Credit card companies increase rates as holiday season approaches

If only it were just the Christmas tree...

Just in case you thought things weren’t bad enough, the credit card companies are stepping up to make sure you know that things can get worse according to a recent article in the Denver Post.

As holiday season approaches, credit card companies have been raising rates (sometimes double or event triple the previous rate), increasing the monthly minimum payment and lowering credit limits on unsuspecting consumers.  In some instances, credit card companies have sent notices of rate increases using mail designed to look like junk mail to increase the likelihood that consumers won’t notice.

Ironically, this is happening right now because of the Obama Administration’s attempt to curb the abusive practices of credit card companies.  In February 2010, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (or, “Credit CARD” Act for short) will go into effect.  If there was any debate about the need for such a law, the blatant actions of the credit card companies to take full advantage of the remaining window of opportunity makes very clear that the credit card industry does in fact need to be reigned in and that increased protections for consumers are very much in order.

If you’re struggling with too much credit card debt in New York and are in need of legal advice about New York bankruptcy and non-bankruptcy options, please feel free to contact me for a free initial consultation.  I’ve been helping individuals fight back against unscrupulous credit card companies for years, and I’ll make sure you get the benefits to which you’re entitled under the law.

Contact

EMAIL Bruce Weiner
Phone
(718) 855-6840 (Local)
(866) 402-8476 (Toll Free)
Fax (718) 625-1966

Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Loan modification scams and U.S. Foreclosure Relief

There’s a great recent post by Professor Katie Porter on the CreditSlips.org blog about loan modification scams.

If you’ve read other posts on NYBankruptcyNet on the topic of loan modifications, hopefully you’re familiar with the basic gist:  namely that any non-lawyer loan modification service (and unfortunately, some lawyer loan modification services) are almost always scams.  The same lowlifes who scammed people with loan originations are have shifted shapes to become the scammers in the loan modification business.

What’s striking about the post, though, is some of the information revealed:

There’s really no lawful way to run a loan modification business that makes a sufficient profit.  The business model for loan modification services relies on high pressure, cash-up-front sales pitches.  And misleading statements that they help 90% of their customers obtain loan modifications.

Sales agents for the U.S. Foreclosure Relief (a loan modification agency recently shut down by the Missouri State Attorney General’s Office) offered Rolexes to the top salespeople and used other high-pressure, low ethics sales incentives usually associated with vacuum cleaner salesmen.

It’s also worth reading some of the back and forth in the comments section following the post as CreditSlips.org tends to attract a very experienced and educated readership.

In the meanwhile, if you’re facing foreclosure in New York, considering filing bankruptcy in New York or need other questions answered to help you save your home and stay afloat, please contact me for a free initial consultation.

Contact

EMAIL Bruce Weiner
Phone
(718) 855-6840 (Local)
(866) 402-8476 (Toll Free)
Fax (718) 625-1966

Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Wall Street Journal says “Beware of ‘Debt-Relief’ offers”

I always try to warn people to avoid the empty promises of debt relief and debt settlement companies that require up-front fees and imply that you’ll only need to pay pennies on the dollar.

Now, the Wall Street Journal is warning people as well in a recent article (“Beware of ‘Debt-Relief’ Offers“).  The article notes that consumer are more vulnerable than ever to the tempting sales pitches of debt relief and debt settlement companies.  However, the article also notes that complaints against these companies are on the rise and that lawsuits against debt relief companies by state attorney generals have been increasing as well.

The problem with debt relief agencies is that the solution they offer is really only appropriate for a very small percentage of consumers.  However, they’re just interested in taking your money (which they require you to give them up front).  They’re not interested in telling you if you do fit in that very tiny percentage.  In other words, the debt relief business is an attractive vehicle for unethical and unscrupulous business people for essentially stealing money from consumers in dire straits.

Other disadvantages of using a debt relief agency are that you can be sued by your creditors, and also that many loans that are forgiven in the process are viewed by the IRS as income, which means you’ll incur tax liabilities.  (By contrast, if you file for bankruptcy, you cannot be sued by creditors and you do not incur any tax liability for reduction in the amount you ultimately end up repaying.)

If you’re facing financial troubles in New York, a good first step is to have a free initial consultation with an experienced and trusted New York bankruptcy lawyer.  A good lawyer will inform you of all of your options–bankruptcy and alternatives to bankruptcy.

