Excessive Automated Debt Collection Calls Violate Consumer Rights

Have you been getting too many automated debt collection calls? If so, you may be entitled to compensation under the Fair Debt Collection Practices Act (FDCPA). The question is, how many calls does it take to violate the FDCPA or the Telephone Consumer Protection Act?

Illegal Debt Collection Practices

If you owe someone money, they certainly have a right to try and collect it by calling you. However, it matters how many times they call you a day, week or month using automated debt collection calls, also known as robocalls, which are automated phone calls that use both a computerized autodialer and a computer-delivered pre-recorded message.

While there’s no rule to define how many calls it takes to constitute an illegal debt collection practice, a U.S. District Court judge in Tennessee recently ruled that 17 calls a month was too much and that consumers who received these calls are entitled to file suit against the debt collector. In his opinion, he reasoned:

Consumer Debt Protection Laws

Consumers are protected by several laws to make sure that debt collection practices are fair and reasonable. The Fair Debt Collection Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA) are two of those laws which, if violated, can result in up to $1,500 in fines per violation. Here’s how they work:
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What is Michigan Bankruptcy Means Test?

Who Can Qualify for Bankruptcy Under Chapter 7?

The means test is required for anyone looking to file Chapter 7 bankruptcy. This is an income-based test designed to reserve the powerful benefits of Chapter 7 for those who truly cannot afford to pay back their debts.

If you’re left with little disposable income each month to pay your bills, you’ll likely be able to file Chapter 7 bankruptcy and discharge your unsecured debts. Learn more about the means test:

The Bankruptcy Means Test: Who Can File?

The bankruptcy law was designed to ensure that Chapter 7 bankruptcy protection is given to those who need it most. The means test is the qualifying step for those looking for file Chapter 7.

The Chapter 7 means test is actually a formula that is used in determining whether or not an individual would have enough money available to make minimal payments to creditors in a Chapter 13 bankruptcy plan. In many cases, those who want to file Chapter 7 are able to do so.

One of the court’s fundamental goals in bankruptcy is to reserve Chapter 7 for men and women who have no means to repay their debts. Before the law change, there were fewer restrictions on eligibility for those who wished to wipe out credit card debt, medical bills, and most personal loans through Chapter 7 bankruptcy (regardless of their ability to repay their debts).

Are you wondering if Chapter 7 is right for you? Talk to Firebaugh & Andrews about your eligibility to file bankruptcy under Chapter 7 or 13:

Step One: Median Income Comparison

The first step in the Chapter 7 bankruptcy means test is simple: it compares your income to the median income in your state for a family the same size as yours.

The median income for your family size may differ dramatically depending upon where you live, and an attorney can tell you whether you are above or below the applicable median income.

If your income is higher than the median income, it doesn’t necessarily mean that you can’t file for Chapter 7 bankruptcy; it just Intriggers the second step in the test.

Homestead (Michigan Income Guidelines)

  • $30,000 for your residence
  • $45,000 if debtor is 65-years-old or older or disabled

Wages

  • Up to 60 percent of wages, but not less than $15 per week, for householders with family
  • Up to 40 percent of wages, but not less than $10 per week, for anyone else

Automobiles

  • Up to $2,775 for one vehicle

Other Property

  • 100 percent of family pictures, clothing, fuel for six months, burial plots, health aids
  • Up to $450 per item, with a total value of no more than $3,000, for household goods, furniture, utensils, books and appliances
  • $500 in value of a church pew
  • $2,000 in value of crops, farm animals and feed
  • $500 in value of household pets
  • $500 in value of one computer and accessories
  • $2,000 in value of tools, implements, materials and other things to enable a person to carry on a profession.
  • 100 percent of worker’s compensation, unemployment and ex-servicemen’s benefits

Step Two: Calculating Disposable Income and Unsecured Debts

The second step is a bit more complicated, and actually breaks down into separate pieces.

Certain allowable expenses (determined by IRS guidelines) are subtracted from your income to find your “disposable income.”

If your projected disposable income over the next five years equals less than $6,000 ($100/month), you will likely “pass” and become eligible to file under Chapter 7.

If your disposable income is greater than $10,000 over the next five years, a presumption arises that you do not really need to file for Chapter 7 bankruptcy. If you can demonstrate special circumstances, you may still be allowed to do so.

In the grey area, between $6,000 and $10,000, another calculation is typically required.

