Articles Posted in St. Louis Chapter 13 Bankruptcy

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Then they have clearly broken the law. This is a somewhat common tactic used by some debt collectors in their (not so noble) attempts to get money out of you. It is a shame that such tactics are resorted to, but it happens all the time. The problem, of course, is that it is completely unlawful.

The body of law that governs the activities of the collection market is the Fair Debt Collection Practices Act (FDCPA). It is a federal statute that lays out precisely what a collector can and cannot do while collecting on a debt. The language of the law is very straightforward, but it is amazing how frequently it is broken. For instance, Section 806(6) of the act state that, “… the placement of telephone calls without meaningful disclosure of the caller’s identity” is a violation. Or Section 807(1), which states, “The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof” is a complete violation of your consumer rights.

This means that if a collection agency calls you and states (or implies) that they are acting under the authority of the local police, they are lying through their teeth (and more importantly, breaking federal law). So long as such a violation can be shown to have happened, the damages to you are monetary (usually about $1,000). The other great component of the law is that the collector has to pay for your attorney fees. This means that there are no upfront costs to you for having an attorney file a case for you.

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No, they may not speak direct to someone other than yourself (or your attorney) without your express permission. And if they do, they are in violation of the law.

The Fair Debt Collection Practices Act (FDCPA) is a federal statute that regulates what a collection agency can and cannot do in their attempts to collect on a debt. The law spells out precisely what is unlawful conduct on their part. The most surprising thing about the whole thing is the number of people out there who are not even aware of the fact that such consumer protection exists at all. Most people think that since they owe the debt, they must endure the non-sense that the collectors spew.

So let me give you an example: Section 805(b) states that, “… without the prior consent of the consumer given directly to the debt collector, or the express permission of the court of competent jurisdiction, or as reasonably necessary to effectuate a post-judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.”

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No they cannot. And if they do, they are in violation of federal law.

The body of law that regulates what a collection agency can and cannot do in their attempts to collect on a debt is the Fair Debt Collection Practices Act (FDCPA). This statute lays out with specificity what is lawful and unlawful conduct. For instance, it is not lawful for a debt collector to threaten you with a law suit, or make it seem as if you have committed some sort of crime, that they are going to report the debt to the credit bureau, or that they are going to garnish your wages. The only time a collector may properly make such a threat is if they have already gained the original creditor’s permission to do so (which is never), and they have the petition for breach of contract already prepared in hand to file against you. Otherwise, it is simply an idle threat that is most likely being used to intimidate you into making a payment (because who wants their wages garnished when they are just barely making it by as it is).

If in fact such a violation occurs, and sufficient facts can be shown, the collection agency will have to pay you damages (usually in the amount of $1,000). In addition, the statute provides that any and all attorney fees must also be paid by the debt collector. This means that you will not have to pay any upfront costs for filing suit against a collector for their unlawful activity.

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Only certain kinds of debts are paid back in a St. Louis Chapter 13 bankruptcy. These would include mortgage arrearage (in other words, the amount of money you have fallen behind on your house payments), car loans, tax debt, back child support, and sometimes a portion of your unsecured debt (like credit cards, medical bills, and payday loans). But the exact amount you pay back per month depends on a several key factors.

A Missouri Chapter 13 bankruptcy is described as a repayment plan over the course of three (3) to five (5) years during which you pay a certain monthly amount to the Trustee. The Trustee then distributes these funds to the various creditors listed in your Chapter 13 plan. At the end of the plan, all the remaining unsecured creditors are discharged (i.e. knocked out forever). This in contrast to a St. Louis Chapter 7 bankruptcy, where all the unsecured creditors are discharged right away.

The main reason why someone would file a Chapter 13 would be because they have fallen behind on their mortgage, are risking foreclosure, but are not in a position to come current on the note right away. Filing a Chapter 13 will stop the foreclosure sale from going through, and allow you pay back the arrearage over a period of years (which is far better than coming up with the funds immediately). Another major example would be a case in which your car is repossessed. A 13 will allow you to get the car back, and pay off the balance of the loan with a much better interest rate than you are probably handling right now. In addition, it may also be possible to cram down the amount owed on the car to the actual fair market value of the vehicle. This can often end up shaving several thousand off of what you owe.