Please contact me to set up a free initial consultation to discuss your situation and get answers to your questions.

For additional reading on the topic of debt relief agencies, see the following:

• Don’t believe the hype: Credit counseling services and debt settlement companies
• Debt management and debt settlement companies invade Twitter-sphere!
• Debt settlement company exposed by ABC News
• Debt settlement company files for bankruptcy!?

Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Foreclosure increase + jobless recovery = Trouble

You may have noticed a couple pieces of bad news circulating in the media the last few days.

One is that foreclosures have continued to climb, according to the quarterly statistics put out by RealityTrac.  Why the increase?  Apparently banks have been delaying a lot of foreclosures as they’ve tried to implement the federal foreclosure program.  Another likely reason is that a growing number of adjustable rate mortgages (ARMs) are starting to kick in and make it impossible for those homeowners to keep up with mortgage payments.

And yet another reason is the increasing rate of unemployment.  Not only are people losing their jobs, but the alleged economic “recovery” is not doing a great job of creating new jobs.

The co-existence of these two trends is, of course, very troubling.  The greater the rate of foreclosures, the bigger a toll it will take on the economy.  And that of course likely means more bad news on the employment front in the near future.

What’s the solution?  A moratorium on foreclosures for those who have lost their jobs has been suggested by James H. Carr, the Chief Operation Officer for the National Community Reinvestment Coalition.  “We do need to think more carefully about a bridge so people aren’t being kicked out of their homes as they are looking for employment,” Carr said in a recent Washington Post article.

Whether this is likely to happen is another matter.  According to the same article, the Mortgage Bankers Association says the mortgage industry is meeting over the next month to discuss solutions.  Though of course the mortgage industry at this point has a much better reputation for creating problems than solving them.

In the meantime, if you’re a New Yorker facing bankruptcy, foreclosure or other financial struggle due to job loss, or you’re worried about losing your job and want to understand your bankruptcy and non-bankruptcy options, please feel free to contact me for a free initial consultation where you can get all of your questions answered.

Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Can I rebuild my credit after bankruptcy in New York?

Yes, you can rebuild your credit within a few years if you’re careful about your finances and pay your bills on time after you’re done with your bankruptcy case.

A lot of people worry about their credit history when they consider filing for bankruptcy in New York.  It’s a legitimate concern and a healthy impulse to raise the question.

However, in the grand scheme, if you’re behind on a lot of bills and unlikely to be able to pay them off over time, then your credit history is likely to suffer regardless of which path you take.  Sure, bankruptcy affects your credit score.  But bear in mind repossessions, foreclosures and collection lawsuits become part of your credit history and remain there for as long as a bankruptcy does (i.e., 10 years).

If you’re drowning under a mountain of debt, then a more logical way to think about it is that filing for bankruptcy is the first step you take towards rebuilding your credit history.  When you file for bankruptcy, the case ends with a discharge.  The discharge gives you a clean slate and the breathing space to get your finances in order.  And regaining control of your finances is the path towards rebuilding your credit score.

Additionally, after your discharge you are suddenly very attractive to certain lenders.  Why?  Because you suddenly have little or no debt.  As a result, most debtors receive new credit card offers after coming out of bankruptcy.  Though it’s important to note that the credit cards generally have stricter standards and more limits than the types of credit cards you might have had previously.  Still, if you need a credit card, and you use it responsibly, then you’ll build up your credit score gradually over time.  In fact, using a credit card and making payments on time over a period of time actually improves your credit score.

If you have more questions about credit cards and credit card debt, or if you’re considering filing for bankruptcy in New York to deal with credit card debt or any other debt, please feel free to contact me for a free initial consultation.  I’ll be happy to answer all of your questions and figure out the best strategy for you to move forward with your financial life.

BAPCPA Man #7 – BAPCPA Man vs. Mortgantua

Another great cartoon from BAPCPA Man as he takes on the evil Mortgantua.  Really seems to sum up what homeowners must bee feeling if they’re facing foreclosure in New York.  To learn more on the topic you can read some of my my previous posts on the topic of foreclosure.

Note: This cartoon is posted with permission from the creators of BAPCPA Man.

Click here to see a larger version of the image.

Dealing with debt collector harassment in New York

Note: Reading this book will likely be far less helpful than the suggestions listed below.

