Articles Posted in Creditor Harassment

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As the nation enters Phase 2 of the Coronavirus Lockdown, millions of Americans are still behind on their monthly bills. Many lenders have implemented programs to help people manage debt payments during this economic uncertainty.  However, while people with student loans, mortgages and automobile loans were offered helpful alternatives to survive the Corona-induced downturn, people with credit card debts often were not. Debtors with medical debt have not fared well either.

A recent article in the California Law Review Online declared that, “The coronavirus pandemic is set to metastasize into a debt collection pandemic. This is because while evictions, foreclosures and student loan payments have been stayed by various government  orders and federal regulations, there is no blanket moratorium or order stopping debt collection lawsuits. Many debt collection law firms have ramped up credit card collections lawsuits since they have not been able to bring or finish foreclosure lawsuits. Many credit card collection lawsuits end up with the consumer getting a default judgment entered against them, since they believe there is nothing that they can do to stop these lawsuits. Debt collection law firms nationwide kept filing new cases during the shutdown, consumers be damned. For example, in Maryland, two major debt collectors alone filed over 2,000 suits in April.  These law firms must keep their gravy train rolling, even if many Americans have lost their jobs or part of their income, through no fault of their own.

After a homeowner gets a judgment against him or her, the law firm will usually attempt to get paid–voluntarily at first, and then by using court process to take the homeowner’s income and assets. There are several ways in Florida that a judgment creditor can collect on a judgment.

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With COVID-19 destroying the economy, scores of retailers have filed bankruptcy in order to get relief from their creditors. Last last year, Congress  enacted a new subchapter of the bankruptcy code to help smaller businesses get relief at a lower cost and more quickly. Corporations of all sizes have used bankruptcy as a survival tool for generations. They did not give it a second thought. There is not stigma when a company does this in order to survive. (Local grocer Winn-Dixie, and many major airlines,  are still around because of their bankruptcy filings.)

However, for individuals, the “stigma” of having gone bankrupt has stuck around a little longer. This seems to be changing now that people realize that bankruptcy is a tool to survive economic downturns.  I just got off the phone with a potential client who called to say that a credit union had sued her. She called asking what she could do about it. She started her call by saying, “I do not want to file bankruptcy.” I asked her why not. She said that she would lose all of her property, ruin her credit, ruin her reputation and lose her job if she filed bankruptcy. I spent 45 minutes with her on the phone. She retained me to handled her Chapter 7 bankruptcy case. I dispelled the myths of bankruptcy and I made her laugh–a lot–which she said took away some of her stress from the collection calls, letters and lawsuit.

MYTH NO. 1:  I WILL LOSE MY PROPERTY IF I GO BANKRUPT

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Nearly two months after Coronavirus exploded on the scene, some states are starting to relax stay-at-home orders, and people are slowly returning to work. It will take a lon time for the economy to recover, and  some White House advisers  are still predicting a 20% unemployment rate.

People are wondering if  the jobs they held prior to the COVID-19 crisis will still be there after things settle down. Economists argue about how many jobs will come back after the pandemic ends.

Prior to the outbreak of COVID-19, the financial press was praising the benefits of the “gig” economy. Uber drivers, Instacart shoppers and other freelancers could set their own hours and get paid in cash daily. Now, gig workers are among those hardest hit by the Coronavirus pandemic. 

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Americans can’t go online, turn on the TV or go shopping without being bombarded with news about coronavirus. Our Facebook feeds are rife with posts about the virus and how much impact it will have on our every day lives.  Just a few months ago, we were gearing up for March Madness, spring break at Disneyworld, PGA Golf Tournaments and Lucero at the  Ryman Auditorium.    Now those events have been postponed or canceled, and even Orlando theme parks are closed for the rest of the month.  Just today, IRS  postponed the deadline on which income taxes are due to July 15.

Our lives have changed in a flash.  The Associated Press warns that Americans must brace for new life of no school and growing dread.  We now spend more time in line at Walmart buying toilet paper than we do lining up for Black Friday sales. Parents worry about their jobs while they wonder who’ll watch their children while they are at work since schools have extended spring break or shut down for weeks.

The world has changed.  We are told to practice “social distancing” and not come within so many feet of our fellow human beings. People are wearing medical masks and gloves when they go out. Some people walk around with Lysol bottles.

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pastdue-150x150If you fall very far behind on your credit card payments, or any other kind of debt for that matter, your debt might appear as having been charged-off on your credit report. A charge-off occurs when you are at least 180 days behind on your credit card payments, and the bank decides that the debt is no longer collectible and decides to write it off as a loss. However, this does not mean you no longer owe the debt. You are still 100% responsible for the debt. But what do you do and what should you expect?

The debt will have to be repaid.

At first, you might think that it is a good thing that your debt has been charged-off and you might even think that you no longer owe the debt. Unfortunately, when your bank decides your account is uncollectible, that is simply an accounting term. It in no way affects your liability for the entire debt owed. However, there is one caveat. The bank can only collect on the debt until the statute of limitations expires. In Florida, the statute of limitations for a credit card debt is five years. Continue reading →

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debtWhen thinking about filing a Chapter 7 Bankruptcy in Jacksonville, Florida, not knowing or understanding the Jacksonville Bankruptcy Process can make filing bankruptcy seem very overwhelming and scary. Not only are Jacksonville Bankruptcy Attorneys asked about what to expect after filing bankruptcy; they are also asked what clients should and should not do before filing for bankruptcy. In order to help you better understand the Jacksonville Bankruptcy Process, please see below for a general timeline of events you should be familiar with.

