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Debt Collector Abuse on the rise
Posted: December 12th, 2011
As consumers struggle to pay their bills, complaints about debt
collectors are growing faster than those in any other industry,
regulators say. The Federal Trade Commission reports that the
number of complaints about debt collectors rose from 104,766 in
2008 to 140,036 in 2010. The FTC receives more complaints of
debt collection harassment
(debt collection industry) than any other industry. The Fair
Debt Collections Practices Act (FDCPA) provides consumers many
rights while a debt collector is trying to collect money from
debtors.
Debt collectors may not harass, oppress, or abuse you or any
third parties they contact. For example, debt collectors may not
user threats of violence or harm, publish a list of consumers
who refuse to pay their debts outside of a credit bureau, use
obscene or profane language, call before 8AM or after 9PM, make
threats such as arrest for not paying your debt, among other
actions such as making false statements.
A USA Today article explains one story of a debtor harassed
by a debt collector. If you feel you are being
harassed by debt collectors,
or are in need of immediate debt relief, please
contact one of our offices today for
a free consultation.
(read the
full USA Today article)
Reporter's notebook: Pardon Jefferson County, but fewer
Alabamians resorting to bankruptcy
Posted: November 21st, 2011
Alabama has joined a national trend, in which U.S. personal
bankruptcy filings totaled 106,255 during October, down nearly
20 percent from a year earlier, according to the American
Bankruptcy Institute's analysis of data from the National
Bankruptcy Research Center.
"The declining filings correlate to tightened consumer spending
and the overall pull back in consumer credit associated with a
stagnant economy," American Bankruptcy Institute Executive
Director Samuel J. Gerdano said in a statement. "We expect total
2011 consumer filings to be less than 2010."
Brad Botes, a partner in the Birmingham-based Bond and Botes law
firm, which represents bankruptcy clients across the Southeast,
said he is not surprised that the number of filings are on the
decline from the height of the economic downturn two years ago.
"The numbers reflect a sense of hopelessness," Botes said.
"Bankruptcies are down significantly from last year. I think
that shows that a lot of people suffering in this economy have
given up and feel there is no way out so why file."
Please visit the AL.com website to read the full article.
New rules will protect
against debt relief outfits
Posted: October 18th, 2010
Consumers complaining about high fees from companies that sell
debt-relief services will soon get some protection from Uncle
Sam. Starting October 27th, 2010, for-profit firms will be
banned from charging a fee before they settle or reduce a
customer's credit card obligation or other unsecured debt. The
Federal Trade Commission's new rules, listed on ftc.gov, cover
telemarketers of for-profit debt relief services, including
credit counseling, debt settlement and debt negotiation
services.
Birmingham bankruptcy lawyer Brad Botes
and Doug Horst, program manager of the non-profit Consumer
Credit Counseling Service, said the FTC ruling is over-due.
Botes, a partner in Bond, Botes, Reese & Shinn, and Horst, whose
agency provides low-cost counseling to debtors, both said many
of their clients have been victimized by debt settlement
companies. (read the
full article)
Debt-settlement firms' claims often unsettling
Posted: October 18th, 2010
With the economy in the tank and the unemployment rate hovering
around 10 percent, many consumers are finding more difficult to
pay their bills. For many consumers, promises made by
debt-settlement companies to "get you off the credit card
treadmill" or to "eliminate debt now" may sound like a great
solution, but it's not always the case. In most cases, experts
say, signing on with a debt-settlement company will put you
further in the financial hole. In some cases, the companies are
fraudulent and take your money with no intention of helping you.
Problem Solver Jon Yates of the
Chicago Tribune examines the issue and how new federal rules
aim to clamp down on the some of the most criticized practices
used by these debt-settlement firms. (read
the full article)
Chicago Tribune
How long does a debt collector have to sue after a credit card
ahs been canceled?
Posted: October 4th, 2010
How old is too old when it comes to being sued for an old debt?
If you are sued for an old debt, you may have a good defense.
