In a lawsuit filed on May 10, 2011, by Clay Daniel Burch, Plaintiff, against Bank of America, Defendant, Burch proved the Defendant repeatedly failed to regard the U.S. Bankruptcy Court automatic stay and discharge injunction. The hearing court rendered its decision on July 27, 2011, in favor of the Plaintiff and awarded Burch $5, 105.05 in compensatory damages, and $12,000 in punitive damages. The reason the Plaintiff was awarded the judgment is because he proved the creditor failed to comply with the law.

Filing bankruptcy initiates an automatic stay. The automatic stay, applicable to all types of bankruptcies, stops certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. After the initiation of the bankruptcy, creditors must go through a U.S. Bankruptcy Court trustee to deal with their debtors.

According to the judge’s order concerning the violation of the automatic stay in the Burch case, “The Plaintiff, an individual, presented evidence that the Defendant received notice of his Chapter 7 Bankruptcy case when it was filed; despite this notice, Defendant repeatedly attempted to contact Plaintiff, both by telephone and by mail. The costs the Plaintiff ultimately incurred were due to actions taken by Defendant after the Plaintiff received his discharge; however, the mere violation of the automatic stay constitutes an injury to the debtor inasmuch as the creditor’s violation restricts the debtor’s breathing spell and subjects the debtor to continued collection efforts, possibly including harassment and intimidation.”

Due to the disregard of the bankruptcy discharge injunction, “The evidence presented at the hearing on Plaintiff’s Motion is sufficient to establish civil contempt on the part of Defendant. Defendant had notice of Plaintiff’s bankruptcy and his discharge, as evidenced by the Court’s records. Defendant also received notice at multiple addresses of hearings held in this adversary proceeding; however, Defendant ignored all notices it received regarding Plaintiff’s bankruptcy case, with the exception of the complaint it received from the Department of Consumer Affairs. The events of which Defendant received notice were in Plaintiff’s favor, as he, in filing and completing his bankruptcy case, received the protection of the automatic stay and relief from personal liability on his debt upon discharge. Defendant violated the discharge injunction by repeatedly contacting Plaintiff after his discharge in attempts to collect its debt from him personally. Finally, Plaintiff suffered harm as a result of Defendant’s actions. Plaintiff was forced to spend time and money to stop Defendant from attempting to collect on a debt for which Plaintiff was no longer liable. Plaintiff endured months of harassing letters and telephone calls. Plaintiff had to hire an attorney, miss time from work, and drive over 600 miles to prosecute this Motion. Plaintiff has met the elements to show civil contempt by Bank of America.”

U.S. Bankruptcy Courts unfavorably view creditors who disregard bankruptcy laws. Filing for bankruptcy is a legal proceeding designed to protect both creditor and debtor and to allow the honest person a fresh start.

Do you need a fresh start? Have you considered bankruptcy? If you need relief from the stress associated with debt and you live in or around the metropolitan areas of Youngstown or Warren, Ohio, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

Bankruptcy can occur due to a divorce, catastrophic event, foreclosure on personal or business property, failure to pay bills on time, loss of income, health problems, poor business decisions, bad timing, bad advice, or a poor economy. When you are bankrupt and can no longer pay bills, bill collectors will begin their debt collection efforts.

What can a creditor do to me if I owe them money?

They can stop doing business with you, report any default or late payments to a reporting agency, turn you over to their collections department, bring a lawsuit against you to obtain a judgment, or if they own a secured note, take back the collateral either by foreclosure or seizure.

How long does it take a creditor to send a debt to an outside collection agency?

Depending on whether a company has its own collection department, a creditor would first send you a certain number of mailed communications as reminders of the debt you owe and then turn the debt over to either their collection department or an outside agency for collections. There is no clear time frame for the process but it generally occurs within a year.

Can a creditor legally sell my debt to an outside collection agency?

Unfortunately, the answer is yes. It is possible. Many creditors put clauses in their contracts to allow them to sell the rights to collection. What can you to stop your debt from being sold? You may ask the new owners of the debt to verify the contractual paperwork and legality of the exchange.

What recourse does a collection agency have in collecting debts?

Collection agencies are bound by the Fair Debt and Collection Practices Act (FDCPA). The Act is a comprehensive statute that details what collection agencies can and cannot do to collect debts and what rights you have as a consumer when dealing with them.

Can a collection agency report the debt to a credit agency?

Yes, but they have to report the debt fairly, accurately, and within the confines of the FDCPA.?

Can a collection agency sue you?

Yes. The primary threat a collection agency has in collecting debt is to obtain a judgment through a lawsuit. Depending on the state in which you live, a judgment can be used by a collection agency to attach liens and garnish wages. Eventually, attached liens can lead to seizures of assets.

Can a collection agency harass me?

Unequivocally, the answer is no. If you send a collection agency a Cease and Desist order, they can no longer contact you, but they still can re-sell your debt to another debt collection agency that can contact you until you ask them to cease and desist. In either case, they must follow the statutes of the FDCPA or suffer heavy fines.

Can you go to jail for not talking to a debt collector or paying you debts?

No! There are no debtor prisons in the United States because you have not committed a crime by owing money.

What can I do If I am overwhelmed by debt collection activities and debt?

You can do what most other Americans do when they find out they have more debt they can pay-off in five years and still pay all their living expenses. You file for bankruptcy protection.

The moment you file a bankruptcy, a judge will order all collection actions to cease. This is called an automatic stay. The automatic stay, applicable to all types of bankruptcy filings, stops certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. Creditors will have to go through a U.S. Bankruptcy Court trustee to deal with their debtors.

