A is for Alternatives to Bankruptcy in our ABCs of Bankruptcy Series

A is for Alternatives to Bankruptcy in our ABCs of Bankruptcy Series

No one dreams of filing bankruptcy when they grow up.  It’s often seen as a last resort and, regrettably, as a failure.  So many people are so avoidant to the idea of filing a bankruptcy, that they do not consider speaking to an attorney, even for a free consultation.  Instead, there are many alternatives they try first, to a varying degree of success. Here, we will discuss the most common alternatives to bankruptcy that we see our clients try before they come to our office.

Instead, they dream of the alternatives.

No one ever dreams of bankruptcy.

1. Modifying a mortgage:  If a mortgage payment is the source of struggles, clients often try to “work with” the bank to negotiate their mortgage into something more affordable.  Modifying a mortgage is when a lender agrees to reduce the interest rate or principal, tack missed payments onto the end of the mortgage, or extend the terms of the mortgage.  Many people find the modification process very frustrating because banks are slow, they lose paperwork, and there is never a clear person who can really help.  Often, there is a hope that modifying a mortgage can help avoid a foreclosure, and is the first of many alternatives a person tries, but it is not uncommon that the foreclosure proceeds while the modification is stalled.

2. Asking for a Creditor’s Help:  Sometimes, credit card companies provide options and plans that make it easier to pay down a debt. For example, Discover Card may lower the interest rate on a card for 8 months or AmericanExpress may freeze and account and forgive late fees as long as payments of $200.00/month are made. However, no credit card company MUST help a client and, despite the friendly face presented by many credit card companies, a credit card company exists to make money, not be a friend.  Often, these assistance problems are short term and are offered to encourage people to pay that company first, allowing the helpful company to be paid while a company with higher demands is not paid.  It is very rare that all creditors agree to plans that make it easier for a person to pay all of their bills.  Typically, a handful of companies are helpful and all others remain steadfast, resulting in a situation that is still untenable for the unfortunate, but honest, debtor. Throwing yourself at the feet of a creditor is not typically a successful alternative to bankruptcy.

3. Draining Retirement to Pay Creditors:  One of the most heartbreaking situations for our potential clients is when they have pulled out all of their retirement to pay off debts and find themselves still in a situation where they cannot pay all of their bills.  Often, a medical debt comes along and a client pays it with credit cards.  Unable to pay off the credit cards (because interest and fees), the client pulls all of their money out of their 401(k).  In taking out their funds, they pay significant penalties, and often end up losing 30-50% before they even start paying their debt, making this one of the alternatives to bankruptcy that is particularly damaging.  What is left makes a significant dent in the debt, but does not pay it all off.  Three to five years later, the client has no retirement and, because of interest and fees), finds themselves in over their heads again and in our office.  Even if the retirement is sufficient to pay off the debt, starting from scratch in building retirement is very difficult and the client’s retirement is no longer growing as much because the principal has been so reduced.  It’s even more disheartening because the government thinks it’s so important to save for retirement that retirement accounts are completely untouchable by creditors.

4. Debt Settlement: This is one of the most common Hail Marys.  They typically try this in 2 ways: through a debt settlement company OR by themselves.  Debt Settlement Companies are, almost without exception, frauds, scams, and damaging to credit.  So much so, that every word of this sentence links to a different resource about debt settlement companies being a scam.  Not only does settling debt destroy credit, but there are huge tax consequences, risks that a creditor won’t play ball, and many other pitfalls that are important to avoid.  Debt settlement companies make BIG money, which is why they spend so much as marketing themselves as THE BEST of the alternatives to bankruptcy, but they often fail to deliver on their promises. The attorneys at Collum & Perry, PLLC have experience helping some clients settle their debts, but debt settlement is done only in very specific, narrow situations.

5. Duck and Cover:  Also known as turtling, many people hide from their debts.  When the going gets tough, the tough become avoidant!  We all know why this is not a good idea, but sometimes people easily pretend that avoiding creditors won’t increase their total debt, kill their credit, and increase their stress in the long run.