Debt collection lawsuits must be timely, accurate and fair. Debt
buyers purchase old debts for pennies on the dollar, use data
bases to file automate lawsuits, and make huge profits. With new
technology, the 11 billion-per-year debt collection industry has
exploded, especially in the courts. (read
more)
AARP
Our view on bill collectors: Firms employ questionable
techniques to collect debts
Posted: September 28th, 2010
The easiest way to avoid being chased by debt
collectors is, obviously, to pay your bills. That said,
collection agencies have a responsibility to obey the law and
treat consumers fairly. At a minimum, collectors have a duty to
ensure that the debts they're trying to collect are real and
that their targets are the people who owe them.
But as debt collection has grown into a huge business, those
rules are easily flouted. The past decade's easy credit —
followed by a crash and a recession — left billions of dollars
in unpaid bills. Banks, retailers and other credit card issuers
charged off more than $86 billion in debt last year, more than
twice as much as in 2000, according to the Nilson Report.
Resourceful debt collectors are also finding sneaky new tactics:
According to reports from Las Vegas and Vancouver, attractive
women — who fail to mention they're working for collection
agencies — become Facebook "friends" with debtors, giving the
agencies access to personal information.
Computer-generated lawsuits are filed by the thousands in states
across the country. Anecdotal evidence suggests that many
consumers never find out they've been sued. In New York, for
example, process servers were found to be filling out false
affidavits claiming they had served people. (read
more)
USA Today
Foreclosure prevention program problems
Posted: September 28th, 2010
Across the country foreclosure rates have reached an
all time high. The Obama
administrations flagship foreclosure program, called Making Home
Affordable, is not working according to the federal government.
The program was designed to help homeowners reduce their
mortgage payments. Only 34% of those who enrolled in the program
have actually received permanent loan modifications. (read
more)
WLBT 3
Woman sues debt collector for contacting her family via Facebook
Posted: September 28th, 2010
Social networking sites, such as Facebook, are a
great way to keep in touch with friends, relatives, old
school chums for many Americans. But in the case of one
St. Petersburg resident, her Facebook account became a resource
for a bill collector on a mission to collect on a debt. (read
more)
St Petersburg Times
ABC Nightline Investigation: Debt Collectors, the N-Word and
Bank of America
Posted: September 28th, 2010
For the last three years, complaints about debt
collections and their tactics have been the number one source of
complaints to the Federal Trade Commission. In the first half of
2010, the FTC received over 65,000 complaints from consumers. As
ABC's Nightline discovered, some Bank of America customers were
certainly no exception. Two days after being confronted by ABC
News, Bank of America has fired a debt collection agency after
several of its operators were caught using racist and obscene
phone calls to collect debts from bank customers.
(read
more)
ABC News.com
FTC bars upfront fees for debt-settlement customers
Posted: August 18th, 2010
Companies that promise to reduce or eliminate credit
card balances and other debt for customers (Debt-Settlement
Companies) will no longer be allowed to charge an upfront fee
for their services effective October 27, 2010. Debt-Settlement
companies will now only be able to charge a fee to customer's
one the debt has been reduced, settled or renegotiated.
The Federal Trade Commission said Thursday that the new
restrictions are a crackdown on the debt-settlement industry,
which flourished during the economic downturn as borrowers
struggled to pay bills. (read
more)
USAToday.com
Old Debts That Won't Die
Posted: August 10th, 2010
The debt collection industry has undergone a
transformation in the last decade. Credit card issuers, health
care providers and cellphone companies now routinely sell debt
that they deem uncollectible to debt buyers, who then either try
to collect it themselves, turn it over to a collections law firm
or sell it again. The statute of limitations for debt varies
from state to state, generally from three to 10 years. In many
states, collectors can restart the clock if they can persuade
the consumer to make even the smallest payment. Making a payment
of any amount will revive the debt so it can be legally pursued
in court. (read
more)
NYTimescom
VT Attorney General alleges debt "relief" firms often make
things worse
Posted: August 1st, 2010
These companies – often called credit consolidators –
make big promises to Americans struggling with mounting personal
debt in a bad economy. They promise to get creditors off
people's backs, to reduce their debt by up to 75 percent and get
them back on “the road to financial freedom.”
