FDCPA - Why Should I Use A Collection Log?

Using some type of collection log is critical when dealing with an abusive debt collector. Here is one that we recommend by our friend Pete Barry - www.alabamaconsumer.com Let me know if you have any questions or comments. John Watts Birmingham, Alabama

What Everyone Should Know About Debt Forgiveness, Obligations and Deficiency

What is a Personal Debt Obligation?

A personal debt obligation is an amount of money legally owed to a lender that arises from a loan agreement. It involves a continuing obligation to make payments until the debt is paid off in full. A lender has the right to sue in order to collect any unpaid outstanding debt. A debt obligation can be secured or unsecured. A secured debt obligation involves the placement of a lien against the debtors property, so a lender can force the sale of the property to pay off the debt. An unsecured debt obligation has no security against the debtors property which means a lender can only sue a debtor personally to recover any monies due.

What is Debt Forgiveness?

Debt forgiveness is the partial or total forgiveness of a debt. It means you no longer owe the debt to the lender or any other party. The lender gives up its rights to collect the debt and instead "writes it off" their books. Once a lender agrees to forgive a debt, the lender will report the forgiveness to the IRS by filing a 1099 form.

What is a Deficiency Debt?

Deficiency debt also known as debt deficiency arises when collateral that is used to secure a loan cannot satisfy the total amount due on the loan. It happens most often with debt involving real estate. However, it can occur in other types of collateralized loans such as car, business, and equipment loans. When a loan goes unpaid, the lender has the right to auction off the property to pay off the debt. If the lender collects less than what is owed at the sale, the shortage is called debt deficiency.

What are the consequences of a Personal Debt Obligation?

You will continue to owe the original amount that was borrowed plus any additional interest, late fees, collections fees, penalties, and/or attorney fees that may come due. If the debt obligation remains unpaid, then the lender can go to court, sue for a money judgment, get a money judgment, and use any legally available collection tactic. Most often, after a money judgment is awarded, a lender will attempt to put a lien on a bank account or garnish wages or put a lien on the debtors real estate. A lender can put a lien on business equipment. A debt obligation that turns into a money judgment can last for many years. In New York, a money judgment last for 20 years.

What are the consequences of Debt Forgiveness or Debt Deficiency?

Whether it is debt forgiveness or debt deficiency, the consequences are essentially the same. A lender has two general options regarding any unpaid debt. 1. The lender can forgive the debt. 2. The lender can get a court ordered money judgment to chase the borrower for the money or sell the debt to a third party.

If a lender agrees to forgive the debt, the lender will, in all likelihood, file a 1099 form for the forgiven amount. You should also remember to check your state taxing authority, since your state may consider debt forgiveness as taxable income. If the debt is secured by property, it may be possible to negotiate an exchange of the property for the full debt balance. In this case, the lender would not have a reason to file a 1099 form.

If the lender refuses to forgive the unpaid portion of a debt, then the lender will try to collect on the remaining balance. The lender can hire an attorney to sue for the remaining debt or sell the debt to a third-party. If successful, a lender will get a money judgment. There are various methods a lender can use to enforce collection of a money judgment. They can request your financial records to see if you have a job; to determine if you possess cash in the bank; or to locate your property. If the lender can find anything you own or earn, it will be seized or attached. The lender has the right to collect a fixed percentage of your wages also known as wage garnishment. By the way, the lender does not need you permission to garnish your wages. The lender simply contacts the payroll department and demands that a portion of your salary go to the lender.

When there is a debt deficiency from the sale of a property, the lender can forgive the difference or try to collect the difference. A deficiency debt becomes a new personal debt obligation unless a lender forgives the deficiency. Sometimes, a lender will demand a property owner sign another loan agreement for a deficiency debt. The IRS and some states offer tax relief to homeowners who have their debt deficiency forgiven. There is more information provided ahead about tax relief in this FAQ.

In our day and age, debt collection is big business. Technology makes it easier to find anyone and to find everything an individual earns or owns. There are third party companies purchasing personal debt obligations and/or deficiency debt from lenders. These third party companies may pay 10 to 20 cents on the dollar for the debt. Once the third party company owns your remaining debt, under most circumstances the third party has the same collection rights as the original lender.

Why does a lender issue an IRS 1099 form after Debt Forgiveness?

