Category Archives: Debt

Can your Credit Card Lender Seize your assets?

credit card lender pic

According to Creditcards.com, there are numerous credit card lenders that are using their agreements as authority to seize things you buy with your credit card if you do not pay your bill in full. Typically, credit card debt is unsecured debt, which means that no assets were pledged as collateral to the lender. However, clauses that permit the lender to seize goods may alter this classification for credit card debt.

Creditcards.com reports that in excess of 200 publicly filed card contracts have provisions that grant the lender a security interest in goods purchased by the holder of the credit card. Examples of this type of card included stores that were financially backed by Capital One, including Big Lots and Costco.

If your credit card agreement contains a security interest clause, it could mean that the lender retains the right to seize purchased items even if you file a personal bankruptcy. This could be quite shocking since most consumers are not aware that their contract with their credit card lender contains this type of clause (or that they consented to it!).

Among Creditcards.com’s other discoveries were the following:

  • There has been a significant increase in popularity in credit cards that postpone interest payment for six months or more. It is important to understand, however, that these types of cards usually include contract language that charges the consumer all accumulated interest if a payment is missed.
  • An estimated 70% of the credit card agreements use variable interest rates linked to the U.S. prime rate or to Europe’s LIBOR index.
  • Credit card agreements are increasingly using mandatory arbitration clauses. This type of provision typically prevents the cardholder from filing lawsuits in court and/or creating a class action with other cardholders against the lender.

How can this type of credit card agreement impact your bankruptcy filing? If your agreement includes a security interest clause, it is possible that certain goods usually exempted from the bankruptcy process are not protected. In other words, the lender may be allowed to seize those items even though you filed for bankruptcy.

It is important to note, however, that most credit card lenders do not enforce their security interest clauses. In the majority of the cases, the items that the lender could repossess are not worth the time and expense it would take to seize them. Consider the following example:

An individual purchases a mattress for $400 and the lender offers a financing option that includes no interest or payments for 36 months. The purchaser does not make any payments over the 36 months and the accrued interest and balance now due total $1100. The purchaser still does not make a payment and the lender starts collection efforts, including telephone calls threatening to seize the mattress. The purchaser contacts an attorney who calls the lender to negotiate by offering $50 to settle the debt as the mattress is now over three years old. The lender stops calling.

To learn more about your credit card agreements or the benefits of filing a personal bankruptcy, call Faro & Crowder today!


What you need to know about Credit Card Debt in Bankruptcy

credit card in bky pic

Credit card debt is one of the most common factors that contribute to individuals filing for bankruptcy protection. If you are overwhelmed by your credit card bills, filing a Chapter 7 or Chapter 13 may be the solution. In a typical Chapter 7, the majority (if not all) of your credit card debt will be discharged or eliminated. In a typical Chapter 13, you will pay a percentage (typically a very low percentage, if anything at all) of what is owed on your unsecured debts.

It is important to understand, however, that there are exceptions to the general rule. Pursuant to 11 U.S.C. §523(a), there are a few exceptions to the rule of dischargeability. The two most common types of credit card debt to be excluded from discharge, include:

  • Credit obtained by lying. When a debtor puts false information on his or her credit application in order to qualify for the credit card, the lender can seek to have all of the purchases made on the credit card to be non-dischargeable. If the court agrees with your lender, you will remain liable to pay the debt even after your bankruptcy case has concluded. The most common occurrences of lying to obtain credit include significantly over-estimating income or under-estimating debt.
  • Fraudulent purchases. Many people incorrectly believe that they can make purchases on their credit card in the days leading up to their bankruptcy filing and discharge the debt. Any charges that are incurred by fraud or false representations can be held to be non-dischargeable. If the court holds that you used your credit card to buy items with no intent to pay for them, you will remain liable to pay the debt. Additionally, if a debtor buys frivolous items, maxes out the limit on the credit card, or even drastically increases credit card use just prior to filing bankruptcy, the creditor can challenge the dischargeability of the debt.

If you have questions about filing for bankruptcy protection, we have the answers. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Should I Negotiate with my Creditors or File Bankruptcy?

