creditor harassment – how to end it

Under the law, threatening violence, using obscene language and calling persistently with the intent to irritate/annoy amounts to harassment. Also, calling home at odd hours or at work place if there has been a notification to not do so or even calling up relatives or friends without your permission can all amount to harassment.

What Can be Done to End to Harassment?

Attempt to engage the creditor before anything else, unless you have a strong feeling that the person may not be pleasant. Explain the reasons for your default, and try to reason with them and ask for payment extensions or payment options, or present any payment plans you believe will be feasible.

As much as one would hope reason and logic can win the battle, the fact is that more often that not, it will not work this way. Debt collectors will almost certainly live up to the stereotype of being unreasonable, difficult people. The next option you, as a debtor, have is to file for bankruptcy. Bankruptcy will ensure that all debt collection actions (including phone calls), ethical or otherwise, come to an immediate end. As soon as you file for bankruptcy all creditors and bill collectors must immediately end their collection efforts. Once you’ve filed for bankruptcy, both the Bankruptcy Court and the attorney will notify all creditors of your bankruptcy through the mail. In the meanwhile, since this could take a week or so to reach them, you can also notify them in case you get a call, or a creditor comes ringing your doorbell.

Legal Remedies in lieu of Bankruptcy?

The Fair Debt Collection Practices Act provides the consumer with legal remedies against creditors who violate its provisions. The federal Fair Debt Collections Practices

Act (FDCPA ) prohibits a collection agency from engaging in many kinds of activities.

(15 U.S.C. §§ 1692 and following.) If a collection agency violates the law, you have the right to sue the agency. If the creditor that hired the agency was involved in the unlawful conduct, you may also be able to sue the creditor. If the behavior is truly outrageous, the creditor may waive the debt and remove the negative marks from your credit report in exchange for your agreement not to sue.

Under the FDCPA , a collection agency cannot legally engage in any of the following activities.

1. Communications with third parties.

2. A collection agent cannot contact you:

• at an unusual or inconvenient time or place—the debt collector must assume that calls before 8 a.m. and after 9 p.m. are inconvenient unless the collector knows otherwise, or

• at work, if the collector knows that your employer prohibits you from receiving collections calls at work.  If you are contacted at work, tell the collector that your boss prohibits such calls.

3. Harassment or abuse.  A collection agent cannot engage in conduct meant to harass, oppress, or abuse you. The agent cannot:

• use or threaten to use violence or harm you, another person, or your or another person’s reputation or property

• use obscene, profane, or abusive language

• publish your name as a person who doesn’t pay bills, such as in a “deadbeats” list

• list your debt for sale to the public

• call you repeatedly, or

• place telephone calls to you or any other person without identifying him or herself.

4. False or misleading representations.  A collection agent cannot:

• claim to be a law enforcement officer, suggest that he or she is connected with the government, or send you a document that looks like it’s from a court or government agency

• falsely represent the amount you owe, the character or legal status of the debt, or the amount of compensation the agent will receive

• falsely claim to be an attorney or send you a document that looks like it’s from a lawyer

• communicate false credit information, including failing to tell someone you dispute a debt

• use a false business name

• claim to be employed by a credit bureau, unless the collection agency and the credit bureau are the same company, or

• threaten to take action that he or she does not intend to take or cannot take.

5. Unfair practices. A collection agent cannot engage in any unfair or outrageous method to collect a debt. Specifically, the agent cannot:

• add interest, fees, or charges not authorized in the original agreement or by state law

• solicit a postdated check for the purpose of threatening you with criminal prosecution

• accept a check postdated by more than five days unless the agent notifies you between three and ten days in advance of when it will be deposited

• deposit a postdated check prior to the date on the check, or

• call you collect or otherwise cause you to incur communications charges.

If you are being harassed by bill collectors, call us for a FREE consultation:

619-800-3082

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FAQ regarding deed in lieu of foreclsoure

Q. What is the definition of a deed in lieu of foreclosure?

A. The homeowner exchanges his or her ownership interest in the house, represented by a deed, back to the mortgage holder in order to avoid mortgage foreclosure and in some cases forgiveness of a mortgage deficiency.

In basic terms, you give the keys to your home back to the bank and you walk away;  the bank agrees not to foreclose or ever ask you for any more money.

Q. Under what circumstances would a homeowner do a deed in lieu of foreclosure?

In general, two sets of homeowners pursue a deed in lieu of foreclosure as a way out for mortgage trouble.

• Homeowners who do not want to keep their home under any circumstances
• Homeowners who, despite a wish to keep their home, reached the assumption that no foreclosure prevention alternatives will allow them to keep their house.