Debt forgiveness is considered taxable income by the IRS and by certain state and municipal taxing authorities. The IRS requires a lender to report the forgiven debt on form 1099-C, Cancellation of Debt. Individuals are required to report any forgiven debt on Form 1040. For example, lets say Mr. Jones originally borrowed $250,000 from the lender. The lender decides to forgive $150,000. Basically telling the debtor he or she does not have to pay $150,000. The IRS believes that since you did not have to pay back the entire loan, then you ended up keeping the money, therefore it is income.

What if I own a property with a value less than the mortgage balance, can the difference be forgiven through a short sale or a foreclosure auction? Can the difference become a deficiency debt? Will the IRS let me exclude forgiven debt and not look at it as income?

The general answer is yes to all of the questions. If a lender agrees to a short sale, the uncollected difference can be forgiven or it can become a personal debt obligation. If the lender forgives the difference then the amount forgiven can be considered taxable income. If the lender refuses to forgive the difference, then it becomes a personal debt obligation. This means a lender or a third party (who buys the debt obligation from the lender) has the right to legally pursue you by getting a court ordered money judgment.

If your home ends up selling at a foreclosure auction for less than what is owed, the uncollected balance is called a deficiency debt. A deficiency from a foreclosure action can be forgiven or can become a personal debt obligation. Various states have anti-deficiency statutes. These statutes prevent a lender from collecting on a deficiency. Also, the federal government enacted the Mortgage Debt Relief Act of 2007. The Mortgage Debt Relief Act of 2007 allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for the relief. The act applies to all applicable debt forgiven between 2007 and 201. It applies up to $2 million for joint filing and $1 million if filing separately. Make sure you read the act and get a qualified tax professional to analyze your specific situation.

The IRS has additional exceptions to the "debt forgiveness is income" rule. The most common situations when cancellation of debt income is not taxable involve qualified principal residence indebtedness, bankruptcy, insolvency, certain farm debts, non-recourse loans and other exceptions established by the IRS. You need to speak with a qualified accountant or other professional, so you understand your tax obligations.

What are Anti-Deficiency Laws?

Simply put, an anti-deficiency law prevents a lender from collecting on a deficiency debt or places limits on how much a lender can collect on a deficiency debt. A homeowner will not be held responsible for any deficiency if the property is occupied by homeowner. Basically, the property must be the homeowners primary residence. The lender can only recover the property and any proceeds from a foreclosure auction sale.

Anti-deficiency laws do not prevent a lender from reporting the deficiency to the IRS. Since the lender is generally prevented from collecting the loss on a sale, the lender can report the loss to the IRS as forgiven debt.

You can contact your states attorney general or banking department to learn about any deficiency laws. You can contact a qualified attorney. There are certain states that limit a lender to only one lawsuit to collect a mortgage loan debt. So make sure you get a professional opinion about your state laws.

What happens If I settle a Credit Card or Business Loan for less than what is owed?

If negotiated properly a credit card company or lender may agree to settle a business loan or credit card debt. Normally, the unpaid balance should be forgiven. This brings up an important principle. In order to get debt forgiveness, it must be in writing!!. Keep this in mind. Just because the lender verbally tells you the debt is forgiven does not mean it is forgiven unless it is in writing. There are instances when a debtor is told the debt is forgiven only to get aggressive collection calls sometime in the future.

How can I determine What Is Best for Me?

Ask yourself "What am I trying to achieve, what are my goals?" Your answer should focus on what puts you in the best financial position in the short and long term. The focus should be on reducing your debt obligation with limited long term negative financial impact. If debt is forgiven, then you may have a tax bill. If the debt becomes a money judgment, then wages can be garnished or certain assets can be seized. You will need a qualified team of professional advisers to assist you or you need to do a fair amount of research. Your advisers can include an accountant, attorney, and/or a consultant.

Each persons circumstance is unique. It requires spending time listening, gathering detailed financial information, reviewing all necessary documents and discussing various strategies.

Now you know so take control.

Debt Collection - Secrets Every Citizen Should Know to Beat Them at Their Own Game and Win

The thoughts of debt collection strikes fear in the heart of millions who can no longer pay their credit card debt but it does "not" need to be that way. Absolutely anyone can turn the table on collectors, beat them at their own game, collect money from them and have their debts marked "paid as agreed" with credit reporting agencies.

The collectors call immediately strikes fear and intimidation into the mind of the person being called because people believe they have a "moral obligation" to pay and now they must deal with a live person over the phone. Change your thinking about collection calls immediately!

