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Fair Debt Collection Help Articles – The Law Firm of Mitch Luxenburg

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19 Jan

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New Rules Could Put More Restrictions on Debt Collectors

January 19, 2014 | By | No Comments

The Consumer Financial Protection Bureau announced its plans to update the rules governing how debt collectors communicate with borrowers.

In early November the Bureau reached out to both consumers and debt collection companies and asked for suggestions on how to improve their interactions with each other. The goal was for the bureau to gain a better understanding of the current problems and how to fix them.

“We want to hear how we can better protect consumers and bring greater accountability to this multibillion-dollar industry without hamstringing legitimate debt collection activities,” said the Bureau’s Director, Richard Cordray, in the New York Times article Consumer Watchdog Takes up Debt Collection.

In the article, Cordray explained that the Bureau received more complaints about debt collectors than any of the other financial products the Bureau oversees. Most of these complaints were about questionable tactics used by debt collectors to obtain payments from consumers.

The debt-collection industry has been regularly criticized for the strategies used to get consumers to pay their debts. The current law was written before the heavy use of text messaging, social media, mobile phones and email, making the language unclear as to how debt collectors can lawfully use these tools to reach debtors. The new rules will address these issues in an effort to modernize the nation’s consumer debt collection system.

If you would like to submit a suggestion regarding possible new debt collection rules, visit  Regulations.gov, or go to RegulationRoom.org, a site operated by Cornell University. The Bureau will be accepting suggestions until February of 2014.

17 Jan

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How to handle your first interaction with a debt collector

January 17, 2014 | By | No Comments

If you’re late on your bill payments, there’s a chance that a debt collector may contact you. Before you receive that phone call, it’s a good idea to understand just how you should handle the situation.

First, know that in the first five days after contacting you (or before), a debt collector must send you a written “validation notice” explaining how much money you owe and the name of the creditor. If you don’t think you owe money, the notice will also include information on how you should proceed.

If you doubt whether you actually owe debt, you have the option to send a letter to the debt collector stating that you don’t owe the money they’re requesting or requesting verification. The letter must be sent within 30 days after you receive the validation notice. The debt collector must stop contacting you, until they send you the written verification of the debt.

When in the midst of dealing with a debt collector, it’s important to know what to say and what not to say. While debt collectors can be annoying, you should try to refrain from using vulgar language with them. It is also a good idea to refrain from releasing certain personal information to them such as:

-       Your social security number, bank account number or credit card information (unless you want to pay the debt).

-       Information about your employment situation or your assets

-       And never agree that you owe a debt if you think you do not, without having it verified.

While we would like to believe that everyone who contacts us as a debt collector is honest, scams do happen. It’s always a good idea to get written proof of the collector’s identity and verification of who they are before you release your personal information. Also, make sure to maintain thorough records of your interactions with the collector.

12 Jan

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What to know when disputing items on your credit report

January 12, 2014 | By | No Comments

Your credit report is kind of like your personal identity profile. It includes information on where you live, how you pay your bills, whether you’ve filed for bankruptcy and your legal history. Sometimes, however, people may believe the information on their credit report is inaccurate. Here at The Law Firm of Mitch Luxenburg, LLC, our lawyers specialize in protecting people from aggressive debt collection agencies. If you believe you’ve been wrongfully identified or have questions regarding your credit report, contact us for a free case review.

Review your credit report: It’s important for you to order a copy of your current credit report and review it for any errors. You are entitled to one free copy of each of your three credit reports each year. Visit one of the following websites, or call the toll-free number to order your copy.

  • TRANSUNION

www.transunion.com

(800) 888-4213

  • EXPERIAN

www.experian.com

(888) 397-3742

  • EQUIFAX

www.equifax.com

(800) 685-1111

Dispute to the credit reporting agencies: You should i dispute all inaccuracies that appear on your credit report directly to the three credit reporting agencies previously mentioned, in addition to the company who reported the information. To take full advantage of your legal rights under the Fair Credit Reporting Act, you must properly forward your complaint directly to these agencies.

