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Uh oh! Chase is in trouble – again? Still?
JPMorgan Chase Bank is facing charges of illegal and fraudulent tactics in over 100,000 debt collection lawsuits in California.
The lender, which went so far as to halt debt collection lawsuits nationwide last year in the face of allegations of wrongdoing, on January 7, 2014 failed in its bid to get the charges kicked out of court.
Chase argued that California legal authority precluded the In the lawsuit filed by California State Attorney General Kamala Harris. Superior Court Judge Jane L. Johnson in Los Angeles rejected that argument and denied the bank’s request that the lawsuit be thrown out.
According to the lawsuit filed by the State of California in May 2013, Chase engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuses against approximately 100,000 California credit card borrowers over at least a three-year period.
On one day alone during the period in question, Chase filed 469 debt collection lawsuits in California. The Attorney General’s complaint against Chase alleges that, to maintain this pace, Chase employed unlawful practices as shortcuts.
Those shortcuts, the suit alleges, allowed Chase to obtain judgments, garnish wages, and place liens on property from California consumers at a rate that wouldn’t have otherwise been possible.
The state’s lawsuit seeks penalties of $2,500 for each violation of California law as well as an additional $2,500 for each violation against a senior citizen or person with a disability.
The next hearing in this case is scheduled for February 10, and it’s looking as if Chase is buckling down for a long fight.
Chase is no stranger to this sort of problem. In 2013 it entered into a Consent Order with the Office of the Comptroller of the Currency after similar allegations were made against the banking giant. There are other states with similar actions currently pending as well.
See also:
- Chase Whistleblower Suit Reveals Total Disregard For Consumer Protection
- Attorney General Kamala D. Harris Announces Suit Against JPMorgan Chase for Fraudulent and Unlawful Debt-Collection Practices (State of California)
- Consent Order Between Chase and Office of the Comptroller of Currency (OCC Website)
- JPMorgan sued by Mississippi AG over credit card misconduct (Reuters)
- California Lawsuit over Chase’s Debt Collection Practices is Still On (InsideARM)
- JPMorgan Fails To Dismiss California Debt Collection Case (Bloomberg)
Knowing what charge-off means can make debt resolution an easier process.
When you go past due on a debt, you the phone calls begin pleasantly enough. Customer service representatives try to gently move you to make a payment, almost apologetically so.
But within a few months of missing a payment, they start talking in ominous terms about charging off your account.
Nobody explains it to you, but it sure sounds scary.
Here’s what you need to know about charge-offs.
“Charge Off” Is An Accounting Term
A charge-off is an indication by a creditor that it has no belief that a debt will be collected.
Federal regulations require creditors to charge-off installment loans after 120 days of delinquency, and revolving credit accounts such as credit cards after 180 days.
A charge off is a bookkeeping entry that has no effect on your obligation to pay.
Until A Debt Is Charged Off, You Deal With The Creditor Directly
Most of the time, collection calls about a past due account will come from the creditor rather than an outside debt collection company. For this reason, the calls may be friendlier and less coercive.
The creditor is being nice to you in the hope that you’ll pay the debt voluntarily.
Once The Debt Is Charged Off, It Is Usually Sold
The creditor is forced to charge off the debt after (in the case of credit card debts) 180 days, signaling that there’s not much change of getting paid.
To reduce the loss involved, the debt is sold to a debt buyer. Often, the transactions involving the sale of the debt is negotiated years in advance through what’s called a forward-flow agreement (sometimes also called a future flow agreement).
Related:
You Still Owe The Debt, Even If It’s Sold For Pennies On The Dollar
It doesn’t matter how little a debt buyer pays for your account. If you owed the money before the sale, you owe still owe it.
The debt buyer can still sue you for the full balance due on the account.
The debt buyer may be willing to cut you a better settlement deal – or not – but that has nothing to do with the price paid for the account.
A Charge Off On Your Credit Report Is A Negative Notation
Whenever you don’t pay a debt according to the original terms of repayment, that’s bad for your credit.
A charged-off debt is bad not only because it indicates that you didn’t pay the debt according to the original terms, but that it’s still outstanding and the creditor has no realistic hope of you ever paying it back.
Related:
Account For Charged-Off Debts In Your Debt Relief Efforts
If you have charged off debts on your credit report and decide to file for bankruptcy, you should include those debts in your bankruptcy case.
If you’re going through debt settlement or credit counseling, account for those charged-off accounts.
If you’re paying off your old debts, pay the charged-off ones as well.