But many of these companies, according to legal experts, are
nothing more than big rip-offs. The Vermont attorney general's
office in February reached a settlement with one credit
consolidator and this month sued another, alleging it bilked
Vermonters of more than $130,000.
(read
more)
TimesArgus.com
Bankruptcy can save your house from foreclosure
Posted: August 1st, 2010
Slick TV commercials and online ads tell delinquent
borrowers that they can save their homes by filing for personal
bankruptcy. But is it true -- or just too good to be true?
...True!
Bankruptcy can bring foreclosure proceedings to a halt, end
harassment from debt collectors, and give borrowers time to make
up missed payments and reorganize their finances. In some cases,
bankruptcy can also help mortgage borrowers save their homes
permanently. It's not, however, going to help every troubled
homeowner. (read
more)
CnnMoney.com
America's new debtor prison: Jail time being given to those who
owe
Posted: July 19th, 2010
Debtor's Prison has been abolished since the 1800's,
however, did you know that there are loop-holes in the legal
system that allow some people to wind up in jail for a debt they
may or may not owe? Debt
collectors are increasingly using the court system as a way to
collect debts from people, often the ones that are least able to
repay. Its important to understand your rights and protect
yourself from agressive debt collectors who are out to collect a
debt at
any cost, even if that cost
is your freedom. (read
more)
WalletPop.com
Debt Collectors Get Nasty
Posted: July 19th, 2010
Complaints of harassment by debt collectors surged
50% to 67,550 in 2009, according to the Federal Trade
Commission. Harassing phone calls, abusive language and physical
violence are becoming a bigger part of business as debt
collectors struggle to round up money from people who don't have
it. (read
more)
CNN Money.com
Peddling Relief, Firms Put Debtors
in Deeper Hold
Posted: June 22nd, 2010
The long recession has delivered an abundance of potential
customers to Debt-Relief companies promising debt relief
assistance. However, consumers rarely emerge from debt
settlement programs with their credit card balances eliminated,
critics say, and may wind up worse off with severely damaged
credit, ceaseless threats from collection agencies and lawsuits
from creditors. New York State Attorney General alleged
that no more than 1 percent of customers gained services
promised by marketers with Colorado coming to the same
conclusion. The New York Times takes a look at Debt
Settlement companies and things you should know if you're
considering one in your future. (read
more)
NYTIMES.COM
Complaints to BBB Against Debt Settlement Companies On The Rise
Posted: May 14th, 2010
Better Business Bureau is warning financially troubled
families to beware of misleading debt settlement companies that
claim they can easily reduce or eliminate credit card debt.
Since the start of the recession, BBB has received more than
3,500 complaints from individuals, including many who paid
hundreds of dollars in upfront fees to debt settlement companies
but only fell deeper into debt. (read
more)
BBB.org
Five
Post-Bankruptcy Myths
Posted: July 22nd, 2009
The decision to file for bankruptcy is typically a last resort
for consumers who find themselves plagued with debt. While
bankruptcy may offer a fresh start and relief from bills
incurred from divorce, unemployment and uninsured medical costs,
many consumers worry about how the decision will ultimately
impact their financial future. Will you permanently ruin your
credit? ..when will you qualify for credit again? Will you get
turned down for a job? .. or how about getting a new car or a
home? The myths of bankruptcy are looked at in this CNBC article
by creditcards.com
Debt settlement via firms can
be risky Down-on-their luck consumers have alternatives
including using an accredited debt-counseling agency or filing
for bankruptcy.
It sounds like a great deal. Hire a "debt
settlement" firm and they'll make much of your debt go away.
Gone! Poof! Disappeared! For a fat-fee, these firms negotiate
with your creditors to reduce your debt in exchange for a quick
partial payment. They often promise to cut debt in half, and
save customers "hundreds of dollars a month." They're
controversial, with critics claiming they rarely live up to
promises and sometimes leave clients worse off.
Posted: July 20th, 2009
Filing for Bankruptcy... find out if it's the right option for
you.
Attorney Brad Botes appears on Birmingham's local ABC station,
33/40 News, to discuss the option of Bankruptcy and when you
should explore it as an option. (Flash Player is required to
view this video)
Posted: May 4th, 2009
ABC 33/40 - Birmingham, AL
If you think Bankruptcy if only for the poor, think again...
