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Good riddance to several debt collectors that seemed hellbent on sending all Oregon student loan debtors into bankruptcy. Pioneer Credit Recovery, Enterprise Recovery Systems, National Recoveries, and Coast Professional had all sued earlier this year once the Education Department said it would no longer send them any more accounts under their current contracts. A federal judge on Tuesday has now dismissed all their claims.
The Department of Education had previously stated that these collectors had mislead distressed borrowers “at unacceptably high rates.” With roughly 7 million Americans in default on more than a $100 billion on their student loans, having the Department of Education actively paying unscrupulous debt collectors to collect on them was a recipe for disaster.
It is probably fair for Oregon and Washington consumers with defaulted student loans to question why the Department of Education did not take this action years ago before thousands of them were sent reeling into bankruptcy.
The original post is titled Student Loan Debt Collectors Denied , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
The Consumer Financial Protection Bureau (CFPB) (4/15/15) issued a final interpretive rule on how to provide mortgage applicants with a list of local homeownership counseling organizations. The interpretive rule restates guidance the CFPB issued in 2013, and provides further guidance for lenders who are building their own lists of housing counselors. The rule also includes guidance on the qualifications for providing high-cost mortgage counseling and for lender participation in such counseling.
“Buying a home is often the largest financial decision in a consumer’s lifetime, and we want to ensure that consumers can access the independent and informed advice they deserve before making that decision,” said CFPB Director Richard Cordray. “Housing counselors are a crucial source of that helpful advice. We will continue to work to improve the home-buying experience for consumers, and today’s interpretive rule will help industry comply with these important protections.”
Housing counselors can provide advice on buying a home, renting, defaults, foreclosures, and credit issues. Advice from housing counselors can be provided at little or no cost to consumers. The Dodd-Frank Wall Street Reform and Consumer Protection Act included a requirement that mortgage lenders provide applicants with a list of local housing counselors. Consumers will receive the list shortly after they apply for a mortgage so they know where to get help when deciding what loan is best for them. Lenders may fulfill the requirement by using CFPB-developed housing counseling lists, which are available through an online tool the Bureau created in 2013, or by generating their own lists using the same Department of Housing and Urban Development (HUD) data that the CFPB uses to build its lists.
Lenders choosing to build their own lists can look to today’s interpretive rule for instructions. Today’s interpretive rule restates the detailed guidance from 2013. It also includes new instructions about: how to provide applicants abroad with homeownership counseling lists; permissible geolocation tools; combining the homeownership counseling list with other disclosures; use of a consumer’s mailing address to provide the list; and high-cost mortgage counseling qualifications and lender participation in such counseling.
The online tool can be accessed here.
Today’s interpretive rule is available here
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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.
CONTACT: Office of Communications Tel: (202) 435-7170
NOTE from Diane – I love to see a plan come together. The establishment and support of the CFPB is the beginning of the pendulum swinging back toward consumer protection. This pendulum takes about 18 years to swing to and fro. It is a good time to be a consumer.
The post CFPB Issues Guidance on Housing Counselor Requirements appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
April 15 is not only tax day, but it’s a great day to look at your financial situation to see if you need to make any adjustments. This is the time when you can analyze how you did financially in the past year. This is the time when you’re required to have your income tax+ Read More
The post With Tax Day Upon Us, Is Your Financial House In Order? appeared first on David M. Siegel.
It seems with ever increasing regularity, there is a chapter 13 emergency filing that my office has to complete. It used to be that a Sheriff sale was the main reason for an emergency filing. As long as the case was filed before the actual Sheriff sale took place, the homeowner had the right to+ Read More
The post Emergency Chapter 13 Filing: From Consultation To Filing In Two Hours appeared first on David M. Siegel.
Falling behind on your federal student loans is like walking down a long, dark hallway.
You have no idea where you’re headed, and there’s no way to know what’s in your way.
Today’s episode of The Student Loan Show helps shine a light, banishing the darkness so you have a better understanding of what’s going on.
In this 19 minute episode we talk about:
- The difference between delinquency and default
- What the government can do to make you pay once you go into default on your federal student loans
- How to avoid default
- Ways to get out of default and back into good shape with your student loans
http://media.blubrry.com/studentloanshow/p/www.studentloanshow.com/wp-content/uploads/2015/04/150414.mp3
Podcast: Play in new window | Download
Like what you hear? Subscribe in iTunes by clicking here.