If you have been sued by a credit card company or by a debt buyer such as Midland Funding, CACH LLC, LVNV Funding, Portfolio Recovery, Cavalry SPV, Asset Acceptance, Unifund CCR Partners or Encore Capital, you need to take immediate action. Here are three things you must immediately do to win the credit card lawsuit in Nebraska:
- File a Written Answer to the Lawsuit. Over 90% of the time defendants fail to respond to the lawsuit and the creditor is awarded a Default Judgment. Not filing a written answer to any lawsuit is probably about the biggest financial mistake you can make. Just by filing a simple written response there is a substantial chance the creditor will drop the lawsuit since they often cannot prove you owe the debt. Written responses must be filed with the Clerk of the Court within 30 days of receiving the lawsuit papers (the “Summons”).
- Demand a Copy of the Contract. Most junk debt buyers do not have any proof that you owe the debt. As documented by the 162-page Federal Trade Commission Report on the debt buyer industry the debt buyers “did not receive any documents at the time of the purchase. Only a small percentage of the portfolios included documents, such as account statements or the terms and conditions of credit.” It is hard for debt buyers to win a breach of contract case unless they can produce . . . err . . . the contract. Write a letter to the plaintiff’s attorney demanding all their documents, including that often nonexistent contract.
- Respond to the Plaintiff’s Discovery Requests. If you are bold enough to file a written response to a credit card lawsuit, the creditor’s attorney will likely send you “Discovery” requests such as Interrogatories (written questions you must answer) , Request for Admissions (requests to admit or deny certain facts), and Requests for Production of Documents (send us all your paperwork). Watch out, this is a set up. If you fail to respond to these discovery requests the court will issue a summary judgment in favor of the creditor. You can avoid that unpleasant result by just responding to their requests within 30 days. If you really want to stir up the hornets nest, reply in kind by demanding that they answer your questions, request for admissions and provide documents to you. Don’t be intimidated—you have the right to demand answers as well.
As documented by the 162-page Federal Trade Commission Report on the debt buyer industry the debt buyers “did not receive any documents at the time of the purchase. Only a small percentage of the portfolios included documents, such as account statements or the terms and conditions of credit.”
As kids we all learned the story of the foolish Chinese emperor who paid his tailor for invisible clothes only to be embarrassed by a child who shouted that The Emperor Wears No Cloths! In a similar fashion, these credit card plaintiffs pack no proof of the debt, and the smart person should seek out legal help to prevent a default judgment and subsequent wage garnishment. For a reasonable flat fee, Sam Turco Law Offices will defend you against these credit card lawsuits. Call or email for a free consultation.
Rebuilding after bankruptcy is a process. It starts with not incurring any negative credit after such time you file for bankruptcy. For example, after your bankruptcy case is over, you want to make sure that you do not incur any negative credit items on your credit Bureau. This would include not falling behind on any+ Read MoreThe post How To Rebuild After Filing For Bankruptcy? appeared first on David M. Siegel.
Awhile back, my practice went from boom to bust. One day I had a staff of 14 people, the next I was sitting alone at a desk in 2,500 square feet of prime downtown Manhattan office space.
At the time, I considered myself a failure. Looking back on it, I realize that I couldn’t have been further from the truth.
My office, prior to the collapse, was making a ton of money – but all of it was going out the door in overhead. My clients weren’t disappointed, but they sure weren’t thrilled with the service we were giving.
On paper, things looked great. And when I sent everyone home, things looked pretty bleak.
If you’re on the verge of filing for bankruptcy – or if you just filed – you probably feel like a failure too.
And like me, you’re wrong. Here’s why.
What’s The Financial Definition Of Failure?
According to Wikipedia, failure is the state or condition of not meeting a desirable or intended objective.
If we’re talking about money, the desirable or intended objective is to have money in the bank and be able to meet your expenses on a monthly basis – ideally with a few bucks left over for a rainy day.
If you’re not in that position then you’re not meeting the desirable objective.
It Comes Down To A Moment
One minute you’re debt-free, and the next you’re submitting an application for a loan.
That’s the moment of financial failure. If it weren’t failure then you’d be in a position to do whatever you want to do without getting into debt.
That goes for cars and homes, credit cards and televisions. If you can’t pay for something by writing a check and you go ahead with the purchase, you’re putting yourself in the position of not meeting the desirable objective.
Reset The Failure Clock
When you get out of debt, you’re trying to achieve the desirable objective of having money left over at the end of the month. Once the debt is gone, you’re no longer required to make monthly payments towards that debt.
It’s not terribly unlike cutting your cell phone bill by $100 per month – in doing so, you free up more money to achieve your goals.
Of course, there are lots of ways to get out of debt.
There’s the slow an steady method of paying off your debts as quickly as possible. There’s the faster means of debt relief that involves filing for bankruptcy. And there are a host of options in between the two.
Does Bankruptcy Make You A Failure?
Bankruptcy isn’t failure because it doesn’t involve an inability to meet a desirable or intended objective.
If your objective is to get out of debt then bankruptcy is nothing more than a legal means to that end.
