Category: Bill Collectors & Creditors

Most often, I write about bankruptcy issues when I see a debtor in a problem that if dealt with properly before a bankruptcy case has been filed, could have been avoided.

Today was one of those days. At the mundane 341 meetings, I saw at least 2 debtors walk blindly into the trustee’s question; “have you recently paid back a family member for a debt?” Both times the debtor got nailed, and they didn’t even know it. The attorney’s silent cringe, and the trustee’s “gotcha” facial expression told all. At least to me. But I’ve been doing this for way too long. The debtor had no idea. Their thinking was probably that is was ok to pay a family memebr for a debt before filing. But it’s not.

I can only assume their attorney either didn’t deal with the issue pre-filing, or had no idea of it. But as an attorney, this is something that you can’t avoid knowing. So I can only assume that in-experience was the issue.

Payments to family memebrs before bankruptcy is an issue in bankruptcy that if not addressed appropriately pre-filing, could cause big problems, and it probably did for this debtor, because the amount paid was large.

The payment to family member problem raises a few issues in bankruptcy. At the top of this list is: 1. is you family member a creditor? The second: 2. Is it going to be a problem that you paid them instead of your other creditors. 3. If you paid them a lot, where did you get the money?

First, your family member is considered a creditor in the eyes of the bankruptcy court. They will be treated just like Wells Fargo and Chase.

Second, it is an issue if you paid your family member back a debtor before you filed your bankruptcy case. All creditors in bankruptcy must be treated the same. So if you’re paying your Uncle Bob back instead of Bank of America, there is a problem. If you did this within a certain time period and then filed, there is a chance that every dime you paid your Uncle Bob could be reveresed by the court, and then divided evenly amoungst your creditors.

I cannot stress enough that these are issues that can be dealt with before filing your case. If you have this sort of issue, you need to talk to an experienced bankruptcy lawyer. Today I saw 2 different lawyers that let their clients get nailed with this. Now these clients are probably going to have to cough up all the money they paid their family member.

Don’t let this happen to you. Be honest and forthcoming with your lawyer, and make sure that the bankruptcy lawyer you choose has lots of experience in bnkruptcy.

Call us for a free consult: (480) 447-1554

When Collection Becomes Harassment

Bill collector harassment is an excessive quantity of or overly aggressive pressure from a creditor or debt collector to pay a debt. It may involve threats of violence, threats to embarrass the debtor, false information, excessive number of telephone calls or home visits or general nastiness. It can even involve contacting employers, neighbors or family. Third-party bill collectors cannot harass, oppress or abuse any person. They also can’t use unfair practices or make false statements. Unlawful acts by debt collectors include:

• Falsely implying that he or she is an attorney or government representative.
• Falsely implying that you have committed a crime.
• Indicating that correspondence they send you is from an attorney when it is not.
• Implying that nonpayment of any debt will result in loss of personal property, wages, or that you will be arrested unless (a) it is lawful and (b) the creditor intends to follow through with such action.
• Threatening to take action that is not legal or that the creditor does not intend to take.
• Implying that the transfer of interest in the debt to someone else will result in loss of personal property or wages, or that you will be arrested.
• Falsely representing that you committed a crime in an effort to disgrace you.
• Misrepresenting your credit or failing to communicate that you are disputing a debt.
• Using written communication which simulates or is falsely represented to be a document authorized, issued or approved by any court, official or agency of the U.S. or any state, or which creates a false impression as to its source, authorization, or approval.
• Contacting you by post card.
• Using any false or deceptive means to attempt to collect a debt or obtain information about a consumer.
• Failing to disclose clearly in all communication that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose.
• Falsely implying that accounts have been turned over to innocent purchasers.
• Falsely implying that documents are part of the legal process when they aren’t.
• Falsely stating that papers being sent to you are not legal process forms when they aren’t

Whether or not you are currently in bankruptcy in Arizona – Mesa, the Fair Debt Collection Practices Act (FDCPA) requires that debt collectors observe restrictions and treat you fairly. This law prohibits certain methods of debt collection. Personal, family and household debts are all covered under the FDCPA. This includes auto loans, medical care bills and charge accounts. However, business loans are not covered by this law. Paying bills on time is generally the best way to avoid third-party bill collector harassment. However, sometimes you encounter unavoidable situations that impact your ability to pay in a timely fashion.

Here is a link to the federal government’s site that will show you all of the FDCPA laws. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf