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Most of my Chapter 7 bankruptcy clients have a lot of credit card debt that was accumulated over time. That debt may have come from making purchases, incurring services charges and interest, as well as taking cash advances  on credit card. While most of credit card debts are dischargeable in bankruptcy, credit card cash advances may represent a significant problem for potential bankruptcy filer.

According to the Bankruptcy Code, any cash advance, or combination of cash advances from one lender, totaling more than 5, obtained within 70 days of the bankruptcy filing date is presumed to be non-dischargeable. This particular provision is included in Section 523(a)(2)(C)(i)(II). The dollar amount of the cash advance, changes every three years.

This provision was included in the Bankruptcy Code because the Congress was concerned that consumers, who obtained significant cash advances relatively close to time they filed for bankruptcy, knew or should have known that they would be seeking bankruptcy relief, and should not be able to eliminate such debts. Another reason for that provision was to prevent consumers from taking cash advances immediately prior to a bankruptcy filing.

However, in terms of procedural issues associated with cash advances taken out with 70 days prior to the filing, in order to have the court declare that the debt is non-dischargeable, the creditor must file objections in the bankruptcy court. Specifically, the creditor must file an adversary proceeding. Since there are filing fees and other expenses associated with such filings, if the amount of the cash advance is not particularly large, most creditors will not bother filing an adversarial proceeding.

However, since a cash advance may result in an adversary proceeding, I always ask my clients about them and, in appropriate situation, may ask the client to postpone the bankruptcy filing until after the expiration of the 70 day period.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

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The Wall Street Journal reports on a new movement in collection agencies to get people to pay for debts they do not owe!  This is not a case of the collection agency having bad data, a common problem.  In this case their data is usually good.  They know that money was owed by someone who died; the deceased did not leave enough money in their estate to pay the debt; and the person they are dunning has no legal obligation to pay it.

Until recently that would have been the end of it (and medical creditors are still letting these debts go).  But now, a subset of collection agencies has offered creditors (usually credit card companies) the chance to recover something from the relatives of the deceased debtor, even though they know that relatives have no legal obligation to pay unless they had cosigned on the account.

How do they convince people to pay these debts they do not owe? One trick is to lie and tell the wife, husband, son or daughter of the deceased that they are responsible for their loved one’s debt.  Many people, not knowing any better and often still in grief, send a check.  Often it is a check they cannot afford to send.

Another technique is harassment, constant calling, which often exceed limits set by the Fair Debt Collection Practices Act.  (For more on FDCPA see our main article on Fair Debt Collection Practices.

A third tactic they use is to play on emotions.  The collector admits that the relative has no obligation to pay, but plays on their feelings for their loved one.  As one victim put it, she paid her husband’s bill because she “…didn’t want his name dragged through the mud like some kind of deadbeat.”

Seniors carry more unsecured debt these days.  According to one survey, people over 75, carried an average of ,200 in credit card debt in 2010, up from three times from 2008.

What to do if this happens to you:  The rule is that if your name is not on the debt, then the deceased’s estate is responsible for paying.  If the debt is secured (like a mortgage or an auto loan) the creditor can repossess that. If there is any money in the estate then the creditor (usually a credit card or a hospital) can file in court for a share of that, but money left to relatives is usually unavailable for debts.

If you are a relative and they come after you, then you should immediately send them a letter like the one shown here Debt Collection Cease and Desist Letter , by registered mail, return receipt requested, with the following last sentence: “I do not owe this debt and you know it.  Any further contact by you will constitute harassment.”

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The Wall Street Journal reports that Ocwen financial, the largest subprime loan servicing organization (servicing about one-fifth of all subprime loans in the U.S.) has hired a team of “social psychologists” to help its collectors figure out the best thing to say to each borrower to get them to make more payments on their loan.

These psychologists have prepared scripts for the collection agents (most of whom are in India and Uruguay).  They have also created software that analyzes what borrowers say, and makes suggestions for responses to be used by collection agents.

Some people think this helps get more money out of borrowers, but others are skeptical.  I agree with a comment from a mortgage industry insider who says that “…the most important factor in getting a borrower back on track is whether the borrower has the capacity to make the loan payments.”

In other words, the vast majority of borrowers make their mortgage and loan payments if they can.  When they stop it’s usually because there has been a loss of income, as with a lost job, or unexpected bills, often due to medical problems.

