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06

Feb 2016

Delbert Services Can’t Hide Behind Indian Tribe

Posted by / in Weekly Posts /

Delbert Services Can’t Hide Behind Indian Tribe law–4th Circuit

Delbert Services is a debt collector, collecting bad debts for the internet payday lender, Western Sky.

Western Sky has been shut down for a couple years.  Their “payday loans violated a host of state and federal lending laws.”   Delbert Services has rocked along, collecting those ?illegal? loans.

Delbert Services got sued for illegal debt collecting by James Hayes and Debera Grant, in Richmond, Virginia. Delbert able persuaded a Judge in Richmond to send the case to arbitration.  (Arbitration, among other things, forfeits the right to a jury trial, found in the Seventh Amendment to the constitution.  It also stops “class actions” where two or three people sue on behalf of everyone who has been scammed in the same way.)  

Hayes and Grant appealed.

The Fourth Circuit, on February 2, 2016, threw out the arbitration.  That allowed Hayes and Grant and the rest to go ahead, for the class and in front of a jury, in Richmond.

The Fourth Circuit said arbitration is almost always allowed–but not here.  Why?  The arbitration agreement said the only law that applied was the “laws of the Cheyenne River Sioux Tribal Nation.”  Three Judges of the Fourth Circuit said that was B.S.  Western Sky (and Delbert Services) “may not flatly and categorically renounce the authority of the federal statutes to which it is and must remain subject.”

This goes beyond Virginia

The Fourth Circuit are the big judges between us the the Supreme Court for Maryland, Virginia, West Virginia, North Carolina, and South Carolina. Last fall, a judge in North Carolina protected Western Sky and Delbert, telling Thomas Brown and Monica Johnson that they had to bring their complaints to the Cheyenne River Sioux Tribe.  This new decision should get Thomas Brown and Monica Johnson out of Eagle Butte, SD  (population 619) and back in front of a jury in North Carolina.

This goes beyond Western Sky and Delbert Services

One of my clients, Jim J, had an internet payday loan with an outfit called American Web Loan.  The interest rate on that loan was illegal under Virginia law–and Jim paid it off according to what could have been legally charged.  But a debt collector, Admin Recovery, kept chasing him.

2-6-2016 1-40-29 PM  American Webloans

American Web Loans says they can violate state and Federal laws, because they are only covered by the law of the Oteo-Missouria Indians.

Like Western Sky, American Web Loan hides behind Indian tribe law: the Otoe-Missouria Tribe of Indians.  

I’ve been dragging my feet on whether it made sense for Jim to go after Admin Recovery–and be forced to fight it out in tribal court in Red Rock, OK, population 293.  Now that the Fourth Circuit has come down on our side, we’re going ahead.  

 Seventh Amendment Jury Trial

 Personally, I think the Seventh Amendment is kind of the forgotten amendment in the Bill of Rights.  Every American has a right to trial by jury in Federal court, when more than $20.00 is at stake.  But Congress, and the Supreme Court, has said over and over that businesses can take away that right in the fine print on their consumer agreements. If you could give up your other rights in fine print, we wouldn’t have any rights at all.  It’s time for the elected officials who talk defending the constitution to defend the Seventh Amendment.                                             

 

 

             

 

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28

Jan 2016

Chapter 13 in Virginia–A New Nightmare

Posted by / in Chapter 13, Chapter 13 Bankruptcy, Weekly Posts /

Chapter 13 in Virginia–A New Nightmare

The Bankruptcy Judge in Norfolk just made chapter 13 in Virginia even more dangerous.  And last night one bankruptcy judge in Alexandria hinted that he agrees.

 

Chapter 13 bankrutpcy in Virginia--Tidewater at this court house

The Bankruptcy Judge in Norfolk is in this Federal Courthouse

The issue came up the the case of In re Marlene Evans.  Ms Evans made her bankruptcy payments to the Chapter 13 Trustee for five years.  According to her plan, she had paid about $4500 toward $23,000 in debts, and the rest of it was supposed to be discharged–gone.

Not so fast, said the Chapter 13 Trustee, Clint Stackhouse.  The Trustee said, you paid me, but you are behind with your mortgage payments. And sure enough, Ms Evans admitted she was about ten months behind on the mortgage.

That means, argued the Chapter 13 Trustee, you didn’t keep all your promises–you paid me, but not the mortgage.  And you promised to do both.

