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Good Article: 5 Things Debt Collectors Are Forbidden To Do

2/15/2016

Below I am linking an article by Amy Fontinelle with a good summary of what debt collectors are not supposed to be doing. Unfortunately, certain collectors do not follow the law. If you are having these issues with a debt collector, you may have a Fair Debt Collection Practices Act violation case. You may also need to consider filing bankruptcy to rid yourself of the underlying debt. Contact an attorney immediately. These types of cases can have short time limits on when you can file a case.

We offer free consultations for both FDCPA cases and bankruptcies. You have nothing to lose. Call (256)778-1644 or click here to contact us electronically.
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5 Things Debt Collectors Are Forbidden To Do
By Amy Fontinelle | Updated December 18, 2014

Debt collectors have a reputation – in some cases, a well-deserved one – for being obnoxious, rude and even scary when trying to get borrowers to pay up. The federal Fair Debt Collection Practices Act (FDCPA) is supposed to curb these annoying and abusive behaviors, but some debt collectors flout the law.
Here’s what you should know about what debt collectors are forbidden from doing so you can stand up for yourself with confidence.
Read more: 5 Things Debt Collectors Are Forbidden To Do | Investopedia http://www.investopedia.com/articles/personal-finance/121614/5-things-debt-collectors-are-forbidden-do.asp#ixzz40FYiQ0ja

Stop Garnishments (Even If It Is Already Being Deducted From Your Paycheck) By Filing Bankruptcy

8/18/2015

I have been getting a lot of questions about garnishments lately. Both Chapter 7 and Chapter 13 bankruptcy filings in Alabama will stop garnishments. This is accomplished in a two-step process. First, we must file your bankruptcy with the bankruptcy court and thereby obtain a case number for your bankruptcy.

Second, in the Court which issued the garnishment (normally your county’s Small Claims Court, District Court, or Circuit Court) we file a Motion to Quash Writ of Garnishment. In this motion we ask the Court that issued the garnishment to enter an order stopping the garnishment and to return to you any money the Court is holding or receives in the future from the garnishment. This means that if we can catch it in time, we may be able to get some of your money back.

Having said this, I would strongly recommend filing a bankruptcy prior to a garnishment going into effect. This would be when you are first sued or before your court date. I say this only because I know a garnishment taking 25% of your wages is not going to leave much to live on, much less enough to save to pay for a bankruptcy.

Please note that a bankruptcy will not stop a garnishment or income withholding order related to child support.

If you are having financial difficulties and/or dealing with a garnishment, find out the truth about how bankruptcy may be able to help. Call (256)778-1644 or click here to make an appointment for your free consultation or to ask any questions you may have.

A Good Article About Going Through Bankruptcy

8/14/2015

I found this article on Yahoo from Business Insider by Libby Kane titled "What one woman learned from declaring bankruptcy after taking on $20,000 of debt".

I believe it is a real and fair accounting of the pros and cons of the bankruptcy process.

A couple of good quotes:

"I was raised in a family where you borrow money, you pay your debts, and that's the way it is," she says. "I had this moment of, 'You know, it's not going to be the end of the world if I do this, and I'll never do this again.' I felt like I didn't have any other choice. It was a long decision coming, but when I finally did decide to file, it was a relief."

"It's a scary situation when you're in it and going through it, but in the end, it's not as bad as you build it up in your mind to be," Flowers reflects. "The process was more straightforward and wasn't as scary as I thought it would be."

Click here for the full article.

Stop Foreclosure with a Chapter 13 Bankruptcy

6/23/2015

You may be able to save your house from foreclosure by filing a Chapter 13 bankruptcy in Alabama. A Chapter 13 bankruptcy allows you to put your arrearage (the payments you have missed) in your Chapter 13 plan and pay them back over the term of your plan (usually 5 years). You will have to pay the entire amount of your arrearage back over this period of time. This in effect “catches up” your mortgage payments, keeping the mortgage company from foreclosing.

Other than allowing you to catch up your back payments the bankruptcy court cannot affect the terms of your mortgage. Therefore, beginning the month after you file for bankruptcy you will have to begin making your regular monthly mortgage payments.

This can be difficult since you were already missing payments and now you are to begin making your mortgage payments again plus a payment to the bankruptcy court. This will require some serious budgeting and discipline, but it will be very important for you to make both of these payments. While there may be some ways to prevent foreclosure if you miss payments post-petition (i.e. after your bankruptcy has been filed), it will be difficult. You will also have to maintain your homeowner’s insurance coverage.

To stop the foreclosure your bankruptcy will need to be filed prior to the foreclosure sale. The 2005 amendments to the bankruptcy laws have made the preparation of bankruptcy petitions much more time consuming. I would recommend you see an attorney immediately and not later than 1 week prior to the foreclosure sale.

