This term has its origins in the sixteenth century during the time of Henry VIII in the United Kingdom.

Personal bankruptcy is considered the last resort in debt management. Bankruptcy has a long standing effect on your credit report. It becomes difficult for the next ten years to get a credit, house loan, insurance and sometimes even a job. This option works out for people who have no ability at all to repay the debts they owe. After this they can start a new life.

There are two major types of Bankruptcies – Chapter 7 and Chapter 13.

In both the above bankruptcies, you may get rid of unsecured debts such as credit card debts, utility shut offs, wage garnishments and repossession of vehicles. In both types of bankruptcies, you get to retain certain assets like taxes, child support money, alimony etc. If you have a plan to repay under Chapter 13, you are allowed to keep property on which your creditor has an unpaid mortgage. A valid payment plan and a capacity to repay ensure you keep the assets.

Bankruptcy for married people or couples and businesses is Chapter 7 bankruptcy. Businesses may file under chapter 13 bankruptcy.

Once either an individual or business file for bankruptcy, they expect a clean record henceforth. If a business opts for a Chapter 7 bankruptcy, it is expected to close down the business after this. Individual opting for Chapter 7 bankruptcy risk losing most of their assets except primary vehicle or home. If the debtor has a loan for vehicle or home and he cannot repay, he has to lose it also.

For individuals, Chapter 7 bankruptcy entails that the courts declare the individual unable to pay debts incurred, and almost all debts are declared void. Certain federal debts, like student loans, still exist even after declaring bankruptcy.

While filing for Chapter 7 bankruptcy, you must list all the assets you have. Barring the primary vehicle and home, all other assets like second house, vehicles and collectibles are liquidated to pay the creditors. In this kind of bankruptcy, the debtor loses only those assets that are not so much in use and he can afford to lose them. The advantage he gets out of this is all his unsecured debt like medical bills, credit cards bills etc get wiped out.

Chapter 13 bankruptcy is used by people who have large assets but their income was just not enough to cover their huge debts. In these cases the debtor gets to keep his assets but his payments are restructured by the court. Payments restructured by the court should be paid in time lest you lose the assets.

Bankruptcy though gives you debt relief, is a very costly proposition in that your credit report carries a black mark for ten years. The result would be, it will be extremely difficult to get approval for credit cards, home loans etc after this.

We can protect you from Junk Debt buyers such as NCO, MCM and Asset Acceptance or and other debt collector that buys old debt.

Junk Debt Buyers buy old or “zombie” debt and sue people with minimal proof or sometimes outside the Statute of Limitations. Debt buyers like Asset sue people with the expectation that the lawsuit will be ignored. Then a default is entered and the debt becomes new again. See our News Stories on “Zombie Debt.”

In Michigan the Statute of Limitation is six years. In Florida, the SOL is four years. So, if you are being called or sued by Debt Buyers for an old or zombie debt, contact us and we will review the case, defend you for free and sue the Junk Debt Buyer under the Fair Debt Collection Practices Act and “make them pay you.”

Fill out our free case evaluation form. We’ll review your case and contact you, usually within 5 minutes to 1 hours time.

A successful debt negotiation requires the debtor to convince the creditor to agree on a balance lesser than the actual one. The creditor has to forgive a part of the debt for this purpose. The paid in full settlement happens when the debtor pays a mutually agreed amount in lump sum. Usually this balance ranges between 25% and 65% of the total outstanding balance.

Financial hardships in the nineteen eighties and nineties in America post recession threw people off gear. Inability to cope up with repayment of debts made consumers opt for debt negotiation. It worked well for both creditors and debtors. For creditors because the money that was written off or could be lost should the debtor file for bankruptcy, could now be recovered at least in part. For debtors, the pressure of minimum monthly balances now could be avoided. Ever since then, debt negotiation has become a viable option for consumers who are unable to meet the demands of the repayments.

What debts can be settled in Debt negotiations?

Unsecured debts like credit card debts and medical bills can be negotiated with the credit card companies. Secured debts like auto loans or mortgages cannot be settled through negotiations. Certain federal student loans also cannot be settled through debt arbitrations.