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That depends on which type of creditor you are speaking with. Different rules apply for the original creditor and collection agencies. It may very well be that the one of them (or both) has violated your rights.

When you fall behind on your debts, the creditor will no doubt start calling you to demand payment and/or send you letters. So long as the conduct of the creditor does not rise to the level of criminal activity (like you are physically threatened, or your property is damaged as a result of their attempts to get money from you), then the original creditor can do just about whatever they want. That’s right. The original creditor can do things like: come to your home and knock on the door to demand money; call you as many times during the day as they wish; send you letters threatening law suits, late fees, charges, and reporting the debt to the credit bureau; pretty much anything that is not criminally related. If you were to inform the original creditor that your intent is to file a Missouri or Illinois bankruptcy, they may or may not stop calling you (even if you give them your attorney’s information). Although it is always a good idea to give the original creditor this information, because this may cause them to stop contacting you.

If the debt has been passed on to a collection agency, the rules change dramatically. The area of law covering this activity is the Fair Debt Collection Practices Act (FDCPA). This statute regulates what a debt collector can and cannot do in their attempts to collect on a debt. For instance, if a collector calls you, and you notify him/her of the fact that you are represented by an attorney for the purposes of a bankruptcy, and they continue to contact you thereafter, they have violated your consumer rights under the act. The damages that have to be paid to you are in the range of $1,000, and they can no longer demand money from you. In addition, the act states that if a violation can be shown to have occurred, the collection agency has to pay your attorney fees. This means that there are no upfront costs to you (which is a nice little bonus!!)

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Yes, it does. And depending on how quickly you get your Missouri or Illinois bankruptcy filed, you can actually prevent the creditor from taking any action at all (so as to avoid any money being garnished from your pay checks).

The filing of a bankruptcy is accompanied by what is called an Automatic Stay. This is a fancy way of saying that everything stops. All creditor activity must immediately cease, including phone calls and letters. This Stay also extends to anything awarded to the creditor by way of a hearing. When a creditor sues you for breach of contract on a debt that you owe, the judgment from the court allows the creditor to do one of three things: 1) garnish your wages; 2) levy your bank account; 3) place a lien against your property. The creditor can execute one of these options, or it can do all three at once. The most likely, of course, is the wage garnishment. The creditor simply sends your employer the necessary documentation, and the payroll department begins to deduct.

But once a bankruptcy is filed (whether it is a St. Louis Chapter 7 bankruptcy, or a St. Louis Chapter 13 bankruptcy), the garnishment must end. Your bankruptcy attorney simply notifies the creditor’s attorney of this fact, and that attorney then sends a Release of Garnishment to your payroll department. In addition, the underlying debt is discharged, along with the rest of your unsecured creditors (whether they be in the form of credit cards, medical bills, payday loans, deficiencies from a repossession or foreclosure, etc.)

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I hear this comment a lot from clients. The level of stress that a mountain of debt can produce can literally be overwhelming. Credit cards, medical bills, payday loans, old utility bills, cell phone carriers, overdrawn bank accounts, deficiencies from a repossession, past due loans, etc. All of these things can build up and spiral out of control. And your life can seem like an inescapable trap.

But it does not have to remain this way. In fact, the relief that you seek is more easily attained than you may think. For instance, when you file a St. Louis Chapter 7 bankruptcy, all of your unsecured debt (the stuff mentioned above) is discharged. This means that the debt goes away forever. The creditors cannot demand payment from you anymore. The creditors cannot call you anymore, or write you letters, or harass you at work. And you are not obligated to pay them anything ever again, or explain anything to them, or even talk to them. They are all gone, in one fell swoop. Once this discharge occurs, you will be in a perfect position to begin rebuilding your credit score. Most people who file a Missouri or Illinois bankruptcy will typically find themselves making major purchases (like a house) within two years, and reestablish a good credit rating within one year.

