BURYING YOUR HEAD?

The debt was so out of control she almost felt like she deserved the punishing phone calls she was getting from her creditors. In fact, she got to the point where she was just too frightened to answer her phone anymore. They found out where she worked and tried to reach her boss. They threatened to arrest her at her office. They called her names, used profanity and made her feel like a failure. Finally one day she said, "Enough is enough, I've got to do something about this." Then she called us.

A lawsuit against the debt collectors under the Fair Debt Collection Practices Act (FDCPA) was definitely in order. But, it was too late. There is a limit on how long you have to sue a debt collector for violations of the FDCPA. Generally, a lawsuit must be brought within one year of the violation's occurrence. This means that the clock starts ticking after that first phone call or message or after the first letter was sent (not received). Not all communication from a debt collector is illegal. But if you feel like you're getting bullied, bugged or punished by a debt collector than call or contact us at Nancy L. Thompson Law Office, P.C. so we can help determine whether their actions warrant a lawsuit.

What to do if you are being harassed by a debt collector:

• Keep great records! Record the day, time and message of each call. The more details the better. Did they leave a name? A name of the debt collection agency? The call back number?
• Keep all correspondence from the debt collector, including the envelopes! The envelopes are time-stamped and can sometimes provide a date when the actual bill/letter may not.
• Be your own private investigator. If you feel empowered enough to answer the calls, know the right questions to ask. Debt collectors are notorious for dodging questions because at the end of the day they just want your money. If we do pursue a lawsuit we're going to have to ensure that this debt collector is a legitimate company (and not located in a foreign country) with a real address to serve them with a lawsuit. We'll do our own digging but any information you can get from them initially will aid in our ability to sue. 

Here are some common reasons clients "bury their head in the sand..."

• You think (or hope) the problem will go away. This may be true, but don't count on it. We've seen debt collectors get pretty brutal with our clients --to the point of threatening their employment and livelihood. A lot of collection agencies will just keep selling your debt from one enity to anohter.
• You don't want to sue anybody. Litigation is risky. Litigation can be a long process. These things are true but the brunt of the work is on us, not you. Your lawsuit against this creditor might just be the one that stops their behavior for good!
• You can't afford a lawsuit. As with many civil lawsuits, we work on a contingency basis. This means that we don't get paid unless we win. And when we win, we only take a percentage of whatever money we win for you. The only real upfront costs to you may be the filing fee in either state or federal court.

Don't wait until it's too late. There are laws in place to protect consumers (YOU) from these unlawful behaviors. Don't bury your head in the sand. There's too much at stake. 

CREDIT REPAIR SCAMS

Late night television and the Internet is full of advertisements for companies promising to remove bankruptcies, judgments and other negative information from credit reports. Sometimes they even offer to help you create an entirely new credit identity. These promotions need to be approached cautiously  though. In truth, no one can remove negative information from your credit report if it's accurate. And some of the tactics suggested by credit repair companies are illegal or ineffective, such as applying for an Employer Identification Number under false pretenses or disputing every credit report entry even if they're accurate. The Credit Repair Organizations Act prohibits companies from charfing a fee for their services before they've  completed the services they promised and many of the strategies offered can be done yourself for free. The Federal Trade Commission warns consumers to avoid credit repair companies that promise to eliminate accurate but negative information and tell you not to contact the credit bureaus directly.

If you've identified false entries on your credit report there are procedures for disputing the entries and perhaps obtaining damages from both the credit bureau and furnisher of the information. Contact  us at www.thompsonlawoffice.net if you have inaccurate information on your credit report that has caused actual damages.

STUDENT LOAN DEFERMENTS

Deferring payment on student loans is necessary when circumstances prevent a borrower from staying current on payments. There are many types of deferments available depending on the kind of student loan and the situation. For instance, deferments on private loans are completely discretionary to the lender. If a private lender wants to grant or deny a deferment they can, without consequences. Ironically, they may also charge a borrower requesting a deferment because they're unable to pay. Sallie Mae often charges $150 for a three month deferment.

For deferments of federal loans there are rules to be followed and made available to borrowers. The most common deferment on a federal student loan is the "in school" deferment. In other words, if a borrower is in school for at least half-time, payments on the federal loans will be deferred. For Stafford loans there are also deferments available when a borrower is unemployed, in a rehabilitation training program, in a graduate fellowship, in the military service or following active duty, temporarily totally disabled or caring for a disabled spouse or dependent. Deferments are also available for economic hardship.

Economic hardship deferment applications must be in writing and can be issued in one year increments for a maximum of three years. To qualify for an economic  hardship deferment a borrower must show that they are receiving federal or state public assistance, are a Peace Corps volunteer, have an economic hardship deferment on another loan or is working full time but still at 150% of poverty. An unemployed borrower seeking a deferment must be registered with an employment agency and must show proof of eligibility for unemployment benefits. To obtain an economic hardship deferment on a Parent PLUS loan, all cosigners to the loan have to be unemployed.

