The Law Offices of Tracy L. Robinson, LC Don't Lose Hope. We help individuals and families repair credit, restore their finances, and get back on track financially. 2025-03-31T12:43:23Z https://www.tlrlaw.com/feed/atom/ WordPress On Behalf of The Law Offices of Tracy L. Robinson, LC <![CDATA[3 important differences between Chapter 7 and 13 bankruptcy]]> https://www.tlrlaw.com/?p=48201 2023-07-27T00:17:39Z 2023-07-27T00:17:39Z Chapter 7 and Chapter 13 bankruptcy are common solutions for individuals, and each chapter of bankruptcy offers different benefits and requires different actions from filers. These are some of the biggest and most important differences between Chapter 7 and Chapter 13 bankruptcy.

There are income and property limits for Chapter 7

Not everyone who hopes to file for Chapter 7 bankruptcy will qualify. They must compare their income to the state median for their current household size. Those who successfully complete the means test and qualify for Chapter 7 bankruptcy are also subject to exemption limits for their personal property. Some assets beyond those protected amounts could be vulnerable to liquidation in a Chapter 7 filing, although most Chapter 7 bankruptcies do not result in the sale of any assets.

Chapter 13 takes longer to complete

Chapter 13 bankruptcy is available to individuals with more assets and higher incomes, but it requires a structured repayment plan before the courts will grant the discharge of someone's remaining debts. The payments will last at least three years after a Chapter 13 filing, if not longer. However, the difference in the timeline balances out when looking at the credit reporting requirements for two types of bankruptcy, as a discharge will come off of someone's credit report 10 years after a Chapter 7 filing or seven years after a Chapter 13 filing.

There are debt limits that apply in Chapter 13 bankruptcy

Those with major unsecured debts can discharge the majority or all of what they owe, with certain exceptions, in a Chapter 7 filing. That isn't necessarily true in a Chapter 13 bankruptcy. Although it may be possible to renegotiate more types of debt in a Chapter 13 bankruptcy, there are limits to the final amount discharged after a repayment plan is complete. The total value of secured and unsecured debts can usually be no higher than $2,750,000. Individuals struggling to pay their bills and worried about their finances may benefit from learning more about the different types of bankruptcy so that they can choose the best option given their current circumstances. Understanding what separates Chapter 7 and Chapter 13 bankruptcies may help people choose the best solutions for their unique financial challenges. Seeking legal guidance can be helpful in this regard.]]> On Behalf of The Law Offices of Tracy L. Robinson, LC <![CDATA[What is the difference between debt collection and debt collector abuse?]]> https://www.tlrlaw.com/?p=48188 2023-05-30T13:57:37Z 2023-05-30T13:57:37Z Abusive practices often seek to intimidate or harass It is lawful for those owed a debt or a company that purchases debt to reach out to an individual through the mail or via telephone. Some organizations even use social media to track people down and contact them. Companies may call someone frequently, possibly as often as daily, to impress upon them the importance of catching up on missed payments. Sometimes, the frequency with which a company contacts an individual and the persuasive tactics used during such phone calls will cross the line between lawful debt collection efforts and harassment. Examples of abusive debt collection practices include:
  • swearing at someone
  • threatening an individual or their family members
  • calling repeatedly
  • refusing to identify themselves
  • publish details of the debts owed
Additionally, those attempting to collect on a dead should abide by the law regarding when and where they contact an individual. If someone cannot receive personal calls at work, collectors aware of that restriction should no longer call them there. If someone informs a company that they work third shift, the company should not call at times when that individual would be sleeping because of their unusual work schedule.

