“We needed it to be more in line with modern times,” said George Cauthen, a bankruptcy attorney who primarily represents lenders. “The whole idea behind exemptions is to leave every individual … to leave them with a little dignity and the basics of getting by in life.

The new law applies in bankruptcy, to protect a certain amount of property from a bankruptcy trustee. But it also applies outside of bankruptcy, to protect property from judgment creditors. It increases the exemption in cash (in lieu of a homestead exemption) from $1,000 to $5,000, in a vehicle from $1,200 to $5,000, in household goods from $2,500 to $4,000, and in tools of a trade from $750 to $1,500. The new statute also adds a $5,000 “wildcard” exemption, which can protect assets not otherwise exempt, if you don’t use all of your other exemptions. Those amounts are per person; for a married couple, the amounts will double. These amounts are in addition to the $50,000 homestead exemption that the Legislature gave us two years ago. Click here for more on how exemptions work.

In practical terms, this change in the law means that if you need to file bankruptcy but your 1998Toyota Camry is paid for, you don’t have to worry about losing it. If you’ve managed to save a couple thousand bucks to pay for your kid’s braces, you don’t have to worry about losing that either. If you inherited your grandmother’s Shaker sideboard, you don’t have to give it up. If you are entitled to a tax refund, you won’t have to give that up either. This statute provides meaningful relief to those in financial distress, and reflects the actual cost of supporting a family in today’s economy. Another bit of good news is that the new statute contains a cost-of-living adjustment, so we won’t have to deal with the statute becoming so outdated in the future.

This change is the law is largely due to the tireless efforts of a few dedicated consumer advocates, especially Sue Berkowitz of Appleseed Legal Justice, consumer lawyers, and ordinary people who wrote, called and e-mailed their elected representatives. I also have to put my native cynicism aside for a moment to say that I have been impressed at the sincere efforts so many of our state legislators put into this legislation. They listened and responded with genuine concern for their constituents.

Table of contents for Back to Basics: Bankruptcy

1. Back to Basics: What This Series Is All About
2. Back to Basics: What Is Bankruptcy?
3. Back to Basics: BAPCPA and a Brave New World for Bankruptcy Lawyers
4. Back to Basics: What Happens to My Credit in Bankruptcy?

We’ve been focusing on news-based entries here at the South Carolina Bankruptcy & Consumer Law Blog lately, so I thought it was time to get “back to basics.” Thus, we’re starting this series of posts to do just that — present the basics of bankruptcy and consumer law.

First up, this week, we’re going to talk about bankruptcy. I hope to cover the following subjects in a user-friendly, easy-to-read manner:

• Who can file for bankruptcy
• The differences between Chapter 7 and Chapter 13
• What happens in a bankruptcy case in South Carolina, from beginning to end
• What kinds of debts can be discharged — and what kinds of debts can’t
• What the discharge really means for you as the person filing
• How bankruptcy can be used to restructure your debts
• And more

If you have any specific questions about bankruptcy you’d like me to answer, please let me know in the comments below! I’ll do my best to incorporate them into future posts in this series.

The mortgage company is suspected of widespread fraud, the paper said, which may have contributed to the subprime mortgage crisis that has rocked the U.S. economy.

The probe will examine underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans.

Bank of America which agreed to buy Countrywide earlier this year claimed it didn’t know about any FBI investigation.

.

The article quotes a law professor named Ronald Mann as suggesting that the credit industry practices are designed to keep debtors entrapped in the prison of debt, and that most would be better off in a Chapter 7 bankruptcy filing.

But, as others quoted in the article suggest, some are not qualified for a 7 under the rules adopted by the BAPCP Act in 2005. About this, little can be done (besides a good faith argument for special circumstances where they exist). But the other excuse offered against bankruptcy — that many simply “don’t want to file” — that, I believe, can be tempered and must be.

Why don’t people want to file bankruptcy when it would resolve the crushing pressure of debt? Because the entire process has been so thoroughly stigmatized, of course, and many believe the unfortunate fib that filing is morally wrong, somehow, or that it makes the debtor weak of character.