Posted: April 9th, 2009
Comcast.net Smart Money
What does Walt Disney, P.T. Barnum, Anna
Nicole Smith, Heidi Fleiss, and Donald Trump Have in common?
They and 30 other well known celebrities have filed for
Bankruptcy.
Famed entrepreneur Donald Trump was $900 million in debt in
1990, but clawed his way back to the top after financial
restructuring. Bankruptcy protection can help people of all
financial make-ups. Find out more celebs who have sought
protection under the Bankruptcy Code. (read more)
Read more...
10 Things Credit Card Companies Won't Say
Posted: March 11th, 2009
Time
SmartMoney.com
Responsible credit card management is
important to a healthy financial future for every consumer.
Learning how to use credit responsibly is a key factor in
bolstering your credibility and avoiding possible bankruptcy.
Many people find out all too late that there are sometimes
catches and quirks that go along with using credit cards and
wind up paying for it the hard way.
SmartMoney Magazine takes a look at 10 things Credit card
companies won't say to the consumer. Increasing interest rates,
over limit fees, and universal default rates, all a good
thing... for them. But how does this all affect you? Nancy Nall
Derringer takes a look at this and more including the question,
"are credit card companies part of the identity theft problem?"
Read more...
House of Cards: The Faces Behind Foreclosures
Posted: March 4th, 2009
Time
Time.com
Jeff Wagoner is a bankruptcy attorney in
Kansas City, Mo., with the brush-cut hair and clear eyes of a
former Navy aviator. From his office in a tower on a hill, he
can see miles of prairie and a world of hurt. Wagoner's clients
(and he has plenty these days) range from folks who had no
business ever buying a house to folks freshly fired from
executive suites. Based on his survey of the economic wreckage,
Wagoner's conclusion is that even the slightest miscalculation
or change in circumstances could send another customer through
his door: "There are not a lot of second chances out there right
now."
Read more...
Debt-Relief Firms Attract Complaints
Posted: February 2nd, 2009
The Wall Street Journal,
wsj.com
As the economy weakens, a growing number of
consumers are paying big money for services from debt-settlement
companies that purport to help them settle their debts for a
fraction of what they owe.
Debt-settlement companies generally advise clients to make
monthly payments into a special account instead of paying
creditors. The firm promises to use the accumulated cash to
settle debts for pennies on the dollar. They often charge hefty
up-front fees, and their tactics can trash customers' credit
scores, boost their tax bills and leave them in greater debt
than when they started.
The
Case For Walking Away
Posted: January 7th, 2009
Newsweek,
newsweek.com
Most families, honorable to the end, struggle
longer than they should trying to repay their debt. If you're
reaching the end of your rope, don't try to hold on. Save what you
can. Read about some of the common mistakes people make in
delaying the decision to go bankrupt. Walking away from your debt
can in fact be the right answer for many people drowning in debt!
You may also view this article in PDF format.
(requires the free adobe acrobat reader)
Debt-Relief Firms Attract Complaints
Posted: September 17th,
2008
The Wall Street Journal,
wsj.com
As the economy weakens, a growing number of
consumers are paying big money for services from debt-settlement
companies that purport to help them settle their debts for a
fraction of what they owe. But experiences shows, customers can
end up wishing they hadn't sought such help. The Wall Street
Journal takes a look at one consumer who hired a debt-settlement
company.
You may also view this article in PDF format.
(requires the free adobe acrobat reader)
After bankruptcy, an entrepreneur rebuilds
Posted: September 25th,
2008
CNN Money,
money.cnn.com
CNN Money takes a look at one business owner's
success in rebuilding his business life post bankruptcy. "After
losing my first business, I built a successful new one and learned
to live debt-free. "
"Strip-down" Could Ease Subprime Mortgage Crisis
Posted: September 2nd,
2008
UC Davis News,
news.ucdavis.edu
Nearly all debtors who file for bankruptcy
under Chapter 13 are homeowners, according to researchers at the
University of California, Davis, Graduate School of Management and
UC San Diego.