The Judge, Stephen St John, agreed.  Even though she had paid what she promised toward the $23,000–mostly credit cards, personal loans and payday loans–they are allowed to start chasing her again, when the bankruptcy was over. Why, because she fell behind with the mortgage payments.

This doesn’t seem fair.

It doesn’t seem fair.  Ms Evans paid what the credit cards were promised–why does she have to pay them again?  Since she admits she’s behind on the mortgage–well, everybody has always agreed that the mortgage company can come after her for that.  And if she can’t work it out, she’ll lose her house.  But why do the credit cards get to hide behind the mortgage company?

And it happens a lot in Chapter 13

People often finish Chapter 13 a few months behind on their mortgage.  That’s because Chapter 13 budgets are very tight.  In Northern Virginia, where the cost of living is real high, they are very, very tight.  So after four years of the Chapter 13 trustee draining every available cent from your budget, towards the end, you may need a $2500 car repair.  And skipping the last couple mortgage payments seems like the only way to do that. Figuring when the Chapter 13 payment is done, then there’s money to catch up the mortgage.

That strategy is now officially a disaster, at least in Tidewater, and maybe in all of Virginia.

The Judges in Alexandria

Last night was the annual dinner of the Bankruptcy Judges and the bankruptcy lawyers.  The Judges got to talk for an hour, and Judge Robert Mayer brought this up.  He didn’t say he agreed (Judges are supposed to tell you what they think–except when you are in court in front of them.) But he did say that “most courts around the country” that have decide this, have all decided the same way.  

UPDATE: Ms Evans Loses Her Appeal

A US District Court Judge in Norfolk, today on January 13, 2017, agreed with the bankruptcy judge. (You can read it here. Evans v Stackhouse.)  It’s now the law in Virginia. If you finish your Chapter 13, and pay the credit cards all your promised, but fell behind on your mortgage, your bankrutpcy is tossed out. The credit cards are allowed to start chasing you all over again.

What’s the lesson? Avoid Chapter 13

Here are some disadvantages of Chapter 13, compared to Chapter 7.  

1.  If your income increases after you start paying, the Chapter 13 trustee will want more.

2.  If you inherit money while you are in Chapter 13,  that money goes to the Chapter 13 trustee.

3. In many cases, the bankruptcy trustee takes your refund.

4. It’s worse on your credit than Chapter 7.

5. Less than half of Chapter 13 filings succeed.

6.  And now, you can complete your payments and still not get a discharge, if you slip behind on your mortgage payments.  

 

hank hildebrand chapter 13 trustee

Tennessee Chapter 13 trustee Hank Hildebrand says Chapter is a “complex, expensive, unproductive system.”

If there’s any way, you want to avoid Chapter 13.   

Hank Hildebrand, Chapter 13 Trustee in the Middle District of Tennessee, and one of the nation’s most frequent speakers on Chapter 13 issues describes Chapter 13 as a “complex, expensive and unproductive system.”  

One more darn thing.

Just had a ruling from the 11th Circuit.  Suppose during the Chapter 13, you are injured in a car accident.   If you go ahead and sue for your injury, without first telling the bankruptcy court, you forfeit your right to sue for that injury.  

Chapter 13 is Anti-family

Client, two years into Chapter 13, asked me today if getting married will affect his Chapter 13 plan.  Well, it might. If the spouse is working, too, the trustee can claim that the increased family income is a substantial, unforeseen change, and ask that the payments be increase.

The members of Congress of the Judiciary Committee, who care about family values, could support a change in the law that blocks the trustee from arguing that.

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24

Jan 2016

Woodbridge Bankruptcy Lawyer 100 Five Star Reviews

Posted by / in Weekly Posts /

Thanks, Woodbridge!  This week brought our one hundredth five star review.

I’m Woodbridge bankruptcy lawyer Robert Weed.  And I’m happy to announce we now have one hundred five star reviews from Woodbridge bankruptcy clients.

I’ve been a bankruptcy lawyer in Northern Virginia since 1993, helping fourteen thousand people get a fresh start in bankruptcy.  (More than any other Manassas or Woodbridge bankruptcy lawyer.)

I’ve had an office in Prince William County for twenty years.  There are three reasons I have happy clients.  The first is, I’m good at what I do. Second, I have great staff. The third is, bankruptcy really works.

