, and to balance their budgets. In addition to keeping track of budgets, the app also is designed to help consumers “spot places that you can improve your spending.”
This app boasts that new users save as much as $600 in the first two months of use, and as much as $6,000 over the course of a year. In addition to YNAB, the article also recommends the app EveryDollar, which also tracks each and every dollar—hence the name of the app—that you spend.
Prism: The Best App for Managing Your Bill Payments
Do you have trouble keeping track of the bills you owe and making on-time payments? Prism is an app that “shows all your bills and financial accounts in a single app, giving you a complete picture of your finances.” The app tracks your bills for you and sends you reminders about due dates. Another benefit of the app is that the user can pay all of his or her bills directly through the app.
Seek Advice from a Bankruptcy Lawyer in Oak Park
If you are struggling with debt or have concerns about dealing with debt, an experienced Oak Park bankruptcy attorney can answer your questions. Contact the Emerson Law Firm to learn more about consumer bankruptcy or options for dealing with harmful debt collection practices.
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Tuesday, September 18, 2018

Debtor Misconduct and Bankruptcy Exemptions

When a debtor in Oak Park files for consumer bankruptcy, there are many steps that are necessary to complete in the filing process as well as throughout the bankruptcy case. Bankruptcy forms and document requirements can be extremely complicated, and many debtors who attempt to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy on their own make errors in the paperwork. For example, debtors almost always need to provide tax returns, income documentation that might include W-2s or self-employment forms, proof of real estate owned and its current market value, proof of vehicles owned and the remaining amount owed, information about bank accounts and retirement accounts, documentation of child support or alimony paid or received, and many other materials.
When you file for bankruptcy, you also need to disclose any and all assets that are exempt. In a consumer bankruptcy case, certain assets are exempt. Exempt assets cannot be liquidated in order to repay creditors—the debtor is allowed to keep these assets even if all debts are discharged. What happens when a debtor fails to disclose an asset that is exempt under the law? That is the question that arose in the recent case of Rucker v. Belew (2018). Although the case was decided in the Eighth Circuit Court of Appeals, it could end up being persuasive authority for courts in Illinois.
Understanding Bankruptcy Exemptions in Illinois
Before we get into the details of the case, we want to say more about bankruptcy exemptions. Debtors in Illinois need to use Illinois bankruptcy exemptions (735 ILCS 5/12-1001). In Illinois, the following are all examples of exempt property in a bankruptcy proceeding:
  • $15,000 of value in a home (homestead exemption);
  • Personal property that includes necessary apparel, school books, family photos, a bible, and $4,000 additional dollars of value in other personal property;
  • $2,400 of value in one motor vehicle;
  • $1,500 of value in tools of the debtor’s trade, which can include implements, professional books, and other tools;
  • Health aids that have been prescribed by a medical professional;
  • Life insurance proceeds;
  • Benefits including Social Security benefits, public assistance benefits, veteran’s benefits, and disability benefits;
  • Alimony and other family support;
  • Damages awards from personal injury lawsuits up to $15,000; and
  • Restitution payments.
Exempt property allows debtors to rebuild their lives after bankruptcy, and debtors rely on these exemptions when filing for personal bankruptcy.
Getting the Facts of the Case in Rucker v. Belew
In the Rucker case, the debtor filed for Chapter 7 bankruptcy. When he did so, he failed to list an exempt asset in his initial bankruptcy filing. More specifically, he failed to disclose a debit account. Upon realizing his error during the meeting of creditors, the debtor attempted to amend his schedules in order to disclose the debit account and to ensure that it would be exempt. The trustee began an investigation and determined that the debtor had additional undisclosed assets that also were exempt. Those assets included an equitable interest in a bank account, unpublished fiction manuscripts, and cash in a house safe. The debtor then attempted to amend the claim of exemptions a second time to disclose these assets and to claim them as exempt.
The trustee objected to the second amended claim of exemptions, arguing that “the second amended claim of exemptions was filed in bad faith” and thus should not have been allowed.
The U.S. Bankruptcy Code does not say anything about denying exemptions on bad faith grounds. The trial court found in favor of the debtor, ruling that a bankruptcy court cannot deny an exemption for a reason that is not outlined in the Bankruptcy Code (specifically, bad faith). The trustee appealed, and the case ultimately was heard by the Eighth Circuit Court of Appeals. The Eighth Circuit relied on the U.S. Supreme Court case of Law v. Siegel (2014), which held that “federal law provides no authority for bankruptcy courts to deny an exemption on a ground not specified in the Code.”
The Eighth Circuit reasoned that an amended claim of exemptions is similar to an initial exemption, and since the Bankruptcy Code does not provide authority for bankruptcy courts to deny exemptions on bad faith grounds, bankruptcy courts accordingly cannot deny an amended claim of exemptions on bad faith grounds. In so ruling, the Eighth Circuit affirmed the trial court’s decision and aligned itself with similar decisions from the Sixth Circuit and the Ninth Circuit.
Contact an Oak Park Bankruptcy Lawyer
Do you have questions about bankruptcy exemptions? An Oak Park Bankruptcy lawyer can help. Contact the Emerson Law Firm today.
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Friday, September 14, 2018

