Articles Posted in Fresh Start / Clean Slate

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No, they may not. In fact, it is unlawful for the collection agency to contact you several times in one day via the phone. This is described as ‘incessant calling,’ and is actionable in the courts.

The area of law that governs what a debt collector may or may not do is the Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA). These statutes regulate the practices of collection agencies. For instance, it is unlawful for a collector to contact you on your cell phone. The reason for this is because the law states you cannot incur charges from their attempts at collection. Most cell phones come with a calling plan of some sort, in which you are provided a certain number of minutes. Each minute used is deducted from the total minutes afforded each month, after which you pay a certain amount for each additional minute used. So if a collector is calling and using up those minutes in an attempt to demand money from you, they are violating your rights.

Or if the collection agency is leaving you voice messages (either on your cell phone or land line), they must be very specific in the type of message they leave. It is necessary, when they leave you a message, to inform you of the fact that they are a debt collector, that the call is an attempt to collect on that debt, who the underlying creditor is, what the name of their company is, and a number that you can reach them at. So if you receive a voice message that says something like this: “Hey John! This is Frank. I have something I need to talk to you about. It’s very important that you give me a call as soon as possible, because this is very urgent. Call me at 1-800-blah-blah.” That kind of message is a violation of federal law, and the collection agency that left it can be held accountable.

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You have a right to demand that the debt collector cease any and all communication with you regarding your debts, but the federal law governing this area states very clearly that such a demand has to made in writing. Assuming that you do indeed make a written demand, then a collection agencies’ subsequent efforts to come after you for the debt in question is a violation of your consumer rights.

The body of law that determines what is or is not acceptable behavior for a debt collector is the Fair Debt Collection Practices Act (FDCPA). This statute regulates what a collection agency can do in their attempts to collect on a debt. One such regulation is found in Section 805(c), which states: Ceasing Communication: If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt…

If after a proper written notification is given the collector continues to make demand on the debt (either by calling or mailing letters), then it has violated the statute. The damages for having done so is to pay you $1,000. The other nice thing about this particular law is that if in fact a violation can be shown to have occurred, the collection agency has to pay your attorney fees. This means that you do not have to pay any upfront fees to an attorney for them to file suit for you.

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Not as bad as you think. But the more important question to focus on would be how long it will take to rebuild your credit. The answer to this may surprise you as well.

To begin with, the filing of a bankruptcy will appear on your credit report for ten (10) years. But this does not at all mean that it will take that long to rebuild. Nor does it mean that it mean that you will have to wait ten years before you can make a major purchase (like on a house of car). In fact, you can expect to see your credit score jump upwards by about thirty (30) points once the debts in your bankruptcy are officially discharged. After this discharge occurs, you are well on your way towards the fresh start / clean slate that the government provides. In other words, you will have a great many opportunities to move forward after the slate of creditors is wiped clean.

For example, when you file a St. Louis Chapter 7 bankruptcy, your unsecured debts (like credit cards, medical bills, payday loans, etc.) are knocked out forever about three to four months after you file. At this point, you may be surprised to learn that the credit industry will be more than willing to extend you lines of credit. Why? Because overnight, you will have become the most attractive candidate in the world. All of your old debt will be gone, and from the credit industry’s point of view, that means that you will be in a perfect position to pay them monthly minimums on new balances. Of course, no one would suggest that you go out and get right back into credit card debt. But many people who want to be more aggressive about rebuilding their score and/or rating will take out one of these cards with a low ceiling, make small purchases, and then make monthly, methodical payments. This will certainly go a long way in raising a credit score over time, while putting you in a good position to make larger purchases (like the financing of a car) in the future.

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This would be a violation of the Telephone Consumer Protection Act (TCPA). Various court cases have determined that a collection agency using this type of technology is violation of the act, and damages can thereafter be assessed. But if such a violation occurs, there are several things that you can do about it.

The TCPA was designed by Congress in order to protect unsophisticated consumers against the tactics employed by debt collectors. Collectors using this method will preselect a set of phone numbers to call the night before by identifying certain people in their database (ex. people who are sixty (60) or more days delinquent in payments to the creditor). The next day, the ‘dialing campaign’ begins, and the computer program automatically calls the selected numbers. As soon as you answer your cell phone, the call is immediately transferred to the first available collection agent (who then proceeds to ask you questions about your debt).

