Alabama Consumer Law Blog

The Florida Bankruptcy Attorney Blog has posted an article which discusses how bankruptcy can actually help you improve your credit score.

Most people decide to file bankruptcy when they find they can't pay their current debts. Not being able to pay has severely reduced their credit score and filing bankruptcy shows the credit bureaus that you are being proactive and taking steps to improve your situation. About a year after filing bankruptcy, you will find that your credit score should have improved because you aren't missing loan payments

It might sound backwards that your credit score would improve after filing bankruptcy, after all, it means that your creditors probably won't get paid. The fact is that they probably wouldn't have been paid in full anyway even if you hadn't filed bankruptcy.

While they would have retained their rights to collect on their debts if you ever came into money, it is often the case that debts (especially credit card type debts), are written off by these companies long before you are able to pay it back completely.

It can take years for a debt to be written off and in the meantime the creditor would be doing what it could to seize your assets and garnish your accounts.

Before you decide to file for bankruptcy, it's imperative that you consult with an attorney. If you have further questions or concerns about bankruptcy, feel free to contact us through our website or by calling 205-879-2447.

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Continuing our series on a typical lawsuit filed against a debt collector under the Fair Debt Collection Practices Act (FDCPA), after the defendant is served, it has two choices if it wants to not settle the case.

Either file an answer or a motion to dismiss.

In our next post we will discuss a motion to dismiss in more detail but in essence what a motion to dismiss says to the court is "There is no way the consumer can win so throw the case out of court."

In an answer, either filed after being served or after a motion to dismiss is denied, the defendant admits or denies the allegations made in the lawsuit. We will cover this in Part Six of our series.

If you live in Alabama and are dealing with debt collectors or have any questions about your rights under the FDCPA related to a debt collector, please feel free to pick up the phone and call us at 205-879-2447 for an appointment or you can contact us through this blog or through our website.

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How Do I Fix False Credit Reporting After A Bankruptcy Discharge?

This is a problem that was very common several years ago and then it improved but now seems to be coming back with a vengance: companies who have their debts discharged are refusing to properly report those debts on consumers' credit reports.

If you have received a discharge from a chapter seven or chapter thirteen bankruptcy, then your credit report should list all of the discharged accounts as having a zero balance. Now, if you reaffirm the debt then this is a different matter.

But assuming you did not reaffirm the debt, then you don't owe it anymore. And the creditor or any collector can't try and collect it from you.

This means the collector or the creditor can't put a balance on your credit report to pressure you into paying the debt.

This is called "parking" an account on your credit reports. The idea is eventually you will need a higher credit score for a loan, an apartment, a job, etc and you will be forced to pay the creditor or collector to "fix" your credit reports.

See, that's why this is illegal. That is why the creditors and collectors love to put false balances on your credit reports. It brings all of this pressure to bear on you and it brings all sorts of profits to the creditors and collectors.

If you are facing this, you should get with a consumer attorney in your area. Normally, but not always, the best way to handle this is to dispute the false balance with the credit reporting agencies (Equifax, Experian, Innovis, and Trans Union) and copy the creditor or the collector (known as the "furnisher"). Explain when you received your discharge and ask the credit reporting agencies to fix this false entry on your reports.

If it is not fixed, you may have the right to sue the furnisher (creditor or collector) and the credit reporting agencies who kept this on your reports. Get with a consumer attorney to advise you of your rights.

You will be helping yourself and doing your part to help encourage these big companies to stop breaking the law....

If you live in Alabama and have had problems with credit reporting errors and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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The Florida Bankruptcy Attorney Blog has posted an article that discusses what the Mortgage Debt Forgiveness Act means for you. This article is particularly geared toward Florida homeowners, but still contains a lot of valuable information for homeowners anywhere whose home is worth less than what they owe on it..

The Act states that a homeowner who has had their mortgage forgiven, partially or entirely, cannot be taxed on forgiven portion of the debt, provided its value is less than $1 million if you're single, or $2 million if married. Without the Act, homeowners still would have been taxed by the IRS and would have been required to pay a percentage of the forgiven debt.

However, the Mortgage Debt Forgiveness Act only applies to your home or place of primary residence. It cannot be applied toward credit card debt, car loans, student loans, vacation home mortgages, or other lines of equity. The Act will become even more useful to homeowners as the number of foreclosures in the country continue to rise and the threat of a double-dip recession looms.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

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Time.com has posted an interesting article with an unexpected twist about homeowners who turned things around on Bank of America.

In 2009, retired police officer Warren Nyerges and his wife Maureen Collier paid $165,000 cash for their newly purchased home in Naples, Florida. They never took a mortgage out on their home, so imagine their surprise when Bank of America initiated foreclosure proceedings in February of last year. The Nyerges hired an attorney, Mr. Todd Allen, and Bank of America eventually dropped the foreclosure.

The Nyerges had racked up over $2,500 in attorney fees and had requested on multiple occasions that Bank of America pay it. They eventually had to take the matter to court, which ruled B o A had to reimburse the couple for the attorney fees. Five months later, after the couple and their attorney had been pursuing reimbursement by phone calls and writing letters, B o A still hadn't paid up.

