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Credit reports and background checks errors
Ever checked your credit reports?  You will after watching this YouTube video: Last Week Tonight with John Oliver talking about errors credit reports and background reports. (I apologize for some of the language this reporter uses, but the information is extremely useful).  What I did not know is that:

• 52% of debts on credit reports are for medical bills.
• One in four credit reports had errors and
• one in twenty were seriously wrong.

I was aware that the errors directly affected someone’s ability to get a job, buy a car or home, get insurance or rent an apartment.  What I had not considered was the havoc errors in these reports would suffer on innocents.  It literally takes years and lots of money to unwind credit or background reporting errors.  That is years out of someone’s life.  Time they could have spent with their family, contributing to their community or just relaxing.  How alone they must feel!!
There are some regulations on the credit reporting companies, but not enough to protect you.  The government agencies are well aware of the problems caused by credit reporting agencies, but do little to protect us.  Except the Consumer Financial Protection Bureau.  They are aggressively attacking credit reporting agencies.  Check out their web site for tools, resources, many very valuable tips and an easy to file complaint process.
Background reports:  Hundreds of companies offer background reports.  These companies do not the same obligations as credit reporting agencies (which is minimum to say the least).  According to the Federal Trade Commission “there is no list of these companies”.  This YouTube review explains how often these background reports are inaccurate and how people are affected by these errors.
You may be one of those who have errors on your reports and never knew it.  Order your free credit reports from www.annualcreditreport.com.  By federal law each credit reporting agency must give you one free report each 12 month period.
The post Credit Reports Listed Me as a Terrorist appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.

ILLEGAL DEBT COLLECTION PRACTICES BY PRESSLER & PRESSLER, LLP AND DEBT BUYER
Release from Consumer Financial Protection Bureau “CFPB”:
Presser & Pressler, LLP, a law firm, Sheldon H. Pressler and Gerard J. Felt, the firm’s two principal partners, and New Century Financial Services, Inc., a debt buyer, were ordered to stop churning out unfair and deceptive debt collection lawsuits.  Most of these lawsuits were on little to no evidence that a debt was owed. The consent orders bar the companies and individuals from illegal practices that can deceive or intimidate consumers, such as filing lawsuits without determining if debts in question are valid. The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Consumer Financial Protection Bureau’s Civil Penalty Fund.

“For years, Pressler & Pressler churned out one lawsuit after another to collect debts for New Century that were not verified and might not exist,” said CFPB Director Richard Cordray. “Debt collectors that file lawsuits with no regard for their validity break the law and violate the public trust. We will continue to take action to protect borrowers from abuse.”

According to CFPB Pressler & Pressler, LLP is a New Jersey-based law firm that collects consumers’ debts for creditors through lawsuits and other means. New Century Financial Services, also based in New Jersey, buys and collects defaulted consumer debts, then hands those accounts off to Pressler & Pressler for collection, who filed hundreds of thousands of lawsuits against consumers. Attorneys generally spent less than a few minutes, sometimes less than 30 seconds, reviewing each case before initiating a lawsuit.
The CFPB found that the parties:

• Made false or empty allegations about consumer debts
• Filed lawsuits based on unreliable or false information
• Harassed consumers with unsubstantiated court filings

Read more of this article, plus a copy of the consent agreement
This action continues the Bureau’s work to address illegal debt collection practices across the consumer financial marketplace, including companies that sell, buy, and collect debt. In recent separate enforcement actions, the CFPB has ordered large banks, credit card issuers, debt buyers, and firms to overhaul their debt collection practices and refund millions to harmed consumers. The Bureau will continue working to ensure all players in the collections market treat consumers fairly.
The post Pressler & Pressler, LLP Fined $1M for Illegal Collections appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.