This calculation compares your disposable income over the next five years to a percentage of your unsecured debt to determine whether any significant repayment to your creditors is possible.

If your disposable income over that five years is greater than 25 percent of your unsecured, non-priority debts, you’ll probably find yourself in the same circumstances as if you’d had more than $10,000 in disposable income.

If your disposable income over a five year period is less than 25 percent of your unsecured, non-priority debts, you will likely “pass” the means test.

You Don’t Need to Go Through the Chapter 7 Means Test Alone

Firebaugh & Andrews can crunch the numbers for you and tell you whether or not you qualify for Chapter 7 bankruptcy under the means test.

The calculation can be complicated, not only because of the numerous steps that may be involved, but because it requires an understanding of the rules concerning how your income is calculated for means test purposes and which debts are classified as unsecured and non-priority.

Many people who want to file for Chapter 7 bankruptcy find that they are still eligible to do so. Firebaugh & Andrews  can help you determine how the means test may affect your bankruptcy options.

Call us today for your fee evaluation 734-722-2999

Michigan Bankruptcy Myths

Here are 10 myths about the Chapter 7 bankruptcy, Chapter 11 bankruptcy, and Chapter 13 Michigan bankruptcy laws:

1. You Cannot File Bankruptcy Under The New Law

Many people believe that the new bankruptcy law passed in 2005 essentially made bankruptcy unavailable to most people. While eligibility for a Chapter 7 bankruptcy may depend on your income, bankruptcy is still available. In many cases, all of the benefits under the old Michigan law remain under the new law.

2. You Will Lose Your House

While you cannot wipe out a mortgage in bankruptcy, if you are able to maintain your payments on your house you can keep it. If you file a Chapter 13 monthly payment bankruptcy, you can use your bankruptcy plan to catch up past due payments over a much longer period than the bank is like.

3. You Will Lose All Your Possessions

People are often afraid that if they file bankruptcy they will lose everything they have. The new Michigan bankruptcy laws generally allow you to keep personal items such as the equity in your home, appliances, furniture, vehicles and similar household property. In most cases, you can also keep your retirement accounts.

4. Your Bankruptcy Will Be Public Knowledge

While anyone in theory can go to the Bankruptcy Court and review case files, this is very uncommon. Most people that file bankruptcy do so without their friends or family knowing anything about it.

5. You Will Never Be Able To Get Credit Again

While bankruptcy has a negative effect on your credit rating, it also reduces your overall debt. Many individuals are able to rebuild their credit over a matter of a few years after filing bankruptcy, and find that bankruptcy itself does not prevent them from obtaining loans for a vehicle or a home.

6. Bankruptcy Cannot Wipe Out Court Judgments

Many people believe that once a there is a court judgment there is nothing they can do. In fact, bankruptcy prevents a court judgment from being collected. However, certain judgments, such as divorce judgments, generally are still collectible.

7. Creditors Will Continue To Call You

Once you file bankruptcy, the law prevents a creditor from contacting you directly or by phone or mail in an attempt to collect a debt.

8. You Can Pick Or Choose Which Debts To Include In A Bankruptcy

When you file Bankruptcy, you need to notify all of your creditors. Some people prefer to leave certain debts off their bankruptcy and “not include” them in the bankruptcy. While on some cases you can agree to pay a debt despite the bankruptcy, you must list all of your debts and creditors in the bankruptcy papers.

9. You Still Owe All The Unpaid Back Taxes

While taxes are sometimes non-dischargeable, you can often discharge personal income taxes as long as they are at least 3 years old and you have filed returns.

10. Filing Bankruptcy Is Difficult

While it is important to carefully review all of the information included in a bankruptcy filing, we strive to make the process very smooth and relatively painless.

Call Firebaugh & Andrews today for your free evaluation. 734-722-2999

Have you filed recently for bankruptcy?

Have you filed recently for bankruptcy? Are you worried that your chances for credit are gone? If so, here’s some good news: you can still get a credit card. And here’s some better news: you can start taking steps immediately to rebuild your credit. With careful planning, you’ll soon be back on financial track. Read on to learn more about applying for a credit card after bankruptcy.   Credit After Bankruptcy  A bankruptcy filing can stay on your credit report for up to ten years. Yet you do not have to wait a decade before applying for a credit card. Lenders decide to approve or deny credit on an individual basis. Many companies offer cards specifically designed for those with poor credit. This means that you may be approved for a credit card quickly after bankruptcy.