Contents of your dispute: Make sure that your complaint is in writing, rather than online or over the phone. It’s important for you to hold on to proof of the information you provided, which is limited if you use the other communication methods. Include a substantial amount of detail regarding what you believe is inaccurate in the report, including account numbers. You should also dispute any incorrect personal information, such as the spelling of your name, date of birth, social security number, or address. Include copies of any evidence you have that supports your complaint and try to be as detailed as possible in your explanations. Also provide identifying information about yourself such as your correct address, social security number and date of birth. This will ensure that your entire dispute is reviewed and investigated.

Your dispute to the credit reporting agencies triggers a duty on their part to notify the creditor(s) of your actions and provide them with all significant information pertaining to your dispute. Both companies must then complete the entire investigation within 30 days of the date your dispute is received by the credit reporting agencies. When the investigation is completed, the agencies will send you their investigation results along with an updated copy of your credit report including any revisions they may have made.

Once you have received your investigation results, if you are not satisfied with them, do note re-dispute to the credit reporting bureaus. Instead, contact our office first at (877) 846-1209 for a free, no-obligation case review.

Please note that there are several limitation periods within which you must file a lawsuit. If you fail to file a claim or lawsuit during this time, you will not be able to seek damages. It’s important that you consider this and take action as soon as possible if there is incorrect information on your credit report.

10 Jan

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Debt Collector Complaints On The Rise

January 10, 2014 | By | No Comments

Now more than ever consumers are not just complaining about debt, but also the tactics used by debt collectors.

Debt ranked second on the list of 2013’s Top Ten Consumer Complaints, published by Forbes, which included other categories such as real estate, retail, and automobiles. The annual list was published around the same time as the Better Business Bureau released a report stating that debt collector complaints have risen 58-percent during the past decade. According to the Federal Trade Commission (FTC), the debt collection industry continues to rank high on the list of industries against which consumers log regular complaints.

Consumers reported instances of debt collectors using threats to collect money from the borrowers. According to an article published on December 3, 2013 in the Lebanon Daily News, a group of collectors actually threatened to close consumers bank accounts, and even the possibility of felony fraud charges. Other consumers were falsely told that they were going to be arrested at their place of employment if they didn’t pay up.

Some consumers actually gave in to the pressure and paid debts they didn’t owe, according to reports by the FTC.

According to the Fair Debt Collection Practices Act (FDCPA), debt collectors are outlawed from using threats or scare tactics to intimidate consumers into paying. Debt collectors may not engage in unfair practices while attempting to collect debt. Examples of FDCPA violations include:

-       Publicizing information about your debt to others (besides your spouse)

-       Failing to identify themselves on the phone

-       Using obscene or profane language

-       Using phone calls repeatedly to harass you

-       Using threats of violence or harm

If you are one of those who believe a debt collector has violated the law, you should contact The Law Firm of Mitch Luxenburg for a free case review by an experienced attorney.  If they can handle your FDPCA case, you will not be charged any attorneys fees.

06 Jan

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How far is too far?

January 6, 2014 | By | No Comments

Now-a-days everyone seems to have a Facebook profile, so it’s no surprise that debt collectors do too. But, when collectors use social media to troll consumers, they may be going too far.

In the NBC article  “Debt Collectors Trolling Facebook — Are They Going Too Far?”, Federal Trade Commission (FTC) representative Joel Winston states that often times collectors use social media to locate people or to see if there are any assets that could be collectable. Winston said that the FTC has received complaints about collectors using social media to either impersonate the borrower’s friend or simply use it as another harassment tool.

The article gives the example of a woman in Florida who was a victim of Facebook harassment by a collector. Melanie Beacham, who fell behind on her car payment by a mere $362, told NBC that after the collector tried to reach her incessantly through text messages and phone calls, they turned to Facebook.

Beacham said that the collector used extreme measures, which included sending private messages to her friends and family asking them to have her call the company. According to the Fair Debt Collection Practices Act (FDCPA), debt collectors are restricted from contacting third parties regarding your debt, which includes family members and friends (other than your spouse).

Beachman took her case to court and sued the collection agency that harassed her. While her case against the collection agency is still pending, her lawyer told NBC that he considers it a victory. The judge restricted the agency from contacting Beachman and her family through Facebook, which marked the first time in this country a ruling has been made to outright ban a collector from social media.

So, is social media completely off limits? Not exactly.

