Debt collectors are permitted to make reasonable attempts to collect debts, as long as the debts are legitimate. However, the Fair Debt Collection Practices Act (FDCPA) identifies collection practices which are not legal . Struggling financially is stressful enough. It may help you to understand what debt collectors can and can’t do when pressuring people to pay their debts.

Fair Debt Collection Practices Act

In 1979, the Fair Debt Collection Practices Act was enacted so that consumers will have protection against the tactics of unscrupulous debt collectors. Aggressive actions to collect debts commonly include:

• Callers making false representations and empty threats.
• Contacting other individuals about your debt.
• Collecting more money than what is owed.
• Calling so frequently the phone ringing becomes unbearable.
• Trespassing on your property (entering without invitation).
• Threatening physical harm.
• Making calls between 10 p.m. and 5 a.m.
• Exposing the debtor to public ridicule.
• Feigning a legal process.

Limitations of Debt Collectors Per FDCPA

Under FDCPA, debtors’ rights are protected.. It’s important to report debt collectors who do not act according to the following guidelines:

• Calls from debt collectors can be made only from 8 a.m. to 9 p.m. in the debtor’s local time. 
• If you request that they not call you at work, debt collectors must stop making calls at your place of employment. 
• There isn’t a specified number of times debt collectors can call on a daily or weekly basis.   Debt collectors are, however, prohibited from continuous calls and annoyance calls with repeated ringing of the phone.
• Although debt collectors can contact friends, neighbors, and family for information about you, they are not permitted to reveal that they are a debt collector. They are forbidden from revealing anything about your debt to people they speak with about you.
• If you advise a debt collector that it’s not a convenient time to talk and then provide an alternate time, your request must be honored.

How to Stop Creditors from Calling 

There are several different ways to stop creditors from calling in Georgia. 

Cease and Desist Letter

One way to stop creditors from calling you at work is to submit a cease and desist letter requesting that the debt collector stop contacting you. Once a debt collector receives such a letter, they are allowed by law to on one more occasion and advise of their next plan of action, if any. Your letter should be sent by certified mail, so that you are able to track the correspondence and provide evidence your request was received.

Make Payment Arrangements

Debt collectors will stop the incessant calling if you make acceptable payment arrangements to payoff the debt. It is important to verify the debt is yours and the amount being collected is accurate.  However, if you do miss a payment, the calls will likely resume.

File for Bankruptcy

In Georgia, when you file for bankruptcy and begin bankruptcy proceedings, part of the process includes informing creditors, after which calls are supposed to stop. When a person files bankruptcy, they must list all of their creditors in the bankruptcy petition.  The court will mail a notice of bankruptcy filing to all creditors that are listed. Any attempt by a creditor to contact a debtor after the case is filed is a violation of the bankruptcy automatic stay. If the calls don’t stop even after you’ve entered into bankruptcy through a Georgia court, the debt collector should be reported to the bankruptcy attorney.

Legal Recourse for Debt Collectors

There are a few legal means for a creditor to collect a debt. While you, the debtor, are wondering how to stop creditors from calling, a creditor may obtain a court declaration that he or she has the right to demand:

• A wage garnishment,
• A lien on the debtor’s property, or
• A levy on the debtor’s bank accounts.

Wage Garnishment

In most cases, judgment creditors pursue wage garnishment. This involves contacting the debtor’s employer and requiring that a certain portion of the debtor’s wage is sent to the creditor each pay period. Georgia’s garnishment rules are the same as guidelines and up to 25% of a worker’s net wages can be garnished.

Lien

A lien is a claim or encumbrance on a property. If the debtor is a homeowner, a judgment creditor has a right to place a lien on the home. This means that if the debtor refinances or sells the home, the debtor will be required to pay the judgment out of the proceeds of the refinance or sale of the home. If the equity on the home is less than the amount of the judgment, then the debtor may be prevented from refinancing or selling the home until the judgment has been paid.

