How to Defend Credit Card or Debt Collection Lawsuits
February 23, 2010
I recently came across a great article by Pennsylvania attorney Jim Kutkowski. It discusses how to defend credit card lawsuits.
While the article is based on Pennsylvania law and court procedures, things work much the same in Maryland. In Maryland, most credit card lawsuits are heard by the District Court, which operates similarly to Pennsylvania’s Magistrate Court.
The article discusses evidence in credit card lawsuits and the back and forth that goes on in Magistrate (PA) and District (MD) court.
In Maryland, the courts often seem to put the burden on defendants to prove that the account wasn’t theirs instead of forcing the Plaintiff to prove that it was. This is an unusual allocation of the burdens of proof in a court case, but it happens.
Read Mr. Kutkowski’s article for valuable information on defending debt collection lawsuits: Credit Card Lawsuits and How to Beat Them
Legislative Updates from National Association of Consumer Advocates
February 21, 2010
The following post is excerpted from an email alert from the National Association of Consumer Advocates (NACA).
These are a few of the current legislative issues NACA is working on:
Forced Arbitration
NACA is still working hard to get the Arbitration Fairness Act (AFA) and the Fairness in Nursing Home Arbitration Act out of the House Judiciary Committee.
The AFA now has 108 co-sponsors! We are pushing Congressman Steve Cohen (D-TN), the Chairman of the House Judiciary Committee’s Commercial & Administrative Law Subcommittee, to schedule a vote on the bill during the next several months. Subsequently we will push for a full vote in the Judiciary Committee. The vote in the House is our first priority; however, NACA continues to lobby the Senate as well, to garner support and build momentum.
NACA is also working hard to preserve the proposed language in the Consumer Financial Protection Agency Act of 2009 that addresses forced arbitration. The version that passed the House and is similar in the Senate, enables the Consumer Financial Protection Agency (CFPA) to restrict and/or ban the unfair practice of forced arbitration from financial contracts. In the House there were attempts to strip such language, and we anticipate that we will again be called upon to fight to maintain the language in the Senate.
Homeownership / HAMP
Yesterday, the Treasury Department released January data for the Administration’s Home Affordable Modification Plan (HAMP).
The Administration’s current plan is still clearly not working as we see foreclosures across the U.S. continue to soar. After 11 months, only one in ten homeowners participating in the HAMP program have had their mortgage permanently modified.
In late 2009, NACA and NCLC conducted a survey about the occurrence of foreclosure sales in violation of HAMP. Over 100 NACA members from 24 states participated. The results indicated that foreclosure sales were still a significant problem and in need of a substantial policy solution.
Two weeks ago, NACA organized a call with its Institute for Foreclosure Legal Assistance (IFLA) grantees to discuss the shortcomings of the HAMP program and what they are seeing in the field. NACA is presently drafting a letter to Congress and the Administration explaining the IFLA attorneys’ concerns with HAMP and to set forth recommendations on what is needed to make the program work for homeowners facing foreclosure.
Consumer Financial Protection Agency
As you know, the pending financial reform legislation that would rein in many Wall Street abuses and create an independent CFPA is still being negotiated in the Senate.
NACA just learned that Senator Chris Dodd (D-CT), the Chairman of the Senate Banking Committee, will be releasing a new draft of his proposed financial reform package next week. The fight right now is about the very structure of the CFPA and whether it will maintain independence.
NACA has been meeting with Senate offices to convey that independence in regards to the CFPA requires the agency be independently funded, have independent rulemaking authority over both banks and non-banks, the head of the agency be independently appointed by the President for a specified term and have independent managerial decision making power, and that the agency have examination and enforcement authority that is not subject to approval or veto.
Chapter 13 Bankruptcy: How is my Repayment Plan Calculated?
February 20, 2010
Overview
Chapter 13 bankruptcy generally lets you keep most or all of your assets and requires you to repay some of your debts over a 3-5 year period. But, how do you determine how much you have to pay and for how long?
Your repayment plan: what is it?
Your repayment plan is a document that describes in detail (1) how you plan to repay your debts and (2) how much you propose to pay.
You submit your plan to the bankruptcy court for approval. The plan must be “confirmed” by a bankruptcy judge. He or she will will review your plan to be sure it complies with Chapter 13 requirements and is feasible considering your economic situation.
Your repayment plan: what debts are included?