6. Buckle down and pay it off:  Of all of the options, this is the most viable alternative to bankruptcy for most people.  However, people still often fail.  Why?  Because life is expensive.  If someone had to borrow money in the past, for whatever reason, it is unlikely that they will be able to avoid needing money again in the future.  Paying off debt, especially large debts that are growing at 29%, can be exceedingly difficult, if not impossible.  One reason to see an attorney for a free consultation is so an attorney can offer unbiased advice on whether it would be better to try to pay off the debt.  It is not uncommon that Collum & Perry recommends that someone not file bankruptcy and, instead, take certain steps to pay off the debt.

Before you pay anyone to help you pursue a bankruptcy alternative, please speak to an attorney about all of your options. Generally, attorneys are aware of the alternatives to bankruptcy and are happy to discuss the consequences of a variety of choices.  Collum & Perry is happy to provide you with the same advice we would give our family members, honestly and clearly, so you can make the best decision.

Financial Protection Law Center letter of congratulations.

As we posted before, Shane Perry scored a major victory for his client, Ms. Houck, who lost her house after Lifestore Bank sold it, despite her open and active bankruptcy.  The magnitude of this case and the decision by the Fourth Circuit is far reaching and will help many people throughout North Carolina and the Southeast.  In her letter, Maria McIntyre, of the Financial Protection Law Center, very kindly informed Collum & Perry that the decision in the case would be very helpful to her in a number of her cases.

Collum & Perry is very happy to work on behalf of our clients and all of those who suffer financial setbacks.  The firm is full of hard working attorneys who are happy to take cases that are complex and confusing and work tirelessly to advocate for the rights of those who have been injured.  Clients come to our office, feeling like they are in financial ruin, and, many times, their financial problems are not of their own creation.  Regardless of the fault, however, Collum & Perry is happy to offer options and solutions to help clients overcome financial hurdles and move down the road of fiscal success.

Letter from Maria McIntyre of the Financial Protection Law Center

Dear Shane, I wanted to express my admiration and appreciation for your excellent advocacy in your Houck case. It was such a complex and meaningful case. It would have been easy to decline such a messy set of facts and procedure when the case came to you. Your decision from the 4th Circuit is very helpful to our firm in several cases we have pending…[confidential] Congratulations on your superb work. Best, Maria McIntyre

Court of Appeals Update on Houck v. Lifestore Bank

We reported that those interested could listen to Shane Perry’s oral argument before the Fourth Circuit Court of Appeals earlier.  We also predicted that Shane Perry’s oral argument resulted in a win for his client, Diana Houck.  The Order has been issued today, available for reading here (to be updated), and it was, indeed, a win.

First, some background:

Diane Houck received part of the family farm in 2000 from her father.  She and her fiance borrowed money to put a mobile home on part of the land.  The loan was refinanced in 2007 so Diana and her fiance could remodel the family farmhouse.  Unfortunately, within a year, Diana lost her job and had trouble making payments.  As many people do, Diana requested help from the bank in the form of a loan modification.  Her bank, LifeStore, referred her to a debt collector, Grid Financial Services, that denied her request because she was unemployed.  Diana then defaulted on her loan.

A client’s reliance on the court to help her save her home may finally reap rewards.

In 2011, Diana was served a notice of foreclosure and, in an effort to save her home, filed a Chapter 13 bankruptcy petition (On September 12) without an attorney.  The foreclosure was stopped.  However, as often happens, the petition was not properly filed and the case was dismissed.  After the dismissal, the bank, represented by the Hutchens Law Firm, through the Substitute Trustee, restarted the foreclosure.

On December 16, 2011, Diana again filed a Chapter 13 bankruptcy petition without an attorney.  Her husband called the law firm representing the bank and the bank to notify them of the petition.  Two days later, the bankruptcy court ordered Diana to appear and show cause why her bankruptcy petition should not be dismissed.  Two days later, Diana’s house was sold at a foreclosure sale. The next day, Diana’s second bankruptcy was dismissed.

With her home having been sold despite the bankruptcy being filed, Diana had no desire to keep the bankruptcy case open.  Instead, she attempted other options for saving her home, all of which were unsuccessful.  She and her husband (a lot had happened!) moved into a rental cabin they owned and hired Collum & Perry.