Late night comedian John Oliver recently offered his unique and humorous take on the debt buying industry, noting that collection agencies are responsible for more lawsuits than any other type of plaintiff, and that many of these lawsuits claim money damages for zombie debt.  Zombie debt is debt that is not legally collectible because the statute of limitations has run.Debt buyers rely on intimidation and ignorance, and obtain legally legitimate judgments when consumer defendants fail to answer a lawsuit.Here’s how it works:  let’s assume that you visited a hospital or otherwise incurred a debt back in 1995 that you never paid. Under Georgia law generally the statute of limitations on an unsecured debt like a medical bill or a credit card debt would be no longer than 6 years.  So, by the end of 2001, your 1995 debt would no longer be legally collectible.  This means that if someone sued you in 2010 for the 1995 debt, you could answer the lawsuit by stating “this statute of limitations for collection of this debt ran in 2001 and plaintiff’s claim should be dismissed.”If you answered a lawsuit using language like this, any Georgia state or magistrate court judge would dismiss the debt buyer’s claim and you would be done.  You could also counterclaim the plaintiff for frivolous litigation, but that is a story for a different day.However, if you fail to answer the 2010 lawsuit, the attorney for the debt buyer would go to court and say, “your Honor, the defendant has failed to answer our complaint and we are requesting a default judgment.”  The judge would have no choice but to grant this request.Incredibly, a debt buyer can get a default judgment even if you were wrongfully identified as the debtor.  In other words, you can be sued for a medical or other debt that you never actually incurred, but if you don’t file an answer to the collection lawsuit, an enforceable judgment will be issued against you.By obtaining a default judgment against you, therefore, a legally non-collectible debt will become a legally enforceable judgment.  And the debt buyer can use that judgment to garnish you wages, put a lien against your house and car, clean out your bank account and take any other legal action to collect the debt.  Further, if you don’t file a written appeal within 30 days, you cannot later come back and say “I want to challenge this claim on the grounds that the statute of limitations has run.”  You now have an enforceable judgment to deal with and with limited exception, your only recourse is to settle the debt with the debt buyer, or file bankruptcy.
Debt buying is big business in the United States.  As he discusses in this video, Mr. Oliver set up a debt buying service and bought over $15 million in out of statute medical debt for $60,000 (this works out to buying debt at half a penny on the dollar).  Mr. Oliver “forgave” this debt but, obviously, most debt buyers pursue collection aggressively.If a debt buyer purchases debt at less than 1 penny on the dollar, but ends up collecting only 5% of what it bought, the return on investment is huge.  This is why the debt buying business is so big and so profitable.Currently, there is very little regulation of the debt buying industry although the CFPB (Consumer Financial Protection Agency), a federal government agency has sued a number of high profile collection agencies and collection lawyers for deceptive and misleading practices.  However, debt buying companies use their profits to lobby state legislators to pass industry friendly laws.How to Protect YourselfThe most important thing to remember is that you have to take action if you receive a collection letter or a lawsuit about any debt, but especially about an old debt.  Never make any payments or enter into a payment agreement on a debt without first talking to a lawyer (a bankruptcy lawyer or  a consumer rights lawyer – Ginsberg Law can be reached at 770-393-4985).

• If you make a payment on an old debt, you risk “reviving” that debt and extending the statute of limitations.
• Never, ever ignore a collection lawsuit.  Nothing good comes from a default judgment.
• Finally, do not take advice from a bill collector or creditor representative.  They will intentionally (or non-intentionally) mislead you and you can be sure that the information they provide you is not designed to help you in any way.

If you have any questions about debts or debt collection, please call our office – Susan Blum and Jonathan Ginsberg are here to answer your questions.The post Comedian John Oliver Explains the Debt Buying “Industry” and Zombie Debt appeared first on theBKBlog.

FEDERAL STUDENT LOANS: ‘PAYBACK PLAYBOOK’ UNVEILED BY CONSUMER FINANCIAL PROTECTION BUREAU. 
INTENDED TO PROVIDE BORROWERS WITH PERSONALIZED SNAPSHOT OF REPAYMENT OPTIONS.
Prototype Disclosures Outline Path to Affordable Payments for Borrowers Trying to Avoid Debt Distress 
WASHINGTON, D.C. — April 27, 2016 the Consumer Financial Protection Bureau (CFPB) unveiled a federal student loan Payback Playbook, “a set of prototype disclosures that outline a path to affordable payments for borrowers trying to avoid student debt distress. The Payback Playbook provides borrowers with personalized information about their repayment options from loan servicers so they can secure a monthly payment they can afford. The Payback Playbook would be available to borrowers on their monthly bills, in regular email communications from their student loan servicers, or when they log into their student loan accounts.”
“Millions of consumers needlessly fall behind on their student loan debt, despite their right under federal law to a payment they can afford,” said CFPB Director Richard Cordray. “The Payback Playbook, which has grown out of our joint work with Illinois Attorney General Lisa Madigan and her colleagues, is designed to help ensure student loan servicers provide personalized information, tailored to the borrower’s individual situation. This will help these borrowers take action, stay on track, and steer clear of financial distress.“
View the Payback Playbook prototypes at: http://files.consumerfinance.gov/f/documents/201604_cfpb_student-loan-playbooks-website.pdf
The public can weigh in starting April 28, 2016 on the Payback Playbook prototypes at: www.consumerfinance.gov/payback-playbook
A copy of the CFPB public request for information is available at: http://files.consumerfinance.gov/f/documents/201604_cfpb_rfi-regarding-student-loan-borrower-communications.pdf

Student loans are the next financial balloon just waiting to burst.  There is little to no education to help students understand how their financial future will be affected by borrowing to pay for some future job which may, or may not, happen.  A graduate with a masters in counseling will likely find themselves burdened with $200,000 in student loans.  The average income is $44,000 annual gross.  The average cost of living for a family of four is $50,000.  This cost of living does not include student loans.  You do the math!!
The post Need Help Paying Your Federal Student Loans? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.