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In the last couple of weeks, I wrote about how certain debt buyers, like Midland Funding LLC, buy debt from creditors in bulk and then prey on debtors for money even if they cannot prove their case at trial.
It looks like California is going to enact laws beginning January 1, 2014 to help protect consumers from these unsavory practices by bulk debt purchasers.
Titled the Fair Debt Buying Practices Act, California SB 233 passed in the Assembly and Senate on an unanimous vote in favor. The measure now goes to California Governor Jerry Brown for his signature. Its provisions would take place on January 1, 2014. I see no reason why Governor Brown will not sign the bill.
Here are some of the highlights of the bill:
- Debt buyers must have in their possession proof that they are the sole owner of the debt, the account balance at charge off, date of default or last payment, name and address of both the creditor and debtor, and a complete chain of title on the account if bought and sold multiple times.
- If the debt is legally too old to file a lawsuit, but still can be reported to the credit bureaus, the debt buyer must use the following language in its first written communication:
“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt buyer] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.”3. If the debt is older than both the statute of limitations and credit bureau reporting, the following must be included in the letter:“The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, and we will not report it to any credit reporting agency.”This should be a helpful law. I estimate 85% of the people receiving a letter with one of these admonitions should be smart enough to tell the creditor to go away. What do you think?
Ken Jorgensen, California Attorneywww.fresnobankruptcylawgroup.com
Photo credit: http://www.flickr.com/photos/headingtonmedia/
The California General Assembly on July 1, 2013 passed the Fair Debt Buying Practices Act by a unanimous vote, ushering in a new set of protections for consumers dealing with debt collectors.
The bill, which becomes effective as of January 1, 2014, will require debt buyers to have in their possession a significant amount of account information before debt collection efforts can begin.
In addition, debt buyers who collect against California consumers must also use very specific language in their debt collection communications.
Hat tip to the folks at InsideARM, a trade publication for the debt collection industry, for the information. We’ll be dissecting the Fair Debt Buying Practices Act in the coming weeks and months, helping you understand this new and powerful law better.
California Consumers To Receive New Protections Starting January 1, 2014 was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Written by: Robert DeMarco
In the Beginning – Code of Hammurabi
The concept of debt relief, in a very general way, is traceable to the Code of Hammurabi (c. 1795 – 1750 B.C.). King Hammurabi united all of Mesopotamia and ruled for forty-three years in Babylon. The Code of Hammurabi is one of the best preserved legal documents and fairly reflects the social structure of Babylon during Hammurabi’s rule. The Code contains two hundred eighty-two laws.
The Code of Hammurabi was harsh; providing for the imprisonment of debtors who are unable to satisfy their obligations. Code of Hammurabi Translated by L.W. King. with Commentary from Charles F. Horne and Claude Hermann Walter Johns, Law 115, Encyclopaedia Britannica (11th ed., 1910) (“If any one have a claim for corn or money upon another and imprison him; if the prisoner die in prison a natural death, the case shall go no further.”); Levinthal, Louis Edward, The Early History of Bankruptcy Law, 66 U. Pa. L. Rev. 223, 230 (1918). The Code was not, however, without mercy. The honest debtor also had the option of selling himself and or family members into slavery, for a period of no more than three years, in an effort to satisfy the obligation. Code of Hammurabi, Law 117 (“If any one fail to meet a claim for debt, and sell himself, his wife, his son, and daughter for money or give them away to forced labor: they shall work for three years in the house of the man who bought them, or the proprietor, and in the fourth year they shall be set free.”); see also, Early History, 237. Yet as harsh as this remedy was, the Roman debtor faired much worse. Early History, 231-232.
DATED: July 3, 2013
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Written by: Robert DeMarco
In the Beginning – Code of Hammurabi
The concept of debt relief, in a very general way, is traceable to the Code of Hammurabi (c. 1795 – 1750 B.C.). King Hammurabi united all of Mesopotamia and ruled for forty-three years in Babylon. The Code of Hammurabi is one of the best preserved legal documents and fairly reflects the social structure of Babylon during Hammurabi’s rule. The Code contains two hundred eighty-two laws.