Shane Perry filed a claim in the District Court for the Western District of North Carolina for numerous claims, including violation of the automatic stay (under §362 of the bankruptcy code), and a number of state claims.  The District Court dismissed the case, stating that claims under the bankruptcy code had to be heard in the bankruptcy court AND that the complaint, as filed, failed to provide sufficient information to make a claim (specifically stating that it seemed more likely that the bank had made a mistake, not a “willful violation.”)

After some judicial gymnastics, the case was heard before the Court of Appeals.

What were the issues and how were they decided?

  • Does the court of appeals have jurisdiction to hear the appeal?
    • The Court determined that they do have jurisdiction because the Order was final under the doctrine of cumulative finality
    • “Because subject matter jurisdiction goes to the power of the court to adjudicate a claim, an order dismissing a claim for lack of subject matter jurisdiction necessarily dismisses the claim as to all defendants”
    • “Because the court could have certified such an order as a final judgment under Rule 54(b) and because the court later entered final judgment against the remaining defendants with its February 20, 2014, order before we considered Houck’s (Diana’s) interlocutory appeal, we conclude that the doctrine of cumulative finality applies and that we therefore have jurisdiction to hear her appeal.”
  • Does the court have subject matter jurisdiction over the matter (specifically, a claim under §362, violation of the automatic stay)?
    • The district court dismissed Houck’s federal claim on the ground that it lacked subject matter jurisdiction, but if the court had actually lacked subject matter jurisdiction, it could not have ruled on the Substitute Trustee’s Rule 12(b)(6) motion (which it did).
    • The court of appeals ruled that the district court’s reliance on two cases on the rules from before the 1984 revisions of the bankruptcy code was erroneous, as they merely indicated that the pre-1984 rules did not create a private right of action.
    • Both parties had agreed that §362 could be heard by the district court, so the Court of Appeals appointed counsel to submit an amicus curiae brief defending the district court’s position.
    • The court of appeals discussed the history of the automatic stay, including the motivation for creating sanctions for its violation.
    • “…[W]hile the district courts were given jurisdiction over bankruptcy cases, Coungress also delegated to the bankruptcy courts, “as judicial officers of the [district courts],” adjudicatory authority, subject to the district courts’ supervision as particularized in §157 and the limits imposed by the Constitution.  In no circumstance, however, did the Act, in conferring such adjudicatory authority, give a bankruptcy court jurisdiction to the exclusion of a district court.
    • “A claim under §362(k) for violation of the automatic stay is a cause of action arising under Title 11, and as such, a district court has jurisdiction over it.  Of course, under §157(a), a district court may refer a §362(k) claim to the bankruptcy court.  If the §362(k) claim did not ‘stem from the bankruptcy itself or would [not] necessarily be resolved in the claims allowance process’…or would only ‘augment the bankruptcy estate and would otherwise exis[t] without regarding any bankruptcy proceeding.'”
    • “Thus, even if Houck’s § 362(k) claim was indeed subject to the Western District of North Carolina’s standing order referring ‘all bankruptcy matters’ to the bankruptcy court, the district court’s failure to follow the procedural rule did not deprive it of subject matter jurisdiction.”
  • Did the district court err in dismissing Houck’s claim under §362(k) because it was legally insufficient?
    • “While the court correctly accepted the complaint’s factual allegations as true, it incorrectly undertook to determine whether a lawful alternative explanation appeared more likely.”
    • The court quoted Twombly in stating that the Plaintiff need only present her claim in a manner that shows that it is not just conceivable, but plausible.
    • The court determined that the complaint adequately alleged that the Substitute Trustee had notice of Houck’s second bankruptcy petition and that Houck sustained injury as a result of the violation.
      • “It is difficult to imagine that a court could demand more specificity with respect to the allegations of notice than the details that Houck provided in her complaint.”
      • “With respect to the Substitute Trustee’s argument that Houck failed to allege injury, the complaint is likewise adequately detailed.”
    • The court also determined that oral, actual notice, sufficient to create notice for determination of a violation of the automatic stay.  No particular form of notice is required to be given.
  • Was Houck an “eligible debtor”?
    • Substitute Trustee argued that Houck’s filing of her second bankruptcy petition within 180 days of her first petition did not automatically trigger the stay under §362(a).
    • The court explained that certain filings do not trigger the automatic stay, but further noted that the automatic stay is only NOT triggered when there is an abuse of the Bankruptcy Code.
    • Houck’s first petition, filed pro se (without an attorney), failed to properly adhere to the rules regarding certain documents that must be filed.  The dismissal was not with prejudice and was not because Houck’s failure was knowing and deliberate.
    • There is no evidence that Houck was not an eligible debtor, and the question is fact-bound, so Houck’s case cannot be dismissed as it appears she was an eligible debtor.
  • Because the state law claims were dismissed based on findings of law that the court of appeals reversed, the order dismissing the state law claims was also vacated.