When people cannot make payments, some adjustment to the terms of the loan, like a modification of the interest rate, is the first thing that should be looked at.  If that does not reduce payments to a level that the borrower can afford, then other actions should be explored including bankruptcy.

One of the underused solutions for keeping people in their homes.  Bankruptcy is very effective if you have a lot of credit card debt that can be wiped out, leaving more money for mortgage payments.  Get more information in our previous post: Filing Bankruptcy Could be Your Best Option

If there is no way that you can afford the mortgage, even with a bankruptcy, then you should try to avoid the pain of foreclosure with a “short sale” or “deed in lieu of payment.”

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The Consumer Financial Protection Bureau (CFPB) is now helping consumers resolve complaints. They are now handling mortgage and credit card complaints but they have plans to handle other types of complaint as well.

In its first three months of taking credit card complaints, the CFPB received more than 5,000.  The top three problems were billing disputes,  disputes about interest rates and issues around identity fraud.  84% were sent to the credit card company (the rest were incomplete or the complainant did not want it sent to the company).  The credit card issuers claim they have resolved 74% of the complaints they received.

This could be an easy way to get your problems resolved.  The creditor is going to be more careful with a complaint that comes in from the CFPB than one from a lone consumer, I bet.  And the CFPB is now taking mortgage complaints as well (that should bring in a flood of business).

You have to go online to file.  The form they have seems easy to use.  Click here to the Consumer Financial Protection Bureau.

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The FTC (Federal Trade Commission) has received a record number of complaints about debt collection so far this year, 164,361.  A large number of these are caused by bad behavior by debt collectors.  Companies (or lawyers) who do debt collection as a business are regulated very closely by the Fair Debt Collection Practices Act, which tells them what they must do, and not do, when trying to collect a debt.   (They cannot call at odd hours, and they cannot tell you that they will take you to court unless they actually intend to do that, for example).  Unfortunately it is common for them to ignore these restrictions.  If you have debt collectors pursuing you, check out the rules here in our main article Fair Debt Collection Practices.

Do not waste time with debt collectors.

My advice has always been that you should not deal with debt collectors.  It is a waste of time.  All they do is hound you for every nickel they can get.  The good news is that you do not have to deal with them.  If you send them a letter like the one you will find here: Debt Collection Cease and Desist Letter , they have to leave you alone except to notify you of a court date.

The letter we drafted ends with a sentence saying that you will deal only with the original creditor.  If the debt is legit, then that is what you should say.  But if it is not, you should say “This debt is under dispute.”  If you want to explain why, that is fine, but they will probably ignore you.

There are many ways to deal with debts, including debt management plans and bankruptcy, and things you can do to straighten out your credit when it has an incorrect entry .  But dealing with a debt collector should not be on your list.

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Recently we wrote about how debt collectors convince people to pay the debts of dead relatives — debts for which they have no responsibility: Debt collector scams: new lows to take your money.  Now, according to the Wall Street Journal, they have found a way to get you to pay debts that are beyond the statute of limitations.

Every state has some limit on the length of time, ranging from three to ten years from the last loan payment, during which debts can still be collected under the law.  Once your debt has passed this time limit, creditors have no legal recourse, and they write off the debt.  But some debt collectors buy this debt and work with a bank to tie a credit card to your making payments.

It’s hard to get by in life without a credit card, and if you have had debt problems you might not be able to get one.  So it may be tempting to be told that if you make a payment on an old debt, you would be eligible for a credit card.

The problem is that once you make a payment on the old debt, the statute of limitations starts running all over again and they can reinstate collection efforts on the entire amount!  They may even set you up for an automatic payment plan with money being charged to your account every month.

So, you get a low limit, high interest, high fee credit card and open up a while new collection campaign on debts that would be past the statute of limitations.  You could have forgotten about them!

If you’re in this situation, look first at a debit card or a prepaid credit card. See our main article on Credit Card Types.

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Suze Orman claims that 70 million people are unbanked or “underbanked,” and they need access to the convenience of a prepaid debit card to make purchases.  So she has come up with a new prepaid debit card that she claims is lower cost than the others, and is the only card that will report activity to one of the Credit Reporting Agencies, Transunion.  She hopes (but does not promise) that this may improve your credit rating.

I agree that a debit card can be very useful for people who cannot get a credit card, but if you can get a checking account, you can probably get a regular debit card free (or close to it) from your bank.  The main advantage is that all your deposits (paychecks included) are automatically available for use with the card.  There is no need to go through the hassle and fees of a prepaid card which requires special deposits; has many fees, and requires you to deliver cash to selected retail outlets before you can use it.

