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Archive for May, 2013

Borrowers’ Rights against Creditor Harassment (Part 2)

Posted on: May 27th, 2013 by andrewmckenna
According to the FDCPA, creditors are legally not allowed to use profanities, nor lie about who they are, when trying to collect a debt from a borrower.

According to the FDCPA, creditors are legally not allowed to use profanities, nor lie about who they are, when trying to collect a debt from a borrower.

As a continuation of Borrowers’ Rights against Creditor Harassment (Part 1), here is some additional information regarding how the Fair Debt Collection Practices Act (FDCPA) attempts to protect borrowers from the potentially abusive practices of creditors and debt collection agencies. While Part 1 focused on what creditors are required to do when interacting with borrowers, here in Part 2, we will focus on what creditors are legally prohibited from doing when attempting to collect outstanding debts.

The FDCPA: What Creditors Are Legally Forbidden to Do

Among the things that creditors are legally prohibited from doing when trying to collect monies owned to them include:

  • Calling borrowers after 9pm or before 8am (in the borrower’s local time zone)
  • Continuing to contact borrowers even after borrowers have sent the creditors written notice that they no longer wish to be contacted and that they do not intend to pay the disputed debt (In such cases, creditors will have to file a lawsuit against the borrower if they wish to continue their efforts to collect on debts.)
  • Incessantly calling or otherwise trying to contact borrowers with the intention of pestering them
  • Contacting borrowers where they work after borrowers have requested that creditors stop doing so
  • Calling or otherwise contacting borrowers who have secured the services of a lawyer (as all communication should go through the lawyer)
  • Contacting borrowers after they have submitted an official request for proof of the debt in question
  • Lying to borrowers about who they are (e.g., by stating they are attorneys or legal authorities) or about the amount of debt in question
  • Publicizing the borrower’s name and contact information on some type of “bad debt” list
  • Using profanities or otherwise abusive language when communicating with debtors
  • Filing false reports on debtors’ creditor reports in an attempt to coerce debtors into paying their debt

If you are struggling with debt and are looking for a financial fresh start, contact the trusted Colorado bankruptcy lawyers at The Law Office of Andrew McKenna. For more than 20 years, we have been successfully overseeing our Clients’ bankruptcy cases so they can resolve their financial issues as beneficially as possible. Our comprehensive legal knowledge coupled with our vast experience allows us to consistently and efficiently help our Clients achieve the best possible resolutions to their financial matters. For an evaluation of your case and expert advice regarding how to move forward, call us at (303) 730-8819.

Borrowers’ Rights against Creditor Harassment (Part 1)

Posted on: May 25th, 2013 by andrewmckenna
The Fair Debt Collection Practices Act sets for a series of borrowers’ rights that attempt to protect borrowers against potentially abuse practices of creditors.

The Fair Debt Collection Practices Act sets for a series of borrowers’ rights that attempt to protect borrowers against potentially abuse practices of creditors.

When borrowers find themselves struggling to pay their monthly bills, it’s not uncommon that they may miss a payment or two and that they will start to be pestered by creditors who are demanding payment. In such cases, it’s important that borrowers are aware of their rights so that they know when creditors have acted illegally and they can seek legal recourse to penalize unethical creditors.

The Fair Debt Collection Practices Act (FDCPA), which was initially passed in 1977 and has since been amended multiple times, establishes a series of rules and regulations regarding how creditors are legally allowed to interact with borrowers when collecting debts. While the FDCPA is focused on protecting borrowers from potentially abusive debt collection practices, it also sets forth various regulations for promoting fair debt collection and for holding abusive creditor accountable for violating the law.

The FDCPA: What Creditors Are Legally Required to Do

According to the FDCPA, creditors are legally required to do the following when contacting debtors about collecting on monies owed. Creditors must:

  • Clearly explain what creditor they are associated with in every type of communication – including phone calls and written letters – sent to debtors
  • Provide debtors with the complete company name and address of the creditor, should a debtor request it, within 30 days of the debtor’s request
  • Inform debtors of their rights to dispute the debt in question
  • Send debtors proof of the debt in question, should debtors officially request such proof, within 30 days of the debtor’s request (If creditors fail to send proof of the debt within 30 days, they are legally required to stop trying to collect on that debt from the debtor).

If creditors do not abide by these stipulations, they will be in violation of the FDCPA, can be sued by debtors and can be ordered to pay debtors up to $1,000 plus attorneys’ fees.