Collum & Perry is very pleased with this decision, which makes clear that claims originating from creditors violating the automatic stay can be heard in district court. Collum & Perry is also very glad to be able to continue the fight to compensate Ms. Houck for the bank’s actions.

 

Why give a free consultation?

Lawyers have many reputations, one of which is that they are expensive.  While it is true that legal advice often does not come cheap, there are exceptions, one of which is the free consultation.  With the costs and expenses of running a law firm, why would any attorney give away any legal advice for free, especially an hour of it?  Here are a few reasons:

1. A free consultation makes it easy for people to come in the door. Law firms are businesses, and increased foot traffic is usually good for any business.

2. Not all lawyers are a good fit for a client and not all clients are a good fit for a lawyer.  A free consultation minimizes the risk that a client (or attorney) will feel obligated to stick in a relationship that does not work.

3. Not all people who contact an attorney need the attorney’s services. The free consultation allows an attorney to gauge the needs of the client and for the client to gather information about the legal process.

4. Everyone likes something that is free.

5. We often have great clients who do not have a lot of money.  By making it easier for these clients to come see us, we may find cases that earn both our office and clients significant amounts of money.

6. While consultations cost clients no money, they do take time.  By agreeing to spend an hour or so in our office, we can verify a client’s dedication to solving their issue.

7. Lawyers are like everyone else — they need to pay bills.  However, like all relationships, a free consultation acts as an interview or a first date.  Once a relationship is formed, it is much more likely that a client will want to hire an attorney.

8. Attorney-client relationships are built on trust.  Often, people do not trust that something is “free.”  By offering a free consultation, and really meaning it, an attorney establishes that she is trustworthy.

9. Word of mouth is great advertisement.  Even if a client learns that she does not need to hire the attorney during the free consultation, that client may refer her friends to the attorney, knowing that the attorney is a good value and trustworthy.

10. A free consultation provides attorneys with opportunities to provide legal advice to those who otherwise may not be able to afford to speak with an attorney.

Just because you didn’t get a bill doesn’t mean you don’t owe it and that it cannot be reported on your credit report.

Today, a client sent us a tax bill from the North Carolina Department of Revenue (which can be vicious).  The bill was from 2009 and was a debt incurred after the client filed a Chapter 13 bankruptcy.  The client wanted to know if the debt was still collectible and was particularly surprised because they had received tax refunds for every year after 2009.  Unfortunately for the client, not only is the debt collectible, but the Department of Revenue can also collect interest and penalties on the unpaid amount.  In this case, it seems easy to understand why the Department of Revenue may have been fine with waiting to collect!  Our recommendation is that the client pay the taxes as soon as possible to avoid garnishment and damage to their credit report, that they are just starting to rebuild.

The Department of Revenue is not the only debt collector that will lay in wait to collect a debt.  As discussed in an article on WCNC yesterday, this is a type of practice called “parking” the debt.  Parking is when a creditor reports a debt on a credit report without first taking any proactive steps to collect it.  Instead, the creditor waits to collect until a consumer pulls their credit report, oftentimes when they’re applying for a mortgage.  This benefits the debt collector that needs to expend no other resources to collect the debt.  Simply by reporting on the credit report once, they don’t have to hire people to collect the debt, use any stamps, or take any time.

