Illegal debt collection practices draw federal scrutiny

Unmanageable credit card debt, looming student loans and unpaid medical expenses are common nationwide. In the current economy, millions of Americans are struggling with debt. Debt collection agencies throughout the country are now facing state and federal scrutiny for violation of debt collection practices law. New legislation and pending lawsuits are part of the efforts to curb illegal creditor actions. After a debtor files bankruptcy, creditors must cease any collection effort and halt legal action. Despite clear laws that aim to prevent creditor action, debtors continue to deal with aggressive agents, lawyers and collection companies that will profit from purchased debts. Outdated laws and failed oversight has made debt collection a $12-billion-a-year business. It is estimated 30 million Americans are harassed and pursued by debt collectors, a number that is up 50% since 2003. While debt collection is nothing new, the high rates of unemployment combined with the collapse of the housing market and underwater mortgages, more debtors are unable to pay their creditors. While bankruptcy is one solution, it may not be enough to stop unscrupulous creditors. Debtors are forced to deal with menacing phone calls and unfounded arrest threats. In some cases, creditors have pursued neighbors and family… Continue reading

Gabby Douglas’ mom filed for Chapter 13, reorganized debts

Sometimes it takes a fresh start to get ahead. Since Gabby Douglas won a gold medal in the Olympics for women’s gymnastics, her mother has also made headlines, both for her sacrifice and the support she provided her daughter, but also because she filed for Chapter 13 bankruptcy earlier this year. She believes that filing bankruptcy allowed her to be able to live and reorganize debt so she could still repay what she owed. When talking about bankruptcy, she is not ashamed and was glad that there was a legal way to protect her home from foreclosure. One reason that debtors in New York hesitate to file bankruptcy is because of a certain stigma or the social pressure to continue to keep paying off debts. In reality, many of these debts will never get paid. For those who suffer from unmanageable debt, usually the hole gets deeper before there is any relief. Bankruptcy provides an opportunity to get a fresh start, but also to pave the way for future financial stability. Natalie Hawkins, Gabby’s mother, filed for Chapter 13 bankruptcy, allowing her to pay down her debt over several years. The bankruptcy filings list Ms. Hawkins as having assets totaling $163,706, including a townhouse… Continue reading

Mortgage delinquency on the rise

In the downtrodden economy, widespread mortgage delinquency is no surprise. After a job loss, divorce, injury or death in the family, a financial setback can be devastating. It is not unlikely that you or someone you know is underwater with a mortgage payment. In attempts to save a home, a family may try to recover after getting behind on mortgage payments, but this cycle can often lead to foreclosure. If you are in New City, New York and behind on mortgage payments or facing foreclosure, remember that you do have options and rights. Filing Chapter 7 or Chapter 13 will put a stop to all legal action by your creditors. A Chapter 13 may give you the opportunity you need to restructure your debts and prevent the foreclosure of your home. Whether you are delinquent on mortgage payments or you are behind on credit card, student loan, taxes, and other debts, there is relief available. Many debts can be eliminated or reorganized through bankruptcy. Delinquencies include all loans that are at least one payment behind, but not yet in the foreclosure process. Some experts believe that delinquency rates are high as a result of persistently high unemployment rates nationwide. A recent report by the Mortgage Bankers… Continue reading

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