If you are struggling with debt and are looking for a financial fresh start, contact the trusted Colorado bankruptcy lawyers at The Law Office of Andrew McKenna. For more than 20 years, we have been successfully overseeing our Clients’ bankruptcy cases so they can resolve their financial issues as beneficially as possible. Our comprehensive legal knowledge coupled with our vast experience allows us to consistently and efficiently help our Clients achieve the best possible resolutions to their financial matters. For an evaluation of your case and expert advice regarding how to move forward, call us at (303) 730-8819.

Avoiding the Payday Loan Trap: Alternatives to Payday Loans

Posted on: May 23rd, 2013 by andrewmckenna
Payday loans, while alluring options when borrowers need cash quickly, can do more harm than good; therefore, borrowers should consider their alternatives to payday loans.

Payday loans, while alluring options when borrowers need cash quickly, can do more harm than good; therefore, borrowers should consider alternatives to payday loans.

Payday loans offer borrowers in need of quick cash a sum of money without having to put up collateral for that money and without having to pass a credit check. As a result, payday loans can be alluring options for individuals with less than stellar credit who may need extra money to fix their car, pay a doctor’s bill or pay for some other unexpected expense that pops up. Although payday loans can help borrowers in need of money out of a financial bind, however, they are associated with excessively high interest rates that can be, in the worst cases, as much as 20 to 25 times higher than credit card interest rates.

This means that, if borrowers are unable to pay off payday loans when the first payment is due, they will face an extremely high payment the next month, which can quickly snowball into overwhelming debt that may take months or even years to pay off. What can make matters worse if the fact that this snowballing debt created by the initial payday loan can quickly damage a borrower’s credit even further, making it that much more difficult for them to obtain any lower-interest rate loans in the future.

Payday Loan Alternatives

To avoid becoming entrapped by the overwhelming debt that can be generated by payday loans, it’s critical that borrowers consider all of their options before taking out a payday loan. Potential alternatives to payday loans can include:

  • Obtaining an advance on one’s paycheck from an employer
  • Borrowing money from a relative
  • Paying for the unexpected expense with an existing credit card or taking out a new credit card to pay for the expense
  • Attempting to secure a loan from a credit union or small financial institution that may not have as strict credit standards
  • Filing for Chapter 7 or Chapter 13 bankruptcy

If you are struggling with debt and are looking for a financial fresh start, contact the trusted Colorado bankruptcy lawyers at The Law Office of Andrew McKenna. For more than 20 years, we have been successfully overseeing our Clients’ bankruptcy cases so they can resolve their financial issues as beneficially as possible. Our comprehensive legal knowledge coupled with our vast experience allows us to consistently and efficiently help our Clients achieve the best possible resolutions to their financial matters. For an evaluation of your case and expert advice regarding how to move forward, call us at (303) 730-8819.

Medical Bills Are Top Cause of Debt, Bankruptcy Filings in U.S.

Posted on: May 20th, 2013 by andrewmckenna
A study compiled by the AMA has found that more than 60 percent of bankruptcy filings in the U.S. are triggered in some way by excessive medical bills and debt.

A study compiled by the AMA has found that more than 60 percent of bankruptcy filings in the U.S. are triggered in some way by excessive medical bills and debt.

While various types of situations, including divorce or loss of a job, can bury people in debt, a recently published study compiled by the American Medical Association has found that more than 60 percent of bankruptcy filings in the U.S. are triggered in some way by excessive medical bills and debt. According to the study’s findings:

  • Individuals who filed for bankruptcy to relieve themselves of medical debts most commonly included homeowners who were between 30 and 50 years old, who were middle class and who had a college education.
  • Medical debt was typically accumulated when individuals had a medical condition that prevented them from working or when the condition required extensive, expensive treatments.
  • Even when individuals had health insurance, they still faced the possibility of accumulating massive amounts of medical debt due to a variety of factors, some of which include expensive deductibles and co-pays, costly prescriptions and bills stemming from having to visit out-of-network specialists.

Bankruptcy Can Alleviate Medical Debt

There are a number of different options for debt relief for individuals who are overwhelmed by medical bills and other debt. While debt consolidation or debt settlement may be a possible option for some, in many cases, borrowers will need debt relief that is further reaching. For these individuals, Chapter 7 or Chapter 13 bankruptcy may be the best solution to obtaining the financial fresh start they need.

While Chapter 13 bankruptcy will help struggling borrowers develop a repayment plan to pay off their debt over the course of three to five years, with Chapter 7 bankruptcy, borrowers will liquidate some of their assets to pay off creditors, and much of their existing debt (including medical debt, credit card debt, etc.) will be discharged.