Recently in the news, New York Attorney General Andrew Cuomo filed a lawsuit to shut down a New York-based debt collection agency that has been blatantly harrassing people.

If you live in New York and are being called by debt collection agencies at all hours of day and night or at work, or if you feel like you are a victim of harassment by debt collection agencies, you do have some options for dealing with the problem.  Which option you choose depends on your individual circumstances.

First, be aware that you do have rights and protections.  Under the federal Fair Debt Collection Practices Act (FDCPA, 15 U.S.C. § 1692), debt collectors are prohibited from harassing you, contacting you at inconvenient times and places and using abusive language among other things.

To get a debt collector to stop harassing you, your options include:

1.  Write a letter to the debt collector – If you make a written request to a debt collector to stop contacting you, the debt collector is no longer permitted to contact you regarding collection.  Make sure to make a copy of the letter before you send it, and send the letter by certified mail so you’ll have proof that it was sent and received.

2.  Retain an attorney – If you have retained an attorney and you notify the debt collector of this fact, the debt collector may not contact you directly.  Instead they may only contact you through your attorney.

3.  Record the phone conversation, and let them know you’re doing it – Debt collectors don’t like to be recorded.  It provides evidence against them in the event you sue them later on (see below).  Especially since a lot of them say things that are clearly lies and intimidation tactics.

4.  File for bankruptcy – The moment you file for bankruptcy, the bankruptcy law protects you with something called the “automatic stay.”  No creditors may attempt to seek payment from you throughout the duration of the bankruptcy case.  If they do, you simply report it to the bankruptcy court and the bankruptcy judge will sanction the creditor.

5.  Sue your debt collector – If the debt collector has violated any laws in attempting to collect from you, you may sue the debt collector for any damages.

• Here’s a good Q&A on Debt Collection Practices on the website of the New York Better Business Bureau.

• And here’s the Debt Collection Frequently Asked Questions (FAQ) page on the website for the Federal Trade Commission.

If you have any questions about debt collection in New York or are considering filing for bankruptcy in New York, you can contact me for a free initial debt and bankruptcy consultation.  These can be complicated topics, so make sure you have a good bankruptcy attorney in New York or someone else you trust to advise you on all of your options.

Can I keep my home if I file for bankruptcy in New York?

The equity in this home may exceed the homestead exemption in New York.

Yes, you can keep your home if you file for bankruptcy in New York. But it’s not a given.  And depending on your circumstances, there are a few different ways to do it.

If you file for Chapter 7 bankruptcy in New York, then you can keep your home as long as the remaining equity in your home (i.e., the amount that you have not yet paid back) does not exceed the homestead exemption for New York, which is $50,000 for an individual and $100,000 for a couple.  If the remaining equity exceeds the homestead exemption, then a trustee can sell your home to pay off creditors.

If you’re in this situation, then the other option for keeping your home is to file for Chapter 13 bankruptcy in New York.  Chapter 13 bankruptcy means you work with your creditors, and with the supervision of the bankruptcy court, to create a repayment plan that usually takes 3 to 5 years.  The idea is that under a Chapter 13 repayment plan, you can reduce the amounts you owe to unsecured creditors (though not to your mortgage lender, who is a secured creditor).  With reduced payments, ideally you would be able to make the payments on your mortgage and keep your home.

The non-bankruptcy alternative for trying to keep your home is loan modification and its cousin foreclosure mediation.   Whether you can negotiate a loan modification with your mortgage lender depends on your circumstances as well as on your mortgage lender.  There is some hope that Congress will put increased pressure on banks and other mortgage lenders to encourage them to enter into loan modifications with homeowners rather than move forward with foreclosure.  But waiting around for Congress to act may not be an option for you.

If you’re worried about losing your home to bankruptcy in New York, you don’t have to make this decision on your own.  The best first step is to meet with a good bankruptcy attorney in New York who has experience and whom you trust to steer you in the right direction.

Please feel free to contact me for a free initial consultation.  I’ll answer all of your questions, figure out the best strategy to help you move forward.  The key, as always, is preparation and planning.

Debt management and debt settlement companies invade Twitter-sphere!

Since setting up a Twitter account (http://twitter.com/nybankruptcynet), I’ve acquired a number of followers who are both nice and interesting.