How to pay the lump sum amount?

There are many debt settlement companies that offer loans for the amount required to pay off the outstanding balance. However, this method has certain disadvantages. The debt settlement companies charge heavy rate of interest and often are unreliable in service. This is a secured debt with collateral on assets and should you default on payment, the lender can seize your assets. The best way in this case is to use up savings or any other deposit that you have.

What happens to your credit report?

No matter what anybody says, the negative remark of debt settlement remains on your credit report. If you negotiate with debt collectors for a settlement, they may promise not to show it on the credit report. This is far from true because the negative comments from the original creditors would still be there in the report.

However, we regularly settle debts for clients as part of FDCPA settlements and the collection agency will remove their inquiry or trade line if you make it part of the deal.

Call us if you have any questions at (800) 737-2345.

Call Brian Parker at (800) 737-2345 and let us help you smile.

Original creditors can call you to collect the payments for debts owed by you. However, creditors do not pursue beyond a few calls and letters. They sell unpaid debts as delinquent debts to collection agencies known as the third party debt collectors for a pittance. These third party debt collectors try to extract as much money as possible by following whatever tactics they can for this.

Third party collectors are not employed by the creditors to collect money from you and hence are governed by the Federal Trade Commission (FTC) in enforcing the Fair Debt Collection Practices Act (FDCPA).

The FDCPA regulates debt collection practices to ensure fair collection. Third party debt collectors resort to nagging you by calling repeatedly to get the payment from you. This constitutes one of the violations under the FDCPA. Debt collectors can call you and request you for a payment. But calling before 8 am in the morning and after 9 pm in the evening is a violation. Along with the calls if the debt collectors.

The debt collection agency engages agents who do the dirty job of calling consumers. They use any and every technique possible to scare you into paying. They leave voice mails or resort to using auto dialers for continues calling.

The FTC received 88,190 FDCPA complaints about third-party debt collectors in 2009. 46.5% of the FDCPA complaints the FTC received in 2009 or 41,028 complaints were about collectors harassing the consumers by calling repeatedly or continuously. This was the most frequent complaint that consumers filed in both 2009 and 2008. The FDCPA lays down strict guidelines on the number of times a debt collector can call and the frequency of his calls. (FDCPA 15 USC 1692d] § 806(5)

When the debt collectors but delinquent debts they get into the business of collecting knowing they don’t have much to lose. They start calling you repeatedly with the notion that after all a few calls from their end and you may succumb to pressure of the calls. Some collectors are very enthusiastic and resort to using profane and obscene language. They try to strike at your emotions by embarrassing you or calling you neighbors or relatives about the debt. In 2009, 14, 321 complaints were about debt collectors using abusive language and 9.684 complaints were about calling at inconvenient times.

Don’t let debt collectors chase you down for money you no longer owe. Have you ever received a letter or phone call asking you to pay a debt that you’re not sure you owe? If so, you may be the target of zombie debt collectors. What is zombie debt? It has become increasingly common for companies to sell their old, uncollected debts for pennies on the dollar to third-party debt collection agencies. Zombie debt can be the result of identity theft, clerical errors or becoming confused with another debtor with a similar name. It is old or made up debt that debt collectors threaten or accuse debtors of owing when in reality, they never had the obligation or the statute of limitations has passed long ago.

Call us if you are being harassed for debt you do not own or the statute of limitations has passed long ago under the FDCPA.

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It can also occur when creditors are not properly informed of your having successfully filed for bankruptcy. In any case, the uncollected debts can be resold again, making the problem difficult to destroy. As soon as you convince one collector that the debt is false, another zombie might rise up to take its place, leaving you to deal with a different collector.

The Law Offices of Brian P. Parker PC help victims of Identity Theft and Debt Collection Abuse. www.collectionstopper.com. Or Call Toll Free (800) 737-2345.

