paydayIf you're falling behind on your debts, beware: You don't want to end up one of the millions of Americans who get their pay garnished.
To avoid being hit, call your creditor or the firm collecting the debt and try to negotiate a payment plan, said Robert Hobbs, senior fellow at the National Consumer Law Center.

Explain the details of your financial situation and propose an amount that you can realistically pay each month.
If that doesn't work and the creditor decides it wants to seize your wages, it generally needs to get a court order first. That means you have the right to appeal.

Look at the judgment and make sure everything is correct.

Read the rest of the article here.


car repoCall it the high-tech repo man: The starter interrupt device, a small piece of technology that can disable a car if a borrower is just one day late in making a payment.

The rise in the devices, as detailed in The New York Times, comes amid a surge in auto loans given to subprime borrowers, or people with credit scores below 640. About one-third of all auto loans are now given to subprime borrowers, up from slightly more than one-quarter in 2010, according to Equifax.

In an effort to protect their assets and minimize delinquencies, dealers and lenders are increasingly outfitting cars with starter interrupt devices and GPS trackers. Given the euphemistic name of "payment assurance devices," the technology allows the repo man to shut down a car if a subprime borrower is even one day late in making a payment.

Many starter interrupt devices require a borrower to enter a code provided by the dealer each month, after they've made an on-time payment. If the payments are missed, the lender can remotely shut off the car's starter, and then use the device's GPS to track down the vehicle and repossess.

While the devices have been around for years, they are increasingly being installed in cars amid the subprime auto loan boom, with about 2 million vehicles now equipped with the devices, The Times notes.

Read the article. CBS News article 

A question with regards to bankruptcy and negative reporting by creditors. After filing for bankruptcy, the Bankruptcy Automatic Stay kept creditors from collection efforts. The bankruptcy was discharged which then reverted the automatic stay to a permanent discharge.

At that point creditors could not collect on the discharged debts, as well certain requirements they must follow regarding credit reporting. If the debts are discharged and the amounts owed were changed to zero as of the date of filing, doesn't that also mean they couldn't continue reporting me as being late beyond the date I filed since they would have been reporting on being late for owing a "zero balance"?


Answer The previous past due status of the loans would be eliminated with the bankruptcy and the balances should all be reported at $0. All of the items should be reported as being included in bankruptcy and the delinquency clock would stop as of the date of your filing.

You should get a three bureau consolidated credit report or report from all three credit bureaus for free at AnnualCreditReport.com.

Look for any credit reporting agencies that are not reporting the data correctly and file a dispute. The information on how to dispute the item will be on the credit report.

 

The following are excerpts from common misconceptions about Personal Bankruptcy printed in a US News article.

1. People who file for bankruptcy are financially irresponsible. "There's always going to be some kind of abuse, but it's far more likely that people run into very serious personal problems in one of three areas: losing their job, going through a divorce, or suffering a serious illness....

2. Bankruptcy discharges all past debts. Many people file bankruptcy hoping they'll be able to start fresh afterwards, but several types of debt are not discharged by bankruptcy. "If you have domestic support obligations [such as alimony or child support], those can't be removed under any circumstances,...

3. If you spend with abandon right before bankruptcy, you won't have to pay that money back. Michael Greiner, a Warren, Mich.-based bankruptcy lawyer and author of Bankruptcy 101: An Insider's Guide to Filing Bankruptcy by Yourself, Without an Attorney, says some people assume they can charge up their credit cards before filing bankruptcy and then have those debts discharged. "Courts have ruled that that's considered fraud, and debt that's incurred as a result of fraud is not discharged,...

As this article cites, two different studies have shown that it is possible to find relief from a large student loan burden but it is not a given. Like with many issues considered in personal bankruptcy the best first course of action is to sit down with a Bankruptcy Attorney and discuss the debt and your specific circumstances.

Conventional wisdom once held that it was almost impossible for debtors to get off the hook for student loans, even after they declared bankruptcy. That thinking was challenged by a 2012 paper in the American Bankruptcy Law Journal that showed that a high percentage of those who sought a release from their student debt were successful. A decision handed down last month in U.S. District Court in Alabama shows that success rates aside, the standards for winning a discharge (legalese for having your loan obligation canceled) are plenty high.

In the Alabama case (subscription required), the U.S. Department of Education sought to overturn a bankruptcy court's decision to discharge $82,000 in student loans made to a former Auburn University sociology major currently working in business development at a staffing company. In its appeal, the government argued that the lower court erred in determining that the debtor met the standard of "undue hardship" needed to discharge student loans.

For the most part, bankruptcy courts have adopted something called the Brunner test for such cases, requiring a debtor to meet three requirements: The student loans must prevent her from maintaining a "minimal" standard of living, she needs to demonstrate a good-faith effort to maximize income and limit expenses, and she must show that her hardship is likely to continue for a "significant portion of the repayment period."

Read the rest of the article on Bloomberg