Levy Bank Accounts

State law in Georgia governs the levying of bank accounts under O.C.G.A. § 9-13-50 & O.C.G.A. § 9-13-16 . State law also governs whether there is a sum of money the debtor can rightly claim as being exempt from the levy. In Georgia, the plaintiff must possess a Fieri Facias, which is a legal writ that enables law enforcement to seize whatever amount of the property belonging to the debtor that can be sold to satisfy the creditor’s claim.

Contact the Law Office of Jeffrey B. Kelly

Contact the Law Offices of Jeffrey B. Kelly today for a free consultation to review your rights to stop debt collections and wage garnishments.   Filing bankruptcy may be the ideal solution to end the harassing bill collectors and provide a fresh start to your financial future. Call 770-637-1756 today.

Debt Settlement

Debt settlement companies cannot protect you from lawsuits. Bankruptcy protects from all collection lawsuits.

The worse aspect of debt settlement is that it creates liability with the IRS. Any amount of the loan that is “forgiven” or “written off” is a taxable event. In contrast, bankruptcy does not create any taxable liability.

Chapter 7 and Chapter 13 Bankruptcy

Chapter 13 and Chapter 7 will clear the deck of your debt problems. In contrast, debt settlement programs almost never do. In a Chapter 13 and Chapter 7, we need the permission or approval of your creditors. The law is the law.

The only situation where a debt settlement program has any reasonable chance of success is where there are small number of creditors. Getting a large number of creditors to voluntarily agree to anything is like herding cats. It is not reasonably possible. In cases where there are lots of creditors, the only thing a debt settlement program will accomplish is prolonging the agony of the debt situation.

Pros and Cons of Bankruptcy

Filing for bankruptcy with the assistance of a knowledgeable bankruptcy attorney can be the best choice to either pay creditors more slowly or remove all debts from the slate. Under the right circumstances, bankruptcy has a positive side to it. Chapter 13 bankruptcy turns large debts into digestible monthly payments. And Chapter 7 bankruptcy removes all debts with the exception of student loans and some other debts. Under both Chapter 7 and Chapter 13, many people keep their houses and cars, as well as personal items.

While it is true that bankruptcy will put a hurt on your credit score, the truth is that most people with debt problems have already hammered their credit score. Bankruptcy will allow you to wipe the slate clean and rebuild.

Debt Settlement or Bankruptcy?

How does the average person figure out if debt settlement or bankruptcy makes the most sense? The bottom line that you need take advantage of a free consultation with us and explore your options.

Read our google reviews. We shoot straight with you. If bankruptcy is not a good option, we will explain it to you.

Contacting a Georgia Bankruptcy Attorney

Thinking about contacting a debt settlement company? Contemplating bankruptcy in GA? Before making a final decision, give the Law Offices of Jeffrey B. Kelly a call at (770) 881-8449. The initial consultation to talk about your case is free.

What Are Collection Agencies, and Why Are They Contacting Me?

If you miss your monthly payments, you should not sit back and assume that debt collectors won’t come calling. Creditors will always do what is in their best interest, which means that you need to be proactive.

If you are behind on your payments, you should immediately contact the company. Explain your situation, and try to develop a repayment plan or compromise. If that fails, your original creditors will turn your information over to a debt collection agency. A debt collector from the agency will then begin contacting you as a representative of your original creditors.

Federal law says that within five days of the agency or collector contacting you, they must provide a written verification of the debt. This document includes the name of the creditor and the amount of money owed, as well as the assertion that any debt whose validity is not challenged within 30 days will be assumed valid.

How Do I Know If I’m Being Harassed?

According to the Federal Trade Commission’s Fair Debt Collection Practices Act (FDCPA), debt collectors have to follow strict guidelines when they attempt to contact you. This law prohibits a wide range of unruly behaviors. If you notice a debt collection agency break any of these rules in an attempt to contact you, make a record of it in case you plan on pressing charges.