If you cannot get a debit card from a standard checking account then a prepaid debit card may be worth checking out, but you can do better than the Orman card.  Fees include from .00 to .95 every time you make deposits (only at stores that take Western Union or Moneygram payments).  There is also a monthly fee and a fee for any withdrawals from an ATM.  That ain’t cheap!

The American Express prepaid card appears to be a better deal.  It has no monthly maintenance fee. They charge for ATM withdrawals after your first free one each month, and depositing money at a retail location (they say they have 50,000 available) incurs the same approximately .95 charge as does the Orman Card.

There is another way to do this:  Use an American Express Gift Card. But you may need some help.  Someone you know could order a “Gift Card” for you via the previous link.  It works like a prepaid debit card, except you cannot withdraw money from an ATM.  Depending on how you do it, it could be cheaper.

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My advice on debt collectors is not to do business with them.  They are not to be trusted.  Send them a “cease and desist” letter  and report them to the The Federal Trade Commission (FTC) if they contact you again.

The FTC got more than 165,000 complaints against debt collectors last year and they have begun to take some action.  According to the Wall Street Journal, they fined Acceptance Capital Corporation .5 million for coercing borrowers into paying debts they did not owe!

Acceptance Capital is one of those companies that buys old debt for a few pennies on the dollar and starts trying to collect it.  Much of this debt it turns out is beyond the statute of limitations (which varies by state, ranging from two to ten years), which means that the borrower no longer owes it.  Courts will not enforce it.

Acceptance Capital did not, it seems, let the borrowers know that the debt was beyond the statute of limitations and they could not enforce it in court.  Not only that, but they did not tell borrowers that if they made a payment the clock would start ticking again, allowing collectors to use the courts.

Do not pay debts you do not owe.  Do not deal with debt collectors.  If you want to pay your debts go to the original creditor or do a debt management plan with a Consumer Credit Counseling Service.

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Also, one of the main issues of many newcomers is organizing the process of studying and allotting time for it. Deciding to go through a course on your own, you bear risk not to go through it at all, because you will always find something more important to do at the moment. It’s an ordinary situation. Something in the course can be difficult for understanding and this may remove your desire to continue study. But if you use the support of the professionals you will not face such difficulties.

It’s necessary to decide whether you want to take an individual training or group course. It’s better to choose individual training if you don’t have an opportunity to visit a group course or you are acquainted with trading on the financial market but still want to raise your qualification level. In this case curriculum is worked out individually for the learner. Studying individually, the learner can devote as much time for studying a certain aspect of Forex trading as necessary. But if you take a group course it’s also possible to learn how to earn on Forex rates changes. Doing a group course, you meet a lot of people who share your professional interests and even can teach you, sharing their experience if they have it. This can be very useful for your future career on the Forex market.

The introduction of any great forex education course will show you that the concept of forex trading is quite simple and any one can easily grasp it. The trader just has to sell his base currency (first currency) and then he has to buy another foreign currency (second currency) as the substitute for the base currency. Now the trader will sell the second currency in the market when there is a favorable change in the value of the second currency and he will buy back the first currency pair again as a substitute for the second currency. And once, you are able to create good amount of profit on your trades, you can close your forex trade with reasonable amount of profit.

As the pricing of the forex currencies keep on changing, the forex investor will have the opportunity to trade in the market more than one time in a day. Almost all forex training courses educate young forex traders to wait until the price indicators of the forex currencies start turning into their favor because only than you will be able to increase your chances to win a game of currency trading.

Almost all forex trading account will give you an instant access to every type of currency pricing charts, forex quotes and analytical data. A vast majority of forex traders take the help of forex software along with their forex trading account so that they can easily analyze the entire forex trading data. The basic aim of using such type of automatic software is to produce forex pricing indicators that are generally based on the trends that are identified in the forex trading data. And a good forex trading education course will help you to understand the proper utilization of such type of forex trading software.

It is really not an easy task for anyone to anticipate the particular forex currency pricing in the currency trading market but there are certain elements that can help you to understand the whole mechanism. A trader can easily learn about these important elements with the help of his currency trading brokers who will provide useful tutorials and eBooks to him so that he can easily understand all the factors that can bring change in the value of the forex currency.