So the TCPA expressly prohibits calls to certain telephone numbers (specifically cell phone numbers) by using an ‘automatic telephone dialing system’ (systems that allow for calls to be made without human intervention) without your prior consent. If you receive such a call, the collector has violated your consumer rights. You would then have the ability to file suit against the company and seeks damages. Damages are usually awarded in the amount of $500. But one of the great things about this federal statute is that if a violation is proven to have occurred, the collector has to pay for your attorney fees. This means that you do not have to pay your attorney any upfront fees for the cost of filing the suit.

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Yes, it can. And this is why it is so very important to make it clear to your bankruptcy attorney how many people live with you, whether those individuals include a spouse, children, parents, siblings, or other relatives. Because the number of people who live in your household can have a substantial impact on which chapter of bankruptcy you may end up filing.

When you file a Missouri or Illinois bankruptcy, there are many things that you will need to disclose to the Trustee and court. Among these things would include a list of all your personal property (furniture, appliances, bank accounts, pending contracts, etc.), a description of any real estate that you have an ownership in, a disclosure of all sources of income, and the number of people who reside with you. The court then requires that you complete what is called a Means Test. This ‘test’ is really a set of very complicated forms, with certain calculations, that must be accurately filled out and filed with the U.S. Trustee’s Office. After all pertinent deductions and exemptions are applied, it is then determined as to whether you are an above-median household or a below-median household.

Let me give you an example: according to the state of Missouri, the average (or median) income for a household of two is: $50,603 (as of January 10, 2012). If you are a household of two, and below this median income level, then you generally qualify for a St. Louis Chapter 7 bankruptcy (assuming you have not filed such a case in the last eight years). But if you are substantially above this level (say you have a household income of $70,000), then the court presumes that you make ‘too much’ money, and require that you do a St. Louis Chapter 13 bankruptcy.

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No, it does not affect your ability to file for bankruptcy protection in either Missouri or Illinois. But in terms of full disclosure, the cases would need to be identified clearly on your bankruptcy schedules so that the Trustee is made aware of it. Once this disclosure is made, it is up to the Trustee to determine if there is anything for your creditors.

When you file a Missouri or Illinois bankruptcy, it is required that you disclose all of your assets and personal property to the court. In other words, you cannot withhold information concerning your ownership interest in anything. This is true regardless of whether you believe the asset or property has any value or not. Included in this list would be any claims or cases you have pending at the state court level, like a workman’s compensation claim or personal injury case.

Of course, cases of this nature tend to take a long time before they are finally decided upon. It is not unusual for a personal injury case, for instance, to take several years before a ruling is made in the state court. And it is also true that just because a case of this nature has been filed in the state court (whether it is a workman’s compensation or personal injury), that does not necessarily mean that you will actually receive any money in damages. These types of cases are highly contingent upon a number of factors that must be proven sufficiently to either a state court judge or jury. On the other hand, it may very well be that your case will settle before going to trial, in which case, you would stand to receive some sort of bulk payment from the party that you sued (after your attorney takes his thirty percent for fees). And if this is the outcome, then it’s important to understand how your bankruptcy Trustee will handle it.

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Yes and no. This happens to be one of those situations in which a ‘yes and no’ answer is appropriate. There are very specific rules concerning joint debt between a married couple. So if you are planning on filing a Missouri or Illinois bankruptcy, this is a great blog post to read.

To begin with, when you file for bankruptcy, the court requires that you disclose all of your creditors. This means that you must give the name, address, and account number for each entity or person you owe (including an indication of things like amount owed, what kind of debt it is, and whether or not the debt has been passed onto a collection agency). All the creditors are then notified of the fact that you have filed a bankruptcy petition, and they in turn may never try to collect on the debt ever again. At the end of your bankruptcy, all the unsecured creditors (like credit cards, medical bills, payday loans, etc.) are discharged.

So let’s assume that you are married, and you have a few credit cards that you own jointly with your spouse. If you own such a debt jointly with someone (whether it is a spouse or someone else), then both parties are liable for the balance. This means that the creditor can demand payment from either person, and it can sue either party if payments are not made. A ‘joint’ debt means just that: you both own it. If you then decide to file bankruptcy individually (without your spouse), these debts are disclosed (again, because the court requires it). But in this case, only you would be discharged as to the joint debts in question. In other words, the creditors could no longer come after you for the joint debts, but they could still continue to come after your spouse.

