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Miami Bankruptcy Law Blog

Bank accused of illegally changing mortgages to stop foreclosure

After the scandal that rocked Wells Fargo last year, one might think that the company's officials would be careful to make sure that all of their activities were legitimate. With that said, it seems a bit unbelievable that they are now being accused of making changes that were unauthorized to the home loans of customers that are in bankruptcy and trying to stop a foreclosure. Before allowing any changes to their mortgages, Florida customers may want to seek the advice of an attorney or at least read the fine print.

At first, the changes that were allegedly made to these mortgage accounts seemed to be in favor of the customer. The loan payments would end up being much lower than before, making them easier for the customer to pay. What customers did not see was that Wells Fargo officials had added many years to the length of their loans. This caused them to owe a great deal more to the bank and led to them having to pay much more for their homes.

Car exemption: How to keep your car during bankruptcy

One of the questions that people often ask about bankruptcy and filing Chapter 7 is whether they will be able to keep their car. The car exemption is especially important to those who have paid their auto loan off and owe nothing on the vehicle. Many Florida residents want to know if they can pay the trustee and keep the car since it is often the only form of transportation that they own.

Laws regarding bankruptcy exemptions are different in each state. With that said, it may be possible to keep a car if it is the sole transportation that a person has. The decision is often based on the amount allowed for the exemption. While a person may be granted $1,000 equity for a car, for example, the car may be worth much more. If the equity in the car is $3,000, but the filer is only allowed $1,000, then the trustee might see the vehicle or may agree that the filer pay $2,000 to keep it.

Creditor harassment earns man 78 months in prison

One man was sentenced to 78 months in prison recently after he was found guilty of preying on those who were behind on payments. Not only did the man's collection agency target those who owed money, but he sometimes went after those who did not even have a real debt. In Florida, as in other states, the Fair Debt Collection Practices Act protects those who are in debt from this type of creditor harassment.

The man was the owner of a debt collection service that schemed to make money off of their targets. Some of those targets actually owed money, and others did not, but they were all subjected to threats, false statements and other forms of harassment. The victims were coerced into giving money to the man, who used various aliases.

Fay Servicing fined $1M for illegal foreclosure practices

Fay Servicing has been fined over a million dollars for what the Consumer Financial Protection Bureau calls illegal foreclosure practices. During the investigation, it was discovered that the servicing agency was not upfront with its clients about the choices that they had to prevent foreclosure. Fay was found to have been moving forward with foreclosures against borrowers who were looking for help in saving their homes. Servicing agencies such as Fay work with clients in Florida and all over the country.

The CFPB ordered Fay Services to pay as much as $1.15 million to those consumers who were victims of the service's illegal practices. As a part of the settlement, the servicing agency will receive no other penalties, and they will not be monitored in the future. The goal of the settlement, according to the CFPB, was to put the matter in the past and move forward.

What can be done when a debt collector crosses the line?

One of the most stressful times in an adult's life is when he or she falls behind on bills. The constant calls and threatening letters from a debt collector can add heavy amounts of pressure to an already scary situation. One of the most potent weapons against fear is knowledge. The best thing for anyone in Florida or other states to do is to be aware of what a debt collector can do, and what he or she cannot do.

For those who have fallen behind on any of their bills, the Fair Debt Collection Practices Act has rules and regulations in place to protect against creditor harassment. According to this law, anyone attempting to collect on a debt is not allowed to be unfair, deceitful or abusive in any way. This is true whether the person owes on a house, car, credit card, medical bill, or any other type of loan or account.

Chapter 13 bankruptcy and when to file

For many, it is hard to understand exactly what bankruptcy is and how it can benefit them. Filing Chapter 13 bankruptcy, for example, is a way for a person to gain control of his or her finances without having to give up everything that he or she owns. With this type of bankruptcy, a person will only have to make one payment per month to a trustee. The trustee is then responsible for paying each of that person's creditors. Many Florida residents choose this method to catch up on their bills.

When a person files Chapter 13, he or she agrees to pay back a portion of what he or she owes. The amount is decided according to how much he or she makes and how much is owed. A person who has a steady paycheck and wants to keep his or her assets might choose this type of bankruptcy. All forms of debt collection are to be stopped when Chapter 13 is filed. A person's home cannot be foreclosed on, his or her paycheck cannot be garnished, and debtors cannot continue to harass the client.

Try these methods to stop foreclosure

To many people, receiving a notice of default on their home means that they have very little if any hope of saving it. Truth is, even if a homeowner is over three months behind on their payments, there are still a few things they can do in order to stop foreclosure. In Florida, many people suffer through the repossession of their home each year. But there are ways to keep this from happening.

One of the first things that can be done to keep from losing a home is to try and work out a deal with the lender. In most cases, a lender would rather work with the debtor than to repossess the house. It is a good idea to see if the lender will find a way to lower the payments or extend the amount of time that the debtor has to catch up on them. Of course, if the homeowner fails to keep his or her end of the deal, the home will still be lost.

Consumer accuses lender of creditor harassment via telephone

A consumer has filed a suit against her lender, claiming that her privacy was invaded when the lender continued to harass her. The suit was filed against Santander Consumer USA Inc. in April. The plaintiff alleges that the debt collector violated both the Florida Consumer Collection Practices Act and the Telephone Consumer Protection Act and committed creditor harassment via telephone.

In the complaint, the consumer claims that the defendant called her several times during the day on her cellphone. The calls were allegedly an attempt to collect money on a debt that the defendant claims that the plaintiff owes. She also states that when she answered her phone, she was greeted with silence or a recorded voice before being connected with a live operator. She adds that not only was her privacy invaded upon, but she was embarrassed and aggravated by the frequent calls.

Chapter 7: The good and the bad

The decision to file bankruptcy can be a difficult one to make. On one hand, people must consider how their credit will be affected, how their reputation could be tarnished, and how it may affect how they feel about themselves. On the other hand, it could be a fresh financial start for the client, as it will stop any and all creditor harassment and give the person who files the chance to reset his or her budget. Anyone in Florida who is considering Chapter 7 bankruptcy may want to consider the pros and cons.

There are several negative aspects of filing bankruptcy. Chapter 7 can stay on a person's credit report for as many as ten years, and all of the person's credit cards will be taken. Any property that is not exempt in the state could be taken and sold by the court-appointed trustee in order to repay the client's debt, and the person will be unlikely to qualify for a mortgage. Bankruptcy will not cover student debt, child support or alimony.

Chapter 7 or Chapter 13: What's the difference?

For those who have become overwhelmed with personal debt, bankruptcy can be the relief they need to get a fresh start. Some may wonder, however, whether Chapter 7 or Chapter 13 is for them. What are the differences and how should one choose? Florida residents who are considering bankruptcy may want to understand the differences.

Chapter 7 bankruptcy is considered to be the faster and easiest way to file. Those who have unsecured debts such as credit cards, personal loans, and medical bills can have those bills discharged through Chapter 7. With this type of bankruptcy, however, the client may have to give up a few assets, such as jewelry or expensive vehicles, but this is not always the case.

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