Such a view is reflected in the works of one Dave Ramsey, a financial “guru” whose opinion on bankruptcy is well-documented as being quite negative. My colleague Chuck Newton writes eloquently about Ramsey’s opinion in this post. An excerpt:

His point is that bankruptcy is a “gut-wrenching, life-changing event that causes lifelong damage” … As for the “life changing” aspect of which he objects, I thought that was the whole point of his system and method. To have a life changing affect on who people deal with and eliminate debt. I guess he argues that “lifelong damage” is the difference. But, what is the “lifelong damage” … Is the damage spoken and written of about stigma? Ramsey, as I understand it, filed bankruptcy. There is a stigma to bankruptcy. There is also a stigma in having to reorganize and fight with your creditors for years at a time. The easy part of the equation is that most people cannot deal effectively by themselves with a catastrophic debt problem. How much long range planning, how much individual negotiations with creditors, how much stress can one take?

This is what concerns me about the social stigma placed on bankruptcy filing. The simple fact is, whatever stigma attaches, does so because of societal norms. But what do societal norms say about constantly struggling with debt collectors — about alternatively bargaining with and avoiding the dunning call? Is it not more admirable to face facts, admit that it isn’t working, and protect your family and your assets?

When even the Bible speaks of debt forgiveness as a mandatory and good thing, you have to wonder how we got so judgmental and compassionless. I’d like to think of my job as one small part of a movement to educate and change the societal norms.

Technorati Tags:
debt management, dealing with your creditors, chapter 7

Cagan warns that this is only the result of reset, and doesn’t take into consideration factors such as job loss, medical catastrophe or other events.

For more information, read this recap at MSN Real Estate.

Technorati Tags: foreclosure risk

Powered by ScribeFire.

I’d agree. First, I’m not sure how many people actually know the FTC has oversight and enforcement authority in this area. Second, of those that do, how many realize how easy it is to lodge a complaint? 

Since this blog’s primary purpose is to educate the public about its rights in the field of consumer debt, let me do my part right now.

Why You Should File a Debt Collection Abuse Complaint With the FTC

One simple reason: the power of numbers. The more complaints the FTC receives, the better information it has about the scope of a particular problem. And the better the information, the more effective its enforcement activities.

Will a FTC complaint solve your problem directly? Probably not. For that, you need some self-help, or the assistance of an attorney in egregious cases.  But you should also file the complaint with the FTC anyway.

How To File a FTC Complaint About Debt Collection Practices

There are three ways.

1. Go to the FTC website at this page - http://www.ftc.gov/ftc/cmplanding.shtm - and click the link for the Consumer Complaint Form. This is the preferred method.

2. Write to the FTC at:

   Federal Trade Commission
   CRC-240
   Washington, D.C. 20580

3. Call the FTC at 1-877-FTC-HELP (382-4357)

Technorati Tags: FDCPA, FTC, debt collection complaints

Powered by ScribeFire.

Did you type in a phrase in Google to get here? This post, the first in what I hope to be a regular series (perhaps monthly, maybe more often if I get inspired), will answer your question, whatever it is! Basically, I’m going to take some of the keywords reported back to me in my statistics, and address them here, in one post. Sound like fun? Let’s play!

1. who is laura t. coffey - She’s the person who writes the weekly 10 Tips column for MSNBC.com. Sometimes quoted here on this blog.
2. dana wilkinson, south carolina, lawyer - Yes. And a damn fine one, too.
3. cosigners family bankruptcy - OK, I got several permutations of this one, including the heartbreaking “i cosigned for a car and she made her payments late so i filed bankruptcy on that debt.” Here’s the skinny on cosigning: yes, it’s YOUR debt, if you cosign. I’m sorry to tell you that. I know it’s not fair. If she doesn’t make the payments, it goes on her credit, and yours. If you declare bankruptcy, though, your personal liability is discharged (but hers isn’t, unless she files and is discharged, too). But neither personal discharge will eliminate the lender’s rights against the car - meaning, they can still repo the car, despite the fact that you’ve got a discharge. What they can’t do is expect you to pay deficiencies or late fees or the like. There’s another post on this subject here.
4. can you get sc after being bankrupt - Can you get what? Santee Cooper? Sure, if you pay a deposit. Saint Kitts and Nevis? Probably not unless you win the lottery. Seychelles? South Carolina? The Safety Car? Santa Cruz? A little more specificity here would be welcome.
5. four primary reasons for filing bankruptcy - Statistically? Or in my experience? If you’re talking about my personal experience, that’s medical trauma/unexpected illness (either debtor’s or family member’s); loss of job; divorce; overspending (yes, it does happen - just not as much as creditors want Congress to think it does). Statistically - um, you’d think I’d be able to find that somewhere, wouldn’t you? I’ll keep looking.
6. can elderly people be cosigners for personal loan? - Can they? Sure. Should they? I don’t recommend it except in very narrow circumstances.
7. SC Law Updates - wow. On everything? I mean, I can try to include more case law updates here for bankruptcy and foreclosure law, but that’s a pretty tall order … On a more serious note, though, you might try the following resources for general South Carolina legal information: SC Code of Laws; SC General Assembly Current Legislation landing page; SC Judicial Department (including advance sheets - case opinions); SC general state government portal.