Abusive debt collection practices violate someone's rights

Those trying to push someone to repay a debt may become abusive and inappropriate in their attempts to be convincing. When a collection professional crosses the line and threatens someone or otherwise becomes abusive, the people affected by that misconduct will want to keep a record of the inappropriately timed calls and the threatening or inappropriate things that collection professionals say on the phone. Holding companies accountable for abusive debt collection practices after seeking legal guidance may be the only way to get them to change how they attempt to collect debts.]]> On Behalf of The Law Offices of Tracy L. Robinson, LC <![CDATA[Are zombie debt collectors coming after you?]]> https://www.tlrlaw.com/?p=48187 2023-04-02T20:57:30Z 2023-04-02T20:57:30Z First, never acknowledge the debt is yours to the collector Until you have a clearer picture of what’s happening, do not acknowledge any responsibility for the debt. You really may not know if the debt is accurate until you review your records. Even then, you may not actually be required to pay it, if the statute of limitations on collection actions (which is 10 years in Missouri) has passed. Any acknowledgment of the debt, agreements to repay or partial payments can sometimes reset that statute of limitations – and that gives the bill collector new power.

Second, know your rights as a consumer against unfair debt collection

You have numerous rights under the Fair Debt Collection Practices Act (FDCPA). This protects you against threats of arrest, abusive language and other forms of harassment. If a debt collector violates the rules, you can file a complaint with both the state attorney general’s office or the Consumer Financial Protection Bureau (CFPB).

Third, know how to react when zombie debt turns into a lawsuit

If the debt collector has already filed a lawsuit against you, it's important to respond to the lawsuit in a timely manner. Failure to respond can result in a default judgment, which means the debt collector will automatically win the case – and that could lead to liens on your property or garnishment of your wages. If you respond to the lawsuit, the debt collector will have to prove that you owe the debt and that they have the legal right to collect it. With zombie debts, that’s not easy. When zombie debt collectors are giving your nightmares, don’t let them keep chasing you: Fight back. Experienced legal guidance can help you defend your consumer rights (and your wallet).]]> On Behalf of The Law Offices of Tracy L. Robinson, LC <![CDATA[Are you dealing with an abusive debt collector?]]> https://www.tlrlaw.com/?p=48180 2023-02-20T07:57:32Z 2023-01-26T19:25:58Z Debt collection itself is certainly legal, but it does have to happen in a specific way. Prior to 1978, there were instances of unfair collection tactics, and so the Fair Debt Collection Practices Act (FDCPA) was put into effect. The goal was to eliminate unfair actions, abuse and deception by debt collectors.

For example, there were issues with debt collectors, contacting people at inopportune times. As such, the Act makes it so that they are not allowed to call you at what is considered an unusual time, which generally means any time after nine in the evening or eight in the morning. It’s also important to know that they have to consider your time zone if the two of you are not in the same time zone during the call.

Financial issues

In some cases, there can be financial issues with the way that debt collectors operate. Maybe they misrepresented exactly what you owed or asked you to pay more. Or perhaps they tried to add fees, expenses or interest charges that go above the amount allowed by law. They need to be fair, honest and transparent with you about what you need to pay.

Attitude issues

The abuse can also come from the attitude of the debt collectors themselves. They are not supposed to use abusive, profane or obscene language at any time. They are not supposed to call you repeatedly, so that it becomes a form of harassment. They also cannot threaten you in any way or claim that violence may be used in order to convince you to pay your debt.

What are your options?

These are just a few examples of ways the debt collectors can be in violation of this Act. If you believe that they have violated it, along with your rights, then it’s important to know about all the legal options at your disposal.

]]> On Behalf of The Law Offices of Tracy L. Robinson, LC <![CDATA[Filing for bankruptcy can stop abusive creditor harassment]]> https://www.tlrlaw.com/?p=48178 2023-02-20T07:57:36Z 2022-11-29T20:40:24Z How bankruptcy helps The same day that you file for bankruptcy, the courts where you submit your paperwork will send notice to the credit bureaus. Those credit bureaus, in turn, will send that information out to creditors. Many companies that engage in collection activity or provide revolving lines of credit to consumers purchase special services so that they receive notice of applicable bankruptcy filings within hours. At the very least, if a creditor calls you by accident after you file for bankruptcy, they should note their internal records and cease doing so as soon as you notify them of your bankruptcy filing. Eventually, credit card balances, medical debts and many other unsecured debts will be eligible for a discharge. You may also need to think about taking action against creditors if they violated your rights.