• Calling at odd hours: The FDCPA prohibits collectors calling you outside of normal hours. Specifically, they are not allowed to call you anytime before 8 am or after 9 pm.
• Deceiving or misleading: Whether the agency says that your debt is larger than it is or they pretend that they are involved with the government, collection agencies cannot mislead you in anyway. They are required by law to be clear.
• Ignoring your attorney: If you have hired an attorney to represent you and the agency continues to contact you directly, they are violating FDCPA. The law forbids them from contacting you directly, as all communication should go through your attorney.
• Any inappropriate communication: Obscene language and threats are both considered forms of harassment from debt collectors. Collection agencies are also forbidden from publishing your name.
• Repeated calls: Calling you repeatedly, or on different numbers, is a form of harassment. Debt collectors cannot engage in this behavior, especially if their intent is to abuse or annoy you.

Even if the actions of the collection agency do not fall neatly into one of these categories, it is still possible that they are harassing you.

How to Stop Harassment by Creditors?

Even if the agency is not technically harassing you, there are a variety of steps that you can take so that they will stop contacting you.

1. Write a letter to the agency. The best option that you have is writing a letter to the collection agency, requesting that they cease communications. Once they receive this letter, the only responses they can give are to acknowledge the letter, inform you that they will stop contacting you, or to let you know that they plan to sue. When you write the letter, you should also send a copy to the Federal Trade Commission and keep one for your own records.
2. File a complaint. If a debt collector is violating the FDCPA when contacting you, you can file a complaint with the Consumer Financial Protection Bureau (CFPA). Filing a complaint or even suing through the CFPA can be an effective method of preventing your creditor from repeatedly or inappropriately contacting you.
3. File for bankruptcy. Filing for bankruptcy is a last resort that should only be taken when your financial situation is dire. Whether it be chapter 13 or chapter 7, bankruptcy will remain on your credit reports for as many as ten years. While it will allow you to avoid debt collectors, it will seriously inhibit your ability to take on further debt without absurd interest rates.
4. Get an attorney. Hiring an experienced attorney to represent you is your best option. They can send a letter to the agency and help you solidify your case against the collection agency.

If creditors are harassing you about any debts that you have accumulated, it is a great idea to get help from our experienced team. Contact our attorneys to begin the process of ending harassment from your creditors.

Under Federal law, the Consumer Credit Protection Act limits the amount of money that can be garnished from your disposable income (the amount of money left over after mandatory deductions like taxes and Social Security).

These limits are set by category of debt:

• Federal student loan debts are capped at 15% of your weekly income;
• Child support and alimony payments are limited to 50% if you are supporting another child or spouse and 60% of your income otherwise;
• Back taxes wage garnishment is calculated by the IRS, depending on the deductions you take. However, they generally amount to no more than 15% of your weekly pay.

Calculating Garnishments from Court-ordered Judgments

Court-ordered judgments are obtained after a credit card, personal loan, or medical debt company have filed a lawsuit against you and the judge has ordered that you are liable for the debt. Before the judge orders you to pay the debt, you will have an opportunity to contest it in court. If you don’t, or if you lose the case, your paycheck might be garnished.

How much money can be garnished will depend on your weekly income. Federal law caps this type of wage garnishment at 25% of your weekly disposable income, or the amount by which your weekly income exceeds 30 times the federal minimum wage (currently $7.25 an hour),

This means that if you are earning $290 or more, after taxes and withholdings, 25% of your income can be taken. If you are earning between $217.51 and $289.99 a week, anything you earn above $217.50 can be taken. However, if your weekly disposable income is $217.50 or less, your wages will not be garnished.

Example Wage Garnishment Calculation

How does this play out with real data? Keep in mind, these are estimates that may or may not reflect your personal situation.

In Georgia, the median annual 2016 salary was just over $51,000, which after Federal taxes will come out to $46,500 if you are single with no dependants and taking the standard deduction. Taking out FICA (Social Security), a flat 7.65% at this income level will take out another $3,900 and put your annual discretionary income at $42,581, or your weekly discretionary income at $819.