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This is one of the more common things I hear from clients. And it makes sense: if you are dealing with large sums of debt, collection agencies are calling you night and day, and you can’t seem to figure out how to manage your finances, things can get pretty stressful. But one of the more pleasant components of my job is when I see someone for the first time (at an initial consultation), and by the time they have left, they are feeling much better about the future. Let me explain why.

It has not been at all unusual to see people having a difficult time getting by in this economy. Times are hard, to say the least. As a result, many individuals have either lost their job, had their wages cut, or been laid off and are now earning far less than what they were used to. When this kind of thing happens, it has a tremendous ripple effect. Because it’s not as if your creditors will stop asking for money when the monthly bills come due. At this point, a lot of people will go further into debt by taking out yet another credit card to pay on the one that they are about to fall behind on (literally robbing Peter to pay Paul). Or, they will allow the debts to go into default, and a collection agency will pick it up.

This is a road that often leads to heartache and stress of an enormous magnitude. Things can seem completely out-of-control, your life spinning beyond your grasp. But there are better times ahead.

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Immediately. Most people believe that it will take many, many years before they can ever again enjoy anything like a decent credit score after filing for a Missouri bankruptcy. But the exact opposite is true. In most cases, an individual can begin to see upward movement of their credit rating within weeks after filing, and revive the score to proper levels within one to two years.

When you file a St. Louis Chapter 7 bankruptcy, all of your unsecured debts (things like credit cards, medical bills, payday loans, etc.) are discharged. That means the debts are wiped out forever, and the creditors can never again demand payment from you. At this point, you can expect to see an immediate jump in your credit score by about a twenty (20) to thirty (30) points. Your opportunities to rebuild even further are going to be there immediately as well. For instance, upon receiving your discharge of debts, you will be flooded with credit card applications. That’s right, flooded. The credit industry (the very entity that had been trying to convince you that filing for bankruptcy was the worst mistake you’ll ever make in your life) will be begging you to come back! This may seem counterintuitive, but the reason for why is simple: overnight you will have become the most attractive candidate in the world. All of your old debt will have been knocked out, which means that you will presumably be in a good position to make monthly minimum payments to them. Of course, there goal would be to get you right back into the same position as before (in which you are racked with burdensome debt levels). But so long as you make small purchases, make monthly methodical payments, you will see your score rise nicely. Most of our Chapter 7 clients are making big purchases on cars and houses within a couple of years after filing.

In a St. Louis Chapter 13 bankruptcy, you are put inside a repayment plan. This will last over a period of three (3) to five (5) years in length. During this time, you will make a single, monthly, consolidated payment to a Trustee to cover certain debts (like arrearage on a house, car note, and tax debt). The Trustee will distribute the monies according to the plan each month. This in turn means that by the time you are done with the repayment plan three to five years later, your credit score is going to look rock solid. And of course, your ability to move even higher is bound only by how aggressive you wish to be in raising it.

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This is nothing to panic about. You can always add a creditor later. Of course, getting everyone thrown in the first time is the easier way of going about things. But the court recognizes that you may end up forgetting a debt that will need to be included at a later time.

The fundamental idea behind the filing of a bankruptcy is disclosure: you are expected to let the court and Trustee know everything about your particular situation. That would include (but is not limited to) a disclosure of all items that you own, whether it is in the form of personal property (like furniture, appliances, clothes, or even bank accounts) or real property (like a house, rental property, or even a time share in Florida). These disclosures let the court and Trustee know what types of things you own that may have equity or substantial value (and therefore subject to liquidation). The court will also want to know what sort of household income you have, whether those sources of income come from your place of employment, Social Security, unemployment benefits, or even from a small business that you run part time out of your basement (because this information will largely determine which chapter of bankruptcy you qualify for). And the court will also expect you to disclose all of your creditors, whether those creditors are in the form of a credit card at your favorite department store, a medical bill from your family doctor, or even debts owed to friends and family. These creditors (whether they are secured or unsecured) have an absolute right to be notified of your bankruptcy filing so that they may do a number of things (like file a Proof of Claim detailing the specifics of your debt, ask for notification of any hearings that may take place in regards to the outcome of your discharge, and the ability to challenge the dischargeability of the debt).

Unless the creditors receive this type of notification, they are thought to have no idea of the fact that your debt to them is subject to discharge by the bankruptcy court. So even if you initially forget to include any one creditor in your bankruptcy petition, you can still add them later (and in fact, you have a duty to do so). There is of course a small fee to include the new creditors (currently set a $30), but that is a small price to pay when the debt you forgot to include is $5,000.

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