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People who have an income but still cannot pay all of their bills have several debt relief options available to them. If you are trying to determine whether debt negotiation or a Chapter 13 bankruptcy is the best option for you, we can help. We can review your individual circumstances and help you make an educated decision, but below are a few tidbits of advice to consider:

  • Cost. Obtaining debt relief can be expensive, so you must consider what it will cost you. Typical Chapter 13 filings cost somewhere between $2500 and $4000. While this amount seems expensive, your lawyer’s fees can be included in your Chapter 13 plan, which means you can pay the bulk of this amount over a three to five year period. The cost of settling your debt is often 10% of the total amount of the debt that is being settled, but it usually must be paid in advance. There may also be monthly fees that you must pay.
  • Taxes. Debt relief options can have negative tax consequences, so you want to make sure you fully understand and are prepared to handle them. Fortunately, there are no tax consequences to obtaining relief from your debt in a Chapter 13 bankruptcy. In contrast, however, when you settle debt and the creditor “forgives” a certain amount, the forgiven amount will result in tax liability. When the forgiven amount is more than $600 it is considered income to you and you will be sent a 1099c tax form.
  • Time. You must understand the time commitment it takes to resolve your financial problems. Chapter 13 cases last three to five years. Although this is a long time, you also obtain a fresh financial start when it is over. Bankruptcy allows you the most comprehensive means for dealing with your debt. Although debt negotiations can occur quickly, they can also take a long time. If you only have on creditor to negotiate with, the process is easier and quicker. However, if you have several accounts with different creditors that need to be negotiated, the process gets more complicated and takes longer.
  • Credit score. Both bankruptcy and debt settlement will negatively impact your credit score. Your Chapter 13 filing will remain on your credit report for seven years. Debt that is reported as uncollectible or forgiven can also remain on your report for seven years. It is important to understand, however, that you can immediately begin rebuilding your credit score and, with time and patience, you can get your financial life back on track.

Don’t delay any longer. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Handling Mistakes on Your Credit Report

Your credit score is important to your financial life. If you are considering financing or re-financing your home, you should thoroughly review your credit report to confirm it is accurate prior to applying for the loan. Mistakes on credit reports are more common that you think and they can cause serious damage to your credit score. In fact, failure to catch an error could affect your ability to obtain a mortgage loan or to be eligible for more advantageous loan terms.

Credit Report | Bankruptcy Attorney Brevard County

Handling a Misreported Short Sale

If you have previously had a short sale on a home, you must confirm that it is properly reported and not listed as a foreclosure. A foreclosure notation on your credit report is extremely damaging to how lenders view your credit-worthiness. Under the law, your creditor must accurately report the circumstances surrounding your default or delinquent account. It is common for a short sale to be noted as the debt being “settled for less than the full balance.” This is an accurate description. However, you must also confirm that the lender does not add the code for a foreclosure to the notation. If you are unable to determine what the codes listed on your credit report mean, it is important to contact the credit reporting agency and have them explain them to you.

Take Immediate Action To Correct Your Credit Report

If you discover there are improper codes on your credit report, you should take immediate action to have it corrected. If you are in the process of applying for new loans, you should put everything on hold until the mistake is corrected. One foreclosure entry could result in you not being eligible for a mortgage loan for three years and up to seven years before you are eligible for a conventional loan. In comparison, a short sale notation only negatively impacts your ability to obtain a conventional loan for two years. As you can see, correcting an improper foreclosure entry or code on your credit report is extremely important.

Correcting Mistakes and Knowing Your Rights

To correct mistakes on your credit report, you should follow the credit reporting bureau’s instructions. Typically, they require you to submit your written objection and any supporting evidence you have that the notation is incorrect. Within 60 days, the creditor that made the report should provide you with a confirmation letter stating that your report has been updated. If your lender fails to make the necessary corrections, it is time to contact us for help. You have rights under the Fair Credit Reporting Act and we will take action to get the issue resolved.

Contact an Attorney at Faro & Crowder, PA

Call us today to schedule your initial bankruptcy or foreclosure defense consultation.

We provide services throughout Central Florida and the Space Coast including Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral and Eau Gallie. Our office is located on Sarno Road in Melbourne, Florida.

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.

