The Fair Debt Collection Practices Act is a federal statute that provides protection for consumers against debt collectors that are abusive.  If you have been harassed or abused by a debt collector, please call us to help you protect your rights.

In recent years, the number of attorneys who practice in the consumer protection area have increased dramatically.  A recent Star Tribune article describes the increase in these types of claims.  Unfortunately, the article glosses over the reason the cases have increased: debt collectors continue to abuse consumers.

Read the article, and call us if you think you may want to explore a claim.

Despite sweeping financial reforms passed by Congress a few weeks ago, there remain loopholes in the new laws that spell continued danger for consumers. Specifically, the new laws still allow some predatory lenders to roam free.

While the reforms put lending restrictions on most major financial institutions, car dealers and community banks escaped the grasp of the new federal regulations. This oversight poses a serious threat to many consumers, as these two industries are annually involved in billions of dollars in loans to tens of millions of people.

Car Dealers

Most folks don’t pay for automobiles with cash. As a result, auto dealers are seasoned veterans of the loan industry. With high stakes in the financial reform package, sources indicate that the auto industry lobbied hard to escape the regulations. Some of their key gains include:

• We Didn’t Do it: One of the most criticized loopholes of the financial reform bill was the “carve out” won by auto dealers. Car dealers escaped further regulation because they convinced legislators that they were not responsible for the recent economic meltdown.
• Power in Numbers: How do car dealers have so much lobbying muscle? Mostly because there are more than 18,000 dealers nationwide. And the financial institutions who aid in most car loans were glad to assist their friends in the car industry, as well.
• More Escapees: In addition to the exemption for car dealers, companies who sell boats, motorcycles, and RVs are also not governed by the new legislation.

Finally, while 90 percent of car loans are financed through standard financial institutions, like banks, car dealers serve as brokers about 80 percent of the time. So, according to consumer groups, the car dealer’s role as a broker leaves room for them to push loans with unfairly high interest rates. According to some reports, car dealers are more likely to charge excessively high interest rates to minorities and lower-income borrowers.

Community Banks

In order to avoid further regulation, community banks successfully argued that they are much different entities than larger financial institutions. Typically, small community banks charge smaller fees than their larger counterparts and are more dependent on aid of small, local businesses.

As a result of lobbying efforts, community banks are now exempt from paying the same Federal Deposit Insurance premiums as large banks. In addition, all banks with assets under $10 billion are not required to follow new lending regulations.

Still, the Independent Community Banks of America recognize the potential for loan scams, and they warn that consumers should always be wary of loans that sound too good to be true. If you are unsure of whether or not you’re the victim of a financial scam, don’t hesitate to contact a bankruptcy attorney.

Did you know that a common contributing factor to bankruptcy filings is serious illness or injury? In fact, many Americans who file for bankruptcy to escape overwhelming debt do so because of medical bills they can’t afford and didn’t see coming.

It makes sense, then, to review some key ways to spend a little money now to avoid greater expenses in the future. Here’s a look at how you can protect yourself and your family, according to a recent article from U.S. News & World Report.

When to Buy New

• Cribs and children’s furniture: Even items that seem to be in good shape can be a health risk, as safety recalls on baby items are fairly common. Rather than scrambling for an item’s history, opt for a new crib with a proven safety record.
• Car seats: While nobody likes to think about getting in a serious car accident, they do happen and can be devastating if you and your loved ones aren’t prepared. Because safety standards are improved and changed commonly, opt for a new seat for your child. Also: consider that some damaged seats may look okay. Better not to find out the hard way.
• Bike helmets: Did you know that bike helmets are built to protect the head for only one crash? A used helmet may not provide the protection you think you're getting.
• Car tires: Like many of the items on this list, tires don’t come with an accident history and might not show visible signs of serious damage. But remember: the cost of new tires is probably less than the cost of the damage that could be caused by a serious accident. An ounce of prevention here is well worth the price.
• Computer software: While buying secondhand may seem like the cheapest way to go, it could end up being a total waste of money. Many kinds of software come with serial numbers that are registered with the company – after one registration, they can’t be used again and so would be worthless. Better to buy new software for yourself and avoid the risk of throwing away money.
• Mattresses and bedding: The cost (in dollars, hours, health and frustration) of dealing with bed bugs, mold, mites, bacteria or anything else that might linger on a secondhand mattress is rarely worth the savings. And don’t think these concerns are memories of a distant past, either: even mainstream retailers have had trouble with mattress-loving critters in recent weeks.
• Shoes: If you aren’t repelled by the idea of wearing someone else’s shoes, they may seem like an intriguing bargain. But be careful: used shoes tend to be molded to someone’s feet other than your own, and their support structures can be worn out. If you plan to be on your feet a lot, you may avoid serious back problems by buying new.

The Department of Labor’s latest report on the unemployment situation in the U.S. shows little change from a week earlier, indicating that significant recovery in the jobs market has not yet taken hold. Here’s a look at some of the latest numbers (for the week ending July 17, published at the end of last week):

• Seasonally adjusted initial unemployment claims increased 37,000 from the previous week, to 464,000, bringing the four-week floating average up 1,250 to 456,000.
• The advance seasonally adjusted insured unemployment rate was 3.5 percent, down slightly from the previous week’s 3.7 percent.
• The seasonally adjusted insured unemployment number was 4,487,000 for the week ending July 10, down from the previous week’s 4,710,000.