The law limits certain kinds of collection activity

There are rules about what creditors and debt collection companies can do. From limits on how frequently they contact you to the times of day when they call and the things they say when you speak to them, there are many rules that apply. If they threatened you, called you repeatedly at work when you told them doing so could cost you your job or otherwise harassed you, you may have grounds to bring a claim against them for violating your rights under the Fair Debt Collection Practices Act. Such claims can lead to financial compensation for you that also acts as a penalty for the company involved. Considering your options can help you take the right steps when handling aggressive creditors and trying to regain control over debts that you cannot repay.]]> On Behalf of The Law Offices of Tracy L. Robinson, LC <![CDATA[What can Chapter 7 bankruptcy do for your debt?]]> https://www.tlrlaw.com/?p=48173 2023-02-20T07:57:41Z 2022-09-28T18:48:43Z Liquidation bankruptcy for your debt People often pick up at least one credit card in their life, but, after you own your first, you’ll likely see a flood of offers in your mail. Many credit card offers can be tempting and people often spend more than their means without realizing the repercussions. Some debt can be unexpected, often caused by outrageous medical bills after an accident or health scare. Many adults have health-care debt ranging from $500 to $10,000. Theoretically, debtors can pay off their purchases or medical debt in the future, but this can be hard to do when interest or late fees are added on. For individuals with outstanding debt, one of the quickest ways to fight it off is by filing for Chapter 7 bankruptcy. Chapter 7 bankruptcy, also called liquidation bankruptcy, helps debtors pay off some or all of their medical, credit card, business or utility debt. Chapter 7 bankruptcy, however, may require debtors to liquidate some of their assets – but, this shouldn’t cause you to shy away from filing for bankruptcy. Many assets are safe from liquidation. You may find that your home, car and some valuables are exempt from liquidations, but a summer home or second car is considered non-exempt. You may find that, after filing for Chapter 7 bankruptcy, you’ll start receiving fewer calls from debt collectors. Bankruptcy has the added benefit of stopping creditors from hounding you down to pay off your debt. If Chapter 7 bankruptcy sounds like the right plan for you, you may need to reach out for legal help to ensure you’re taking the right steps.]]> by <![CDATA[FTC Takes Action to Stop Credit Karma From Tricking Consumers With Allegedly False “Pre-Approved” Credit Offers]]> https://www.tlrlaw.com/?p=48171 2023-02-20T07:54:24Z 2022-09-02T13:31:24Z https://www.ftc.gov/news-events/news/press-releases/2022/09/ftc-takes-action-stop-credit-karma-tricking-consumers-allegedly-false-pre-approved-credit-offers?utm_source=govdelivery Nearly One Third of Some “Pre-Approved” Offers Resulted in Denials; Company to Pay $3 Million and Halt Deceptive Claims The Federal Trade Commission has taken action against credit services company Credit Karma for deploying dark patterns to misrepresent that consumers were “pre-approved” for credit card offers. The FTC alleges that the company used claims that consumers were “pre-approved” and had “90% odds” to entice them to apply for offers that, in many instances, they ultimately did not qualify for. The agency’s order requires the company to pay $3 million that will be sent to consumers who wasted time applying for these credit cards and to stop making these types of deceptive claims. “Credit Karma’s false claims of ‘pre-approval’ cost consumers time and subjected them to unnecessary credit checks,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue its crackdown on digital dark patterns that harm consumers and pollute online commerce.” Credit Karma provides tools that allow consumers to monitor their credit scores and credit reports. To use Credit Karma’s services, consumers must provide the company with a variety of personal information, allowing Credit Karma to amass over 2,500 data points on each consumer, including credit and income information. Credit Karma uses that information to send targeted advertisements and recommendations for financial products, like credit cards. According to the FTC’s complaint, Credit Karma violated Section 5 of the Federal Trade Commission Act by falsely representing that consumers were pre-approved for credit offers or had 90% odds of approval. The complaint alleges that Credit Karma’s conduct harmed consumers by:
  • Deceiving them about whether they were approved: Despite Credit Karma’s claims that consumers were “pre-approved,” for many offers, almost a third of consumers who applied were in fact denied. Credit Karma often only revealed the possibility of denial in buried disclaimers or false claims that consumers had “90% odds” of approval. Credit Karma was aware that its consumers were misled: for example, its own customer service training materials cited “I was declined for a pre-approved credit card offer .... How is that possible?!?!?!” as a common issue representatives would encounter.
  • Costing consumers time and harming their credit score: The complaint alleges that, in response to Credit Karma’s false claims, numerous consumers wasted significant time applying for credit card offers. Additionally, when consumers applied for these offers, third party financial companies made a “hard inquiry” on their credit reports, which in many instances lowered consumers’ credit scores and harmed their ability to secure other financial products in the future.