The bottom line is while it may take some cutting back on other expenses, a Chapter 13 bankruptcy in Alabama can save your house from foreclosure.

Do you have questions or comments regarding this topic? Please call my office or email me through this website and/or make an appointment to see me in my Hartselle, AL office for your free, no obligation, consultation.

Bankruptcy Can Save Your Vehicle

6/23/2015

If you are behind on your vehicle payment or just struggling to make the payment, a Chapter 13 Bankruptcy in Alabama may be able to help. First, in almost all circumstances a Chapter 13 Bankruptcy can stop a repossession by handling the payments you are behind. In fact, the Chapter 13 Bankruptcy plan will take care of the entire balance on the vehicle. This normally results in a reduced payment by spreading the balance back out over the 60 month period of the plan and by reducing the interest rate to 5.25%.

A Chapter 13 may possibly help you even further. In a Chapter 13 bankruptcy you can, under certain circumstances, do what is called a cramdown. If you meet the criteria for a cramdown, you are allowed to only pay back the current fair market value of the vehicle, not the total amount owed.

For example, let’s assume you bought a car 2 ½ years ago, financed $25,000.00 and because your credit was not the best, you have a 12% interest rate. Your payments would be about $556.00 per month. You would still owe $14,352.00. Let’s say, per the NADA Used Car Guide you, the vehicle is now worth $8,000.00. By putting the vehicle in your Chapter 13 plan you could (1) extend the loan to 5 years, (2) reduce your interest rate tremendously, (3) reduce the balance owed on the vehicle to $8,000.00. This would in effect reduce your car payment to $152.00 (less than 1/3 the previous payment).

So, what’s the catch? First, you must have had your car loan for at least 910 days, basically 2 ½ years in order to qualify for a cramdown. If you have not had your car for 910 days, you can still lower the interest rate, but not the secured principal. Second, by extending the loan through the length of the plan, you may not be able to obtain the title on the vehicle until the end of the 5 year plan. Third, to maintain the benefit of the cramdown, you normally must complete your Chapter 13 plan. If your case is dismissed or you convert to a Chapter 7, some issues may arise. Fourth, your car must be worth less than the amount owed. If your car is worth the amount owed or more, then there is nothing to cramdown; however, you may still be able to lower the interest rate on the remaining amount owed on the loan and lower your monthly payment.

A Chapter 13 bankruptcy may be able to fix many of your cash flow problems. Please educate yourself and do not let yourself continue to struggle for no reason. Take the first step by calling my office or contacting me through this website and making an appointment to see me at my Hartselle office.

BIG CHANGE FOR ALABAMA BANKRUPTCY LAW -- IN A GOOD WAY

6/16/2015

Lately most changes to the laws affecting bankruptcy have been negative or harmful to debtors. However, just last week, a bill was passed and signed into law which is helpful for debtors. This new law raises the homestead exemptions and personal property exemptions in the State of Alabama. These changes finally bring Alabama in line with or at least closer to other states in this regard.

Below is an information sheet from the Alabama Appleseed Center for Law and Justice, Inc. about the new law. “Alabama Appleseed Center for Law & Justice, Inc. is a non-profit, non-partisan public interest legal advocacy organization whose mission is to work for systemic policy reforms that achieve justice and fairness for low-income, unrepresented and other vulnerable populations.” Alabama Appleseed deserves much credit for pushing these changes to the Alabama exemption laws. These changes will benefit the poor, the middle class, and the elderly for years to come. You can visit their website at http://www.alabamaappleseed.org.

Stop Collections Harassment from Debt Collectors in Alabama by Filing Bankruptcy

6/12/2015

All collection attempts by creditors are to stop as soon as your bankruptcy is filed. When your bankruptcy is filed the "automatic stay" goes into place. This prohibits debt collectors from making any effort to collect any debt against you. It stops phone calls, letters, lawsuits, garnishments, foreclosures, and repossessions.

The automatic stay remains in effect during the pendency of your bankruptcy. It can be lifted by secured creditors to whom you are collateral to or to secured creditors to whom you were supposed to make payments to during the bankruptcy, but have not.

Although the automatic stay goes into effect immediately when your bankruptcy is filed, in reality creditors will not receive notice from the bankruptcy court for 7 - 10 days. For this reason you or your attorney should inform creditors who are threatening to take actions such as foreclosure or garnishment that you have filed bankruptcy and provide the creditor with a case number.

Creditors who knowingly violate the automatic stay will be required to reverse any adverse action they took after the automatic stay went into effect (such as foreclosure or repossession) and may be subject to paying fines and debtor's attorney's fees.

If you are being harassed by collections efforts of creditors and debt collectors, contact me or another qualified bankruptcy attorney in Alabama. The initial bankruptcy consultation is free.

Bankruptcy In Alabama

5/5/2015

Bankruptcy is Federal Law, so it should be the same in every state, right? Not quite. Unfortunately for individuals in Alabama the Bankruptcy Code allows individual states to opt out of the Federal Law in one key area; that is exemptions. This in effect creates Alabama Bankruptcy Laws.

How does this affect Alabamians? First, let us look at real estate. The Federal Exemption for real estate is currently $21,625 for a single debtor or double, $43,250, for a married couple debtors. This means a married couple could have a house worth $150,000 and only owe $100,000, that is $50,000 in equity, and still have no problem filing a Chapter 7 bankruptcy and keeping their house.

However, in Alabama the real estate homestead exemption is only $5,000 for an individual debtor and $10,000 for a married couple. So, in the example above of the $50,000 equity, $40,0000 of it would be non-exempt in Alabama. Therefore, a trustee in a Chapter 7 may seek to take the real estate to obtain the equity. To save the house debtors may be force to file a Chapter 13 and pay this non-exempt equity to the trustee over a period of a maximum of 5 years. Many debtors are not able to make these payments.

The Federal Exemptions are similarly higher and better regarding personal property as well, when compared to Alabama’s exemptions.

Every now and then, the Alabama Legislature does discuss raising our state’s behind the times exemptions. Unfortunately, the banking and insurance lobby is much more powerful than the consumer lobby. Hopefully, one day exemptions based on modern day real and personal property values will be passed in Alabama.

In the meantime, if you do have equity in your house, do not despair, there are still bankruptcy and non-bankruptcy options, of which you may be able to take advantage. Contact me or another qualified bankruptcy attorney immediately. I have free initial consultations, so you have nothing to lose but a little of your time.

How To Keep Your Stuff In Bankruptcy

5/5/2015

Many of the clients I meet with believe that if they file bankruptcy, they will lose all their stuff, i.e. cars, house, etc. About the same number of clients believe that if they file bankruptcy they can keep the stuff they owe on without paying for it. Neither of these beliefs are true.

First, the great majority of people who file bankruptcy can keep the stuff they want to keep. If you file a Chapter 7 bankruptcy, you must continue to pay for the stuff as per your original agreement with the lender. If you file a Chapter 13, you can pay for the stuff through a plan and many times reduce your interest rate, payments, and sometimes even the balance to be paid back. A Chapter 13 will also take care of payments you have missed prior to filing.

Even though a bankruptcy can sometimes help with payments, you still must pay for most property for which you owe. The most common exception to this rule is for what the bankruptcy law call "non-purchase money security interest in household goods." These are debts where when you borrow money, normally from a finance company, the lender asks you about appliances, furniture, electronics, or tools you already own and lists these items as collateral for the loan. The bankruptcy law allows you to avoid these liens in many circumstances, and thereby keep this type of stuff without having to pay the debt on it.

Bankruptcy is a Personal Decision

5/5/2015

You may look at this title and think “Of course it is! Why are you telling me something that is so obvious?” Well, I am writing this because in my years of discussing the possibility of bankruptcy individuals, it is apparent that the great majority of people do not view bankruptcy as a personal decision. People worry: “What will my parents or children or other family think?”; “What will my neighbors think?”; “What will my banker think?”; “What will my church think”; “I’ll be too embarrassed to let my house or car (that I can no longer afford) go back.”; and/or “I’ll be too embarrassed about my credit score.”

You must forget about what others may think and make your own decision based on what is best for you and your family. Many of the people whose opinions you may be worrying about may be in a similar or even worse situation than you. In addition, true friends and family are going to support you in making a decision that is best for your family.

How can bankruptcy be the “best” decision for your family? First, it could save your marriage. Many divorces are a result of financial stress. Bankruptcy may be able to wipe away financial problems caused by bad decisions and/or bad luck; thereby, removing the blame and stress that can cause marital discord.

Second and somewhat related, bankruptcy can give you some time back. Are you working a second job or lots of overtime or extremely long hours just to be able to make your minimal debt payments? If you can do it and are making progress, then by all means continue. However, if it is taking a toll on your health and/or your time with your spouse and children and/or your going to have to keep it up for 20 years to pay off the debt, then it may be time to step back and see if this is really worth the toll it is taking. Bankruptcy may be the way out.

Third, bankruptcy can stop a foreclosure of your house or a repossession of your vehicle. Or in the alternative, bankruptcy can get you out of a house and mortgage or vehicle and car payment you can no longer afford. So, bankruptcy is flexible enough to keep you in your family home, if that is what is best; or get you out of a bad deal and keep you from being sued if that is what is needed.

The bottom line is educate yourself. Send me an email. Make an appointment for a free consultation. Find out what is best for you and yours and then make your own decision. If filing bankruptcy is your decision, I am sure the people in your life you care about would rather you do this than see you go through some of the possible results of not filing.