If you are struggling with debt and are looking for a financial fresh start, contact the trusted Colorado bankruptcy lawyers at The Law Office of Andrew McKenna. For more than 20 years, we have been successfully overseeing our Clients’ bankruptcy cases so they can resolve their financial issues as beneficially as possible. Our comprehensive legal knowledge coupled with our vast experience allows us to consistently and efficiently help our Clients achieve the best possible resolutions to their financial matters. For an evaluation of your case and expert advice regarding how to move forward, call us at (303) 730-8819.

Options for Cosigners of Defaulted Loans (Part 2)

Posted on: May 16th, 2013 by andrewmckenna
If you are a cosigner of a loan that has been defaulted on, refinancing the loan or filing for bankruptcy may be your best options if you can’t make the payments.

If you are a cosigner of a loan that has been defaulted on, refinancing the loan or filing for bankruptcy may be your best options if you can’t make the payments.

As a follow up to Your Options if You Cosigned a Loan That Has Been Defaulted On (Part 1), here are some additional tips for cosigners regarding what they can do if their loved one has defaulted on a loan. It’s important to point out that some of these options have a downside but that they can ultimately help you climb out of debt if you are financially responsible and are diligent about following through with them.

  • Consider refinancing the loan – One option for refinancing the loan involves attempting to refinance the cosigned loan with the other borrower. On one hand, this can help lower the monthly payments, which may get them down to a number that the other borrower (or you as the cosigner) can now afford to make on time. However, if the other borrower is still unable to make even these lowered monthly payments, you could now be stuck making more interest payments and ultimately paying more money than you would have before refinancing the loan.
  • File for bankruptcy – If you are facing credit card debt, healthcare debt or other debt that has put you in a position of not being able to pay off the cosigned loan, you are likely overwhelmed by debt and may want to seriously consider filing for bankruptcy. Although bankruptcy will not discharge all of your debt (such as your student loan debt or any court-ordered payments handed down to you), it can help you discharge a large amount of debt, which may free up funds to pay off the debts that have not been discharged by bankruptcy.

If you are struggling with debt and are looking for a financial fresh start, contact the trusted Colorado bankruptcy lawyers at The Law Office of Andrew McKenna. For more than 20 years, we have been successfully overseeing our Clients’ bankruptcy cases so they can resolve their financial issues as beneficially as possible. Our comprehensive legal knowledge coupled with our vast experience allows us to consistently and efficiently help our Clients achieve the best possible resolutions to their financial matters. For an evaluation of your case and expert advice regarding how to move forward, call us at (303) 730-8819.

Options for Cosigners of Defaulted Loans (Part 1)

Posted on: May 13th, 2013 by andrewmckenna
Cosigners of loans do have some options in the event that the other borrower on the loan is unable or unwilling to continue paying on that loan.

Cosigners of loans do have some options in the event that the other borrower on the loan is unable or unwilling to continue paying on that loan.

While many financial advisors will strictly warn their clients to be careful about cosigning a loan for a loved one, parents cosigning loans for their children – and these days, more commonly children cosigning loans for their parents (or loved ones) – is commonplace; therefore, it’s crucial that cosigners are aware of what their role is and what to expect in the event the loan they have cosigned is defaulted on. Regardless of whether the person for whom the loan is for can no longer make payments or has intentionally decided to stop paying on the loan, the cosigner will be responsible for making any missed payments or will suffer negative impacts to his credit score if the payments are missed.

In such cases, cosigners have the following options for dealing with loan defaults:

  • Try to secure a forbearance – If the other person on the loan cannot make the payments for a temporary period of time but does intend eventually, when possible, to make the payments, and if you as a cosigner cannot make the payments in the interim, you may be able to secure a forbearance from the lender. A forbearance can suspend loan payments for a period of a few months, which may be just enough time to help you or the other person on the loan gather the money necessary to continue making the monthly loan payments.
  • Attempt to secure a loan that could get you out of the cosigned loan – Although difficult, you may be able to secure a loan that would allow you to pay off the cosigned loan early, would transfer the debt to the other borrower named on the cosigned loan and would get you off the hook for the other borrower’s debt. However, because the initial loan required you to cosign it in the first place, it is unlikely that another lender (unless that lender is a private party) would be willing to have the original borrower be solely responsible for the principle of a debt.

If you are struggling with debt and are looking for a financial fresh start, contact the trusted Colorado bankruptcy lawyers at The Law Office of Andrew McKenna. For more than 20 years, we have been successfully overseeing our Clients’ bankruptcy cases so they can resolve their financial issues as beneficially as possible. Our comprehensive legal knowledge coupled with our vast experience allows us to consistently and efficiently help our Clients achieve the best possible resolutions to their financial matters. For an evaluation of your case and expert advice regarding how to move forward, call us at (303) 730-8819.

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