However, there are two categories of Twitter followers who are more persistent than others and who I block every time:

1. Representatives of the oldest profession, and
   
2. Debt settlement and debt management companies

(I apologize for having to put #1 in the same list as #2 as it clearly besmirches the reputation of #1.)

I thought perhaps it was worth taking a closer look at these persistent harassers in the Twitter-sphere.  In deciding which category to focus on, I’ve determined that my New York bankruptcy lawyer background makes me primarily qualified as a commenter on category #2, i.e., debt settlement and debt management companies.

Now let’s take a look at some of my recent Twitter “friends” (so that you don’t have to):

1.  “government_loan” and “_debt_solution” and “debt_secured_”:  It turns out these three are related.  Their feeds consists entirely of cliches and platitudes that most likely are being copied from a proverbs website somewhere.  (Or even more likely, are being posted by an automated software program.)  A click through to the link they provide takes you first to a page that offers a free book of “7 Sexy Twittering Secrets.”  (See?  Not so far off from Category #1 after all.)  And a link at the bottom to “Debt Consolidation Government Loan” takes you to “The Expressway to Freedom from Debt.”  No names of contact people or even of a company name.  Sure, let’s give them control of our finances.  What could go wrong?

2.  Debt1Solutions:  A combination of random posts that are either quotes on the topic of debt or else inane comments about new blogs, e.g., “Blog up about Michael Jackson doctor’s debt problems, could this explain his actions. Debt problems will drag you down.”  Um, thanks.  Most disturbing about Debt1Solutions page is that in the “Website” field, all I can see is “http://[unsafe l…” and the link has been rendered un-clickable by the wholesome folks at Twitter.

3.  bankruptcybgone: Lastly is a Twitter follower who lands right in the middle of categories #1 and #2 named “bankruptcybgone.“ Sounds innocent enough, but its Twitter page is accompanied by a headshot of a rather buxom young woman.  No accompanying links.  Not sure what to make of it other than I don’t think she’s going to have the desired affect on your finances that you may be seeking.

All of this is hopefully telling you what you already know about debt settlement and debt management companies.  Namely, that they’re bad options.

If you are seeking thoughtful, intelligent, strategic help with bankruptcy in Manhattan, bankruptcy in Brooklyn, bankruptcy in Queens or bankruptcy anywhere else in New York, please feel free to contact me for a free initial consultation.  I’ll answer all of your questions and lay out all of your options so that you really do have a “debt solution,” don’t need a “government loan” and are able to make “bankruptcybgone.”

Debt settlement company exposed by ABC News

“We’ll help you settle your debts for pennies on the dollar.”

Sound familiar?  Maybe you’ve seen these Credit Solutions ads on TV, on the internet or even in the New York subway.  ABC News recently ran a segment where they investigated Credit Solutions and the debt settlement industry, which revealed that the debt settlement company is essentially running a scam.

If you’re struggling with large credit card debts, promises like this that offer to quickly reduce not just your debt but also your stress level most likely sound very appealing.  The problem is that debt settlement companies like Credit Solutions (which happens to be the largest debt settlement company in the U.S.) aren’t able to actually help most people.

Of course, that doesn’t stop them from taking your money.  And they take it up front.  As the ABC News video shows, too many people have given money to debt settlement companies like Credit Solutions and then never hear from them again.  What’s worse is they tell their customers to stop paying their credit card bills (which also must sound very appealing).  So if you’re the customer already feeling financial stress, you’re out a couple thousand dollars and you still have all your credit card debt, except that now it’s worse due to accumulated interest and late fees.

Also, they’re not very transparent, so you’re taking a huge risk when you put your faith in one.  Sure, they do help some people.  But they’re cherry picking the best clients and ignoring the rest.  So even if you heard from a friend who had a positive experience using them, just remember that’s the exception to the rule.  It in no way means you’re going to get the same result.  So why take the risk?

Using a debt settlement company is penny wise and pound foolish.  If you’re looking for alternatives to bankruptcy in New York, make sure to deal with it properly from the start.  Otherwise you’ll likely end up spending a lot more money and time dealing with it down the road.

Get in touch to sit down and talk with us for a free initial consultation to learn all of your options–bankruptcy and non-bankruptcy– for dealing with debt.  And never pay anyone up-front to help you settle your debts.