In addition to deferments, borrowers can verbally request a discretionary forbearance for causes such as poor health or other personal problems. While a forbearance may be needed for a short term crisis it's important to remember that when a forbearance ends, all interest is capitalized, creating a long term significant increase in the amount of the student loan debt. If you're having student loan issues contact us at www.thompsonlawoffice.net.

DEBTORS' PRISON

The practice of putting people in prison for not paying their debts ended in the United States more than a century ago. Some state constitutions include provisions banning these "debtors' prisons." But some creditors are increasingly using a little known tactic that, to the people they target, feels a lot like being sent to jail for not paying their debts. In Iowa, as in many states, a creditor who gets a judgment against a debtor but is then unsuccessful at collecting the debt can ask for a "debtor's examination." These "exams" take place before a judge and are used to find out where a debtor has bank accounts, what property they own and where they're employed. Debtor's exam hearings are unlike other debt collection hearings that are frequently ignored by debtors without consequence, though. Failure to attend a debtor's exam is considered contempt of court and can result in the creditor asking for a bench warrant to have the debtor arrested and brought before the judge. If the arrest takes place at night or in a different county then where the lawsuit occurred, the debtor may be put in jail until they can be brought before a judge. Some of these jail stays last for days. Bond to be released from jail is the amount of the debt itself, which is often impossible for the debtor to pay. When the debtor can be brought before a judge the examination takes place. If the debtor has no money or property available to pay the debt they're released without further proceedings. But the consequences of being arrested, perhaps placed in jail and being brought before a judge can be severe to someone's employment and family life.

The lesson is to never ignore a notice of hearing for a judgment debtor's examination. If you're not certain about a hearing notice contact us at www.thompsonlawoffice.net. But more importantly, even before a debtor's exam is scheduled make plans for how to deal with the debt. If you're not going to file bankruptcy then how will you pay the debt? Are you going to try to negotiate  a payment plan or settlement with the creditor? If so, contact them immediately. If this debt is just one of many, how do you plan to deal with them all? Start making plans for whatever solution you choose sooner rather than later. Don't wait to take action until the result of missing a hearing lands you in jail.

TELEPHONE CONSUMER PROTECTION ACT

The Telephone Consumer Protection Act (TCPA) prohibits debt collectors from calling a cell phone number using an automatic telephone dialing system without the debtor's prior express consent. Automatic telephone dialing systems include "predictive dialers" and any equipment that has the capacity to store or produce telephone numbers using a random or sequential number generator and to dial the numbers automatically. You can often recognize calls made with these systems because of the brief delay between when the call is answered and the caller speaks. 

Prior express consent means the debtor gave his or her cell phone number to the original creditor at the same time the debt was incurred, for instance in a credit application. If the cell phone number was provided to the creditor after the debt was incurred, it doesn't fit the law's definition of prior express consent. Violations of the TCPA can result in statutory damages of $500 for each call, or up to $1500 per call if the violation was willful or knowing. Since most debt collectors know whether they are calling a cell phone or landline, their phone calls are frequently willful or knowing, leading to treble damages. If you think a debt collector is violating the TCPA start keeping good records and contact us at www.thompsonlawoffice.net.

Student Loan Debt Collector Misleading Debtors

Although the ability to discharge student loans in bankruptcy is limited, it's not completely impossible. So a debt collector who told a debtor that her student loan debts couldn't be discharged in bankruptcy violated the federal Fair Debt Collection Practices Act, according to 2nd Circuit Court of Appeals. Since the ability to discharge student loans is very dependent on the facts of each case, the debt collector's blanket statement to the debtor was misleading and deceptive. An unsophisticated debtor might have assumed bankruptcy wasn't an option for them. It's not uncommon for student loan debt collectors to imply that bankruptcy can provide no relief to borrowers. If you're facing debt collection on a student loan and the creditor or debt collector suggests you no repayment options or that bankruptcy can't help please contact us at melissaatthompsonlaw@gmail.com.

Financing a Vehicle

The National Association of Consumer Advocates, of which I am a member, suggests the following tips when you're financing the purchase of a new vehicle.

• Keep your current vehicle until the amount you owe on the loan is less than the resale value of the vehicle. It's best to wait until the entire loan has been paid off before trading it in. 
• Before you shop for a car, get prequalified for a loan at a credit union or bank. Take the dealer's financing only after careful comparison and if it offers the best final terms. 
• Watch out if the dealer offers you more for your car than it is really worth. While this may sound like a good deal, they are likely adding the debt you owe on the old car to the price of the new car, or inflating other costs on your new deal.
• Never tell a dealer how much you are willing to spend per month; instead negotiate a fair cash price for the vehicle.
• Negotiate the price of the new vehicle first, before the dealer evaluates how much you'll get for your trade in. Keep negotiations separate and beware of a monthly car note that hides the price of the new vehicle and what you are getting for the trade in. 
• If you are buying a used vehicle insist on seeing the title before you sign a purchase contract. The dealer can't get the title until the loan has been paid off.
• In general, avoid buying items like theft-etching, rust proofing, upholstery protection, GAP insurance, extended service contracts, and lifetime oil changes.