Q. Why would someone want to forfeit their home as a first choice?

•       Homeowner does not like the house itself.
•       The location is no longer right.
•       The house is no longer the right size or right type.
•       Neighborhood or zoning degradation.
•       Repair, renovation or structural issues.
•       Homeowner no longer needs a house at all anymore.

Q. How does a homeowner end up at the conclusion that they must give up the house?

• Mathematically beyond hope
• No applicable methods to stop foreclosure
• Exhausted all options

If you are facing foreclosure, contact us for a FREE initial consultation:

619-800-3082

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Former MLB outfielder, Lenny Dykstra, charged with bankruptcy fraud

Lenny Dykstra, best known for playing centerfield for the New York Mets and Philadelphia Phillies, was charged with bankruptcy fraud for purportedly selling possessions from his $18 million home. Dykstra, known by his nickname “Nails”, filed for bankruptcy in July 2009.  Dykstra removed, destroyed and sold property that was part of the bankruptcy estate without the permission of the trustee, allegedly.

Contact the Zarcone Law Firm today for your FREE initial consultation at 619-800-3082 regarding bankruptcy, IRS offers in compromise or other debt related problems:

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Mortgage Help Is Declining Fast

Last summer, officials revealed  a $1 billion program to provide loans to aid the unemployed pay their mortgages until they could obtain employment. It was scheduled to go into effect before the end of the year but the program has yet to accept any applications.

Now the existence of the main program, the Home Assistance Modification Program, is in doubt.

The House, controlled by the Republicans, voted this week to terminate the foreclosure relief program. The Democrat-controlled  Senate will seek a rescue.

The housing assistance effort has failed to end a tsunami of foreclosures and a decline in home values.  There were 225,000 foreclosure filings in February nationwide.

If you have questions about a foreclosure contact us at

619-800-3082

info@financialfreshstart.org

 

 

primer on wage garnishment

Garnishment in California is a practice creditors can use to recover amounts owed from debtors who do not pay of their own accord. For example, wage garnishment is when a creditor collects part of the debtor’s wages or income sent to the creditor, to fulfill the debt. Money held by third parties, such as money in a bank account, could also be garnished.

Garnishment is an apparatus for enforcing a judgment. Therefore, in most cases a creditor has to file a lawsuit and obtain a judgment to create its right to the money. For instance, the IRS does not have to obtain a judgment first.

California Exemptions

Social Security is usually exempt from garnishment under California state law.

California’s garnishment exemptions include:

• Pensions: all public and private retirement benefits are protected, including distributions from IRAs, state and county worker benefits, and firefighter or police office benefits.

• Public benefits or assistance: workers’ compensation; unemployment benefits; aid to families with dependent children; aid to the blind, disabled, and aged; student financial aid; relocation benefits; union benefits owing due to a labor dispute.
• Insurance benefits: disability and health benefits; life insurance proceeds if the policy prohibits proceeds them from being used to pay creditors; matured life insurance benefits, up to the amount needed for support; homeowner’s insurance proceeds.

Maximum Limit

California follows federal law to determine the maximum amount that can be garnished. The lesser of the following may be garnished:

• The amount by which a debtor’s weekly income exceeds 30 times the minimum wage.
• 25% of disposable income, with “disposable income” defined as income left after legally required deductions from a person’s paycheck. Only legally mandated deductions are considered in calculating disposable income—other obligations or deductions, even ones enforced by employer policy (e.g. deductions for health insurance), are not counted. Therefore most of a person’s income will be considered “disposable income.”

However, note that the 25% rule applies for most debts. There are certain debts, like taxes or child support, where the 25% rule doesn’t apply.

Statute of Limitations

Once the creditor obtains a judgment for money owed, the creditor has up to 10 years to take any action to collect.  During the 10 years following the judgment the creditor may garnish the debtor’s wages.

If you have any questions about wage garnishment, contact us at:

http://financialfreshstart.org

info@financialfreshstart.org

619-800-3082

IRS announces easing of tax collection practices

The Internal Revenue Service announced measures to be more lenient with taxpayers who can not pay their tax liability, in recognition of the financial crisis affecting the entire economy.

IRS Commissioner, Doug Shulman, announced five concrete steps that the IRS will use to be more flexible. He said he gave IRS personnel greater authority to suspend enforcement in certain circumstances, for example, when a taxpayer has recently lost a job, support is based solely on social security benefits or faces steep, unexpected medical bills.