Ways Debt Collectors Violate Your Rights

Defense Against Debt Collection - Brevard County

Debt Collection Harassment – Brevard County

When you fall behind on your bills, it doesn’t take long before you are being harassed by debt collectors. Whether you owe the debt or not, it is important that you understand your rights under the law. The Fair Debt Collection Practices Act (FDCPA) is an important law that prohibits debt collection agents from using unfair, deceptive or abusive tactics to get consumers to pay their past due accounts.

The FDCPA specifically applies to “debt collectors” which is defined as an individual or entity who routinely collects debts owed to others. This means that the statutes apply to collection agencies, lawyers who regularly collect debts and debt-buyers.

According to the FTC website, the following are examples of prohibited collection actions:

  • Harassment. A collector cannot harass a consumer by threatening violence, using profane language, or calling the debtor repeatedly to annoy him into making a payment. A debt collector is prohibited from threatening to publish the consumer’s name on a list of people who refuse to pay their debts.
  • Unfair practices. There are a variety of ways a collector can engage in unfair collection practices. Common examples are attempting to collect additional fees that are not allowed under the contract or by law, depositing post-dated checks early, or making threats to seize the borrower’s property when the collector has no such right.
  • Deceptive statements. A debt collector is prohibited from lying about who they are or who they work for. A collector must truthfully tell you the amount you owe. Further, the collector cannot lie about actions they can take against you or falsely claim they will have you arrested for not paying your debt. Finally, a collection agent is prohibited from providing false credit information to any other parties, including credit reporting bureaus.

Contact your Brevard County Bankruptcy Attorneys today for a free initial consultation

Consumers deserve to be treated with respect and honesty. If a debt collector is taking any of the above actions against you or is otherwise harassing you, contact the legal team at Faro & Crowder, PA, for the advice and guidance you need.

Assessing Your Debt

 Assessing Your Debt - Brevard County Bankruptcy

Consider your debt relief options – Brevard County Bankruptcy Attorneys

If you are struggling financially and living paycheck to paycheck, it is time to consider your debt relief options. Filing a Chapter 7 or Chapter 13 bankruptcy can be the first step to taking control of your debt and getting your financial life back on track. The first step in making this decision is to objectively assess your debt.

What exactly does this mean? The Internet has several different websites that can assist you with the process. Most offer a “debt quiz” that gives you questions to answer regarding your financial status. By answering yes or no to these questions, the website may provide you with suggestions on how to improve your finances. But remember, this is very generalized advice and it is not legal advice, so it should be only used as a means for helping you assess your debt.

There are also websites that provide a debt calculator, which can be helpful because it permits you to enter the amount of your debt and the applicable interest rates. A debt calculator allows you to see how your debt will continue to increase over time. Again, these websites may offer generalized advice on ways you can pay your debt off.

The most vital action you can take is to be honest with yourself about your debt. If you are facing a temporary setback due to the loss of a job or divorce that you can overcome, then it makes sense to live by a budget until you have gotten back on track. However, if you are facing overwhelming debt and you believe there is no way you will ever recover from it, you should confer with a personal bankruptcy attorney.

No website or DIY book can replace the advice and guidance of an experienced lawyer. Let one of our attorneys review your individual finances and help you understand all of your debt relief options. Discharging your debt and obtaining a fresh financial start is often the best decision for our clients. In fact, many of them tell us they wish they hadn’t waited so long!

Contact Faro & Crowder, PA today for your FREE initial bankruptcy consultation

Stop living under the weight of your debt. Let us help. Contact Faro & Crowder, PA, today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Negotiating Payment Plans with your Creditors

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If you are considering negotiating a debt settlement plan with your creditors or you are hoping to avoid filing bankruptcy by settling your debt, it is essential to confer with an experienced debt relief attorney. Each creditor handles their debt settlement procedures differently, so working with a knowledgeable lawyer can help ensure a positive outcome.