Five stars for Woodbridge Bankruptcy lawyer Robert Weed

There are two reasons one hundred Woodbridge bankruptcy clients have given us five stars. I’m good at what I do. And bankruptcy really works.

Are you nervous if bankruptcy really works?

Like most people, you’re wondering if bankruptcy can really help.  That’s natural.  I can tell you nearly everyone feels nervous at the thought.  And much better after they’ve made the plunge.  Listen to these Woodbridge bankruptcy clients.

Vanessa C, in her five star Google review said,  “Anybody going through bankruptcy deals with all kinds of emotions and experience anxiety & fear & worry. Valerie takes the time to listen & is reassuring and walks you through step by step making the whole process so much easier.”  

Susan F left us a five star Google review, “I felt very guilty about going the bankruptcy route but realized I had no other options. The staff, specifically Valerie made everything very easy for me.  I am now glad I made the decision to go through with the bankruptcy.”

Brian gave us five stars and added, “I was extremely nervous as to the thought of going through bankruptcy.  The team at his office makes you feel at ease.”

If you don’t believe your neighbors in Woodbridge, believe Donald Trump

Donald Trump wouldn’t be a billionaire if he hadn’t, “used the chapter laws, the bankruptcy laws to [his] own benefit.” He adds,Came out great … I’m glad I did it. Four times I’ve taken advantage of the laws. . . .I used the laws of the country to my benefit.”  (You can read more in USA Today.)

Several years ago, I calculated that Trump’s fourth business bankruptcy got rid of twice as much debt as all twelve thousand people I had helped put together.  

How About the Supreme Court?  “A new opportunity in life.”

Do you still think bankruptcy is some kind of punishment because you can’t pay your debts.  The official US Courts website says the exact opposite.  The purpose of bankruptcy is to help you.  

A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:

[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.

Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934).

Do you need a new opportunity in life?  That’s what my Woodbridge bankruptcy lawyer office is here for.  

And the Federal Reserve?  “Sharp boost” in your credit score

What’s the number one reason people drag their feet before talking to a bankruptcy lawyer?  For most people, it’s their “credit.”  

Now if your credit score is over 700, bankruptcy will hurt it.  But if slow payments and high debts have dragged your credit down, filing bankrutpcy will help you.   Two different studies by Federal Reserve banks, both came to the same conclusion.  

“The individuals who go bankrupt experience a sharp boost in their credit score after bankruptcy.”  

 That’s from a February 2015 study sponsored by the Federal Reserve Bank of New York.

 “Credit scores start to recover immediately after the bankruptcy filing.”

926.713335634307

“The individuals who go bankrupt experience a sharp boost in their credit score after bankruptcy.”

 That’s according to an August 2014 study sponsored by the Federal Reserve Bank of Philadelphia.  

 Bankruptcy gives you a new start five ways.

1.  Creditors can’t call or bill you.

2.  They can’t take you to court or garnish you.

3.  Your credit score will improve.

4.  You’ll sleep better.

5.  You’ll be smarter.

 Read More Reviews?  See the Smiles

Still wondering?  All together, we have more than seven hundred five star reviews.   You can see them here and here.  When you read the reviews, you can see the smiles.  

I love being a Woodbridge bankruptcy lawyer, because I can help almost everyone I see.”

If you want to make an appointment, use our Get Started Now email box. Or call 703-335-7793, our main switchboard.  Contact us today and sleep better tonight.

 

 

 

                                                                                                                                                                                                                                                               

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13

Jan 2016

Keeping Your Car Financed with Ford Motor Credit

Posted by / in After Bankruptcy /

Ford Credit Has the Right to Pick Up You Car When you File Bankruptcy, Even If You Are Current.

Actually, under the 2005 bankruptcy reform, any car finance company can pick up your car when you file bankruptcy.  But Ford Motor Credit is the only national lender that does that.  (A few states have laws that protect you. Virginia, where I am, isn’t one of them.) Most lenders would rather get payments than get the car.  

Ford wants to you to reaffirm your debt with them. When you reaffirm, you take the debt complete out of the bankruptcy. After a short waiting period, you can’t change your mind.  

As your lawyer, I don’t like reaffirming debts. If you reaffirm and can’t make the payment, you get an after-bankruptcy repossession on your credit.  An after bankruptcy repossession pretty much guarantees seven years with bad credit. An after bankruptcy repossession (on a reaffirmed car) probably means an after bankruptcy judgment and an after bankruptcy garnishment.  A real mess.