How Algorithms can Affect Consumer Debt Collection

The Fair Debt Collection Practices Act (FDCPA) protects consumers against unfair debt collection practices, as well as harassment by debt collectors. However, consumers regularly experience contact from debt collection companies that appears to be in violation of the federal law. According to a recent article in Wired Magazine, “One in four consumers contacted by debt collectors feels threatened, and most consumers say the calls persist even after requests to stop.” Indeed, many borrowers describe these practices as “a living nightmare.” Is there a better method for debt collection that does not run the risk of harming consumers or violating their rights under the FDCPA?
The article discusses a new debt collection startup that aims to use algorithms and technology to revolutionize the debt collection industry, and we want to look closely at its methods and benefits.
Using Technology to Change the Face of Consumer Debt Collection
The new startup is TrueAccord, and it begins from the premise that persistence of unfair debt collection practices should be treated as “a software problem.” In other words, technology may be able to help ease the burden of consumers’ experiences with debt collection companies while still allowing debt collectors to perform the tasks associated with the job. Ohad Samet, the cofounder and CEO of TrueAccord, describes the startup’s premise like this: “We believe that we can use technology to radically change the user experience and really help people with their day-to-day finances.”
Samet goes on to explain how TrueAccord uses algorithms to get in touch with consumers who owe debts “through email, text, and the occasional Facebook ad, nudging them to check their inbox for an email from TrueAccord.” This method would replace the “robocalls that go unanswered, letters lost in a pile of mail, and pushy collection agents who work on commission.” Through TrueAccord, debtors would also be able to create payment plans for debts online, as well as to change the terms of repayment plans or to cancel payments if necessary.
Privacy Concerns and the Pros and Cons of Technological Debt Collection
Could this kind of technology actually work without becoming predatory? Samet explains that TrueAccord is not obtaining information about consumers through unscrupulous methods and routes. Instead, it relies on “machine learning to analyze data collected from behavior on its website and other information shared voluntarily.” Through this kind of data analysis, TrueAccord is able to determine how much debt a consumer owes, to whom the consumer owes the debt, and whether the consumer is behind on payments.
In addition, TrueAccord is designed to “learn” about the best method for contacting consumers based on each consumer’s personal preference. For example, by analyzing data, Samet and the other cofounders of the startup believe that TrueAccord will be able to determine whether a consumer prefers to have contact with a debt collector via email, text, or phone, and even how often the consumer prefers to receive such contact. Moreover, TrueAccord is designed so that it can predict a consumer’s preferred “tone of voice, such as empathetic, friendly, or inspirational, but never aggressive” when being contacted by a debt collection company.
Learn More from an Oak Park Consumer Protection Lawyer
While it is not yet clear whether startups like TrueAccord will be able to relieve consumers from repeated violations of the FDCPA while still urging those consumers to repay debts, the startup does have aims that could change the way debt collection works. In the meantime, if you are struggling with debt, you should speak with an Oak Park consumer protection attorney about the options available to you. Contact the Emerson Law Firm today to learn more about how we can help.
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Friday, September 7, 2018