Or if the better option for you is a St. Louis Chapter 13 bankruptcy, then the relief from debt is handled in a slightly different way. A Missouri Chapter 13 is a repayment plan. This allows you get caught up on things like your mortgage (so you can save your home from foreclosure), to make sensible payments on your car (so that it does not get repossessed), take care of your tax debt, and come current on any back child support obligations. All of these kinds of debts are consolidated into one easy, monthly payment to the Trustee. The Trustee then distributed the funds to the various creditors listed in your Chapter 13 plan.

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My suggestion would be, yes, you should appear in court on the day of your hearing. Not doing so can have negative consequences (even if you end up filing a Missouri or Illinois bankruptcy later on). let me explain why.

If you fall behind on your debts, one of the things that a creditor can do is to sue you for breach of contract. In other words, you agreed to make certain payments per month, you failed to do so, and now they want the court to recognize that you have breached your end of the deal. In order to make this happen, the creditor (through their attorney) will file the Petition for Breach with the proper jurisdiction, and then have you served with a summons. The summons is very important, because this is the document that informs you that a hearing has been set on matter, which includes date, time, and location. If you are not properly served with a summons, the hearing cannot take place.

Assuming you are properly served, the summons will indicate the date and time on which the hearing will be held. This hearing is your opportunity to make any argument you might have as to the validity of the debt in question. But if you do not appear on the designated date and time, the creditor will receive what is called a ‘Default Judgment.’ A default judgment is an order from the court essentially saying that the creditor wins by default (because you did not show up). Once the creditor receives this type of judgment, it may then move forward with its range of remedies. These would include a wage garnishment, bank levy, or placing a lien against your property. So this is why it is important to make an appearance.

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In such a situation, you should be made aware of the pros and cons of filing bankruptcy, because depending on which chapter you file, you could possibly lose the asset. But then this is why it is so terribly important to seek out a lawyer who has a great deal of experience in handling these types of scenarios. Let me explain what I mean below.

To begin with, when you file a Missouri or Illinois bankruptcy, the court will expect you to disclose all of your assets and property (in other words, you will be required to make it clear what you own, and not withhold information about anything). So you will have to provide a list and description of all real estate in which you have an ownership interest; you will have to list and describe all automobiles in which you have an ownership interest; and you will have to disclose all personal property you own as well, such as furniture, appliances, tv, stereo, bank accounts, etc.

Once this full disclosure is complete, you will then be asked to provide fair market values for each item. For instance, if you own a home, you will need to list what you believe to be the amount of money the house could sell for on the open market. Sometimes this can be done by having an appraisal completed, but that is not necessary. The price at which real estate near your home has sold for is a good indication (assuming the houses that sold nearby are similar in size and complexion). Or if the house needs a lot of work, or if there are many houses in the area that are currently for sale (and none of them have sold in a year). All of these factors can play a role in determining the value of your house.

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Yes, you can. But you will be limited to a Missouri or Illinois Chapter 13 bankruptcy. The federal bankruptcy code states that an individual may not file a St. Louis Chapter 7 bankruptcy more than once every eight (8) years. Once the eight year mark is passed (this is the date on which you filed the case, not when you received your discharge), you are again eligible.

But yes, you may still file for bankruptcy during this eight year window. You can still file a St. Louis Chapter 13 bankruptcy. This is described as a repayment plan over the course of three (3) to five (5) years, during which certain creditors are paid back. Examples of the types of debts paid back are mortgage arrearage, car notes, tax debt, back child support, and possibly a portion of your unsecured debt (however, there is always a good chance that even this type of debt can be fully discharged as well).

There are a number of beneficial things that you can do in a Chapter 13 that you cannot do in a Missouri or Illinois Chapter 7. For instance, you can get rid of a second (or junior) mortgage attached to your house in a 13. So long as the fair market value of your home is less than what you owe on the first mortgage, then any junior lien can be stripped off. This means that you would only have to deal with one mortgage thereafter. It is also possible to ‘cram down’ the amount that you owe on your car to the actual value of the automobile. Many people are upside down on their cars (i.e. they owe more than the car is worth). So long as you purchased the car 910 days or more ago (which works out to be roughly two and a half years), then you will only be required to pay back the value of the car as opposed to the balance on the note (which can sometimes be a difference of thousands of dollars).

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