Fort Lauderdale Bankruptcy Lawyer Blog

When your phone stops ringing off the hook, that is a huge relief! What does it mean though? The truthful answer is "I don't know." It's impossible to know why creditors stop calling with any degree of accuracy. Sometimes they go on to other debts and start calling those people - a fresh list so to speak. Sometimes, they stop calling because they are ready to file a lawsuit and the case has been sent to their attorney. Suing you is not an abusive tactic although it might feel like one. Creditors have the right to go to court to try and collect money that is owed to them.

You shouldn't be terrified of a lawsuit. A lawsuit is nothing more than a legal process by which the creditor has to prove you owe them money and that they are entitled to collect it. You have rights in this legal process also. You have to the right to defend yourself if you don't think you owe the money. Often I see lawsuits filed that don't comply with the local evidence rules for filing lawsuits. Creditors often choose lawsuits as a last resort because of the expenses involved. Defending a lawsuit is expensive also. If you try to do it yourself, you almost always get into trouble because the credit company has a lawyer and they know the rules of the court better than you may. When more than one credit card company sues you, the option of defending lawsuits gets expensive and there's no guarantee that you will win. Ignoring a lawsuit is NEVER a good option. That always results in a final judgment against you that the creditor can enforce in other ways.

A better option is usually (but not always) to file for bankruptcy protection under Chapter 7 or Chapter 13 and start over again. We can help you look through all your options and decide on what's best for you in your particular situation.

When you owe money to a creditor, their options for collecting are usually pretty limited unless they file a lawsuit. They often start by blowing up your telephone with several calls a day. They fill up your mailbox with letters from their collection department, their attorneys and debt collection companies. More aggressive creditors will call you at work -- even though you tell them to stop and they have also been reported to call neighbors and family members. I am often asked if there are laws against these tactics and the answer is yes.

The Fair Credit Collection Practices Act (FDCPA), prohibits all of these things that the creditors are doing. The FDCPA prohibits contact with family members (except spouses). The law prohibits credit collectors from calling you at inconvenient times - defined as before 8:00 a.m. or after 9:00 p.m. FDCPA also bars repetitive phone calls or the use of bad words or abusive language. The creditor can't threaten to file a lawsuit when there is no intent to do so. Debt collectors also cannot continue to contact you after you have told them that you are represented by a lawyer.

FDCPA sounds really good doesn't it? So why do creditors keep calling and harassing you after you've asked them to stop? Or why do they call you fifty times a day when they know that they can't? Because the law doesn't offer much help when it comes to enforcing its' provisions. If a creditor violates the FDCPA, you can bring a lawsuit but the damages are capped at $1,000. Bringing an individual lawsuit is very expensive and these cases are often difficult to prove. Most of the cases brought under this Act are class action lawsuits (suing on behalf of groups of people with the similar issue) but these cases are also few and far in between because of the legal hurdles.

A stronger deterrent for creditors are the protections offered through the bankruptcy code. Bankruptcy could also be a way for you to completely eliminate your debt or restructure the repayment into something you can afford.

Another common threat by creditors trying to collect money is "We are going to take your house and your car!" I even had one person tell me that they threatened to take their pet!

Rest assured that a creditor cannot just come over to your house and take any property from you without legal authority. Simply owing them money is not "legal authority" that will allow this. They must first file a lawsuit and get a court order allowing them to collect the money legally and involuntarily from you. That means that they have to go through the expense of hiring a lawyer and filing a lawsuit. Before going through the expense of a lawsuit, they usually send letters and phone calls for months trying to collect without having to spend the money.

Don't let creditors steal your peace of mind with their threats. You have many options available to you and you also have legal rights. Call or email our office today for a free consultation and find out how existing laws can help you stop the creditor abuse.

Creditors have often driven people into our office by threatening to arrest them for not paying. I'm always shocked when I hear this because it's such a clear violation of credit collection laws and creditors know this. However, we also have a huge Latin population in South Florida and in their native countries, I am told that they can be jailed for not paying debts. No doubt that this tactic has worked on many people who have fled their country because of such allowable abuse. This is not the case in Florida or the United States.

So let's clearly state it here: You cannot be arrested and put in jail for a civil debt owed to a credit card company or a bank.

Normally, the only time you can be arrested is when you break a criminal law or if you do not obey an order of the court in a family matter (these are called contempt orders). If you fail to follow the order of a court, you are being jailed for contempt most of the time - not for owing money. You must obey court orders if they tell you to pay money to someone. If you can't pay, then you must talk to the court and work something out. You just can't ignore court orders.

With that said, owing money to a person or or a credit card company is not a crime and it's not something that you can be put in jail for. The United States does not have "debtors' prisons." A creditor can take your money through garnishment or other involuntary measures only after they have gone through the legal process of filing a lawsuit and obtaining a final judgment against you.