So, what can you do?  First, never assume that just because you haven’t heard from a debt collector that you don’t owe them money.  Second, watch your credit report and credit scores.  Third, dispute any errors on your credit report.  Finally, if you think you have a problem and something does not seem right to you, contact our office.  We will be happy to help you resolve your creditor issues.

Bank fees are just one way that banks look out for themselves

On June 10, 2015, the Superior Support Judge for Complex Business Cases ruled that an attempted class action over whether a bank could charge an account for transactions in order of largest transaction to smallest transaction would not be allowed to proceed, even though it was clear that the bank’s practices greatly increased bank fees.  In this case, People’s Bank had posted charges from high to low, like in the following:

Time of Transaction Transaction Balance
Starting Balance $50.00
06/26/2015 at 7:00 P.M. Grocery Store $35.00 $15.00
06/26/2015 at 5:00 P.M. Gas station $20.00 -$5.00
Overdraft fee $35.00 -$40.00
06/26/2015 at 1:00 P.M. Vending Machine $1.75 -$41.75
Overdraft fee $35.00 -$76.75
06/26/2015 at 10:00 A.M. Convenience Store $5.00 -$81.75
Overdraft fee $35.00 -$116.75

Notice that the accounting leads to the bank’s charging three bank fees.  However, if the bank had posted the transactions in the order of their occurrence, it would have appeared as followed:

Time of Transaction Balance
Starting Balance $50.00
06/26/2015 at 10:00 A.M. Convenience Store $5.00 $45.00
06/26/2015 at 1:00 P.M. Vending Machine $1.75 $43.25
06/26/2015 at 5:00 P.M. Gas station $20.00 $23.25
06/26/2015 at 7:00 P.M. Grocery Store $35.00 -$11.75
Overdraft fee $35.00 -$46.75

The difference between the two accounting methods is $70!  For the same transactions.  While the difference between three bank fees and one bank fee may not seem like much,

The Court found that People’s Bank’s contract made it clear how transactions would be posted and even going as far to say that it may increase the amount of fees charged.

While this sort of practice has not been permitted since 2010, when the Office of the Comptroller of the Currency enacted the Electronic Fund Transfer Act, known as Reg E, it acts as a reminder that Banks may have friendly commercials featuring horse drawn carriages, use names that seem very patriotic, and even indicate that they are a bank of the people, but they are businesses who want, and like, to make money and their source of money is their customers.  Even after the changes in 2010, bank fees (overdraft fees, non-sufficient funds fees), make up over 60% of consumer checking account revenue!

This is why we have a number of suggestions for our clients:

1. Don’t bank where you borrow;

2. Always have 2 bank accounts, even is one is just a back up;

3. READ the agreement you sign with the bank carefully.  It may be confusing, but you need to understand what it says;

4. Use a bank you trust and one that has as few fees as possible.  We typically recommend BB&T, Blue Harbor (local to Mooresville, NC and Huntersville, NC) and CapitalOne360.

Personal Injury Outrage!

Attorneys who represent people who have been the victims of medical malpractice are shocked by an opinion entered on June 2, 2015, by the NC Court of Appeals.  The case is over medical negligence, negligent infliction of emotional distress and intentional infliction of emotional distress.  Despite the severe injuries, the Court decided to dismiss the case on a procedural issue, specifically Rule 9(j) of the North Carolina Rules of Civil Procedure, which states:

 Medical malpractice. – Any complaint alleging medical malpractice by a health care provider pursuant to G.S. 90-21.11(2)a. in failing to comply with the applicable standard of care under G.S. 90-21.12 shall be dismissed unless:

(1)        The pleading specifically asserts that the medical care and all medical records pertaining to the alleged negligence that are available to the plaintiff after reasonable inquiry have been reviewed by a person who is reasonably expected to qualify as an expert witness under Rule 702 of the Rules of Evidence and who is willing to testify that the medical care did not comply with the applicable standard of care…

What many believe this means is that all medical malpractice lawsuits MUST be reviewed by an expert BEFORE they are filed and that the expert must review all medical treatment and medical records and, of course, that this must be explicitly stated in the Complaint.