Alabama Bankruptcies continue to climb
Posted: September 2nd,
2008
The Birmingham News,
al.com
Birmingham bankruptcy lawyer
Brad Botes said his client base
is approaching levels he has not seen since mid-2005, when a surge
of clients sought bankruptcy protection prior to the tougher new
law.
"Between foreclosures and others overwhelmed by debts as they deal
with high gas, energy and food prices, it is no wonder so many
people are struggling to get by right now," Botes said.
12 Myths about bankruptcy
Posted: July 1st,
2008
Like most big, bad scary things, bankruptcy has a reputation based
on a few tidbits of truth and lots of embellishment. It's not
nearly as frightening once you know the facts.
With a mind toward de-clawing the monster, here are a dozen
misconceptions about bankruptcy. -
bankrate.com
When staying alive means going bankrupt June 29th,
2008
Health insurance didn’t keep cancer-stricken California woman
solvent -
MSNBC.COM
Business bankruptcies soar in early part of year June 5th,
2008
Birmingham bankruptcy lawyer Brad Botes said the business growth
is a sign that companies are being hurt by the credit crunch and a
slowdown in the housing ... (read more) The Birmingham News -
al.com
Bankruptcy Filings Up 30 Percent in Last 12 Months
June 4, 2008
Bankruptcy filings leapt up 30 percent for the 12 months ending
March 31 -- from 676,000 in 2007 to nearly 902,000 this year --
according to data from the Administrative Office of the U.S.
Courts.
<..>
The top five states for bankruptcy filings per capita in the 2008
data are Tennessee, 6.7 per 1,000 population; Georgia at 5.45;
Alabama at 5.29, Illinois at 5.16; and Michigan at 4.82 per 1,000.
-
The National Law Journal
Build credit without a credit card April 22,
2008
Kiplinger's Personal Finance Magazine -
MSN Money
Beware cut-rate bankruptcy advice. March 29,
2008
Liz Pulliam Weston -
MSN Money
Bankruptcy has become little more than a few months in purgatory,
rather than the seven-year ache -- and lifelong disgrace -- it
once was.
Law Makes Debt Relief Harder for Homeowners. January 12,
2008
Jane Birnbaum -
New York Times
Chapter 13 delivers foreclosure alternative. November 7,
2007
James Paton -
rockymountainnews.com
Facing rising mortgage payments and a weaker
housing market, more Coloradans are turning to Chapter 13
bankruptcy to try to avoid losing their homes.
Bankruptcy Reform Bites Back
Christopher Farrell,
businessweek.com, October 29, 2007
In past periods of
economic turbulence, American households were able to escape
mountains of bad debt—and keep their homes—by declaring
bankruptcy. During the weak growth years from 2001 to 2003, for
example, nonbusiness bankruptcy petitions averaged...
Bankruptcy FilingsIn First Half of 2007 Up 48 Percent from a Year
Ago
Press Release (ABI) — The total number of U.S. bankruptcies
filed during the first six months of 2007 increased 48.23 percent
over the same period in 2006 in all bankruptcy court districts,
according to data released today by the Administrative Office of
the U.S. Courts. Total filings reached 404,090 during the first
half of the calendar year of 2007 (January 1-June 30), compared to
272,604 cases filed over the same period in 2006.
(Read More) -
American Bankruptcy Institute
Declaring Bankruptcy Can Improve Your Credit Score
Credit scores can run the gamut among
bankruptcy filers. "In that population, you'll find some consumers
who have very good FICO scores, some who have very bad FICO
scores, and in between" Granted, you won't be able to bring your
score up to the perfect 850 as long as your bankruptcy stays in
your report, but with good credit management after filing, a score
in the 700s isn't impossible. - SmartMoney.com
Consumers facing tough times with debt
NEW YORK (AP) — NEW YORK - Rising interest rates and higher
gasoline prices are putting the squeeze on consumers’ budgets, and
many are finding it harder to keep up with their bills.- From
MSNBC
Hooray for Bankruptcy! or -
PDF File
Author Spike Gillespie takes a look at Bankruptcy. - From the
NY Times
Bankruptcy information contained in this
section may not necessarily be written or provided by Bond and
Botes directly.
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