Week to week, the changes often aren’t very significant and don’t always reflect larger trends; however, last week’s numbers provide a somewhat hopeful picture when compared with figures gathered a year ago:

• Initial unemployment claims under state programs (unadjusted) totaled 498,022 for the week ending July 17; in 2009, the same week saw 585,575 claims.
• The number of people claiming insured unemployment benefits in state programs came to 4,581,351 in the most recent week, which marked a 186,572 person increase from the week prior, but was down from 6,256,960 during the same period in 2009.

These data, like many of the job loss information collected this year, show that recovery in the jobs market continues to be slow and inconsistent. While the national unemployment rate is down slightly from its 10+ percent high, it’s still well above where it needs to be and bankruptcy filing rates continue to remain high.

Unemployment Benefit Extension

Some more-or-less good news for unemployed Americans is that Congress and the White House have reportedly passed legislation that will extend unemployment benefits through November of this year.

The measure, which had difficulty getting through Congress because of Republican opposition, means that those whose benefits have expired or are about to will receive a few more weeks of government support.

While the nation’s unemployment rate clearly indicates that jobless citizens need help, many GOP legislators were apparently hesitant to pass the bill because of the affect it will have on the nation’s deficit.

So how will the extended benefits work? It seems that distribution of the funds will vary by state, so check out local resources to see what steps you need to take if you’re eligible for funding from the extended benefits.

After a bankruptcy filing, many people are reluctant to wade back into the world of credit, often because too much credit allowed them to build up the kind of debt that pushed them into filing for bankruptcy in the first place.

But, as many financial analysts note, rebuilding credit is an important part of recovering from personal bankruptcy. Here’s an outline of why and how to know if you’re ready to apply for a new credit card. For a more detailed look, check out this article from BankRate.com.

Credit after Bankruptcy?

Put simply, you need credit because in contemporary American life, your credit history plays a major role. Specifically:

• Housing: Many landlords check a person’s credit report before determining whether to rent to her. Theoretically, because a credit report includes a history of payment of various debts, it can give a landlord an idea of what kind of renter you’ll be (i.e. whether or not you’ll pay rent on time).
• Employment: It’s also common for employers to check the credit report of a potential employee. Some lawmakers are trying to see this practice changed, but for now you can expect a job application to include someone peeking at your credit report.
• Loans: This is perhaps the most important reason to reestablish credit. Whenever you apply for a loan (whether it’s a credit card, a mortgage or something between), the lender will check your credit. The terms of your loan will generally be based in large part on your credit score and the information in your credit report. Those with a strong history of paying loans on time are decent risks for lenders and so can be offered lower interest rates. And the reverse is also true.

But having no credit history at all means that potential landlords, employers or lenders would have no way to gauge what kind of risk you’d be to them, and so might deny you whatever it is you want.

When to Apply for a Credit Card

This depends largely on you and your financial habits. The BankRate.com article suggests considering these factors:

• How you’ll use it: The best way to use a credit card is to use it like cash. In other words, only buy with a card what you could afford with cash. That way, you can pay your bill in full at the end of each month. Cards grant you certain conveniences (like online shopping), not a license to spend.
• Why you filed for bankruptcy: If something unexpected like a divorce, death, illness or job loss led you to file, consider saving up about two months’ expenses before applying for a card. That way, if another emergency crops up, you won’t be tempted to run up a balance on your card.
• What card you’ll get: There are a lot of credit cards out there. Do plenty of research and find one that suits your needs. And if you can’t qualify for anything but cards with outlandish fees, wait a bit longer and try again.

Anyone struggling with debt or trying to rebuild after a bankruptcy filing probably knows how challenging credit card bills can be: though the plastic rectangles themselves may be highly convenient, the monthly payments we make on them often are not.

And, with the economy tighter than the lid on a pickle jar, posts like this one are useful. It outlines some ways to minimize the amount you owe on your credit card without significantly altering your lifestyle (which, for many of us, may be impossible at this juncture).

Steps Toward Less Credit Card Debt

• Pay earlier than you have to: If you have a revolving balance on your credit card (meaning that you don’t pay the full amount you owe each month), interest is charged to that amount every day, so that the longer you wait to pay your bill, the more interest accrues. If you can pay even a few days before the due date, you can save yourself a little bit each month. And, if you know you have a revolving balance and have online payments set up, you don’t have to wait until you receive a bill to make a payment—if you get unexpected cash in the middle of the month, you can funnel it toward your credit card debt before it disappears into groceries.
• Pay more than you have to: The Credit CARD Act requires credit card bills to indicate how long it will take you to pay off your entire debt by making only minimum payments, which is a nice feature. It reminds us that the minimum payment is not designed to ease our monthly burdens—it’s designed to make money for the credit card companies and stretch our payments out over a long period, over which we’ll pay plenty of interest. Whenever possible, send more than the minimum payment. Ideally, aim for paying your card in full each month.
• Double check your bill: Next time you receive a bill, review all your purchases, especially regular monthly subscriptions and memberships. If you could conceivably do without any of them, cancel and save some money each month. Remember that most libraries carry lots of magazines and a lot of content is available online. Plus, memberships are designed to make companies a profit—so if you aren’t absolutely dependent on yours, snip them out.
• Leave home without it: While it’s easy to justify carrying a credit card in case an “emergency” happens, having the card with you at all times can be dangerous financially. Try keeping it at home for a week and noting how different your buying habits are. If nothing else, this exercise should open your eyes to when and how you tend to use your card—and how you could limit or eliminate unnecessary purchases.
• Rethink outings with groups: Eating out can get expensive—especially if you frequently put the group’s meal on your card and everyone gives you cash. It’s far too easy to use that cash for something other than paying your credit card bill, and meanwhile you could be paying interest for everyone’s dinner. Suggest a night in every once in a while, or arm yourself with cash.