Further, the Court ruled, relying on Bass v. Durham Cty. Hosp. Corp., 158 N.C. App 217,  580 S.E.2d 738 (2003), rev’d per curiam for reasons stated in the dissent, 358 N.C. 144, 592 S.E.2d 687 (2004), that a complaint that fails to state the necessary verbiage cannot be dismissed and refiled after the Statute of Limitations expires, to correct the defect.

This is another factor that can suffocate the ability of injured people to obtain compensation from doctors doing wrong.  While Collum & Perry believes that doctors generally offer excellent care, when a person suffers due to a doctor’s negligence, our attorneys want to do whatever possible to ensure the person is fairly compensated.  By creating a special class of people (Doctors) and making it even more expensive to file lawsuits, there may be a chilling effect, leading to fewer cases.  This means fewer consequences for bad doctors and an increase in people being injured due to malpractice.

But isn’t Bankruptcy Federal?

It is common that clients search for information about their case online.  They don’t want to “bother” their attorneys, they don’t trust their attorneys, or, sometimes, they do not have a bankruptcy attorney.  As a result, they search for “bankruptcy law” and whatever specific topic they are curious about: losing a house, rebuilding credit, keeping a car, ruining lives, etc.  Even if they enter a specific zip code or location, they still may find results from all over the United States, not just North Carolina or, more specifically, the Statesville or Charlotte division of the Western District of North Carolina.  They then read everything they can without realizing that bankruptcy is different from place to place.

Collum & Perry is located in Mooresville, North Carolina, just north of Charlotte.  For that reason, most of our cases are filed in the Western District of North Carolina, although we can also file cases in the Middle District of North Carolina, but North Carolina has four districts total.  Even within the Western District, we file cases in the Statesville Division, the Shelby Division and the Charlotte Division.  Each division has slightly different ways of doing things, each District has significantly different ways of doing things, and the differences from state to state are even more substantial.

For example, in North Carolina, there is a Bankruptcy Administrator (or BA).  The Western District’s BA is Linda Simpson. The BA oversees all of the Trustees in an effort to maintain the integrity of their work.  She also reviews and approves pre-filing credit counseling course and financial management courses.  In every other state, except Alabama, there is a US Trustee, who is part of the Justice Department.

Within North Carolina, there are differences between districts.  In the Western District of North Carolina, there is no confirmation hearing.  Clients are often comforted to hear that they will not have to attend Court or be in front of a judge.  However, in the other districts of North Carolina, there are confirmation hearings. While neither system is necessarily better, they are different.

Further, within the Western District of North Carolina, there are a number of divisions.  The Statesville Division of the Western District of North Carolina includes certain counties (Iredell, Wilkes, Alexandra, Catawba, Caldwell, Watauga, Ashe, and Allegany), the Charlotte Division has certain counties (Gaston, Mecklenburg, Union and Aneon), the Asheville Division has others (Transylvania, Henderson, Buncombe, Yancy, Mitchell, Avery, Madison and Haywood), and the Bryson City division captures the remaining (Swain, Graham, Cherokee, Clay, Macon and Jackson).  You can see a map here.  So, if a couple lives in zip code 28115, they will file in the Statesville division.  If they file a Chapter 13, Mr. Steven Tate will be their Chapter 13 Trustee.  If they filed a Chapter 7, they would have one of a number of different Trustees.  However, if a couple’s zip code were 28078, they would file in the Charlotte Division.  They would have Mr. Warren Tadlock as their Chapter 13 Trustee.  Someone in the Statesville Division would NEVER have the same Chapter 13 Trustee as someone in the Charlotte Division.  However,if someone files a Chapter 7 Trustee in the Statesville Division, Wayne Sigmon may be the Trustee and he is also the Trustee in Charlotte division cases.

A map of the districts in North Carolina. We are located in the Western District but also have attorneys who practice in the Middle District.