When you owe money that you can't pay, it's very stressful. Most people feel guilty about it and don't know how to fix the situation. Creditors don't help the situation by calling 50 times a day and using abusive tactics to scare people. The majority of times, there really is no money to pay a creditor with and their aggressive and abusive statements only add more stress.

A question that often comes up in bankruptcy consultations is "What can a creditor do to me for not paying?" We've been told many times that creditors are threatening to throw people in jail, take their homes next week, garnish their wages, take away their birthdays (okay...I made up the last one).

The three most common things that a creditor in Florida does is garnish your wages through your employer, freeze and garnish your bank accounts, and/or take your car in order to sell it and pay down the debt. All of these actions are usually involuntary on your part, and they require a final judgment from a court. To get a final judgment, a creditor must first file a lawsuit. If a creditor doesn't have a final judgment, then he really can't do much more than call you, send you letters and try to get you to voluntarily pay your debt.

Later in this blog, we'll talk about those three things in a little more detail.

Often people considering bankruptcy think they can "keep that one credit card that is almost paid off" when filing bankruptcy. They think it will help them rebuild credit faster, or they're just in love with their American Express card and just wouldn't dream of leaving home without it!

Unfortunately, you cannot pick and choose which debts to list in your bankruptcy petition. All of your debts, including credit cards and debts you owe to friends and family members (you can always pay friends and family back if you choose) must be listed on your petition.

When you sign a bankruptcy petition, you are certifying under penalty of perjury that all of your assets and debts are listed. During the 341 meeting with the trustee (also known as the "meeting of creditors"), the trustee will also ask you (under oath again) if you have listed all your debts on your petition.

As I have explained to many clients that are hopelessly enamored of a particular card (Macy's comes to mind), it really doesn't do any good to leave it off the petition or not tell your bankruptcy attorney about it. The majority of credit card companies routinely monitor the bankruptcy filings and credit bureaus for changes to your credit standing. If they see a bankruptcy filing, they will automatically close your account whether it's listed or not. Better to wipe the debt out and start all over again since you're probably not going to keep the card anyway.

We are happy to offer a free consultation in our Coral Springs or Davie location to discuss your financial picture and how quickly you can rebuild your credit again after a Chapter 7 or Chapter 13 bankruptcy. Most people have credit card offers in the mail again within a month or two of their case closing. A lot quicker than they ever thought! Find out the truth about bankruptcy today!

You may be surprised to learn that filing bankruptcy may be the fastest way to repair your credit and get back on your feet.

While you owe money to the credit card companies and are not paying, your delinquency is reported to the credit bureau. Every time your credit card debt is sold, it's usually reported again by the debt buyer or the collection agency. All of these entries remain on your credit report for 7 years from the date of entry. Many times, debt collectors will alter a number on the account number (never on purpose, I'm sure) and report the debt again a couple of years later. Every time this happens, it will be on your credit report for 7 additional years. It could take you significantly more than 10 years to clean that up or qualify for a mortgage.

A Chapter 7 bankruptcy remains on your credit report for 10 years from the day of filing. But that doesn't mean that you won't have credit for 10 years or that you have to wait that long to buy a house. You will get credit card offers in the mail within a couple of months after your case closes. Two years after you receive your order of discharge, you also may qualify for FHA loans again.

Don't listen to what others say about bankrutpcy and keep yourself from enjoying the pease of mind that being debt free brings. You probably don't have credit now and really have nothing to lose except the creditor phone calls and harassment. In fact, you will probably recover much quicker.

We offer free consultations where you can get all the facts about how a bankruptcy might be able to help you enjoy life again. Call or email us today!

The most common question I am asked by those that are interested in filing a Chapter 7 bankruptcy is "How soon will it take to rebuild my credit score after filing bankruptcy?" Most are surprised to learn that they will beging to receive credit offers within months of receiving the order discharging their debts. I always tell them that with a word of caution though.

There are many companies who charge outrageous fees for their credit cards. I saw one offer where they were giving the person a $250 credit line. A careful reading of the fine print, however, showed that there was a hefty fee for "processing" the card, a large annual fee, and a monthly recurring charge. All told, these fees and charges totaled just under the $250 credit limit that was being offered. Their first statement after receiving the card was already at the credit limit! Stay away from those offers!

Most of the major banks offer secured credit cards to those wishing to establish credit. These banks operate in a straightforward manner. You open up a savings account with the bank and they issue a credit card equal to the amount of money you have on deposit. Your money earns interest while you are rebuilding your credit. Those are the type of cards that I reccommend to my clients and those should be the only type of cards that you should consider. Check my website for a list of banks that offer secured cards and beware of the mail.