Before you apply for a credit card, keep in mind that due to the bankruptcy filing, you may be viewed as a higher risk customer to lenders. This means that it might be more expensive to obtain and keep a credit card. Cards for those with poor credit usually come with higher interest rates and lower credit limits. Remember that having a credit card is a privilege. If you use it wisely, you will be able to enjoy the many benefits involved.   Imagine Gold MasterCard   The Imagine Gold MasterCard is a smart card to apply for after bankruptcy. It accepts all applications and does not require a security deposit. Even better, it reports to three major credit bureaus. There are several fees involved with this card, including an annual fee of $150 and a one-time processing fee of $4.95. As you use the card and pay off the balance each month, you can improve your credit score.
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3 things to avoid when being sued by a debt collector in Michigan.

1) Never give creditors access to your bank account.

Now here is one we get calls all the time from a potential client to say well they said they would only take X amount out, then you check your bank account and instead of $200 gone they took $1200, now its your word versus their word, good luck ever getting that money back.

2) What can creditors take and not take?

Here is a law that you must be aware of and why its SO important to hire a professional like Firebaugh & Andrews to make sure you are not taken advantage of. This law is to protect those that are either on disability or SSI. Your benefits are EXEMPT from from seizure protected by federal laws. Now this is not automatic you MUST make the creditors your bank aware that your deposits in your account (the income) is from your disability or SSI payment. We have seen cases of unscrupulous debt collectors grabbing your cash, if they do take it again good luck getting your money back.

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What is the most common ways to commit fraud when filing bankruptcy?

Bankruptcy fraud is a federal crime that occurs when a person knowingly and fraudulently commits certain prohibited acts in connection with their bankruptcy case. According to the United States Department of Justice, bankruptcy fraud occurs in approximately ten percent of all bankruptcy filings. The United States Trustee is responsible for investigating cases of bankruptcy fraud and the Department of Justice is responsible for prosecuting those who commit bankruptcy fraud. If convicted, a person may be fined up to $250,000 and/or imprisoned for up to five years in a federal prison.

Proving Fraud Took Place

In order to convict a person of bankruptcy fraud, it must be proven that the individual intended to commit the crime. There must be an actual intent to deceive, which requires evidence that there was planning involved. If a person makes a mistake or forgets to include an asset when preparing the bankruptcy documents, this would not constitute bankruptcy fraud because intent is a necessary element of the crime.

Concealment of Assets

The most common type of bankruptcy fraud is concealment of assets whereby a debtor hides assets from the bankruptcy trustee so that the trustee cannot liquidate those assets to pay creditors. Concealment of assets involves transferring assets to a friend or family member, or, failing to disclose certain assets or income in the bankruptcy documents. Concealment of assets accounts for over 70% of all bankruptcy fraud.

False Statements

Another method of committing bankruptcy fraud is by making false statements, either in person during a bankruptcy proceeding, or in sworn documents. When a person files for bankruptcy protection, they are required to fill out a petition and complete numerous supporting documents, including a statement of their financial affairs and a schedule of income and assets. If the debtor intentionally makes a false statement in the documents, he or she may be prosecuted.
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5 Bankruptcy Myths Debunked

While some assume that a bankruptcy filing means the person can’t resist the temptation of credit cards (and in some cases, it may), most people who will file for bankruptcy do so for other reasons. Here’s a look at some of the myths surrounding consumer bankruptcy.

1. People who file for bankruptcy are financially irresponsible. “There’s always going to be some kind of abuse, but it’s far more likely that people run into very serious personal problems in one of three areas: losing their job, going through a divorce, or suffering a serious illness,” says Walter W. Miller Jr., who teaches bankruptcy law at Boston University School of Law.

Long-term unemployment, the legal fees associated with divorce, the cost of running two households following a divorce, or the high cost of medical care have all driven well-intention Americans into bankruptcy. As of April 2012, more than 5.2 million Americans had been unemployed for six months or longer, according to the Bureau of Labor Statistics. Meanwhile, a 2011 survey by the Centers for Disease Control and Prevention found that 20 percent of American families had problems paying medical bills in the past year.