Debt collectors can and will continue to use the Internet to locate people who owe money. What is posted publically on social media is fair game and open for anyone to use. This is just another reason why it’s important for you to be careful about what you put out onto social media. Your profile may not be as private as you think, and your information could fall into the wrong hands.

Photo by:  reynermedia – via Flickr

01 Jan

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What is in your credit report?

January 1, 2014 | By | No Comments

In today’s society, your credit score can make or break you. For those with a good credit history, the future is bright — you’re more likely to be considered for a mortgage, car loan, and approved for credit cards. For those on the other end of the spectrum, there can be a bit of struggle to get approved for loans and other types of credit. With credit bearing so much importance in a person’s life, it’s a bit surprising to hear that many people haven’t even taken a look at their credit report and thus aren’t in tune with where their credit stands. If you’re one of those who have either put off ordering their credit report, or simply don’t understand what it entails, this article will help you understand the ins-and-outs of your credit report.

Essentially, a credit report is a combined record of your credit history and personal data. It includes information on who you are, where you live, your criminal history, bankruptcies, existing credit, and a list of those who recently requested your credit report.

The information present in your credit report is gathered and maintained by the three major credit reporting bureaus — Equifax, TransUnion, and Experian. They use resources such as creditors, banks, your public records, credit card issuers, and car finance companies to obtain information about you. The three bureaus all rely on different sources for their information, so what is present in one credit bureau’s report might not match the content in another’s report.

The information is then provided, in the form of a credit report, to persons or entities that request it. Because credit reports contain personal information, there is limited access to them. To see a full list of those who have access to the information in your credit report, please visit the Federal Reserve website.

Marriage and Debt

December 26, 2013 | By | No Comments

Wedding Photos

Two things you should know before tying the knot

As unromantic as it sounds, marriage is a contract. While many couples enter into a marriage with existing personal debt, others experience debt issues during the course of their marriage. While there are ways to avoid inheriting your spouse’s debt, you could be held accountable in the future. If you’re in debt or are preparing to marry an indebted person, here are two things you should know before you tie the knot:

The difference between Common Law and Community Property States:
Whether you take on your spouse’s debt is determined by which state you live in. Nine states have “community property” laws, which holds a couple jointly responsible for debt incurred by either party during the marriage. However, community property law does provide you with the option to sign an agreement with your spouse stating that your debts are treated separately. Community property states include California, Nevada, Washington, Idaho, Louisiana, Arizona, New Mexico, Wisconsin, and Texas. The rest of the states are  “common law” states. Common law states only hold the person whose name is tied to the debt liable. You are not liable for your spouse’s debt. Neither law holds you liable for debt incurred by your spouse before marriage.  However, regardless of whether you live in a community property or common law state, you could still be held responsible for your spouse’s debt if it is considered a “necessity” – for example, medical expenses, mortgage payments and food bills.  Because there are so many variations in these laws from one state to another, it is important to consult with a lawyer who practices law in the state where you live for concrete answers.

Signing on to indebted accounts
Regardless of whether you live in a community property or common law state, opening a joint account with your spouse makes you liable for that debt. This holds true if you sign on to your spouse’s personal account as a joint holder, and the account goes into default. If you and your spouse refinance your pre-wedding debt together under joint names, you are also responsible for the debt incurred.

Photo By: Scott Shaefer

17 Dec

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When a Paid-debt Resurfaces

December 17, 2013 | By | No Comments

You were certain you paid off that old credit card, yet you’re still receiving calls from the debt collector. How do you prove to a debt collector debtthat you’re in the clear?

You were certain you paid off that old credit card, yet you’re now receiving calls from the debt collector. To make matters worse, you’re unable to locate the payment information and have little record of the transaction. How do you prove to a debt collector that you’re in the clear?

For starters, if you’re one-hundred percent certain you’ve already paid the debt then you are not required to do anything. It’s your choice whether to provide the debt collector with information confirming your payments. However, doing so may get them off your back and avoid further collection efforts, such as lawsuits.

If you don’t have the documentation of your payments or letters proving you paid the debt, you should contact the creditor or your bank to request the information. All creditors should have this information on file for several years following the date of the transaction. While you are not required to provide the collector with this information, it may be in your best interest to avoid any future contact.