8. Wilmington Trust Robert Moser - Either the president of Sun Trust Delaware Trust Company, in Wilmington Delaware, or a Wilmington NC police detective. Take your pick. (Probably others, too.)




9. sc law on payday loans - I have been remiss in not passing along this product before now. The SC Appleseed Legal Justice Center has published a fantastic resource for this topic - “Payday Lenders And the Law - Know Your Legal Rights Before Turning That Check Into Cash” (available here in English and here en Espagnol)




10. how to protect yourself if your husband defaults on a loan - Oh, boy. Talk about sensitive topics. While you’re not liable yourself, unless the loan’s for a necessity of life or you cosigned for the loan, it will still affect your financial lives together. My advice, although I’m not a marriage counselor, is to make sure you both fully hash out your financial histories, and have a clear understanding of needs, goals, and expectations (preferably before saying “I do”). After the wedding, the advice is the same for anyone who wants to protect their credit rating: check your credit reports periodically, and make sure you get a look at all three CRAs, not just one (as they each sometimes report different debts). Make sure you know in whose name the debt in your marriage has been placed, and if your name is on that loan, you need to take some responsibility for making sure it gets paid on time.
    

Technorati Tags: keyword cleanup, bankruptcy, consumer law,

Powered by ScribeFire.

Briefly: In this opinion for the Sixth Circuit, the Court overturned a district court’s dismissal of the plaintiff’s claim against Discover. The plaintiff, both for himself and as the executor of his wife’s estate, claimed Discover’s harassing collection efforts exacerbated his wife’s diagnosed bipolar disorder, leading to her eventual suicide. The magistrate, to whom the case was referred (as often happens in federal court), noted that the wife’s acquisition of the cards in question (as well as the spending itself) were all symptoms of her severe mental illness (she’d signed up for the cards under his name, with herself as an authorized purchaser); her husband had made considerable effort to control both the manic behavior and the effects. When the truth came out about the cards, he canceled them and alerted the issuers that he’d never applied for them. 

The wife killed herself, to the husband’s surprise; although he knew of her illness, nothing in her behavior (except for a slightly more relaxed demeanor) alerted him to her plans. The psychiatrist who reviewed the records, and had treated the wife earlier, noted the following in his report:

As my attached hand-written notes indicate, Ms. MacDermid was primarily concerned by the recent allegation by a credit card creditor that she had been guilty of “credit card fraud.” …  She was terrified at the prospect of going to jail and causing further embarrassment to her family, particularly her husband. … [S]he was preoccupied with the allegations of credit card fraud, and that it appeared to be the primary stressor which contributed to the deterioration of her emotional and mental condition in April and May of 2003. Subsequent to her selfinflicted gunshot death on June 13, 2003, it was reported to me by Mr. Don MacDermid, her husband, that she had just been threatened with immediate jailing by credit representatives of Discover Card, and that her fear and embarrassment related to the threat of incarceration appeared to be paramount in the voiced fears which led to her suicide.

Summary judgment was granted to Discover on the wrongful death claim; other claims were dismissed (including FDCPA and TILA claims and state law claims such as intentional infliction of emotional distress). The court’s opinion reviews these claims generally, in the context of debt collection harassment suits, and for that reason alone the opinion would be worth your while. The court affirmed the dismissals of all the claims (including the FDCPA - because Discover was collecting for itself, and was not a “debt collector” under the statute), and affirmed the grant of summary judgment for the wrongful death claim. But the intentional infliction of emotional distress claim was revived, and that’s good news for Mr. MacDermid, for now he gets to present his testimony and evidence to the jury - evidence of conversations including salient comments such as the following:

MacDermid also related in his complaint a telephone conversation that he had on April 9, 2003 with
Adonica Gilmore, a Discover employee. Because MacDermid had taped the conversation, he was
able to describe it in some detail in his complaint:
• that she [Adonica Gilmore] had checked with the local District Attorney’s office and
had spoken with a lady named “Harriott” who had told her that, under the facts
described above, Mr. MacDermid is legally liable for his wife’s charge card; and
• that she had filed a report with the Giles County Sheriff’s office; and
• that Harriott Barkly of the Giles County District Attorney’s office, advised her that
because the MacDermids were married, and because Mr. MacDermid was aware of
his wife’s problem, he “should keep a better eye on her” and should “keep her away
from the internet”; and
• [that Adonica Gilmore stated about Mrs. MacDermid,] “I don’t think you want her
going . . . well you know”; and
• that there was no need for him to talk to a lawyer, because, even though there was
no signature, and it was procured on the Internet, Mrs. MacDermid’s application is
binding on Mr. MacDermid, and he is definitely liable; and
• that [Adonica Gilmore stated], if the matter could not be resolved, “I’ll just call
Harriott” . . . and have the authorities “take a little trip out to your house.”

Wow.

Technorati Tags: FDCPA

Powered by ScribeFire.

The debt collector who left this comment on my blog, for one:

Alternatively, you could try paying your bills and then you wouldn’t have this problem in the first place.

Why shouldn’t a collector ring you. You owe someone money and have either refused or ignored all other requests for payment.

Oh, sorry I forgot that everyone in debt is a victim.

(I deleted it, as I do all spam and any comment designed to harass or intimidate my readers.)

Of course, no one ever said debtors = victims. Anyone who knows me at all knows that I’m pretty big on personal responsibility. Those (few) clients of mine that found their way into bankruptcy due to overspending (the vast majority get there thanks to catastrophic events outside their control, as is true of most bankruptcies nationwide) are told up front by me, at the first consultation, that they’re going to exit the other side of this process with more information, and much better habits, and if they’ll let me, I’ll help them shake that victim mentality and start to create true financial independence.

No, the “debtors are victims” crack is a favored ploy for debt collectors. Because you don’t think of yourself as a victim but instead worry about others thinking you’re trying to get preferential treatment - in short, you don’t want anyone thinking of you as a victim - this comment is designed to elicit your shame.

Did it work? I hope not. I hope my blog is helping educate people about creditor tactics and dirty tricks, and maybe even persuading debtors to stand up, stop hiding, and start taking control of their financial lives by fighting back against the creditors who engage in those dirty tricks. That, of course, was what the post that prompted that comment was all about - violations of the FDCPA.

So - let’s see if I can answer the question, as inartfully phrased as it might have been: Why shouldn’t creditors call debtors in violation of the FDCPA? How about because it’s against the law? Or, if that’s not enough for you, how about because it’s a shameful way to make a living - harassing and intimidating others for pay?

Creditors and bill collectors who skate on the thin ice of FDCPA violations have to take the position that the only reason you’re not paying your bills is because you’re a deadbeat. Otherwise, what would be the justification for their existence? If you really just don’t have the money, then there’s no point, right? It’s a numbers game, and they play it for the odds. You have the right not to be harassed in your own home, at your job, among your neighbors and family members. Not the privilege - the right.

And that’s why they shouldn’t violate the law, Anonymous Commenter.

You no longer answer the telephone. You know who’s on the other end - another nasty-toned collector, another creditor’s employee with a supercilious tone, bent on making you feel 2 inches tall. The number scrolls on the screen or the display, and you sigh, and feel a little more beaten down inside. Maybe your kids have noticed, and you are starting to feel less than honest with them. Maybe you tell them it’s a telemarketer, or a wrong number.

I’m here to give you permission - and encouragement - to pick up the phone.

First of all, it’s your phone. You need to reclaim ownership over it and not allow them to intrude into your home life by remote.

But more importantly - every time that bill collector calls - after you’ve told him not to - it’s a violation of the Fair Debt Collection Practices Act (FDCPA).  Make a new habit of keeping a pad and pen by the telephone, and answer those calls. Make excellent notes about each and every call - names, dates, times, length of calls, and (most importantly) what was said.  The following statements are red flags:

• Threatening criminal prosecution
• Statements suggestion they will take immediate legal action
• Any sort of harassing conduct - name-calling, calling when you’ve told them it’s inconvenient, rude language, intimating you’re immoral or have done something illegal
• Calling at work (after you’ve told them you’re not allowed to take personal calls at work)
• Calling your neighbors or family members

If any of these things happen during those phone calls, stop thinking of them as little daggers being thrown at you. Bill collectors only engage in this kind of behavior for one reason - and one reason only: it works.  Stand up and help stop this abusive treatment by making a record of it, and taking the violators to court. 

Technorati Tags: FDCPA, debt collector harassment

Powered by ScribeFire.