In the case of In re Cooley, — B.R. —-, 2007 WL 512758 (Bkrtcy.N.D.Ala.,2007), the court was confronted with the question of whether a lender could compel arbitration of claims made for violations of the Truth in Lending Act (”TILA”). The lender argued that the debtor’s claims should be submitted to binding arbitration in accordance with the terms of an arbitration agreement signed by the Plaintiff when she purchased and financed the truck. The court, in agreeing with the lender, found that the adversary proceeding commenced by the debtor was not derived from the bankruptcy laws, and there was no inherent conflict between enforcement of the parties’ arbitration agreement and the underlying purposes of the bankruptcy laws. Thus, the court did not have the discretion to refuse to enforce the arbitration agreement.

Technorati Tags: TILA, bankruptcy, truth in lending

You refinance your mortgage, buy a car, or take out a new credit card and run it up to the maximum.  Suddenly you start getting offers for those high-interest, low-limit credit cards that seem to follow around only people who are in credit trouble.

How the heck do all these companies know something’s changed?  Welcome to the world of “credit triggers.”  Lenders and others - even people to whom you owe no money and have no relationship - can at a pretty minimal cost subscribe to a trigger service with one or more credit bureaus. There are over a dozen parameters that permit subscribers to be instantly notified if there are changes in the credit profile of monitored individuals. These triggers may be employed by creditors as collections assistance, or even by debt buyers as a way to know when to turn the screws on you.

Ever wonder why you pay off one debt and the others start calling?  Or you apply to refinance your house and the old debts you wiped out in bankruptcy magically reappear?  These triggering events may suggest to old creditors that you’re suddenly in a position to pay off that old debt.

According to a post at the AIC Real Estate Blog:

It has gone so far off center that Experian permits a lender to submit a list of names (from its current portfolio? Maybe you?) to be monitored for credit shopping or request that a list of names (not necessarily existing customers) that match a specified profile be generated on a regular basis. In addition, marketing, risk, and retention triggers are now available on a daily, weekly, or quarterly cycle.

So the next time you get a collection letter from an old debt, maybe it’s because the creditor is watching you more closely than you might otherwise think.

Technorati Tags: credit triggers, experian, equifax, transunion, debt buyers, debt, credit

People file for bankruptcy to get protection from harassing creditors and collection agencies.  Most consumers don’t want to take the walk down the road to the bankruptcy court, but they do so because they are at wit’s end and don’t know what else to do.
Not only are creditors required to stop contacting you after you file for bankruptcy, they are also required to update your credit reports to show that you have a $0 balance and that the obligation was discharged in bankruptcy.

The bankruptcy laws don’t force creditors to take this action, however.  Rather, it’s the Fair Credit Reporting Act that requires a creditor to update reporting whenever that creditor knows or has reason to know that the current reporting is incorrect or incomplete.  In other words, once a creditor is informed of a bankruptcy that creditor is required to update its reporting of the debt.

Simple, right?

The problem is that many creditors do not update your credit report after your bankruptcy has been discharged.  Some people believe that this is just a mistake the creditors make, that some accounts fall through the cracks.  But the truth is that these creditors know exactly what they’re doing.  They continue to show the balance as due in the hopes that you will be forced to pay the debt in the future.

How often does this happen, you ask?  Nearly every single credit report I see for someone who has gone through bankruptcy has a significant error on it, and most have 3 or more errors.

If you have errors on your credit report then you have rights under the US Bankruptcy Code and possibly under the Fair Credit Reporting Act.  The creditors can be held liable for money damages and can be forced to pay your legal fees.

Don’t take this sitting down - fight back!

Technorati Tags: bankruptcy, discharge, credit report, FCRA

The case of In re Peaslee, decide on December 22, 2006 in the US Bankruptcy Court for the Western District of New York, involved a Chapter 13 plan providing for the bifurcation of a creditor’s claim secured by debtor’s vehicle. The case trustee filed a valuation motion seeking a determination that the creditor had secured a claim for the vehicle’s retail value and an unsecured claim for balance of amount due under retail installment contract.

John C. Ninfo, II, Chief Judge, held that if all of the debt included in the claim secured by a vehicle is not secured by a purchase money security interest, then the exception provided under the anti-bifurcation statute (the “hanging paragraph” of 11 U.S.C. sec. 1325(a)(9)) does not apply. Judge Ninfo also held that when a debtor refinances a vehicle for a new one there is no purchase money security interest under New York law. Therefore, the hanging paragraph does not apply and the vehicle creditor will have a secured claim in the amount of the vehicle’s retail value and an unsecured claim for the remaining amount owed.

In re Peaslee, — B.R. —-, 2006 WL 3759476 (Bankr. WDNY 2006).

Technorati Tags: chapter 13, hanging paragraph, 910 car claim