Your plan must explain how you propose to satisfy the following requirements.
Priority debts. Your Chapter 13 plan must pay certain debts in full. These debts are called “priority debts” and include back wages you owe to employees, child support and alimony, and some tax debts.
Secured debts. In addition to paying priority debts, your plan amount must also cover your regular payments on secured debts, such as a car loan or mortgage. The plan must also allow you to pay any past due amounts on your secured debts.
Unsecured debts. The plan must show that any “disposable income” you have after paying priority and secured debts (described above) will go towards paying some of your unsecured debts. Your disposable income is calculated using a formula set by the bankruptcy court.
You usually don’t have to repay unsecured debts in full. But your plan must show that you are putting any remaining disposable income towards their repayment.
And, if you have a lot of assets that would be subject to seizure by the trustee if you had (hypothetically) filed Chapter 7 bankruptcy, then the amount you must pay towards your unsecured debt might be higher.
Your repayment plan:Â how long does it last?
The length of your repayment plan depends on a number of factors, including how much you earn and the amount of your debts.
If your average monthly income over the six months prior to your bankruptcy filing date is more than the median income for your state, you will need to propose a five-year plan.
If your income is lower than the median, you may propose a three-year plan.
Chapter 13 Bankruptcy: What is it and How Does it Work?
February 17, 2010
What is a Chapter 13 bankruptcy?
Chapter 13 bankruptcy is sometimes called “payment plan bankruptcy.”
In a Chapter 13, a person with regular income proposes a plan to repay some or all of his or her debts over a three to five year period.
The amount of debt the person must pay back depends on many factors, including the person’s income, total debt, and living expenses.
A Chapter 13 bankruptcy (1) lets consumers keep their assets and (2) gives them time to catch up on debt payments while under the protection of what is called the “automatic stay.”
The automatic stay prevents creditors or debt collectors from trying to collect while a person is under the protection of the bankruptcy court. The automatic stay prevents or stops most foreclosures, car repossessions, and debt lawsuits.
Will my debts be wiped out?
If you file Chapter 13 bankruptcy, you will have to pay back some of your debts. But, at the end of the payment plan, any remaining unsecured debt is wiped out.
Can I keep my assets in a Chapter 13 bankruptcy?
In a Chapter 13 bankruptcy, you usually don’t have to give up your assets, but you must pay some or all of your debts.
This is very different from a Chapter 7 bankruptcy, in which most of your debts are wiped out, but you might be required to give up assets that aren’t covered by your bankruptcy exemptions.
Do I need income to qualify for Chapter 13 bankruptcy?
People filing Chapter 13 bankruptcy must have regular income of a certain minimum amount. The required income amount depends on the amount of your debts, your living expenses, and several other factors.
If your income is irregular or too low, you might not be eligible to file a Chapter 13 bankruptcy. But, you might qualify for relief under Chapter 7.
Can I have too much debt to qualify for Chapter 13?
Yes. There are limits to how much secured debt you can have, and how much unsecured debt you can have. If your debts exceed these amounts, you will not qualify for Chapter 13. (But, you might qualify for bankruptcy relief under another chapter.)
A “secured debt” is a debt that is tied to property (such as your house or car) that the creditor can take back if you don’t pay the debt.
An “unsecured debt” is debt that is not tied to property that can be taken back by the creditor. Examples of unsecured debt include medical bills and most credit cards.
Continue reading “How is my Chapter 13 Bankruptcy Repayment Plan Calculated?”
Maryland Consumer Rights Coalition Releases Report on Debt Settlement Companies
February 4, 2010
The Maryland Consumer Rights Coalition (MCRC) and Maryland Attorney General Doug Gansler recently announced the publication of MCRC’s report “Debt Settlement in Maryland:Â Compounding Problems, Deepening Debt.”
Click here for a copy of the report.
As you might guess from its title, the report paints a pretty dire picture of debt settlement companies.
The report examines the following:
- Problems with procedures used by debt settlement companies. Consumers are told to stop paying their bills and instead make monthly payments to the debt settlement company.
- Additional damage done to consumer’s credit file by these debt settlement tactics.
- Large advance fees charged by debt settlement companies whether or not they ever do any work for the consumer.
- Difficulties consumers have in canceling debt settlement agreements and / or getting refunds when no work is ever done on consumer’s behalf.
If you are considering signing up with a debt settlement company, read this report so you can make an informed decision.
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