It is important to also understand that a creditor is typically not required to negotiate a debt settlement plan with you. In fact, there are several factors that most creditors take into consideration when deciding whether to settle with you, including:

  • Your total amount of debt owed
  • The type of debt (secured by collateral or unsecured)
  • Whether you are negotiating with the original creditor or a debt collector
  • How much interest has accrued on the debt
  • The amount of your total income
  • Whether you have previously filed a personal bankruptcy and how long ago the filing occurred
  • Whether you have any pending foreclosures or asset seizures

A significant advantage of working with a lawyer who handles Chapter 7 and Chapter 13 filings to handle your debt settlement negotiations is that your creditors will understand that bankruptcy is an option for you. This is important because many creditors will be paid nothing if you file for bankruptcy, so it motivates them to settle for a lower amount in order to avoid not getting paid at all.

An attorney can also ensure that the creditor is not tacking on unwarranted interest or fees to the amount you owe. Additionally, having a lawyer draft (or at least review) your settlement agreement is important to ensure that your best interests are protected. Finally, if negotiations do not work out with your creditors, your debt relief attorney can help you understand whether filing for bankruptcy is a beneficial option for you.


Q&A about Vehicle Repossessions

Vehicle Repossessions

When you obtain a loan to buy a vehicle, your car loan documents provide that your lender has the authority to repossess the car if you fail to make a timely payment. The contract should detail what events constitute a default, which can include a variety of events, but failure to make a payment occurs most frequently.

Below are a few the questions we commonly get from our clients regarding the seizure of their car or truck. If you have a question not covered, however, please contact one of our knowledgeable attorneys for help.

Can the original contract be modified to change my payment terms? Yes, if the lender agrees to the modification. It is imperative that you get the loan modification in writing because proving a verbal agreement is difficult.

Does the creditor send notice before my car is repossessed? In most jurisdictions, your creditor is permitted to seize the collateral pledged to it at any time after default occurs, without providing notification to you. A repossession agent is permitted to go onto your property to take the vehicle, but only if the agent can do so without breaching the peace. This means that the agent can seize the car from your driveway, but he cannot use physical force, threaten it, or enter a closed structure to seize the car without permission.

What happens if the repo agent breaches the peace? Every case is different, but the creditor may be ordered by the court to pay a penalty and/or pay for any harm caused to you or damage done to your property. Depending on the circumstances, breaching the peace may also provide a successful defense if the lender files a collection lawsuit against you seeking to recover the deficiency remaining after the vehicle has been sold.

Can I recover the personal property that is in my vehicle when it is seized? The answer to this question depends upon what state you live in. In some states, the repossession agent must give you an inventory list of all the personal items that were in your vehicle when it was seized and instructions of how you can get them back. If a creditor cannot account to you for the items that were in your car, contact us to discuss whether you can seek compensation for such items.

If you are struggling financially and you want to discuss your debt relief options and how to avoid having your vehicle repossessed, contact us today to schedule an initial consultation.


Is there anything I can do About a Default Judgment?

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If you have been sued by a creditor and you did not appear or file a timely answer with the court, it is likely a default judgment has been entered against you. Many people just “give up” when this happens and believe there is nothing that can be done about it. However, many times there are good excuses for why you failed to appear or file an answer. If this is true for you, we can help you seek to have the default judgment set aside.

There are two primary types of “good cause” for failing to respond to a lawsuit, which are (i) there was a defect in the process that led to the default judgment, or (ii) you have a “reasonable excuse.” Additionally, you must be able to demonstrate that you have valid defenses to the plaintiff’s claims against you.

Substantial defect

If there was a procedural defect or an irregularity in the proceedings which caused the default, it can constitute sufficient good cause for failing to appear. For example, if you were not properly served with the summons and petition or complaint. Common examples of improper service include leaving the court documents with a minor at your residence who fails to give them to you, serving somebody with your same name and you never receive the papers, or mailing the papers by certified mail to an improper address.

Reasonable excuse

There are a variety of reasonable excuses that may have prevented you from participating in the lawsuit against you. For example, if you were in a serious car accident on the way to attend your hearing, the judge will find that to be a reasonable excuse for setting aside the default judgment against you.

Defense

You must also be able to inform the court that you have valid defenses against the plaintiff’s allegations in order for the default judgment to be set aside. This means that you must be able to explain why you should be granted another day in court. Let one of our attorneys help you determine if you have valid defenses to the collection case.

Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


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