Telecommunications Debt Collection Issues


If you think about an unscrupulous debt collector or debt collection company, do certain types of debt come to mind more than others? For many Oak Park residents, the image of aggressive debt collectors whose actions may rise to the level of harassment might be one involving unpaid credit card debt or student loan debt. Yet there are many different types of debt that consumers take on, and some debt collectors specializing in collecting particular kinds of debt. According to a recent report from the Consumer Financial Protection Bureau (CFPB), telecommunications debt collection is an area that has resulted in consumer complaints in recent years, and the CFPB has tracked data concerning this particular kind of debt. Telecommunications debt collection refers to telecom collections, or telecommunications providers.
Debt collectors are required to abide by the laws set forth in the Fair Debt Collection Practices Act (FDCPA). What do you need to know about telecommunications debt and unfair debt collection practices?
Changes in Telecommunications and Debt Collection
Why is the CFPB studying telecommunications debt and its effects on consumers? As the CFPB report explains, in recent years the nature of telecommunications technology has shifted, and “this evolution includes mergers between wireless, cable, and internet service providers.” At the same time, there have been “legal settlements over cell-phone billing practices,” as well as “continued growth in mobile wireless and fixed internet adoption, including consumers shifting from traditional cable and phone services to internet-based alternatives.”
What does all of this mean for consumer debt and collections? In short, the companies that are attempting to collect on telecom debts have shifted based on changes in consumer behavior, as well as changes to companies themselves. For instance, a company that solely provided telecommunications services might have merged with another type of tech company, resulting in some telecommunications debt collections coming from a different type of company altogether.
Understanding Telecommunications Debt
One of the notable things about telecommunications debt collections is that they have declined steadily from early 2014 through 2018. The likely reasons are those listed above—mergers and changes in consumer behavior. Another notable feature of this debt is that it is not a significant amount of consumer debt, averaging under $500 for a collection. The following are some of the key findings from the CFPB:
  • More than 20% of consumer credit reports contain a telecommunications debt;
  • Median telecommunications collection balance is $408;
  • Only 17% of telecommunications debts exceed $1,000;
  • Telecommunications companies rarely attempt to collect their own debts, turning instead to debt buyers or debt collection companies; and
  • Most consumers with a telecommunications debt on their credit report have low credit scores.
Even though telecommunications debts are generally for low amounts, this does not mean that telecommunications debt collectors do not need to adhere to the FDCPA. As with other types of debts, consumer reports harassment and unfair debt collection practices for telecom debts.
Contact an Oak Park Consumer Protection Lawyer
If you have been harassed or treated unfairly by a debt collection company attempting to collect a telecommunications debt, you should speak with an Oak Park consumer protection attorney about your case. Contact the Emerson Law Firm today for more information.
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Friday, August 31, 2018

Can I File for Two Types of Bankruptcy at the Same Time?


Is there ever a situation in which a person or entity can file for two types of bankruptcy at the same time? For instance, if you are a business owner and have a struggling business, and you are also having immense difficulty with your own personal finances, can you file for two different forms of bankruptcy at the same time?
Generally speaking, the Bankruptcy Code clarifies that an individual cannot file for two different types of personal bankruptcy at the same time, such as Chapter 7 and Chapter 13 bankruptcy. Likewise, a corporation cannot file for two different types of bankruptcy at the same time, such as Chapter 7 and Chapter 11 bankruptcy. For a single entity to file for two different types of bankruptcy, there are timetables and waiting limits for multiple discharges. We will talk you through the waiting times if you want to file for bankruptcy twice, and then we will explain scenarios in which a business owner could end up in two different types of bankruptcy proceedings at the same time.
Filing for Bankruptcy Twice as an Individual (or as a Corporation)
If you are thinking about filing for bankruptcy, or if you are in the middle of a bankruptcy case, or if you have recently had a bankruptcy discharge: Can you file for bankruptcy again? Whether you are an individual or a corporate entity, you typically cannot file for two different types of bankruptcy at the same time. However, you may be able to file for two bankruptcies back-to-back depending on your circumstances.
Whether you recently filed for bankruptcy or are in the middle of a bankruptcy case, you will need to abide by a waiting period if you recently received a bankruptcy discharge. The waiting times vary depending upon the type of bankruptcy you want to file. If you want to file for Chapter 7 bankruptcy, in most situations you will not be able to receive a discharge if you received a Chapter 7 or Chapter 11 discharge in the last eight years, or if you received a Chapter 13 discharge in the last six years. If you want to file for Chapter 13 bankruptcy, you will not be able to receive a discharge if you received a previous Chapter 13 discharge in the last two years, or a Chapter 7 or Chapter 11 discharge in the last four years.
There are some exceptions, and you should speak with a bankruptcy lawyer about your particular situation.
When an Individual and a Business File for Bankruptcy
When it comes to filing two types of bankruptcy at the same time, the scenarios in which this might happen are those in which both an individual and a corporation (of which the individual may be a shareholder or have an interest) file for bankruptcy at the same time. For example, an individual debtor might file for Chapter 7 or Chapter 13 bankruptcy to deal with personal debts, and at the same time, that individual might have a stake in a corporation that has filed for Chapter 7 or Chapter 11 bankruptcy. Technically, when a corporation files for bankruptcy, it is not the individual filing. Yet this is a situation in which one party could be involved in two different bankruptcy cases at the same time.
Keep in mind that business owners who are sole proprietors do not have separate individual finances and business finances—they are all wrapped up together, so that individual could not file for personal bankruptcy and separate corporate bankruptcy at the same time. Rather, an individual filing would be necessary to manage business or personal debt.
Seek Advice from an Oak Park Bankruptcy Lawyer
If you have questions about bankruptcy, an Oak Park bankruptcy attorney can assist you. Contact the Emerson Law Firm for more information.
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