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 Outdated laws and failed oversight has made debt collection a $12-billion-a-year business.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

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

New bill urges discharge of private student loan debt

Generally, the bankruptcy code outlines which debts can be discharged, however, courts do have some authority in the event of severe hardship. In Chapter 7 and Chapter 13 bankruptcy, most unsecured debts, including credit card and medical debt can be discharged or reorganized, while secured debts, including student loans, taxes, and judgments must be paid in full. A new bill is calling on legislators to pass new regulations that would also allow the discharge of private student loans in bankruptcy. Many students in New York and nationwide are burdened by high rates of unemployment and a challenging job market as well as extremely high student loan debt with accumulating interest. In the current economy, many young people are indebted to private lenders and unable to recover, even after filing bankruptcy. While many federal loans have fixed interest rates and the ability to defer payments, many students who take on private student loan debt have no relief in the event of hardship. A recent survey found that many students who took out private loans didn’t know the difference between private and government loan debt. In the proposed new bill, colleges and universities would be required to inform students about federal aid options, including… Continue reading

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