Oak Park Real Estate & Estate Planning Blog

We have previously discussed debt collection practices by the Internal Revenue Service (IRS) and changes to the law resulting in private debt collection companies handling unpaid tax bills. The new law that took effect, allowing for the use of private debt collectors for federal tax debt, faced much opposition from consumer advocates who voiced concerns about whether debtors would be treated fairly and whether these collection companies would abide by the Fair Debt Collection Practices Act (FDCPA). Now, according to a recent article in Forbes , “it appears those concerns were not unfounded.” A group of senators sent a letter to one of those debt collection companies concerning consumer complaints. Are the debt collection companies with which the IRS contracts violating the FDCPA and harming consumers? Senators Address Alleged FDCPA Violations in Tax Debt Collection As the article explains, a group of senators, including Senator Sherrod Brown (D-OH), Senator Ben...

The U.S. Supreme Court agreed to hear a case in which consumers who had defaulted on their car loans and argued that Santander, which had purchased the debts, was acting in violation of the Fair Debt Collection Practices Act (FDCPA). In this case, after the petitioners defaulted on their car loans, Santander purchased those debts from CitiFinancial Auto and attempted to collect on them. Among the central questions the U.S. Supreme Court needed to address was whether a debt buyer, upon purchasing debts as Santander did, looks more like a “creditor” or more like a “debt collector.” The latter would be subject to the FDCPA in ways that a creditor would not. The case is Henson v. Santander Consumer USA, Inc . The U.S. Supreme Court, which reached a unanimous decision, determined that a company like Santander is allowed to collect debts that it purchased for itself without becoming a “debt collector” under the FDCPA. The decision may impact debtors negatively, and it is impor...

Debtors in the Oak Park area who file for Chapter 13 bankruptcy do so for many different reasons. In some situations, your income may not allow you to file for Chapter 7 bankruptcy (in other words, you might not pass the “means test”). In other situations, you may not want a liquidation bankruptcy and feel confident in plans to repay creditors over the course of several years. In many cases, debtors file for Chapter 13 bankruptcy because it can prevent foreclosure and allow the debtor and his or her family to keep their home. Regardless of the reasons that you filed for Chapter 13 bankruptcy, what happens if you want to modify your payment plan? Can you modify your Chapter 13 bankruptcy payment plan ? What happens if you cannot make the payments outlined in your plan? Background on Chapter 13 Bankruptcy As a brief reminder, as the U.S. Courts website explains, Chapter 13 bankruptcy is one of two common types of bankruptcy for individuals. Typically, an individua...

According to a recent article in The New York Times , the Trump administration has “called for the neutering of many of the central provisions of the Dodd-Frank Act,” which could result in the Consumer Financial Protection Bureau (CFPB) losing much of the power it currently has to prevent abusive debt collection practices , and to provide other consumer protection measures. Specifically, the Treasury Department recently released a report that contended the CFPB has engaged in “regulatory overreach” and that its director should be removed. What else was in this report, and what is the future of the CFPB under the Trump administration? Treasury Department Seeks to Roll Back Consumer Protections Under Dodd-Frank What are some of the specific ways in which the Treasury Department wants to roll back consumer protections and the role of the CFPB? Most immediately, as the article clarifies, the Treasury Department report “recommended greater exemptions from the so-called Vo...

For quite some time, commentators and consumer protection advocates have voiced concerns about student loan debt . According to a recent report from CNBC , student subprime debt has risen drastically over the last year, contributing to the trillions of dollars of student debt throughout the country. As an article in MarketWatch explains, some student borrowers, especially those who took out student loans to pay for for-profit colleges, may be more similar than we might think to “homeowners who used shady mortgage products to finance their homes in the lead up to the housing crash.” Indeed, “borrowers who took out student loans to attend for-profit schools defaulted at the same or higher rate within five years as those with subprime mortgages.” Now that the numbers reflect a surge in student subprime debt, what can we expect for borrowers who owe money on these loans? Is personal bankruptcy ever an option for student loan debt? Student Loan Debt Rises While Creditw...

According to a recent article in Bloomberg , more American families are incurring debt at a particularly high rate than most of us would assume. As the article suggests, we have not seen the current rates of consumer debt in which individuals are late on payments for auto loans and credit cards since 2008. In some cases, reports about more consumers using credit cards and buying new automobiles can actually suggest that the economy is improving or is thriving; people would not necessarily be making purchases if they were not employed and in a position to do so. However, when reports indicate that consumers are tending to fall behind on debt payments , such reports could intimate that we are heading toward another financial crisis. What else should Oak Park residents know about consumer debt and the risks of falling behind on auto loans and credit card payments? Higher Charge-Off Rates Reflect Consumers’ Inability to Pay Among the first indications of unpaid auto...