The post What Happens When You Default On Federal Student Loans appeared first on Bankruptcy and Student Loan Lawyers - 866.787.8078.
Years ago, student loans were easier to deal with.
You graduated, got a job, and paid off your loans in 10 years – sooner, if you got a good enough job.
But even for people with “normal” jobs, repaying a student loan was a short-term inconvenience that led to a better future.
Nowadays it’s not so simple. College is more expensive than ever, and we’re forced to use student loans to cover the majority of it. By the time we graduate, we’re looking at tens of thousands of dollars in debt.
This new reality requires a new way to attack the problem of student loan repayment. Without new rules, we’re never going to win the student loan wars.
Luckily, we’ve got a roadmap for you to follow.
Start Repayment Immediately
When you finish school, you get six months before the federal student loans come calling. But you can end that forbearance as soon as you part ways with the school.
When you start paying faster, you finish paying faster. Even cutting out six months of interest can mean a lot.
Don’t Go Standard
When you enter repayment, you can choose your repayment schedule. If you don’t, the servicer will put you into the standard 10-year repayment schedule.
If you’re smart, you won’t let that happen. Skip right to one of the income dependent payment plans. These plans let you adjust your monthly payments based on a percentage of your income.
Your payment is set as a percentage of your income from the previous year. When you start paying at graduation, your payment will be low because you likely didn’t make much money as a student.
As an added bonus, income dependent repayment plans come with the ability to wipe out your unpaid student loans. Depending on your loan age, that may be 20 or 25 years.
Pay Private Loans Faster
Private student loans don’t offer income dependent repayment options. There’s no forbearances, deferments, or loan discharge. Interest rates tends to be higher, too.
In other words, private student loans are a ripoff that offer no protection for you.
That’s why it’s important for you to pay those private student loans as fast as you can. Every spare dollar you have should go to the private student loan company.
If you can, consider refinancing the private student loans. Most people don’t have that option because of their credit or income, but it’s something to think about.
Keep Your Taxes Separate
The government looks at household adjusted gross income when calculating income dependent repayment amount.
If you’re married and file taxes together, adjusted gross income includes your spouse’s income. But if you file separate tax returns, only your income counts.
You may want to file taxes separate from your spouse. Depending on the difference in your annual refund, the savings on your student loans may make it worth the effort.
Consider a Job in Public Service
Federal student loans offer the option for public service loan forgiveness. If you work full-time for the government or a not-for-profit then you may qualify after 10 years of repayment.
Couple that public service job with an income dependent repayment option and you may end up wiping out a big chunk of your loans.
Public service loan forgiveness doesn’t apply to private student loans, but any savings is worth it.
Don’t Panic
If you worry about your student loans all the time then you’ll drive yourself crazy. Panic and you’ll make mistakes, losing focus on the goal of getting out of debt.
Lay the groundwork early so you can get a plan for paying off your student loans. There may be bumps in the road but if you know all your options then it will make it easier for you.
The post The Modern Rules of Student Loan Repayment appeared first on Bankruptcy and Student Loan Lawyers - 866.787.8078.
Sometimes dealing with debt can feel like a shell game…you make a payment on one debt at the expense of making a payment or remaining current on another debt. What are your options to resolve your debt while maintaining a balanced budget? Learn more about your various options below. At Acclaim Legal Services debt resolution […]
The post Debt Relief Blog Series: Determining Your Best Option. Part V: Impact in Your budget appeared first on Acclaim Legal Services, PLLC.
What if a bar could not serve a customer a second drink until one hour after the first drink was consumed? What if a donut shop could not sell a second serving unless they determined if the consumer would burn off all the calories by the end of the day? What if a tobacco store could not sell a second pack of cigarettes without first taking a lung x-ray? What if casino gamblers could not place successive bets until completing a session with a gambling addiction counselor?
The Consumer Financial Protection Bureau has announced that it will issue a complex set of regulations that are designed to prevent consumers from renewing high interest rate payday loans over and over again. The impact on the payday lending industry should be devastating.
Today we are taking an important step toward ending the debt traps that plague millions of consumers across the country,” said CFPB Director Richard Cordray. “Too many short-term and longer-term loans are made based on a lender’s ability to collect and not on a borrower’s ability to repay. The proposals we are considering would require lenders to take steps to make sure consumers can pay back their loans. These common sense protections are aimed at ensuring that consumers have access to credit that helps, not harms them.