Put more simply,

$51,000 annual salary (before taxes and FICA)
-$4,519 (Federal Taxes)
-$3,900 (FICA)
= $42,581 discretionary annual income

$42,581 ÷ 52 weeks = $819 weekly discretionary income

From this, if you owe money for:

Defaulted federal student loans: you could pay $122.85 each week ($819 discretionary income x 15% garnishment).

Child support and alimony: you could pay $491 each week if you owe support to one child or spouse ($819 x 60%) or $409 if you are supporting another child or spouse ($819 x 50%).

Back taxes: you could pay $122.85 each week ($819 x 15%).

A court-ordered judgement: you could pay $205 a week ($819 x 25%).

Georgia follows Federal law, so the calculation will not change here. However, other states may follow a different pattern.

Protecting Yourself Against Wage Garnishment

First and foremost, do not ignore court papers. If you are served with a lawsuit, read the papers careful and seek legal advice. If your wages are currently being garnished, you may be able to protect some of your income that is exempt from garnishment, such as social security income or social security disability, retirement income or unemployment income.

Filing for bankruptcy is also an option, because it will freeze all collection actions until you have time to get back on your feet again.

This article is for informational purposes only and should not be taken as legal advice. To speak with a qualified wage garnishment attorney, contact Kelly Can Help online or call us at 770-637-1756.

What Is a Wage Garnishment and How Can It Impact You?

A wage garnishment occurs when a creditor files a lawsuit against you in a court of law. The court must approve and issue a money judgment against you in order for a garnishment to proceed. In the event the court approves the garnishment, the creditor is then able to send information to your employer about the garnishment. This will legally force your employer to take the court-approved amount out of your paycheck and pay it to your creditor.

If a garnishment occurs, the court will determine the proper amount for the garnishment. In some cases, this may be 25 percent of your income. Percentages vary. It depends on the amount you owe and the amount you earn.

Most often, individuals do not know much about a wage garnishment until they receive a court order or notice that the garnishment will occur. This can create a bit of a panic, but you can stop the garnishment from occurring. To do so, you may need to file bankruptcy. When you file, it automatically freezes all legal action against you. This action can be very powerful when it comes to giving you the freedom to get your debts in order.

Some Creditors Do Not Have to Go to Court

Most credit card and personal loan creditors must go through the court system to garnish your wages. However, some types of debts do not require garnishment orders to come from the court system. This includes creditors that you owe taxes to, such as the local, state, and federal government. It also includes student loan debt, child support debt, and alimony debt. As a result, you should act quickly on these types of accounts to minimize your losses.

What About Exemptions?

Under state and federal law, individuals have some form of protection against the garnishments themselves. These protections are called wage garnishment exemptions, which help protect some of your earnings from garnishment. More specifically, the exemptions protect specific types of income you have.

Though state laws differ, most of the time, states will have protections in place to protect some or all of your income from garnishment if your income comes from any of the following sources:

• Social Security income, such as Social Security Disability
• Child support income
• Alimony income
• Retirement income
• Disability income
• Unemployment insurance

Factors such as the amount of money you have in your bank accounts and pay stubs detailing your income are used to verify how much you should pay in garnishments. Do not assume your wages are protected.

What Should You Do?

Whenever possible, pay your debts on time. If you have the ability to make lump sums on your debts, do so. If you cannot, work with the creditor or collection agency to make payments that fit your disposable income. The key here is that you remain in charge of what happens. You may wish to make a claim of exemption. If your income comes from a source listed above, this may be all you need to do.

However, if you cannot secure the wage garnishment exemption, or you are earning minimum wage and simply unable to pay off your debts, it may be time to consider bankruptcy. You may find this is one of the best ways to freeze all of your debts immediately. Then, the court can determine if you should repay your debts after the bankruptcy discharge occurs.