Enforcement Action

Under the FTC Act, the FTC has the authority to take action against companies for engaging in unfair and deceptive acts or practices. The FTC’s proposed order against Credit Karma requires the company to:
  • Stop deceiving consumers: The FTC’s order prohibits Credit Karma from deceiving consumers about whether they are approved or pre-approved for a credit offer, as well as about the odds or likelihood that a consumer will be approved for a credit offer.
  • Pay $3 million in consumer redress: The order requires Credit Karma to pay $3 million to the FTC, which will be sent to consumers who were harmed by the company’s actions.
  • Preserve records: To help prevent further use of deceptive dark patterns, the order requires Credit Karma to preserve records of any market, behavioral, or psychological research, or user, customer, or usability testing, including any A/B or multivariate testing, copy testing, surveys, focus groups, interviews, clickstream analysis, eye or mouse tracking studies, heat maps, or session replays or recordings.
The Commission vote to issue the administrative complaint and to accept the consent agreement was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov. NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $46,517. The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.  ]]> by <![CDATA[Biden to Cancel Up to $10,000 in Student Debt for Borrowers Making Over $125,000 a Year]]> https://www.tlrlaw.com/?p=48165 2023-09-13T08:27:07Z 2022-08-24T15:59:22Z

https://www.ed.gov/news/press-releases/biden-harris-administration-announces-final-student-loan-pause-extension-through-december-31-and-targeted-debt-cancellation-smooth-transition-repayment