Todd Allen, the couple's attorney, went to court and obtained a order of foreclosure against the bank. Allen then went to the bank's local branch with the order of foreclosure and a few sheriff's deputies. He told them to remove cash from the teller's drawers, take the banks computers, furniture, and other property of value. One hour after he began this, the bank's manager produced a check for $5,772.88 to cover Allen's legal fees and additional costs the Nyerges had accrued.

Some might say all’s well that ends well in this scenario, seeing as the Nyerges got their home, Allen got his fees and the bank got it’s comeuppance. But there are deeper implications to every one of these foreclosure foul-up horror stories we read about, and even those we don’t. The finger-pointing to outside attorneys seems reminiscent of the banks’ excuse for the robo-signing scandal that broke last fall, and just as flimsy: the fact that a bank has lots of foreclosures to process and hires an overworked, underqualified or otherwise not-up-to-the-job professional to do it does not justify the nonchalance with which documents and properties of such gravitas were treated. The similarity didn’t escape Allen, who told CBS News, “this is a symptom of a larger problem.”

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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The Washington Post has posted an article that discusses how the attorneys general of both Illinois and California have launched investigations to look into problems in the mortgage servicing industry.

The attorneys general are hoping that by putting pressure on the mortgage servicing firms, the firms will turn around their "shoddy foreclosure practices." Illinois Attorney General Lisa Madigan issued subpoenas to two mortgage servicing companies base in Florida- Lender Processing Services Inc. and Nationwide Title Clearing Inc.- claiming that both firms have been taking processing shortcuts such as robosigning.

“Foreclosure became a rubber-stamping operation that robbed many homeowners of the American Dream without a fair and accurate process,” Madigan said in a statement.

California Attorney General Kamala Harris has also served Lender Processing Services with a subpoena over data discrepancies from 2007.

“California homeowners have been exposed to fraud and crime at every step of the mortgage process,” Harris said in a statement, vowing to continue looking for “inaccurate or unjust foreclosures."

A representative from LPS couldn't be reached, but a spokeswoman for National Title Clearing said the firm had not yet been given a subpoena, but if they were, they would cooperate fully “to the fullest extent of the law” to “clear up common misconceptions” about the mortgage assignments the company is responsible for.

Illinois and California aren't the only states to look into the inner workings of the mortgage servicing industry. New York Attorney General Eric Schneiderman has had meetings with 7 of the top banks in an effort to investigate how mortgage securities were being bundled and sold. He has also issued subpoenas to 4 bond insurers "for information related to claims paid on mortgage-backed securities and any litigation and settlements entered into with the banks."

In addition, attorneys general in two other states separately sent letters to Bank of America regarding foreclosures. Connecticut’s attorney general said that the firm wasn’t doing enough to help distressed homeowners, while Utah’s alleged that one of the bank’s units had not complied with state laws in its foreclosure practices.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

If you have further questions or concerns, feel free to contact us through our website or by calling 205-879-2447. You may also obtain a copy of our free book on stopping wrongful foreclosures and the problems of hidden fees by emailing us.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

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Yahoo Finance has posted an article that gives some pointers on how you can get your finances organized and raise your credit score.

1. Check your credit report.
The best way to start trying to improve your credit score is to examine your credit report. Check it carefully to be certain that all the debts listed on it are actually yours. If you see any debts or accounts listed that aren't yours you need to report the error to the credit bureau so you won't be penalized for it. You can obtain a free copy of your credit report every 12 months from each of the credit bureaus- Experian, TransUnion, and Equifax.

2. Learn the details of your credit card debt.
To create a plan to pay off your credit card debt you need to first asses which cards you carry the most debt on. Make a list of the balance on each card and the corresponding interest rate and plan to pay off the cards with the highest interest rates first. If you're using your credit cards as a means to get by because you're unemployed, then you need to decipher which cards have a lower interest rate and use those for daily purchases, if possible.

3. "Improve Your Interest-Rate Situation"
If your credit score is too low, you probably won't qualify for any new credit cards that boast a lower interest rate but it certainly wouldn't hurt to look into it. Applying for a new credit card temporarily knocks down your credit score a little, but if the interest rate is significantly lower then it's worth it. If you are approved for a new card, be sure you fully understand the balance transfer fees before swapping your high interest debt over to that card. Make sure the swap financially benefits you in the long run. You could also call your creditors to ask about a lower interest rate or if they can waive the card's annual fee.

4. Pay off the highest interest debt first.
It will benefit your finances in the long run if you pay off the cards with the highest interest rates first. Keep sending in your payments for the lower interest cards on time, but put any extra aside for the high interest cards. The sooner your high interest debt is paid off, the easier it will become for you to pay off remaining debts.

5. Create a payment system.
A whopping 35% of your credit score is determined by on time payments, so one of the easiest ways to substantially improve your score is to simply pay on time. Add the payment due dates to a calendar and remind yourself to check the calendar regularly. Using an online bill payment system through your bank account can also be a good way to keep track of when things are due. Some online bill payment systems can be synched up with other accounts to send you reminders of when payments are due.

6. Budget.
Figure out exactly how much money you have coming in every month and hold yourself accountable for your spending. Holding yourself accountable will also help you figure out exactly how much of your income can be put toward paying off your credit card debt each month.

If you have had problems with a credit card or a credit report and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

You can join our Facebook Fan Page - Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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