Ready to Get Some Additional Help?

Learning about all federal bankruptcy exemptions and what you can expect in terms of wage garnishment takes time. Our team can help you gather the information so you can learn what to expect. If you are facing debt collection, tax debts you cannot pay, or other financial difficulties, contact The Law Offices of Jeff B. Kelly about your options. Call us at 770-637-1756.

If you are being chased by debt collectors, follow these steps to protect yourself.

Know your rights

Even if you owe a large debt or have defaulted on a loan, you have rights. The Federal Trade Commission (FTC) is a federal government agency designed to protect consumers, including you.

Often, debt collectors engage in illegal practices that run afoul of the Fair Debt Collection Practices Act (FDCPA). This federal law prohibits deceptive, unfair, and abusive debt collection actions. This means that debt collectors cannot:

• Make phone calls at all hours of the day or night
• Curse at you or use obscene language
• Threaten violence or to have you arrested
• Lie or misrepresent your legal rights or the amount owed
• Obtain information from you through lies or misrepresentations
• Contact you at work if you tell them not to

If you believe a debt collector is engaging in any of these behaviors, you can file a complaint with both the FTC and the Consumer Financial Protection Bureau (CFPB), which is another government agency that protects you from abusive practices. Georgia also has a Consumer Protection Unit that provides resources if you are dealing with unscrupulous debt collectors.

Educate yourself

Avoid the instinct to bury your head in the sand. Knowledge is power.

First, ask the collection agency for a debt validation letter. This letter should include the amount of debt owed and the name of the original creditor. Was it from a maxed out credit card? Defaulted student loans? An overdrawn bank account? Find out the answers to these questions.

Second, look at your own papers. Compare your records to the debt validation letter. You should also read the fine print in your contract regarding defaulting on loans and debt collection to ensure that your contractual rights are protected.

Third, hit the books. What is the statute of limitations on your debt? If you forgot to pay a dentist 10 years ago, in many states, including Georgia, the debt might be unenforceable because the debt is too old. Georgia requires that a lawsuit to collect a debt must be filed within 6 years, otherwise, the creditor is out of luck.

Fourth, look at your credit report. What is being reported and how does it affect you? I encourage everyone to spend time looking over their credit reports on a regular basis, but you should absolutely check your credit report if you are being harassed by debt collectors.

(Note: even if you are not actively being hounded for an old debt, your credit report may show collection accounts you unaware of.)

Dispute the debt

Once you have your ducks in a row, there are a number of ways you can go about disputing the debt.

Is it your debt?

Often, debt collection agencies work quickly and sloppily. If they put in a social security number wrong, or misspell a name, they could be chasing you rather than the proper debtor. When you are validating the debt, the collection agency needs to show you why it believes this a financial obligation that you owe.

If you file a written dispute of the debt within 30 days of the first contact from the collection agency, the agency must stop all collection activities while it verifies in writing that this debt is indeed yours.

How much should you actually owe?

Double check the math of the collection account. The collection agency or the original creditor cannot artificially inflate your debts. Read your contract to determine the amount of interest you owe. Even innocent mistakes, such as an erroneous decimal point could have major consequences.

Don’t be on the hook for zombie debts

A zombie debt should be dead because it’s being collected after the statute of limitations has run out. In Georgia, as in many states, the statute of limitations for debt collection is six years. Credit.com provides a statutes of limitation by state, if your debt originated somewhere else.

Even if the statute of limitations has come and gone, if you agree the debt is yours or make a payment, you can be held responsible for it again. Get everything in writing before agreeing to anything.

The FTC does go after companies that threaten to sue over zombie debts, but you should also do your due diligence to make sure you are protected.

Haggle

Once you have gone through the steps to ensure that the debt is yours, made sure the amount is accurate, and know that the collection agency can still legally collect the debt, do not be afraid to negotiate.

Often, debt collectors pay a very small amount to the original creditor for the right to collect a debt. Paying any money to them likely will net a profit, so they are often willing to cut a deal in order to move on.