What’s the point?  Essentially, every Trustee has different approaches and requirements.  Every district has different local rules and regulation.  Each state has different laws that apply.  So, even though Bankruptcy law is Federal, the wide variety of differences make it very important to hire an attorney and ask your attorney to help you with any aspect of your bankruptcy case.  Online searching is great, but cannot replace a knowledgeable, experienced attorney who advocates for you and knows the local rules!  Here at Collum & Perry, our office strives to assist all of our clients in achieving the best possible result from what is otherwise an untenable situation.

Big win for peace and quiet!

Robocalls aren’t even this pleasant!

Under the Telephone Consumer Protection Act, businesses (debt collectors and banks included) are generally barred from making robocalls to a cell phone without consent.  If a business makes robocalls, the recipient can sue the business for up to $1,500.00/call.  Yesterday, the FCC issued new rules that are big wins for consumers, although it was a hotly contested issue, split down party lines, involving even Twitter.  These new rules make it even harder for telemarketers to annoy people, for debt collectors to harass people, and for any business to interrupt dinner!  The rules, which resulted from the fact that unwanted calls are the #1 complaint received by the FCC, provide for the following:

  • Phone companies can provide technology that blocks robocalls.
  • Consumers can withdraw consent to receive consent to receive robocalls/robotexts at any time in any reasonable way (meaning that there is no need to revoke consent in writing and that consent can be revoked even if already expressly given).
  • Companies are now required to stop calling reassigned telephone numbers after a single call.  This means that when someone gets a new number that gets dozens of robocalls, one request is all it should take to get the calls to stop.
  • The new rules clarify the definition of an automatic telephone dialing system to make clear that it is any machine with a future capacity to dial randomly, sequentially, and/or from a list pre-loaded by a human dialer.  Even if a person has to have a part in the process, it is an autodialer if the person is not dialing the entire number.
  • Consent must come from the party called, not the intended recipient.
  • Text messages are calls.
  • Autodialed and/or prerecorded calls and text messages to mobile phones still require prior consent.

Collum & Perry is a lawfirm dedicated to protecting the rights of consumers. If you believe that any company has violated any of the rules above, we will be happy to help. There is no reason you should be harassed, bothered or irritated by businesses who know the laws.  Collum & Perry will be happy to discuss your options for ending harassing phone calls.

What is a reaffirmation agreement and do I need one?

If you have secured debt on personal property you want to keep and you’re filing a Chapter 7, you may need to sign a reaffirmation agreement.

Reaffirming a debt is to agree that you will owe the debt after the bankruptcy case is over.   So not only can the creditor repossess its collateral, it can also collect directly from you.  Essentially, it’s as though you “did not include” that particular debt in the bankruptcy.

For example, if you owed $18,000.00 on your car before you filed, your payments were $345.00/month and your interest rate was 7.8%, signing a reaffirmation agreement typically agrees, again, to pay at those same terms.  Occasionally, it is possible to get a lower interest rate when a debt is reaffirmed, but that is rare.

A vehicle must be reaffirmed to ensure you can keep the vehicle.

Your loan, not your love, needs reaffirmation after a Chapter 7.

You must sign a reaffirmation agreement if you wish to hold on to your car after a Chapter 7 bankruptcy.

 Before signing, make sure that you are willing and able to continue making the payment.  You should only reaffirm a debt when you must AND you are relatively certain you’ll be able to make the payments.  Reaffirmed debts are usually reported on your credit report, and a good payment history on a reaffirmed debt can be essential to rebuilding credit.  Collum & Perry will assist you in making sure the reaffirmation is completed correctly, signed, and submitted to the Court.  An attorney can only sign the reaffirmation agreement if it appears likely that you can afford to make your payments.

Collum & Perry DOES NOT recommend that you reaffirm a debt on a home.  Additionally, bankruptcy judges in the Western District of North Carolina discourage reaffirmation agreements because they make a person personally responsible for a debt that can often become a huge burden.  Some attorneys refuse believe that reaffirming a mortgage is malpractice.  If a bank has insisted that you should have signed a reaffirmation agreement, simply tell them that mortgages are generally NOT reaffirmed where you filed bankruptcy.  If you need the mortgage payments to be reported on your credit report, find out how to do so here.