Ford Credit

I don’t like reaffirming your car loan with Ford Motor Credit. On the other hand, you may not like walking to work.

On the other hand, you probably don’t want to walk to work.  

So before you reaffirm with Ford Motor Credit, I’m going to ask you some questions.

Are you really happy with this car?  Has it shown any signs of mechanical trouble?

Do you have some other way to get around?  Do you have a junker that will be good for a year or two, until you get good credit?

Could you in fact get around on bus or Metro for a while?

Did Ford give you a really good deal when you bought this car.

After we talk about all that, maybe you’ll decide to let Ford take the car. If you insist, you and I will sign the reaffirmation and Ford will let you keep the car.  (As long as you keep up the payments.) 

Because reaffirmations are so dangerous, the law requires your lawyer–that’s me–to sign off that I think it’s a good idea. (Usually, I don’t think it’s a good idea. “Let them eat steel,” is what bankruptcy lawyers like to say.) And many people also have to explain it in person to the judge.  Because of the long and annoying paperwork, here, and possible court appearance, I charge another $200 to handle car reaffirmations with Ford.

If you give the car back to Ford, it won’t take that long to buy a new one at a good price.

I tell people to wait three years, if possible, after the bankruptcy, in order to get the best deal on new car financing.  (And whatever you do, do NOT go out and finance a car at 21% the week your bankruptcy is final.) But even a year and a half after bankruptcy, you can rebuild your credit and get a car loan at a good rate.  Alice got a Nissan, from the dealer, at 4.76% barely a year after.

Usually, unless the dealer is having trouble selling cars, you’ll get your best rate on a car from a credit union.

 

 

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05

Jan 2016

After Bankruptcy Violations by Debt Collectors

Posted by / in After Bankruptcy /

More often than they should, debt collectors contact people after the bankruptcy is over.

I’m Northern Virginia Bankruptcy Lawyer Robert Weed, and I hate it when people do illegal stuff to my customers. When debt collectors pester my clients after bankruptcy, I sue them.  That’s why I was glad to see what the Second Circuit decided yesterday in the case of Garfield v Ocwen.

Here’s what they said.  If a debt collector bothers you after bankruptcy and a debt discharged by the bankruptcy,  you can sue them under the Fair Debt Collection Practices Act.  Why is that important?  Because the Fair Debt Collection Practices Act gives you the right to sue them for $1000.00 in statutory damages.

Suing under the FDCPA in this courthouse.

Here’s the US District Courthouse in Alexandria, where we’re suing a debt collector under the FDCPA for an after bankruptcy violation.

That right, to sue under the Fair Debt Collection Practices Act, is on top of your right to complain to the bankruptcy judge.  

If there’s a violation while the bankruptcy is going on, the bankruptcy court is probably where you want to be.  Because the bankruptcy code provides for “punitive damages” for continuation of collection acts while the bankruptcy is still on.  (That’s 11 USC 362(k).) That means the judge can slap them as hard as he wants.

(You can read a good example of a judge slapping them hard, in the case of Parker v. Credit Central.  Credit Central kept going in court against Marion Parker, even after her bankruptcy was filed.  The bankruptcy court awarded Parker $10,000 in punitive damages and $30,000 in legal fees.  In December 2015, the 11th Circuit Court of Appeals said the bankrutpcy court was OK to do that.  Because Credit Central committed the type of conduct that the automatic stay was created to prevent, punitive damages were appropriate to serve the dual purposes of punishing Credit Central for its indifference to the law and Parker’s rights and to deter it from committing future similar misconduct.” )

Once the bankruptcy is over, all you can get from the bankruptcy court are actual damages.  (For example, if you got garnished, you could get the garnished money back; and if the garnishment caused bounced check fees, you could get those too.) But nothing for your trouble.  Nothing to slap their hand, to remind them to respect the law.

Debt collectors understandably don’t like to get $1000.00 slaps on the wrist, under the FDCPA.  So they argue that the Bankruptcy Code should be the only law that applies.  The Ninth Circuit bought that argument in a decision called Walls v Wells Fargo, back in 2002.  Most other courts have ignored it, but this past summer a Federal Judge in Roanoke agreed.  Lovegrove v Ocwen.  