Debt collectors are so accustomed to being in control of the situation, they frequently go beyond what is allowed by law. Specifically, the Fair Debt Collection Practices Act or FDCPA sets out in detail what can and cannot be done over the phone and allows large fines for misconduct.

You can say "communicate with me in writing only" and hang up the phone but that is not any fun, will not allow you to collect money or reduce your alleged debt to zero. To do these things you will need to know a few basics about collection calls.

Collectors can never prove that you owe them money unless "you admit" that you owe which establishes a contract between you and the collector. They tell you "this call is recorded" and hope to your record your "confession" to coerce money from you.

To beat them, there are few things you will need to do. First go by Wal-Mart or Radio Shack and purchase a digital recorder that will record an hour or so of conversation. Call a friend to test your digital recorder to make sure you can hear both sides of the conversation on the recorder.

Never give a collector any information whatsoever! They will probably know you by name when you answer so having your name on the recording is fine but be sure that is the only thing they ever know. Absolutely do not answer any of their questions or give any information whatsoever.

Now the fun begins. It will be your job to frustrate the caller and have him get upset instead of you. You can search YouTube for examples of answering debt collector calls and get the idea of how to do it but remember not to give any information.

When the collector begins to get upset because of your "no answer" tactics you are doing great so just remain calm and let him get all bent out of shape and hopefully use profanity, yell and scream, threaten to sue you, ruin your credit and use more "not allowed" phone tactics.

Once you have gathered sufficient recordings is time for you to call the collection agency and make "your" demands. Ask for a supervisor and tell them that you intend to file a federal lawsuit for their misconduct Under the Fair Debt Collection Practices Act. Be dead serious.

You can play some of your best recordings to show them that you have absolute proof of their misconduct. Once you have convinced them that you are going to file the federal suit, you can offer them a way out of the lawsuit by having them mark your debt "paid as agreed" and have them send it to you in writing.

Dealing with debt collection can be fun and extremely rewarding when you use knowledge to your advantage and do not ever forget that most collectors are not as smart as a fifth grader!

Illegal collection tactics Debt Part 2: ask to pay more than you should

Continually harassed by collection calls when debts are due, is the cause of much stress and anxiety of thousands of people, but debt repayments Fair Practices Act, FDCPA more commonly known, was signed into law by United States Congress to track all the activities of collection agents and to protect consumers from any breach FDCPA. The bill was signed into force due tothousands of agents were abusing collection methods. collectors are allowed under the law passed in 1978 to use some methods to collect debts. However, third party agents hired by creditors to recover debts often use unethical methods to collect money from consumers who are aware your rights, ignoring the law.

Having to deal with unscrupulous collection agents can be an enlightening experience, because most peopleI'm not aware of what you're capable of until you have gone through a serious financial problem that left them without means to pay the bills. Serious illness, foreclosure, bankruptcy or job loss can devastate a family who do not know where to turn.

Fair Debt Collection Practices Act Regulations are very specific actions that others can take collections agents trying to collect debtsconsumers. When these companies do not comply with the law could face lawsuits, fines, imprisonment or possibly. Under the FDCPA, agents are authorized to make collections calls, but the law contains restrictions. Can not call before 8 am or after 9:00, you can call the job unless you have informed in writing that your employer can not make personal calls. One of the most important things to consider when it comes to a third party collector, is to haveeverything in writing.

The law states that a collection agent can not use any abusive or scare tactics to collect money owed ​​to a creditor. He cited cases where debtors have been threatened with the loss of property, arrest, imprisonment, and have also been threats of violence against them. If legal action against the debtor is taken into account, can you explain what can happen in relation to personal property, but can not use threats of violence and can notconstantly harass a person to repay the debt.

A third tactic that collectors are trying to make a debtor, or demand, even to pay more money than was in the original contract. This may be in the form of additional taxes, interest or additional charges. Fair Practices for the Collection of Debt Law § 808. Unfair practices [15 USC 1692f] prohibits such actions. This says that the collection of each section, interest rates,or charge that is not specifically mentioned in the original contract, except as permitted by law, can not be collected. Several states have signed laws to better protect consumers in their state.

Fair Practices for the Collection of Debt Law § 808. Unfair practices [15 USC 1692f] contains eight sections on the practice of collecting the money and what constitutes a violation under the FDCPA. The subsections are specific forms ofincluding payment and deposit post-dated checks dated checks before the date would be valid. In addition, cover concealment of identity, which threatens to take legal action against the lender when they have no authority, and communication by post, in an attempt to get additional money from the debtor. If you are receiving the collections of the constant calls, contact a lawyer immediately if you feel that your consumer rights have been violated.