When you’re responding to the debt collector, it’s recommended that you do it in writing and keep a copy for yourself. Send all communications by certified mail, return receipt or some other method that provides proof of delivery. If you have questions regarding the debt, feel compelled to ask the collector. By law, debt collectors who claim consumers owe money are required to provide certain information about the debt in writing within five days of their first contact with you. This information includes the amount owed, the name of the creditor and an explanation of how to request verification and/or dispute the debt.

Photo By: Images of Money

 

Dealing with College Debt

December 13, 2013 | By | No Comments

It’s not an easy time for college graduates in their 20-something’s. According to a recent survey published by the American Institute of CPA’s, recent graduates prioritize paying off college debt higher than other milestones. The survey showed that about 40 percent have postponed buying a 401(k)2013car, 15 percent pushed back marriage, and 29 percent said they delayed the purchase of a new home because of their debt.

Like many, you may not have fully understood the future financial strains when you decided to take out a student loan. But now you’re stuck with it and the only way to move forward is to pay it off. Below are three tips for combating your college debt and easing the financial burdens along with it.

Understanding what you owe and where you owe it
There are several types of student loans, and many students take out more than one. It’s important for you to understand the conditions under which you will need to repay your loans. Some loans require immediate monthly payments, while others present options to defer payments or assist with interest. In a perfect world you would want to focus on high-interest-rate loans first.  However, you should consider grace periods, as they aren’t the same for each loan. Also, make sure to confirm your address to ensure that you will receive all notices, so you don’t suffer the consequences of late payments.

Learn more about forgiveness programs
One option for dealing with student loan debt is to take care of it in its entirety. You may consider taking part in a Public Service Loan Forgiveness program which helps alleviate student debt in exchange for public service work. Examples include taking part in the Peace Corp, volunteering for AmeriCorps, working in public-interest law or joining the military. Although these programs don’t always take care of debt, their contributions tend to be significant. While this isn’t an option for everyone, it is something to consider.

Be hesitant about consolidations
While consolidating your loans can help reduce your monthly payment, it also extends the period during which you’re repaying your loans. It may seem like a great idea right now when you’re tight on cash, but consolidating loans can leave you with debt for years. If you choose to go down this route, make sure to protect options like deferment on loans to avoid losing repayment flexibility.

Photo by: 401 (k) 2012

11 Dec

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Spending Strategies

December 11, 2013 | By | No Comments

If you are in process of paying off debt, you’re not alone. The first step to paying off debt is coming up with a budget that fits your lifestyle and income. Use the following steps to help create a monthly budget that you can stick to, as you travel down the road to a debt-free life.
SpendingStrategiesPhoto
Write it out
Write a list of everything you spend money on during the month. This should include everything from utilities to entertainment. It’s okay to estimate if you aren’t sure exactly how much you spend in a specific category, but we recommend aiming at a higher amount rather than lower. Once you have written all of your expenses, create a new category and record your net monthly income.
Then, create a separate list outlining all of the debt you owe from the lowest amount to the highest. Make sure to note the minimum payment due for each item and the percent of interest. This will help you to better gauge the total you owe and the amounts in which you should plan your payments.

Evaluate your monthly expenses
Once you have all of your expenses in front of you, identify which are luxuries and which are necessities. For example, the $6 latte you treat yourself to every morning is a luxury, whereas your monthly mortgage payment is a necessity. While it’s okay to occasionally give in to your vices, these little expenses really add up. You will be surprised at how much money you can save each month just by packing your lunch or taking the train to work.

Create a plan and pay it off
Once you’ve determined where you can cut back, write out your monthly budget. Include the information you wrote down in the first step to ensure that your monthly payments are part of it. Then, take your debt-spending money and apply it towards your highest priority debt. Depending on your situation this could be your smallest debt or the debt with the highest interest rate. Start paying off the extra amount in addition to the minimum payments each month toward the other debt. Continue making the payments until that debt is completely paid off, and then continue to apply the same method to the other debt on your list.

However, it is very important that you always make at least the minimum monthly payment on every one of your debts. If you do not, you may find your accounts being sent to debt collectors and you will likely suffer damage to your credit scores. You also could be sued if you stop paying on an account.

Photo courtesy of 401(K) 2012 – via Flickr