We’re fighting this issue right now, in the US District Court in Alexandria, VA.  We are going after McCabe, Weisberg & Conway for this after bankruptcy letter.  On the second page, it says “if you have obtained a bankruptcy discharge, this is not an attempt to collect a debt from you.” But it also says, “THIS IS AN ATTEMPT TO COLLECT A DEBT.”  And on the first page it says, “The amount of the debt is $325,547.42.”  

We think that violates the FDCPA in two ways.  First, it’s a false statement of the “amount or legal status of any debt.”    Second, saying that it “not an attempt to collect a debt” and that “THIS IS AN ATTEMPT TO COLLECT A DEBT”–that’s “misleading.”  Both of those violate the FDCPA at 15 USC 1692e.

The Judge here will let us know what she’s decided, on January 29, 2016.  I’ll keep you posted.

 PS 

Well, we lost.  Judge Brinkema told them that their letter was confusing–it confused her, she said.  But she told us that our only complaint was with the Bankruptcy Court.  She wasn’t about to bother with it, under the FDCPA.

This issue went to appeal at the Fourth Circuit in a case called DuBois v Atlas 15-1945. (But the Fourth Circuit ducked it. They ruled against the consumer in a different way, and said they’d take up the issue we’re concerned about another day.)   So for now, we are out of luck on this.  We have three or four cases, even clearer violations, that are on hold right now.

PPS

In a new decision called Owens v. LVNV, the 7th Circuit said that applying to be paid in a bankruptcy on a debt that’s too old, is NOT an FDCPA violation: because it’s not misleading. (The consumer has a chance to figure it out if they look, apparently.) But any false statement during (and presumably after) the bankruptcy would be an FDCPA violation.  Judge Brinkema is clearly out of step when she said that the consumer can only complain to the bankruptcy court. We hope the 4th Circuit will tell her that, soon.    

   

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29

Dec 2015

To Keep Your Security Clearance, Watch Your Credit

Posted by / in Weekly Posts /

Bankruptcy and Security Clearance:  Knowing What to Do Is More Important Than Ever.

bankruptcy and security clearances

“Agencies should collect criminal and financial information, such as a civil legal proceeding or credit score…at least twice every five years.”

Federal News Radio broke the story yesterday.  People with security clearances will have their credit checked much more often.  That was in the budget bill, just passed by Congress, December 2015.

“Agencies should collect criminal and financial information, such as a civil legal proceeding or credit score…at least twice every five years.”

You can read the complete story, here.  

Ignoring the problem will cause you to lose your clearance

The same Federal News Radio broke that story, I filed a bankruptcy for Don and Donna.

Both Don and Donna are disabled vets; both have clearances; both were in financial trouble for three reasons.  First, they had owned a house near a base with a lot of cutbacks.  Values dropped and they couldn’t sell it, or rent for enough to cover the payment.  Second, they were still battling medical problems, because of their service.  Third, late in life, they started a family and had small children.

They came to see me in the spring of 2014.  But then Don lost his nerve, and decided the try to “handle the problem himself.”  Of course he couldn’t.  They came running back to see me in October 2015.  Why?  Not a garnishment–something far worse.  Don had lost his clearance because of financial irresponsibility.  Luckily, he’s a Federal employee, not a contractor, so right now he’s on admin leave, rather than just out of work.  Filing bankruptcy at this late date just MIGHT help him get his clearance back.

security clearance

Bankruptcy means a Federal court has bought your excuse and agreed you can’t afford to pay. Just ignoring the problem means you cover up. Which do you think is better?

Let me make it clear.  Filing bankruptcy is not good for your clearance.  Paying your debts on time is good for your clearance.  But filing bankruptcy is way, way, way better than just having the debts go late.  

Filing bankruptcy tells your security office that a Federal court has bought your excuse and agreed you can’t afford to pay.  Just ignoring the problem tells your security office that when you are in trouble, you cover up.  Which do you think is better?

I’ve done a thousand bankruptcies for people with secret and top secret clearances.

Once you are in financial trouble, you need to self-report, explain the problem, and talk to a bankruptcy lawyer.  That will almost always avoid trouble.  Ignoring the problem, getting further behind, will usually, sooner or later, cost your job.  

 

 

 

 

 

 

 

 

 

 

 

 

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NORTHERN VIRGINIA BANKRUPTCY LAW OFFICES