AUGUST 24, 2022
Contact:   Press Office, (202) 401-1576, press@ed.gov
Today, the U.S. Department of Education (Department) announced a final extension of the pause on student loan repayment, interest, and collections through December 31, 2022. Borrowers should plan to resume payments in January 2023. While the economy continues to improve, COVID cases remain at an elevated level, and the President has made clear that pandemic-related relief should be phased out responsibly so that people do not suffer unnecessary financial harm. To address the financial harms of the pandemic by smoothing the transition back to repayment and helping borrowers at highest risk of delinquencies or default once payments resume, the Department will provide targeted student debt cancellation to borrowers with loans held by the Department of Education. Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation. Borrowers who met those income standards but did not receive a Pell Grant will be eligible for up to $10,000 in relief. The Department will be announcing further details on how borrowers can claim this relief in the weeks ahead. The application will be available no later than when the pause on federal student loan repayments terminates at the end of the year. Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the Department. The Department is also making available a legal memorandum regarding its authority for these discharges.   The Department is also proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. The proposed rule would protect more income from loan payments. It would cut in half—from 10% to 5% of discretionary income—the amount that borrowers have to pay each month on their undergraduate loans, while borrowers with both undergraduate and graduate loans will pay a weighted average rate. It would also raise the amount of income that is considered nondiscretionary income and therefore protected from repayment. The rule would also forgive loan balances after 10 years of payments, instead of the current 20 years under many income-driven repayment plans, for borrowers with original loan balances of $12,000 or less. Additionally, the proposed rule would fully cover the borrower’s unpaid monthly interest, so that—unlike with current income-driven repayment plans—a borrower’s loan balance will not grow so long as they are making their required monthly payments. The plan would also simplify borrowers’ choices among loan repayment plans. The proposed regulations will be published in the coming days on the Federal Register and the public is invited to comment on the draft rule for 30 days.   "Earning a college degree or certificate should give every person in America a leg up in securing a bright future. But for too many people, student loan debt has hindered their ability to achieve their dreams—including buying a home, starting a business, or providing for their family. Getting an education should set us free; not strap us down! That’s why, since Day One, the Biden-Harris administration has worked to fix broken federal student aid programs and deliver unprecedented relief to borrowers, " said U.S. Secretary of Education Miguel Cardona. "Today, we’re delivering targeted relief that will help ensure borrowers are not placed in a worse position financially because of the pandemic, and restore trust in a system that should be creating opportunity, not a debt trap. " Additionally, the Department is proposing long-term changes to the Public Service Loan Forgiveness (PSLF) program that will make it easier for borrowers working in public service to gain loan forgiveness. Specifically, the Department proposed allowing more payments to qualify for PSLF including partial, lump sum, and late payments, and allowing certain kinds of deferments and forbearances – such as those for Peace Corps and AmeriCorps service, National Guard duty, and military service – to count toward PSLF. These proposed regulatory changes build on the progress made with the temporary changes announced last year by the Department that expire on October 31, 2022. Since the start of the temporary changes, the Department has approved more than $10 billion in loan discharges for 175,000 public servants. To apply for forgiveness or payments to count toward forgiveness under the temporary changes, visit the PSLF Help Tool. The Department is also taking steps to reduce the cost of college for students and their families and hold colleges accountable for raising costs, especially when failing to deliver good outcomes to students. The Department has already re-established the enforcement unit in the Office of Federal Student Aid and recently withdrew authorization for the accreditor that oversaw schools responsible for some of the worst for-profit scandals. The agency will also propose to reinstate and improve a rule to hold career programs accountable for leaving their graduates with unaffordable debt. And the Department is announcing new steps to take action against colleges that have contributed to the student debt crisis. These include publishing an annual watch list of the programs with the worst debt levels in the country and requesting institutional improvement plans from colleges with the most concerning debt outcomes that outline how the college intends to bring down debt levels. The Biden-Harris Administration will keep fighting to reduce the cost of higher education by working to make community college free and doubling the maximum size of the Pell Grant.
]]> by <![CDATA[The leading cause of bankruptcy is outside of your control]]> https://www.tlrlaw.com/?p=48163 2023-02-20T07:54:32Z 2022-07-22T19:05:35Z Medical issues cause nearly two-thirds of modern filings According to a recent review of bankruptcy proceedings in the united states, approximately 65% of the people involved cited medical issues or medical debt as their reason for filing. Even if you are financially responsible and have good health insurance, you never know when you could fall ill. For example, those who beat cancer are 2.5 times as likely as those without cancer to need to file for bankruptcy. There's a reason the risk goes up so sharply. New treatments may not yet have FDA approval and therefore will not qualify for insurance coverage. It could cost you hundreds of thousands of dollars to get immunotherapies or other cutting-edge care that could save your life. Unfortunately, when you get better, you will then have to worry about those massive medical debts.