Deferred Levies

In such cases, the tax liability is not eliminated or forgiven, but the collection activity, including the notices and phone calls, levies, liens and penalties, will be postponed, said IRS officials.

Second, taxpayers who fail to make a payment under a payment agreement with the IRS, the IRS will not automatically suspend the agreement.

It would allow taxpayers who are in economic trouble the ability to miss a payment. Missing more than one payment may compromise the installment agreement.

The IRS also expand eligibility for its “offer in compromise” program, taking into account certain taxpayers who appear to have enough equity in their homes to cover their tax burden. In the past, offers in compromise were not considered for those with equity in their homes.

Under an offer in compromise, a taxpayer can be resolved with the IRS for less than the total amount of taxes owed.

Special Unit

Mr. Shulman said he created a special unit to investigate cases where individual taxpayers with an equity  real estate may qualify for an offer in compromise.

In addition, taxpayers who do not receive a payment under an existing offer in compromise agreement to work with IRS officials to avoid any breach of this Agreement.

Finally, Mr. Shulman said the IRS to accelerate the payment of publications for taxpayers in financial difficulties.

Taxpayers who have difficulty meeting their obligations, should contact the IRS to take advantage of this new flexibility, said Shulman.

profits keep going up – jobs don’t.

Corporate America continues to report impressive profit gains but job creation continues to lag. Dividend increases are up sharply and the Dow Jones Industrial Average is above 12000. It makes job growth the continued missing piece of the economic rebound puzzle.

So far, earnings are up 28% from a year earlier and sales are up 7.7% for the S&P 500 firms that have reported. But the juxtaposition between profits and job growth remains a big mountain for companies hoping to keep growing their business to climb.

The other thorn in the side of the economy would be lackluster housing market, which provides a source of spending for consumers.

The lack of significant job gains 18 months after the recession was deemed “over” isn’t such a mystery when considering how companies were able to return to strong profit growth in a short period of time. Companies mainly relied on aggressive job cuts, and with companies now enjoying their resurrected earnings and demand still choppy, they are not adding to their payrolls.

To add to the fun, the price of commodities have been skyrocketing. This adds more reason to hold off on hiring. The commodities spike is pressuring profit margins and keeping companies guarded about adding to labor costs.

For the first month of 2011, the economy added a paltry 36,000 jobs, the Bureau of Labor Statistics reported Friday. Economists had expected more than 130,000 jobs. The unemployment rate fell to 9% from 9.4%, as more people found work and the pool of workers fell by more the 500,000. Winter weather that blanketed much of the country contributed to the weakness.

Some companies in hiring cycles include Enterprise Rent-A-Car, Norfolk Southern Corp., and Union Pacifiic.

But this is being offset by sectors such as banks and drug makers where jobs are still being pared. Several banks, including American Express Co. and Wells Fargo & Co., have either recently announced layoffs or signaled job cuts might be coming. Abbott Laboratories said it is trimming 1,900 jobs, or 2% of its work force.

Pfizer Inc. last week said it would slash as much as 5% of its 110,600-person global work force, including the layoff or transfer of about 1,100 employees at its Groton, Conn., facility. Pfizer plans to stop research in allergies, urology and other areas that didn’t seem as likely to bring medicines to market soon, a spokeswoman said.

Again, if jobs don’t recover it’s hard to see how the economy will be able to sustain meaningful growth.

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Companies face bigger jury verdicts

(From Bloomberg) The stalled economy and a surfeit of negative corporate news, such as the BP Plc oil spill, sudden-acceleration suits against Toyota Corp. and bank foreclosure practices, has fueled public anger, affecting lawsuits against companies in unrelated cases across the country, legal experts said.

Ten of the 50 largest jury verdicts last year came in product-defect cases, compared with five in 2009 and one in 2008, according to data compiled by Bloomberg. There were 15 such verdicts of $25 million or more in 2010, compared with seven in 2009.

The largest jury verdict of the year of any kind was for $1.3 billion in a copyright-infringement action against SAP AG. That was also the largest copyright jury award in U.S. history, almost 10 times higher than the second-biggest, according to Bloomberg data.

The top product-defect verdict was for $505.1 million against Teva Pharmaceutical Industries Ltd., the Israeli drugmaker, and its U.S. distributor, in a Nevada case over a claim that packaging of its anesthetic propofol created a risk of contamination and led to the plaintiff’s hepatitis. Three of the top 10 were in smokers’ suits against tobacco companies, led by a $152 million award against Lorillard Tobacco Co. in Boston in December.