6 to 8 Years Before Filing a Jacksonville Chapter 7 Bankruptcy:

If you filed a Chapter 7 Bankruptcy before AND received a discharge of your debts, then you will not be eligible to file a new Chapter 7 Bankruptcy before eight years after you filed your previous Chapter 7 Bankruptcy.

If you filed a Chapter 13 Bankruptcy AND received a discharge, you might be able to file a Chapter 7 Bankruptcy after six years if you paid a minimum of 70% of your unsecured claims.

1 Year Before Filing:

Your Bankruptcy Trustee can look back as far as one year for debts paid back to relatives or close business partners. What this means is that a payment made to a relative or business partner could be construed as a preferential payment over your other creditors. If this should happen, the Court could take the payment back from them in order to distribute it evenly to all of your other creditors.

This same concept holds true if you have tried to hide your assets from your creditors by transferring, destroying or hiding any of your property within one year of filing Bankruptcy. In this situation, the Trustee might deny a Chapter 7 Bankruptcy discharge and/or recover the property.

However, your Jacksonville Bankruptcy Attorney may prefer that you wait two years to ensure there are no issues when you do file. Continue reading →

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You have already filed and completed a Chapter 13 Bankruptcy. All of your unsecured debts have either been paid off or discharged and all of your secured debts (such as your mortgage) are current. You found the light at the end of your financial debt tunnel. In addition to your mortgage, you have been approved for a couple of new credit cards and a personal loan. You are able to make all payments very easily. Then, very unexpectedly, you are laid off from your job or are forced to take a pay cut. You can no longer afford to continue to pay your mortgage along with the credit cards and personal loan. Your creditors are already sending you harassing letters in the mail and calling your phone multiple times a day. You are devastated. You worked so hard to get out of your financial crisis only to find yourself in another one. You need bankruptcy protection NOW. You find out that your income is now low enough to qualify for a Chapter 7 Bankruptcy. So you think you’ll just file a Chapter 7 Bankruptcy, reaffirm your mortgage, and be ok. Right? You meet with a bankruptcy attorney to get the process started only to find out you cannot file a Chapter 7; at least, not yet.

The good news is that you can definitely file bankruptcy again, but there are very strict time limits that must be followed if you have already received a Chapter 13 discharge. In order to file a Chapter 7 Bankruptcy, you must wait 6 years from when you filed your Chapter 13 Bankruptcy, but you only have to wait 2 years from when you filed your Chapter 13 in order to file another Chapter 13. Therefore, you can usually file for another Chapter 13 immediately after receiving a Chapter 13 discharge, since Chapter 13 Plans generally last between three and five years.

In the above scenario, you filed your first Chapter 13 Bankruptcy on August 15, 2013. Today is October 29, 2015, just over 2 years later. Therefore, you cannot yet file a Chapter 7, but you can file another Chapter 13 in order to receive bankruptcy protection now from your harassing creditors.

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The thought of having to file bankruptcy can be very scary. There are a lot of unknowns at first. One of the biggest unknowns is determining when it is time to finally give up, throw in the towel and actually declare bankruptcy. Meeting with an experienced bankruptcy attorney can be very helpful, but if you are not quite ready to speak with an attorney, here are a few questions to ask yourself if you are trying to decide if you should file bankruptcy now.

  1. Are you only able to make your minimum credit card payments or no payments at all?
  2. Are your wages being garnished by a Wage Garnishment Order?
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debt-collector-madCreditor Harassment During Bankruptcy

When you file a Chapter 7 or Chapter 13 bankruptcy, something called an automatic stay is put in place as soon as you file. This Automatic Stay prevents your creditors from continuing to try and collect a debt from you, but unfortunately your creditors will most likely not stop harassing you and trying to collect from you the moment you file for bankruptcy. This is because it takes the Bankruptcy Court a few days to prepare your Notice of Bankruptcy and to then mail it to all of your creditors. If, however, your creditors continue to harass you after a reasonable time has passed for them to receive notice of your bankruptcy from the Bankruptcy Court, then they are most likely in violation of the Automatic Stay, provided the debt falls into one of the very limited exceptions: criminal matters, child support, alimony, taxes, certain evictions, ect.

So what should you do if a creditor is still harassing you? The first thing you should do is to let the creditor who is harassing you know that you have filed bankruptcy. You can do this verbally over the phone, or by writing. For example, you can write that you filed bankruptcy on their bill and mail it back to them. Letting the creditor know you have filed bankruptcy stops the contact in the majority of instances. These initial contacts from your creditors shortly after filing bankruptcy are generally just mistakes, which is often due to the creditor’s system not having been updated with the Notice of Bankruptcy they received. It is not yet time to be alarmed, but it is important to keep a log of their contacts with you.

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Thumbnail image for Thumbnail image for money.jpgCreditors have hounded you for months. Your bills have been piling up, but you have finally saved enough money to pay off one of your debts in full. You feel some relief because you have finally made a step towards getting out of debt. However, something happens and you are forced to file bankruptcy just three months later. Your bankruptcy trustee may now consider the payment you made a preferential payment, because you paid one debt off in full while giving nothing to your other creditors.

When a debtor declares bankruptcy, he or she is not allowed to show preference to any one creditor and must divide their assets equally among all creditors. This means that if a debtor pays one creditor in full (6 months prior to filing bankruptcy if a normal creditor and 1 year if a family member) the creditor may be forced to give the money back to the bankruptcy trustee.

11 U.S.C. § 547 defines preference as:

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