What you should know about the Federal Fair Debt Collection Practices Act.: An article from: Florida Bar Journal best price !

Overview

This digital document is an article from Florida Bar Journal, published by Florida Bar on June 1, 1997. The length of the article is 3324 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: What you should know about the Federal Fair Debt Collection Practices Act.
Author: Barbara A. Sinsley
Publication:Florida Bar Journal (Magazine/Journal)
Date: June 1, 1997
Publisher: Florida Bar
Volume: 71 Issue: n6 Page: 70(5)

Distributed by Thomson Gale

Check best price for What you should know about the Federal Fair Debt Collection Practices Act.: An article from: Florida Bar Journal and free ship now!.

>>> More details update!! <<< Before out of stock.

Recommended Products

Chapter 13 bankruptcy debt limit - should you too?

Chapter 13 bankruptcy involves a reorganization of its finances. Through the Plan adopted by the Court will reimburse some or all of their debts over a 3-5 year period of time. the payment amount depends on your income and a variety of other factors, but did you know that may be too much money for Chapter 13 at all?

Under section 109 (e) of the U.S. Bankruptcy Code,

Only an individual with regular income that has the date of filing of the petition,contingent debt is not being wound up, with no guarantee of less than $ 250,000 and noncontingent, liquidation, secured debts of less than $ 750,000, or an individual with regular income and the spouse of such person, except a stockbroker or agent of a commodity, which should, on the date of filing of the petition, noncontingent, liquidation, unsecured debts that aggregate less than $ 250,000 and noncontingent, liquidation, secured debts of less than $ 750,000 may be a debtor under Chapter 13 of thistitle.

These figures are adjusted based on the annual cost of living based on consumer prices approved by the Judicial Conference of the United States. The Labor Department releases figures on consumer price index for the period.

This is good news for the millions of Americans who bought homes during the housing boom of recent years. Fall into foreclosure, have become Chapter 13 only to find they are blocked because theirloans are too high.

When you have too, could be forced to file Chapter 11 to keep your home. This can be much more expensive and time consuming, requires a tremendous amount of work just to get the same result could be obtained in Chapter 13.

The other option is Chapter 7, which can not protect your home and other property.

For cases filed from April 1, 2007 to March 31, 2010, Chapter 13 debt limits were $ 1,010,650in the secured debt and $ 336.900 in unsecured debt. It has been suggested by some that such limits may rise by 7% of the cases filed from April 1, 2010-03 31A, 2010. Without doubt, help many consumers who are trying to keep their homes and properties in case of failure.

If you are considering filing for bankruptcy is important to talk with your attorney before your case is presented to ensure that your debts are within the limits from the filing date. If yourcase is filed and exceeds the limits of debt then you may have to convert your case to Chapter 7 or 11, what is worse, can have your case dismissed and has few options in the short term.

FDCPA - Facts You Should Know

The Fair Debt Collection Practices Act or FDCPA was developed in order to protect consumers from being harassed by collection agencies. It has been observed that many consumers were choosing the option of bankruptcy being threatened by debt collectors. It Thus, a federal law called the FDCPA was passed to provide guidelines of debt collection.

The important facts:

Debts or under FDCPA-Typesdebts covered by FDCPA may vary slightly from state to state. In some states, the law may cover a wider range of types of debt, but in most cases are similar: The types of debt, which generally are covered under the Act are:

- Personal Loans

- The home equity loans

- Car Loans

- Loans to finance retail

- Loans for the purchase of medical care

- Credit Card Debt

- First mortgage

- Second Mortgage

OThe debt covered by FDCPA-The law provides general guidelines for all parties involved in debt collection in relation to others. However, there are some specific inclusions and exclusions. Individuals and organizations whose behavior is governed by the FDCPA Act ​​are:

- Collection Agencies

- Business Recovery

- Creditors who collect debts from other creditors

- Collection Attorneys knowlawyers who serve debt recovery

- The creditors collecting debt under false names

Notes - Individuals who provides misleading collection

Debt collectors or not covered by the FDCPA - There are some debt collectors, whose activities are not restricted by the FDCPA. The parties that are excluded by law are:

- In the house staff or collection of creditors collecting debts

- Bankscollect debts

- Credit card companies like Chase, Visa, Mastercard, Citibank, American Express, MBNA.