The total of the largest five product-liability verdicts was $1.1 billion, up from $620 million in 2009 and $408 million in 2008. The 77 percent growth from last year accelerated a trend from the previous year, when the biggest five product verdicts rose 52 percent from 2008.

There hasn’t been any radical change in product-liability law to cause this change.  Prejudice today “is more subtle and not always conscious,” he said. “It’s a blue-collar feeling that corporate America doesn’t really care, and that’s difficult to eliminate in voir dire,” the jury selection process.

Outcomes in cases still “in the pipeline” may reflect the recession’s impact, said Carl Tobias, a University of Richmond law professor in Virginia.

“What’s happened to the economy could well make people distrustful of big entities, particularly corporate ones,” Tobias said. “There may be a fair amount of exposure going forward.”

There may be another reason for the rise in large product- defect verdicts, said Will Kemp, a lawyer who was part of the team that won the $505 million jury verdict against Teva.

It’s “cheap defendants and cheap insurance companies,” Kemp said in an interview.

“The defendants and the insurance companies are holding onto their money and they’re not settling the cases,” he said. “When the recession started, everyone started to hold on to their money. They’re making people try more cases.”

Gene Egdorf, an attorney who won a $54 million product- defect verdict in January 2010 against Caterpillar Inc., the world’s largest maker of construction and mining equipment, agreed.

“It’s getting tougher and tougher to get cases settled,” Egdorf said. “The companies may be hoping for better results on appeal.”

Many of the verdicts of 2010 may be reversed or reduced on appeal, or in post-trial motions, as typically happens to the biggest jury verdicts in product-liability suits.

 

show me the assignment! Mass Supreme Court stops foreclosures.

The Massachusetts Supreme Court recently ruled against Wells Fargo and U.S. Barncorp in two foreclosure cases in which the loans were packaged into securities.  The Supreme Court upheld a decision to void two foreclosure sales because the owners of the loans could not establish that the loans had been assigned to them.  Both of the loans had been assembled into mortgage-backed securities sold to investors.

This is an example of “show me the paper” defense. Cases in California where homeowners have attempted to establish a defense that the party foreclosing on their home could not produce the original note have not been successful.

Individual loans often are sold to an investor, with the new owner’s name left blank in loan documents to limit paperwork hassles as the loan subsequently changes hands before being combined with other loans into mortgage-backed securities.

Justice Robert J. Cordy concluded in a concurring opinion that the two banks showed “utter carelessness” when they “documented the titles to their assets.”

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Bankruptcies up in 2010.

Former NBA number 1 pick Derrick Coleman filed for bankruptcy in 2010.

The number of personal bankruptcies exceeded 1.5 million last year,  as unemployment rates and depressed home prices drove more households to seek court protection.

Personal bankruptcies ticked up 9% from 2009, the highest level since a revamp of the law took effect in 2005, and rose 25% in California.

The other areas of increase were the Southwestern states and the Southeast.  In Arizona, they rose nearly 24%.

Some experts think 2011 could see the beginning of a downtrend in bankruptcy filings as the economy improves and consumers borrow less. “Over the course of the year, I think bankruptcies will be going down,” said Robert Lawless, a University of Illinois law professor. “The reason for that is borrowing’s down…there’s less of a reason for people to take the legal step of filing for bankruptcy.”  The unemployment picture has not improved though in 2010 so although people may be borrowing less, they aren’t making more.

And it wasn’t Joe Six Pack that was filing for bankruptcy in 2010.  Consider:

• Derrick Coleman (Former #1 pick of the NBA draft) filed chapter 7 bankruptcy in March 2010, saying he owed his creditors nearly $4.7 million. He listed assets of just $1 million.
• Toni Braxton (R&B singer, who has sold over 40 million albums) filed chapter 7 bankruptcy in October 2010. This was her second filing, as she previously filed in 1998. She listed debts of between $10-$50 million and assets of between $1-$10 million. She stated she would like to keep her home, which she owes $1.6 million but is worth only $1.2 million. She wants to work out a modification.
• Antoine Walker (Former NBA All-Star) filed chapter 7 bankruptcy in May 2010. Even though he made $110 million in his career, he listed his assets at only $4.3 million.
• Mark Brunell (Former NFL Pro-Bowl quarterback) filed Chapter 11 bankruptcy in June 2010. He earned over $50 million during the past 10 years, but failed real estate investments forced him to file.
• Dermontti Dawson (Former NFL Pro-Bowl offensive lineman) filed Chapter 7 bankruptcy in July 2010. He listed his assets at $1.42 million and his debts at $69.66 million.

See our website at www.financialfreshstart.org.