When taping the collector:

1. Always be polite. Even if they insult you, say, “why are you being insulting to me or why are you getting personal with me,” and stay calm without getting sucked into their insult game. You want to show them for the abusers that they are.

2. Always, get names of the collectors and names of the company. Ask for their address. If they don’t honor your reasonable requests it is on tape.

3. Always ask them to cease and desist calling you. Again, you want their bad actions on tape. So, if they are calling before 8am or after 9pm, ask them why they call at those times. Q.You guys called at 7am yesterday, why did you call so early? We need them saying this on tape if that is what they did. Or ask them, Q.Why are your collectors calling me so much when I asked you to stop? Get it on tape .

4. The point is to get their harassment on tape and also show the collection agency it has a bad collector. You might be doing them a favor and others who may be subject to this bad guy. Again, be polite.

Let me know your thoughts at (800) 737-2345

First thing you have to do is to not do something: Don’t throw the letter away. Again, it is all about attitude. If you get scared, you will close your mind to possibilities. If a debt collector is contacting you they are probably breaking the law. Smile. Let’s look at the possibilies:
Four things the letter has to show you for it to be legal:
• How much they say you owe;
• The name of the creditor to whom the debt is owed;
• They have to give you thirty days after receipt of the letter to dispute the validity of the debt or any portion of it or they will be assume debt is valid;
• That if you dispute the debt (better do it in writing) they have to verify you owe the debt or go away; and
They have to give you the “Mini-Miranda Warning”, which must state that the communication is from a debt collector and that any information obtained may be used to collect the debt and that all subsequent communication from the debt collector must also include this warning.
They can sue you within that thirty day period too so get a letter to them asap.
There are two types of letters to send.
Cease and Desist Letter: This is good really for only one kind of debt. If a debt collector is looking for you to pay on a debt that is older than dirt (or your state’s statute of limitation) then as much as they yell and threaten, they can’s sue you for it. Once they receive this letter, they have to stop contacting you or you can sue them. Otherwise, legally, this letter is not a good letter to send as a cease and desist letter does not stop them from suing you unless you don’t owe the debt. Sometimes it even speeds things up as the debt collector that won’t give up and can’t talk to you really has no choice but to sue you a legitimate debt.
Validation Letter: Better letter to send. Even a debt collector that is collecting a legitimate debt from you within the statute of limitations has to stop until they validate the debt. Plus, a lot of debt collectors give up collecting rather than going to the trouble of compiling what is legally required to respond to your validation letter. So, you won’t hear from the debt collector and there will be no lawsuit. Also, if they put a mark on your credit report (after receiving the letter) or they send the debt to another collector without your dispute, they face a lawsuit from you.
Call us if you need a cease and desist letter or validation letter. And keep smiling.

Brian Parker

Remember: This is about changing your attitude and taking control. If the debt collector is going to harass you in a rude and illegal manner, don’t get upset. Take control and use their own bad actions against them. If you do this right, you will be hoping they call again.

1. Consider calling the debt collector as then if they repeat their harassment (as they have in the past-don’t force them into anything) you have it on tape as proof. Make sure first find out if you are in a one-party or two-party consent state. For help, check out: http://www.rcfp.org/taping/states.html. If you are in a one-consent state, you need only one consent (yours) and don’t have to inform the caller of your taping. Two-party consent states require that you inform the caller you are taping them. By the way, you will be surprised what debt collectors say even when you tell them they are being taped (they think you are blowing smoke).

2. Always be polite, unemotional and clear. A court or jury may have to hear this. If the debt collector is mean or abusive, let them sound like the bad guys, not you.

3. If they have said harsh or abusive things to you in the past, ask them about why they said those things. This way, if they choose to now repeat the insults, it is on tape. Ex. Q.Why did you say you are going to call the sheriff on me the last time we talked? Q. Your collector kept telling me she was going to sue me, is that what is going to happen? Again, the goal is to have them repeat what they previously said on tape. Don’t force them or cause them to if they have never said that. However, if they have said bad things in the past and you ask them to repeat it, you are getting their history of abuse on tape. Get it on tape .