The Code of Hammurabi was harsh; providing for the imprisonment of debtors who are unable to satisfy their obligations. Code of Hammurabi Translated by L.W. King. with Commentary from Charles F. Horne and Claude Hermann Walter Johns, Law 115, Encyclopaedia Britannica (11th ed., 1910) (“If any one have a claim for corn or money upon another and imprison him; if the prisoner die in prison a natural death, the case shall go no further.”); Levinthal, Louis Edward, The Early History of Bankruptcy Law, 66 U. Pa. L. Rev. 223, 230 (1918). The Code was not, however, without mercy. The honest debtor also had the option of selling himself and or family members into slavery, for a period of no more than three years, in an effort to satisfy the obligation. Code of Hammurabi, Law 117 (“If any one fail to meet a claim for debt, and sell himself, his wife, his son, and daughter for money or give them away to forced labor: they shall work for three years in the house of the man who bought them, or the proprietor, and in the fourth year they shall be set free.”); see also, Early History, 237. Yet as harsh as this remedy was, the Roman debtor faired much worse. Early History, 231-232.
DATED: July 3, 2013
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for July 02, 2013 Casey Anthony wins partial victory in bankruptcy court Textbook publisher Cengage files bankruptcy to cut debt Belle Foods bankruptcy: Grocery company struggles to pay debt
Many people are under the impression that bankruptcy will not eliminate or discharge student loan debt. While this is true, it may not be the case for everyone. In some cases, student loan debt may be causing the household an undue hardship. This may allow student debt to be eligible for elimination, but even if [...]
Congress took no action so the interest rate on federal Stafford loans rose as of 12:01am July 1, 2013. We’re still here to tell the tale.
It was like a summer blockbuster movie, complete with heroes and villains, the halls of power, and tension right up to the last second.
The media jumped all over it, trying to wipe the public into a frenzy.
The funny thing is that most people I spoke with didn’t know or care that student loan rates were going to jump as of July 1, 2013.
In case you don’t know, the rate on federal Subsidized Stafford loans went from 3.4 percent interest to 6.8 percent interest on Monday, July 1, 2013. Congress could have prevented the leap, but ended up bickering like an old married couple.
The cost of this monumental inaction? About $4,598.77 per student.
More Reasons It’s Not A Huge Deal
The interest rate was set to rise on new subsidized Stafford loans only.
Existing loans remain untouched.
New unsubsidized Stafford loans, PLUS loans, Perkins loans, and private loans remain untouched.
As of now, the most you can get in subsidized Stafford loans over your entire education is $23,000.
How The Interest Rate Affects New Borrowers
At 3.4%, you’ll pay $4,163.40 in interest over a 10-year repayment term.
At 6.8%, you’ll pay $8,762.17 in interest over a 10-year repayment term.
It comes out to $38.23 per payment.
It’s a difference, but not a monumental one that shatters the record books.
Get Angry About Something More Productive
If you come out of school with student loans, you’re likely in trouble anyway. Your income doesn’t keep pace with the cost of living, jobs are scarce, and all but a few at the top of the academic ladder are pulling down enough money to pay the student loans and groceries.
Rather than looking at the interest rate, consider some of the repayment options available to federal student loan borrowers.
Make some noise with your Congressional representatives to prod them into creating some protections for you on the private student loan front.
Image credit: spaceninja
Student Loan Rates Rise, Sky Doesn’t Fall was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Many consumers and small business owners who consider bankruptcy protection are confused about the process due to many misconceptions or false information. While bankruptcy laws were updated in 2005, there still seems to be a considerable amount of misunderstandings about who can file and whether it damages your reputation. One of the most effective ways [...]
Every now and then I am asked whether debt from an SBA Loan can be discharged in a Chapter 7 bankruptcy. The short answer is "yes".
I am asked this question because it is linked to a government program. However, there is nothing special about a SBA loan compared to any other private business loan when it comes to bankruptcy. It is treated like every other loan. Like all other loans, however, a SBA loan would not be dischargeable if the loan was obtained by fraudulent means.
For the most part, business owners typically do not need to worry about whether their SBA loan will be discharged in bankruptcy. However, there can be a foreclosure issue. Many SBA loans are secured by a deed of trust on real property. Because of the deed of trust, the lender will have the right to foreclose on the property. In conclusion, even though you personally are no longer responsible for the debt, your lender can still sell your property through a foreclosure sale in a Chapter 7 bankruptcy.
Your After Bankruptcy Credit Report Your after bankruptcy credit report is a big part of your “fresh start” in bankruptcy. That’s why it’s my job, as your bankruptcy lawyer, to make sure your after bankruptcy credit report is right. Only a handful of bankruptcy lawyers see it that way, and I’m one of them. Mistakes [...]The post After Bankruptcy Credit Reports–Why You and Your Lawyer Need to Follow Up appeared first on Robert Weed.
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