Contact an experienced attorney

This article does not provide legal advice and is for informational purposes only. If you need help working with an unscrupulous debt collection agency, contact our office to speak with our experienced attorneys today.

Difficulties for Insured & Uninsured

Even those who have health insurance are beginning to struggle with medical expenses. The majority of policies require an out-of-pocket payment when they receive medical care or obtain prescription products. “Copays” are set amounts payable for specific services. For example, a doctor’s office visit may require a $25 copay at the time of the appointment and a pharmacy may require a $10 payment for each prescription that is purchased. A deductible is a base amount that the patient must pay annually before their insurance begins to cover their expenses. For example, a patient may have to pay the first $500 in medical expenses they incur out-of-pocket; expenses for the remainder of the year would then be covered by the insurer.

Acknowledging Medical Expenses

Medical costs and expenses should be incorporated into a comprehensive budget along with your rent or mortgage, utilities, etc. Often people are put into a position where they must choose between paying medical bills or pay for other critical expenses such as groceries or car insurance. It is best to avoid paying medical bills with credit cards because it can lead to further interest on the debt. Surprisingly, health care costs are among the most common reasons that people file for bankruptcy.

Initial Options/Strategies to Handle Large Medical Bills

Explanation of Benefits (EOBs)

After you receive medical treatment, your health insurer will typically send you an EOB statement after the medical provider files a claim with your insurer. This document is not to be confused with a bill. An EOB lists the cost charged by the medical provider and the amount that your insurance will pay.

Billing Errors & Insurer Denials

When you receive a medical bill, it is critical to thoroughly read it. Keep in mind that a visit to one provider may generate bills from others; for example, if your doctor ordered you to have blood work done during your visit by a third-party laboratory, you may incur multiple bills from that single visit. The bill should be itemized and show the CPT codes that reflect the services provided. If you suspect an error, it is best to be proactive and contact the provider’s billing department or contracted billing company. If your insurance company has denied the claim for services that you think should be covered, it is best to contact them to discuss the amount owed. You have the right to appeal decisions made by your insurance company.

Responding to Negotiate

If you determine that the bill is your responsibility and you are unable to pay it in full, it is best to contact the provider to seek other options. It is critical that these efforts are initiated before the bill is “past due” and sent to a collection agency. You should inquire if the provider has discounts available for people with lower income. The provider may consider lowering the amount of the bill if you are able to pay the reduced balance in one lump payment. Check whether a payment plan can be established for repayment; ideally, these would be interest-free arrangements.

Hospital Financial Assistance

You may qualify for financial assistance to assist with unpaid hospital medical care. For example, the Northeast Georgia Health System offers financial assistance to those who meet federal poverty guidelines and have received emergency care that is deemed medically necessary. This type of debt relief may be free or available at a reduced cost.

Georgia’s Indigent Care Trust Fund

According to the Georgia Department of Community Health, the state’s Indigent Care Trust Fund was implemented in 1990 to allow lower-income residents access to medical care. The program works to promote the availability of Medicaid among the disadvantaged and those in rural areas. People who are uninsured may still be eligible even if they are unable to qualify for Medicaid.

Debt Consolidation

Individuals who are burdened with multiple debts may consider a medical debt consolidation. This is when your debts are combined and paid in a single monthly payment. An effective consolidation plan will ideally lower the rate(s) of interest and allow you a more affordable way to pay off your debt. There are many ways of consolidating debt such as:

• Zero or low-interest credit card: You may transfer all of your debts to a credit card with a lower rate. Many cards offer introductory rates such as 0% interest for periods of six to twelve months.
• Home equity loan or credit line: A homeowner may use the equity in their home to consolidate multiple debts into one affordable loan payment.
• Debt consolidation loan: Those with an adequate credit score may qualify for a consolidation loan. You should shop around to find one with the lowest possible interest rate.
• Borrow from a friend or family member: Keep in mind that financial agreements can have a negative effect on relationships—even among close friends or family.