The CFPB proposals target consumers loans that must be paid back in full within 45 days. Most payday and auto-title loans are due within two weeks, and CFPB research indicates that 4 out of 5 payday loans are rolled over within two weeks. According to the bureau, what starts off as a short-term loan usually turns into a long-term “debt trap.”
Lenders making high interest rate payday loans would have to comply with one of the two following regulations:
- Debt Trap Prevention:
- Lenders would have to determine if borrowers could repay the loans at the outset.
- Lenders would have to collect paycheck stubs and tax returns to determine the borrower’s income.
- Lenders would have to document borrower’s major obligations, repayment history and credit profile.
- A 60-day “cooling off” period between loans would be required.
- To make 2nd and 3rd loans the lender would have to obtain additional documentation to verify if the consumer could repay the loan.
- Debt Trap Protection:
- Lenders would be limited as to how many loans they could extend to a consumer in a one year period.
- Lenders could not keep consumers in debt on short-term loans for more than 90 days in a 12-month period.
- Rollovers would be capped at two – three loans total – followed by a mandatory 60-day cooling-off period.
- The second and third consecutive loans would be permitted only if the lender offers an affordable way out of debt.
The impact of these regulations on the payday lending industry would be immediate and substantial. The very notion of determining whether a payday borrower can repay the debt is absurd. The proposed regulations are not designed to “regulate” the industry but to destroy it. When 80% of the industry’s customers renew their loans every two weeks can no longer receive more than 3 rollovers in a year, the impact on the industry will be significant. The proposed CFPB regulations will weed out many lenders and certainly reduce industry profits in general. When these reforms roll out sometime next year, the payday lending industry will cease to exist as we know it today.
Image courtesy of Flickr and Jason Comeley.
1) Don’t Lie.
Don’t lie, don’t lie, DON’T LIE!!!! There is a reason this is listed as number one. Lying is the worst possible thing you can do in a bankruptcy. Not only can it result in your bankruptcy being denied, it can also result in massive fines and prison time. You heard that right, lying can and often will result in PRISON TIME. Don’t believe me, as one of the stars of the Real Housewives who is currently serving time for lying to the bankruptcy court. This means that you should make sure not to lie to your attorney as well, because that will lead to lying to the court.
2) Don’t leave out assets.
Failing to list assets can be catastrophic. In most bankruptcies a debtor is able to protect everything they own. However, an asset that is not listed cannot be protected. An unlisted asset will be found by your bankruptcy trustee, it will be sold and you will not see any of the proceeds from that sale. Furthermore, if it is found that you left it off on purpose, well then we fall back to number 1. NEVER LIE. Your bankruptcy will be denied and you could serve time in jail.
3) Don’t leave out creditors.
Under the bankruptcy code you are required to notify the court of the names and addresses of everyone you owe money to. This doesn’t just mean the creditors you want to include. It doesn’t just mean the creditors who are hounding you. This doesn’t even mean just the creditors with a paper trail. This means everyone who could possibly maintain a claim against you. This includes parents, siblings and girlfriends. If a creditor can prove that you intentionally left them off of your schedules we revert back to number 1. NEVER LIE. Your bankruptcy will be denied and you could serve time in jail.
4) Don’t forget to disclose potential lawsuits/claims
As stated above, an individual filing for bankruptcy is required to list all of their assets. A potential lawsuit or claim against a person or company is an asset. Failure to list it can have all of the same ramifications as any other asset listed above. However, in addition to all of the other pit falls, failure to list an asset can result in a court ruling of judicial estoppel. In essence the court is stating that because you told the bankruptcy court that the claim didn’t exist, the court in which you file suit is going to take you at your word and rule that it doesn’t exist as well. If you were expecting a multi-million dollar personal injury judgment, you can now consider that gone.
5) Don’t payback any debts to a family member, friend or business associate
Many individuals who are in over their head are forced to go to their family or friends for loans to help them get by. As they struggle to avoid bankruptcy they are taking out loans from their mother, their childhood friend or their boss. However, when those individuals start to contemplate the reality that they need to file, they want to funnel what little money they do have to pay off those close to them. The problem is that these individuals are considered insiders. Any money paid to an insider on a debt is recoverable by the Trustee. What this means is that the Trustee will file a lawsuit against your loved ones to get the money back into your bankruptcy estate. If you are considering bankruptcy you should speak with a qualified bankruptcy attorney BEFORE paying back anyone close to you.
