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Showing posts from September, 2015

Deceptive Debt Collection Practices Targeted by CFPB

Under theFair Debt Collection Practices Act (FDCPA), debt collectors cannot harass or threaten debtors in order to collect payments, and they cannot engage in false or deceptive debt collection practices with the aim of collecting money owed. Yet creditors and debt collectors do not always abide by the FDCPA. What happens in the event that a debt collector uses deceptive collection practices in order to recover on a debt? The Consumer Financial Protection Bureau (CFPB) can take action against that collector. According to a recentnews release from the CFPB, the Bureau has cited both Encore Capital Group and Portfolio Recovery Associates for buying “debts that were potentially inaccurate, lacking documentation, or unenforceable.” How Does the FDCPA Define Deceptive Debt Collection Practices? It is important for consumers to know their rights and to understand that certain federal laws were designed to protect them from unfair practices by debt collectors. Specifically, Section 807 of the …

Federal Loans, Student Debt, and Limited Options

Recent news stories have highlighted the serious problem in our country of student loan debt. Student loans are linked to a new consumer debt crisis across America. By and large, those reports tend to focus on private student loans, for which borrowers are not eligible for income-based repayment plans and often run out of deferment or other hardship options when attempting to make payments. And as many of us know, it is difficult although not entirely impossible to have your student loan debt discharged when you file for Chapter 7 bankruptcy. However, private students loans are not the only problem. According to arecent article in the Huffington Post, the federal student loan debt burden in our country is beginning to eerily mirror the subprime mortgage crisis. High Interest Rates, Overwhelming Debt How could student loans resemble subprime mortgages? On the surface, the two types of loans should not look alike at all. However, when we look at data on lower income borrowers who attended…

Learning More About Time-Barred Debts

What is a time-barred debt and how can it help you, as a consumer, to know more about this topic? According to arecent article from the Federal Trade Commission (FTC), it is extremely important for consumers to know more about time-barred debts and actions a debt collector cannot take with regard to these types of debts. In short, time-barred debt is a debt that is “too old for a debt collector to sue you to make you pay.” Debts have a lifespan, also known as a statute of limitations. After that time period has run out, a collector cannot take action to recover that debt from you. Each statute of limitation varies depending on the state. In our state, debts related to written contracts have a 10-year statute of limitations under Illinois law (735 ILCS/5/13-206). However, credit card debt and other forms of debt may have a short, five-year statute of limitations. The FTC provides some important points for getting to know more about time-barred debt and your rights as a consumer. What You…

Consumer Difficulties with Income-Driven Repayment Plans

Most student loan borrowers know that it is extremely difficult todischarge student loans in bankruptcy. While federal loans do not tend to pose as great a burden to debtors as private loans given the options for income-driven repayment plans, there are always exceptions. According to a recentnews release from the Consumer Financial Protection Bureau (CFPB), some of those income-driven repayment plans could be pushing consumers closer tofiling for personal bankruptcy. Alternative Repayment Options for Federal Student Loans The CFPB recognizes that student loan debt in our country---which total around $1.2 trillion, according to arecent article in Forbes Magazine—is placing a heavy burden on students, their parents, and on the economy. The CFPB assumed that the mere repayment of these loans was not the only problem for borrowers. As with other debtor-creditor situations, student loan borrowers have encountered many different problems with their repayment plans, including but not limited …

Violations of the Bankruptcy Discharge

Once you have received abankruptcy discharge, your past creditors are supposed to stop trying to collect debts from you, right? While going through a Chapter 7 orChapter 13 bankruptcy should result in previous creditors ceasing to attempt to collect on debts you no longer owe, sometimes creditors or debt buyers are persistent, even after you have provided them with a copy of your discharge order. While it can be extremely frustrating to receive a bankruptcy discharge only to be hounded by creditors, there are steps you can take against these actions. In addition to collection after a bankruptcy discharge, sometimes creditors do not abide by the rules even earlier in the process. A recent Illinois case,Melnarowicz v. Pierce & Associates, makes clear that creditors must abide by the Fair Debt Collection Practices Act (FDCPA) when a debtor files for bankruptcy. The particular case involved a Chapter 13 bankruptcy and a mortgage foreclosure. If we take a closer look at the case, it can…