Whether that legal means to an end is right for you … well, that’s a question of your assets and your liabilities in light of your abilities.
Have the ability to repay your debts over some reasonable amount of time without sacrificing food, clothing, shelter or reasonable health care? If so, bankruptcy isn’t right for you because you haven’t failed – you’re meeting your desirable financial objective already.
If, however, you’ve already failed financially then finding a way out of debt – including filing for bankruptcy – may be something to consider.
Being a bankruptcy attorney is a unique situation. It is one of the few areas of law where the attorney can actually assist the client and at the end of the service, the client is 100% pleased with how everything went. In most areas of law, whether it be contract law, divorce law, criminal law,+ Read MoreThe post Why I Love Being A Bankruptcy Attorney In Chicago appeared first on David M. Siegel.
Getting the outcome you deserve for your financial situation includes having the right legal representation in your corner. Taking time to choose a good bankruptcy attorney may save you headache and frustration down the road. Debtors have been known to choose an attorney based on an advertisement, price or claims in what they say you [...]
If you are someone who is considering filing for bankruptcy, then the most important decision that you’re going to make in that process is deciding which attorney you are going to hire. In some cities, there are literally hundreds of bankruptcy attorneys that are advertising their services in directories, on the Internet, and newspapers. But+ Read MoreThe post Helpful Tips To Select A Bankruptcy Attorney appeared first on David M. Siegel.
Death may be the end of the road for many, but if someone is in bankruptcy then the case can still go on.
What if your loved one has filed for bankruptcy and dies before the case is over?
Does the bankruptcy case disappear, or does it continue?
How does it affect the administration of the deceased person’s estate?
What if it’s a joint bankruptcy case – and the other person is still alive?
Nobody ever said death was easy …
If The Debtor Dies During Chapter 7 Bankruptcy
If someone files for bankruptcy and dies before the case is over, that bankruptcy can – or in some situation, must – continue.
Chapter 7 bankruptcy creates an estate as of the date of filing, and that estate contains all of the person’s debts and assets as of that date. There’s no right to dismiss a Chapter 7 bankruptcy without court permission, so the debtor doesn’t have control over whether to continue to dismiss the action.
If the meeting of creditors has been held and concluded, the case will continue through to discharge. The lawyer will need to ask the court to excuse the requirement of a financial management certification unless it’s been done.
Related:
Things get thorny if the meeting of creditors hasn’t been held by the time the debtor dies. The administrator of the probate estate (or, if there is none, the next-of-kin) needs to go to bankruptcy court and be appointed as what’s called a next friend. That will allow someone else to appear at the meeting of creditors on the debtor’s behalf.
If The Debtor Dies During Chapter 13 Bankruptcy
If a Chapter 13 bankruptcy case is pending while the debtor dies, there are two options:
- dismiss the case; or
- proceed in the same manner, so far as possible, as though the death had not occurred.
The problem here arises if the case is a joint bankruptcy – two spouses filing together.
If you filed for bankruptcy with your spouse, you can dismiss the case as to him or her only. Your bankruptcy case will continue, but your spouse will be dropped and dismissed.
Related:
- Chapter 13 Bankruptcy Basics
- Federal Rule of Bankruptcy Procedure 1016: Death or Incompetency of Debtor
Can A Spouse Continue A Chapter 13 Alone?
When spouses file a joint Chapter 13 bankruptcy case, both of their incomes are considered in determining the Plan payment and term.
With one spouse dead, however, the income scenario changes markedly.
If you’re in an active Chapter 13 bankruptcy case that you can’t afford anymore, here are some choices to consider with your lawyer:
First, Split The Case. When you file a joint bankruptcy case, i’s actually two separate cases that are filed under a single docket number and handled together. You can split the case into one for you and the other for your spouse.
For The Deceased Spouse – Convert Or Seek A Hardship Discharge. Depending on the reason for the Chapter 13 bankruptcy filing, you can either:
- convert your spouse’s case to one under Chapter 7; or
- request a hardship discharge.
For Your Chapter 13 – Continue, Dismiss, Convert, or Hardship. You can convert, dismiss your Chapter 13 bankruptcy case, or seek a hardship dismissal without splitting the case. But you can also make these moves independent of the deceased spouse.
For example, you can split the case and dismiss the spouse’s Chapter 13. Then you could continue your own Chapter 13.
Or split the case and convert your spouse’s case to one under Chapter 7. Then dismiss your case.
The options are complicated, and seemingly endless.
Death Can Be The End Of Bankruptcy – But It Doesn’t Have To Be
As you can tell, there are lots of options when it comes to handling death in the context of a bankruptcy case. It all depends on your goals, the debts and assets at issue, and how you can fit those facts into the context of the law.
Lucky for you, the law’s not nearly as inflexible as the Grim Reaper.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.