Bankruptcy is designed to be a last-resort option for people with serious financial problems. When someone files bankruptcy, her debts are discharged, which means that they are no longer legally owed. Apparently, however, Capital One didn’t get the memo on how bankruptcy works. A auditor appointed by a bankruptcy court in Massachusetts found that Capital One pursued over 15,000 claims for debts that had been discharged in bankruptcy. Yup, our good friends at Capital One seem to have made a practice of trying to collect debts that they have no legal right to collect. Capital One, of course,...
The L.A. Times is currently running an investigative series on so-called Buy-Here Pay-Here auto dealerships. The first installment describes the basic business model used by these businesses and identifies a number of the pitfalls of buying a vehicle from them. A buy-here pay-here dealership is, as the name suggests, a dealership that finances the car loans itself, rather than using banks or finance companies. They market to people with low-income and bad credit that can’t qualify for conventional financing. In return for agreeing to finance borrowers that don’t have access to mainstream...
1. If possible, negotiate a lump sum settlement. The best way to get a good deal from a debt collector is to offer a lump sum settlement. Debt collectors usually have blanket authority to settle debts for between 40% and 80% of the full balance if you pay the settlement in a one-time payment. If you’re unable to afford a lump sum payment, the debt collector usually has the authority to agree to smaller monthly payments, often over a couple of years. But in exchange for the flexibility of a low monthly payment, you’re probably going to have to pay the full account balance. 2. The...
Reader’s Digest posted an article last week titled 13 Things a Debt Collector Won’t Tell You. It’s a fascinating peek inside the world of debt collection and it gives some insight into how debt collectors are trained. Here are some of the most revealing, along with my comments: Debt collectors are trained that all consumers are compulsive liars. Let’s face it, collecting debt is an unpleasant job, especially if you have a conscience. It’s much easier to aggressively push for payment when your training demonizes all consumers as irresponsible liars. Debt collectors...
1. Up to $1,000 in statutory damages. If you bring a successful FDCPA case, the court will award you up to $1,000 in statutory damages. These damages are provided by law as a penalty against a debt collector that violated the FDCPA and you don’t have to prove that you suffered any actual harm to be awarded statutory damages. Although there are rare cases where a court awards a consumer less than $1,000, in most cases the consumer is awarded the full $1,000. 2. Provable actual damages. If a debt collector’s abuse has caused you to cry or lose sleep or if the collector’s harassment...