6) Don’t transfer assets out of your name
The worst idea almost every client has prior to coming into my office is to begin transferring assets out their name to “protect them”. However, this misguided attempt to protect assets does just the opposite. While exemptions may have been able to protect those assets, once they are transferred out of the debtors name they become fraudulent transfers. The trustee can recover these assets without providing any compensation to the debtor. This counts not only for physical assets like cars or boats, but also financial assets like bank accounts. Nothing should be transferred out of your name without first discussing it with a qualified bankruptcy attorney.
7) Don’t max out your credit cards prior to filing
A question that every bankruptcy attorney hears on a regular basis is: If I am filing anyways, should I go on a shopping spree prior to filing and “maximize my benefit”. The answer is a resounding NO. When you borrow money you do so with an agreement to pay debt. Bankruptcy relieves you of the burden to repay that debt, but only if you are acting in good faith. Using your credit cards at a time that you know you cannot afford to repay the debt is considered to be an act of fraud and violates the good faith requirements of bankruptcy.
8) Don’t let bankruptcy defeat you
By the time clients make it to my office they are often years into financial crisis. They have fought tirelessly to repay their debt and they often feel that bankruptcy means defeat. Defeat in their battle to get ahead. Defeat in their battle to repay those they owe. Defeat in life. That is not the case. Bankruptcy is not an end but a beginning. Henry Ford, Walt Disney, Thomas Jefferson and Abraham Lincoln all filed bankruptcy prior to their success. They didn’t let the need for bankruptcy end their promising futures, but rather used the fresh start offered by bankruptcy to push forward with the life they had always dreamed of. Don’t ever let past debts ruin your future. Bankruptcy is not a defeat, bankruptcy is a new beginning.
According to an article in the American Banker, by Rachel Witkowski , 4/9/2015, The Consumer Financial Protection Bureau “CFPB” has filed a massive lawsuit against more than a dozen debt collectors, payment processors and related entities for failure to stop fraudulent collection tactics. The case was filed in U.S. District Court for the Northern District of Georgia, on March 26, 2015.
The article goes on to say that the “complaint accuses a handful of connected debt collectors based in Georgia and New York of harassing consumers about “phantom” debts. But the potentially groundbreaking part of the case is that the CFPB also sued several payment processors, including worldwide processor Global Payments and its contracted parties, because the agency said they “should have known” about the alleged violations.”
Why is this “ground breaking”? This is the first time that payment processors are held to the same standard of responsibility as the debt collectors. Yes, there are standards even though most us in the debtor bankruptcy world don’t see any prosecution for breaching those stands. But I get off my point – there are legal implications if someone tries to collect on a debt they know to be noncollectable (e.g. bankruptcy or statute of limitations). Those obligations are now being argued apply to the processors of the debts. In other words the processors cannot say “Mikey told me to do it” and think they are protected.
The article goes on to say “Our lawsuit asserts that consumers were harassed, threatened, and deceived as part of a reprehensible scheme to collect debt that was not even owed,” said CFPB Director Richard Cordray, in a press release. “We are taking action against the many parties that allegedly contributed to this phantom debt collection operation. The ringleaders of the scheme, the telemarketing company that broadcast millions of robo-calls, and the companies that processed the payments should all be held accountable for taking advantage of vulnerable consumers.”
The complaint said that “consumers paid millions of dollars” because of the threats made by the debt collectors, including Universal Debt & Payment Solutions, WNY Solutions Group, and Check & Credit Recovery. The debt collectors used collectors and automated telephone broadcasting services to contact consumers and their family members to threaten consumers with false allegations of check fraud and false claims of debt owed, which would result, according to the debt collectors, in service of a ‘financial restraining order,’ notification to the consumer’s employer of the alleged fraud or debt, garnishment of wages, and arrest, unless the consumers paid the alleged debt'”
Several parties were named in the complaint: Electronic Merchant Services, Global Connect LLC, Global Payments and a subsidiary, Pathfinder Payment Solution, Frontline Processing Corp., Universal Debt & Payment Solutions, WNY Solutions Group, and Check & Credit Recovery. The agency specifically cited Marcus Brown and Mohan Bagga in a press release Wednesday for leading the group of people named in the case for running some of the entities.
The post CFPB Launches Massive Lawsuit – Debt Collectors, Payment Processors and others appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
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