Bankruptcy

Those who have accumulated a debt load that is insurmountable may consider contacting an attorney who is experienced in bankruptcy law. This is generally considered a last resort, as it has long-term negative effects on your ability to obtain credit. Bankruptcy is a legal process that may allow you to eliminate credit card debt, medical bills, and other unsecured debts. Your attorney will advise you on whether a Chapter 7 or Chapter 13 bankruptcy is best suited for your situation.

Attorney for Bankruptcy in Georgia

For over 20 years, the Law Office of Jeffrey B. Kelly has assisted clients struggling with significant financial debt by helping them obtain a fresh start. The practice has expanded to offer six convenient locations in Georgia. For a complimentary case evaluation, contact our office or call (770) 637-1756 today.

Understanding Bankruptcy

Bankruptcy is a federally-based legal process where a debtor may protect or liquidate available assets to repay debts. For individuals, a bankruptcy may be either a Chapter 7 or a Chapter 13. A Chapter 7, which may be referred to as a “fresh start” or “straight liquidation” is geared for those with minimal income and assets. It essentially discharges all qualifying debts without repayment. A Chapter 13 bankruptcy, commonly referred to as a “wage earners plan”, restructures the individual’s debt into some repayment arrangement over a set period of time. Often the amount to be repaid is only a fractional amount of the entire debt.

Debt Consolidation

A debt consolidation involves combining a group of separate debts into one. Typically, the goal is to consolidate debts with high rates of interests into one that offers a single monthly payment at a lower rate of interest. This may be an option for those with various debts that are still at a manageable level for the borrower. A loan also may be obtained against an asset, such as your home, that functions as a tool for consolidation of multiple debts.

Consolidation Loans

One common type of consolidation loan is a home equity loan. We will use a simple example to illustrate the concept. Assume you have three separate credit card accounts with balances of $1,000 each with interest rates of 9, 10 and 12%. You could obtain a loan against your home for the total amount to satisfy these debts ($3,000) and then repay the single equity loan, which has an interest rate of only 8%. Another common form of debt consolidation is via balance transfer. Based on the prior example, you could transfer the balances from the credit cards with the 10% and 12% interest rates to the card that affords you the lower 9% rate.

Key Differences

Consumers may be misled by marketing that they see from bankruptcy attorneys who advertise a Chapter 13 bankruptcy as a “bill consolidation” or “debt consolidation”. Chapter 13 bankruptcy requires court approval of a plan and assigns a trustee who is responsible for making payments to creditors. A bankruptcy court may determine that certain assets be sold with the proceeds forwarded to creditors. In a bankruptcy, you have the benefit of a federal court and your attorney’s oversight ensuring that parties are not misled or subjected to dishonest practices. This is not the case with debt consolidation firms and the State of Georgia has implemented consumer laws governing them.

Georgia Consumer Protection Law

The state’s Debt Adjustment Act established a host of provisions that regulate firms within the debt consolidation industry, some of which are as follows:

• The fee charged by the firm may not exceed 7.5% of the monthly total paid to creditors

• Firms are required to maintain a minimum of $100,000 in insurance that can be used to compensate victims in situations such as employee theft, forgery, or other fraudulent activity

• This insurance must be purchased through an organization that meets certain state standards

• Consumers who feel their protections were violated have a legal means of bringing action against the firm, which may be done with assistance from an attorney

Avoiding Unscrupulous Consolidation Companies or Schemes

There have been many cases where criminals executing scams have posed as legitimate debt adjustment firms. Many advertise themselves as non-profit organizations that actually are quite the opposite. Often consumers are presented with debt management solutions that are simply “too good to be true” and require that a large fee be paid upfront. Such activity has become increasing possible in our internet-based consumer marketplace that may allow these firms to more easily deceive consumers who are often desperate to find a solution to their financial woes. If you suspect fraud, there are many resources available including the Georgia Consumer Protection Unit and other consumer advocates such as the Better Business Bureau.