How bankruptcy helps

When you file for bankruptcy, the courts issue a stay that will prevent future collection activity. If you complete the process and the courts approve your bankruptcy, you will be able to discharge the remaining balance on your unsecured debts, like your credit cards and hospital debts. There are different kinds of bankruptcy available for people in different circumstances. A Chapter 7 filing could help those unable to work and with limited personal property quickly discharge their debts. A Chapter 13 bankruptcy can help someone with higher income or assets they need to protect from liquidation. Unlike so-called debt solutions, bankruptcy filings actually get to the heart of someone's financial issues and can help eliminate their debt, in addition to ending stressful collection efforts. Learning more about personal bankruptcy can help you regain control over your financial situation.  ]]> by <![CDATA[Income-Driven Repayment and Public Service Loan Forgiveness Program Account Adjustment]]> https://www.tlrlaw.com/?p=48160 2023-02-20T07:54:36Z 2022-05-31T20:19:45Z https://studentaid.gov/announcements-events/idr-account-adjustment

On April 19, 2022, the U.S. Department of Education (ED) announced several changes and updates that will bring borrowers closer to forgiveness under income-driven repayment (IDR) plans. These adjustments to borrower accounts include conducting a one-time revision of IDR payment counters to address past inaccuracies (including automatically discharging loans for eligible borrowers) and permanently fixing IDR payment counting by reforming ED’s IDR tracking procedures going forward.

ED will begin work on implementing these changes immediately, but borrowers will not see the effect in their accounts until fall of 2022.

One-Time Payment Count Revision for Eligible IDR Borrowers

  • As part of this initiative, ED will conduct a one-time revision of IDR-qualifying payments for all William D. Ford Federal Direct Loan (Direct Loan) Program and federally managed Federal Family Education Loan (FFEL) Program loans.
  • ED will conduct a one-time account adjustment to borrower accounts that will count time toward IDR forgiveness, including
    • any months in which you had time in a repayment status, regardless of the payments made, loan type, or repayment plan;
    • 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance toward IDR and PSLF forgiveness;
    • months spent in deferment (with the exception of in-school deferment) prior to 2013; and
    • any time in repayment prior to consolidation on consolidated loans.
  • Any borrower with loans that have accumulated time in repayment of at least 20 or 25 years will see automatic forgiveness, even if you are not currently on an IDR plan.
  • If you have commercially held FFEL loans, you can only benefit from the IDR account adjustment if you consolidate before we complete implementation of these changes, which is estimated to be no sooner than Jan. 1, 2023.
  • If you have made qualifying payments that exceed forgiveness thresholds (20 or 25 years), you will receive a refund for your overpayment.

Permanent Fixes to IDR Payment Counting

  • In addition to issuing new guidance to student loan servicers to ensure accurate and uniform payment counting practices, ED will track payment counts in our own modernized data systems.
  • ED is undertaking an effort to display borrower IDR payment counts on StudentAid.gov so that you can view your progress yourself.
  • Additionally, ED is working on regulations to revise the terms of the IDR program to further simplify payment counting, which includes proposals to allow more loan statuses to count toward IDR forgiveness, including certain types of deferments and forbearances.

Effects on Public Service Loan Forgiveness (PSLF) Applicants

  • If you have applied or will apply for PSLF, these changes may have an impact on you by increasing your qualifying payment count.
  • If you have 12 or more months of consecutive forbearance or 36 or more months of cumulative forbearance, you will receive PSLF credit for those periods of time if you certify qualifying employment.
  • These changes will be applied automatically. If you believe you might benefit, you should update your employment certification history to reflect all periods of public service employment.

Estimate of Impact

  • ED estimates that this action will result in automatic debt cancellation for at least 40,000 borrowers under PSLF and several thousand borrowers under IDR.
  • More than 3.6 million borrowers will receive at least three years of additional credit toward forgiveness under IDR.
  • Beyond the changes that will provide relief retroactively to borrowers, ED will take action to ensure that borrowers continue to receive these benefits in the future.
  • Also note that any debt discharged through IDR will not create a tax liability for you. The American Rescue Plan Act included a provision temporarily modifying the tax treatment of discharged student loan debt. Specifically, the law excludes from gross income qualifying student loans that are discharged between December 31, 2020, and January 1, 2026. During this period, the amounts of forgiven student loan debt will not be subject to taxation.

If you’ve made a complaint to your servicer and it has not been resolved to your satisfaction, you can submit a complaint to us.

To read more about these announcements, read ED’s full press release.

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