2. Bankruptcy discharges all past debts. Many people file bankruptcy hoping they’ll be able to start fresh afterwards, but several types of debt are not discharged by bankruptcy. “If you have domestic support obligations [such as alimony or child support], those can’t be removed under any circumstances, “If you have to pay restitution because of a crime, that’s another debt that can’t be removed.”

As a result of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, student loan debts also fall in that category, although a Congressional bill called the Fairness for Struggling Students Act would allow private student loans to be discharged in bankruptcy court. According to Epstein, student loans can be forgiven if you’re able to prove a hardship such as permanent disability, but that process is separate from bankruptcy.

Tax debts are sometimes reduced or discharged depending on the circumstances, but as Epstein says, “if you didn’t file tax returns, there’s no way you’re going to get those tax debts removed.”
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Can I Get Out of a Co-Signed Lease?

When you cosigns on a loan, you are agreeing to be liable for the remaining balance if the original person on the lease fails to fulfill his or her obligations under the loan. If that person does not handle the lease in a responsible manner by making ongoing and timely payments, this can negatively impact the co-signer’s loan.

Fulfill the Contract

If the co-signer is more concerned about the potential damage to his or her credit or wants to take on a substantial credit move and does not want the cosigned loan to affect him or her, the best way out of the lease may simply be to pay it off. For example, if the lease was for payments of furniture for ten months, the cosigner may simply choose to pay off this balance. He or she could then enter into a separate agreement with the original party and transfer his or her debt to the cosigner rather than the original property owner.

Check Contract Provisions

The lease is a contract between the co-signer, the person entering into the lease and the property owner. As such, the provisions in the contract specify the legal obligations of each party. The lease may include specific provisions regarding how to terminate the contract. For example, a contract regarding a property that is being leased may state that a renter can break the lease if he or she pays a certain number of the remaining months on the lease and forfeits his or her security deposit. Weigh the consequences to breaking the lease and determine whether this would represent a smaller loss than having to carry out the lease.

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What circumstances will allow you to include your school loan in your bankruptcy.

Every year, millions of students are convinced to take on student loans with promises of huge salaries upon graduation, but often the reality is a bit different and these same students are left with an enormous debt and little or no means of repayment. Indeed, these debts can last for decades.

Millions cannot afford to repay their student loan, some may think that filing chapter 13 can be done with your school loan but it is not 9 out of 10 times. Now what circumstances may allow you to include your school debt into your bankruptcy?

The very rare exception is when one can show at the time of the bankruptcy that the debt created by the student loans is going to create an unreasonable burden to the debtor and that the debtor will never be able to make payments, often because of a disability or other circumstance beyond the debtor’s control. Absent that, the debts to federal student loan companies are exempted from bankruptcy and will not be discharged. If you believe you are in such a situation contact Firebaugh & Andrews are these circumstances are very rare and there is only one way to find out, call us now for your free consultation 734-722-2999.

Are the fees I paid my bankruptcy lawyer and trustee tax deductible?

Basic Information Bankruptcy fees paid to lawyers and trustees can be either a tax deduction or not and it will depend on the type of bankruptcy filed, Chapter 7 or 13, and on the items included in the petition. In order to take any bankruptcy expense as a deductible item on your taxes, you will need to file a Form 1040 and itemize your expenses. If you file using the short form, you will not be allowed to claim any itemized deductions.

Deductions Allowed by IRS
Regular legal expenses for Chapter 7 and 13 bankruptcies and the filing fees, $299 for Chapter 7 and $274 for Chapter 13, are not deductible as defined in IRS Publication 908, the Bankruptcy Tax guide, which rules these fees as personal expenditures. However, if your attorney spends time communicating with the IRS regarding any tax issues you have; those fees are deductible and will be listed as a miscellaneous expense on your Schedule A tax form. Any fees that you pay to either your attorney or an accountant for the preparation of your taxes while you are in a bankruptcy proceeding will be taxable itemized deductions on your Schedule A Tax Form.

Allowable Expenses as Tax Deductions
Any item paid in your plan to a trustee that would normally be a tax deduction, such as back federal or state taxes, spousal support, delinquent mortgage payments or mortgage interest, can still be taken as a personal tax deduction. These are expenses that you are paying through the bankruptcy distribution process by your payment plan administrator, the trustee, and it is the same as if you were writing the check yourself. It is a good practice to ask an accountant or your attorney if you are not sure whether an item is deductible or not.

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