Experienced Georgia Bankruptcy Attorneys

Those who find themselves in difficult financial situations associated with debt should consider seeking the advice of a legal professional that can explain your options. Debt consolidation may be appropriate for some people, but not for others based on the unique circumstances. The Law Office of Jeffrey B. Kelly has assisted clients with over 5,200 bankruptcy cases. We encourage you to contact our office today for a free consultation at (770) 637-1756.

The Wall Street Journal recently reported that United States Federal authorities have cracked down on a phone scam where Indian call centers were used to swindle millions of dollars out of Americans.  The Journal reports that these fake debt collectors harassed Americans with threats of arrest, job loss and/or collection lawsuits.  What really shocks me is that they allegedly posed as law enforcement officers.

The Federal Trade Commission has published a great guide on how handle a situation where you receive a call from a debt collector.

When you receive a phone call from a debt collector you should never give them:

• your social security number
• bank account numbers
• credit card numbers
• your birth date
• or any other personal information.

You should request the following information from debt collector:

• his name
• his company
• the mailing address for his company
• his phone number

In addition, the Federal Trade Commission says that you should refuse to discuss any debt until you receive a written “validation notice” in the mail.

As word gets out about the fake debt collectors, legitimate collection efforts by phone will become extremely difficult in the future for almost every company.  With the advent of caller identification, may people don’t answer their phone unless they recognize the number.  When I go home, I never answer the home phone period.  It’s never for me.  Almost everyone I know calls me on my cell.

Even when the consumer recognizes the name of the company, they should still request written verification from the caller.

However, just because a collector gives an address and name does not necessarily mean they are legitimate.  While giving a name and address makes it easier for the FTC to prosecute the crooks, it does not stop them from trying to steal your money.

I remember when the foreclosure crisis first started, there were many crooks that had no problem giving addresses to unsuspecting consumers who thought they were paying for a loan modification of their home mortgages.

What will the scammers think of next?

Other Posts:

1.  What is Chapter 13?

2. What is Chapter 7?

3. How much does it cost to file?

4.  How do I stop a garnishment in Georgia?

5.  How do I stop a foreclosure in Georgia?

Under an agreement with the Federal Trade Commission, Asset Acceptance will  now stop threatening to file lawsuits against consumers who have debts that have expired under state statutes of limitations.  In Georgia, if your debt is more than six years old and a creditor files a collection lawsuit against you, you can have the case thrown out of court because it is barred by the statute of limitations.  Six years old means that you have not made any payments in the last six years.

Asset Acceptance must also conduct a reasonable investigation in the basis for claiming that the debtor owes them money.

In his recent blog post, bankruptcy expert Jay Fleischman explains the debt buyer business model.  Jay explains how some debt buyers play fast and loose with collection laws and how you are the prey in their hunt for the money.

The debt collection industry seems to be coming under increasing scrutiny by the federal government.  A few weeks ago, I wrote a blog post about how JP Morgan has mysteriously stopped filing collection lawsuits.

Will this decrease in collection lawsuits be permanent?  Will Asset Acceptance start being nice to consumers because the FTC has started getting tough with them? Will these collection companies give up on the opportunity to squeeze millions of dollars out hard working consumers who are barely making it?  I think not.

I believe that the increased scrutiny will simply lead to collection practices that just barely comply with the letter of the law.  Even when debt collectors play by the rules, they can still be extremely aggressive and make themselves a pain in your neck.

If you have bill collectors that are calling and threatening you, Chapter 13 or Chapter 7 will stop all of the harassment.  If you would like to schedule a free consultation to discuss your situation, please call me at 770-637-1756.

Other Posts:

1.  What is Chapter 13?

2. What is Chapter 7?

3. How much does it cost to file?

4.  How do I stop a garnishment?

5.  How do I stop a foreclosure?