Why you should answer the phone when the debt collector calls

With turbulent unemployment rates, foreclosures in a higher level, and the U.S. economy still in chaos, more Americans than ever feel they are drowning. Maybe it's because they are underwater in their mortgages or perhaps because they are forced to hang their hopes on what sometimes seems like a do-nothing Congress to extend unemployment benefits. For these and many other reasons, everybody is doing everything possible to keep afloat alone.

Unfortunately,> Collection Agencies Debt understand that people are more vulnerable than ever, and can use this knowledge to try to take advantage of consumers. Have died, consumers tend to be victims of unscrupulous debt collectors. Knowing that you are late in paying bills is one thing to be persecuted and harassed by collection agencies debt to add salt wound.

However, as tempting as it may be to ignore the debt phone calls and letters, that is in your best interest to answer the phone when you call a debt collector. Why? On the one hand, knowledge is power. When answering the phone, you get valuable information that can work to your advantage. That may be hard to believe, but keep reading.

The industry of debt collection is governed by the Fair Debt Collection Practices Act, a federal law that describes what is legal and illegal> Debt collection behavior. When a debt collector violates the FDCPA, you have every right to sue the agency in federal court. When you do, there are several possible outcomes. Often, the case negotiated out of court, which means you could receive a cash payment or part or all of the specific debt could be erased. If the case goes to court and the court finds in your favor, you may receive a reward of up to $ 1.000.

Before you protest, if could afford a lawyer to have a debt in court, then he could afford to pay the debt, you should know that the FDCPA states that if the court finds in their favor, the collection agency that violates the law must pay the legal costs. This is why debt fair reputation of lawyers will not charge you to represent yourself, but get paid, but paid by those who violate the law.

What this has to do with answering the phone when a> Collector calls? Keep a log of calls to debt collection, including dates and times of calls, calls, and what has been said, is an important first step to establish a violation of the FDCPA. When answering the phone and talk to a debt collector, you can begin to gather evidence of the allegations. E 'against the law for a debt collector threatens you, call the point of harassment, call and hang up on several occasions, to make a callworkplace if it has indicated that it wishes to be contacted there, and call early in the morning or late at night. There are a number of other behaviors that are illegal under the Fair Debt Collection Practices Act. It is important to know your rights, contact a lawyer fair debt collection agencies and maintain their unethical actions.

Credit card debt statute of limitation - What You Should Know

Each state has a statute of limitations on credit card debt. The limitation refers to the period after which, creditors can not sue to collect the debt. The time is calculated from the date of last payment or date of last activity (ie the last time you used the card .)

See the old law limits debt graph, which specifies the time in oral contracts, promissory notes, written contracts, and open-ended accounts. Note thatthe transient nature of the state legislature is required to check the status of the limitation period with the state attorney's office. For more information, visit http://www.naag.org.

In the past 10 years, a growing trend has emerged, where aggressive debt collectors buy old debt accounts and actively pursue consumers to collect the debt, even if the prescription is gone. They buy these accounts for pennies, and expect you to pay. Evenif you pay $ 1 to the account - make a good profit.

This is a violation of the Fair Debt Collection Practices Act Some creditors, even lie and say that the limitation runs from the day he bought the account. These businesses are so audacious that some of them in exchange for not suing and, indeed, go to the court case - not to harass others in day and night, use bad language or promiseto erase the negative signs of credit repot, if you send a minimum payment.

If you are in this situation, here are some tips on what to do:

Do not send a payment - if the recipe has passed in your state. In this way, make your eyes the recent crime. It will also give collectors the idea that you are an easy target and you can attack on other fronts.
Keep an eye on your credit report to ensure that they are not reporting negative information about you. Your old account should be reflected in the debt in your credit report due to the limitation is gone. If you find that information is being reported, to take immediate corrective action and correct the errors.
If possible, ignore all contact with the collection agency. Do not accept their calls. If you send communications by mail, you want to keep these as proof of harassment.
Fair> Debt Collection Practices Act indicates that there are some things that creditors can not do in their attempt to collect the debt. Http / / www.poorcreditgenie.com / answers.html Go to a list of plain talk. For a complete list, go to [http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm].
Check the statute of limitations of the information with the State Attorney's office and seek further advice on how to navigate the situation.