Debt collection basics may simple, but bankruptcy laws can be very complicated. If you are considering bankruptcy, contact a bankruptcy lawyer. If you need relief from the stress of debt and you live in or around the metropolitan area of Gary, Indiana, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, was suppose to eliminate the abuse of the bankruptcy system and clarify which debtors could file Chapter 7 Bankruptcy.

The mood at the time, led mostly by conservative lobbyists who represented various creditors in the banking industry, was to stop the perceived abuse of bankruptcy filings by the deadbeats who were trying to use the system for their own benefit.

Lobbying groups insinuated some debtors were abusing the system by running up large debts and escaping with their assets, due to liberal state and federal exemption laws. With the economy beginning to waiver, the lobbyists convinced Congress the bankruptcy laws should be updated. According to many bankruptcy judges and trustees, the changes to bankruptcy laws did little to eliminate the problems and may have actually made things worse.

What is wrong with the legislation? There are problems with the means test, which is used to determine if an individual, group, or business qualifies for Chapter 7 Bankruptcy.

Chapter 7 Bankruptcy, commonly called a “liquidation bankruptcy”, is the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A court-appointed trustee gathers and sells non-exempt property, and uses the proceeds from the sale to pay the debtor’s creditors.

Debtors whose income is below the state’s median income are not subject to the means test. If the debtor’s income is above the state’s median income, a means test calculator is provided to calculate whether their income is too high to file for Chapter 7 Bankruptcy. Those who cannot pass the means test may be allowed to file Chapter 13 Bankruptcy and repay a portion of their qualifying debts with a 3 to 5 year debt repayment plan.

There has been some confusion and controversy about the means test.  At the center of the controversy is the method used by the U.S. Bankruptcy Court for addressing the use of projected disposable income (PDI), disposable income (DI), and current monthly income (CMI).

On the official means test form, B-22A, the definitions are addressed in one manner to determine CMI and expenses, and in Forms I and J, they are addressed in different manners. These differences result in two different disposable incomes. Unfortunately, the Courts are divided on the definitions and usage, and the Supreme Court has recently made a ruling on part of the problems, but the ambiguities still exist.

Over 1.5 million people filed for bankruptcy last year with no significant drop in Chapter 7 Bankruptcy filings. The BAPCPA has not reduced bankruptcy filings, but it has created problems. Bankruptcies cost more to file and lawyers’ fees have more than doubled, online credit counseling is the norm, and the pace of personal bankruptcies is growing, nearing 2004 pre-reform levels.

Bankruptcy laws can be complicated, and you may need the expertise of a bankruptcy lawyer. If you need relief from the stress of debt and you live in or around the metropolitan area of Newark, New Jersey, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

Bankruptcy filings have been declining since the beginning of 2011, but for the third time in the past 90 days, I have had a cashier try to short change me. This has never happened to me in the last 64 years. Was it an accident, a sign of the times or a result of our poor economy? 

Cash strapped businesses are hiring desperate minimum wage employees. Could these employees be attempting to increase their pocket change by stealing from me? For example, the other day a cashier took my $20 and neatly placed it on the cash register. The bill was $2.07, and I handed her a dime for the 7 cents. She rang up the order and handed me back 3 cents and thanked me. 

“I gave you a $20 bill plus a dime,” I objected. She replied, “Oh, that is right,” as she quickly lifted the $20 bill from its hiding place (right by the cash register drawer). Was it a inadvertent mistake? I probably would have thought so, if she had not smiled. I understand common mistakes, but I told her if it happened to me the next time I came in, I would have to report her to her manager. She did not say a word and she did not seem disturbed about what she had done. 

This year I have medical problems, two major operations and two heart attacks. I did not work for 18 months, and my savings evaporated. It is hard to make a living wage, and I can understand the temptation to cheat others. I hope I never would, but in a desperate situation, you never know. 

Are some Americans so desperate they are willing to steal extra money from their customers and risk not only their jobs, but breaking the law? Maybe so, not surprisingly, individuals who are willing to cheat the government are on the rise. The bankruptcy system has seen an increase in bankruptcy filers attempting to commit fraud, causing the US Bankruptcy Courts to increase their investigative efforts to identify the offenders. 

Recently a wife and husband from Iowa were sentenced to two and four years respectively in federal prison for defrauding a US Bankruptcy Court in Florida. The couple sold assets to their family in Iowa, moved to Florida, and filed for bankruptcy. Florida bankruptcy laws allowed the couple more favorable bankruptcy exemptions. When they returned to Iowa, they retrieved their assets from their family. 

Bankruptcy fraud is a crime. Common criminal actions under bankruptcy laws which may be illegal include: concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing. Falsifying bankruptcy forms is also considered perjury and is illegal. Although the new bankruptcy laws are more favorable for the debtor, they were not intended to allow criminals to defraud the bankruptcy system. Filing for bankruptcy allows the debtor to start over. When you try to hide assets from the bankruptcy process, it is cheating 

If you are in a desperate financial situation, do not resort to stealing and other types of unethical behaviors. Do not do what the cashier did. Take advantage of the bankruptcy process which can allow you to start over and have a fresh financial start. 

If you are considering filing for bankruptcy, you may need to consult with a bankruptcy lawyer. Debts can cause stress and bankruptcy laws can be complicated. If you live in or around the metropolitan areas of Buffalo or Niagara Falls, New York, contact us at www.betterbankruptcy.com . We will help you find a bankruptcy attorney in your who can answer your bankruptcy questions.