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Bankruptcy
Go Directly to Jail?
Over at the Bankruptcy Law Network, a group blog in which I participate with some very smart consumer bankruptcy attorneys all over the country, I’ve just posted about debtors who are told by collection agencies that if they file for bankruptcy they’re somehow committing a crime. It never ceases to amaze me - the depths to which some unscrupulous collector types will sink in order to grasp just one more dollar.
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The problem of unscrupulous creditors giving false information to debtors concerning bankruptcy was one of the evils Congress sought to eradicate in enacting 18 U.S.C. 157(3). That statute makes it a federal bankruptcy crime for a creditor to make a false representation to a debtor about bankruptcy as part of scheme to defraud. While I am confident that the false representations occur quite frequently in practice, thr tough part of making a case would be in proving that the creditor’s conduct was part of a larger “scheme to defraud.”
And now comes proposed legislation that prohibits debt collectors “from using misleading statements.”
That’s sure to nail them. No more debtors’ prisons.
I can sleep beter at night now.
–Jack Payne
http://www.sixhrs.com