Bankruptcy: What Is It And What Do The Chapters Mean?
Bankruptcy in the United States is a constitutionally (Article 1 Section 8, Clause 4 to be exact) approved way for individuals and business entities to settle good sized amounts of debt. In charge of making the bankruptcy laws is Congress, and the most recent change was an amendment to existing laws through the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. For other laws that are relevant to bankruptcy, refer to the United States Code.
Bankruptcy cases are filed in United States Bankruptcy Court, so federal law will govern the procedure in bankruptcy cases. But state laws are also applied when property rights are being determined. One example is that rules that protect property from creditors (the people who you owe money to) will come from state law.
Bankruptcy comes in a number of forms, or Chapters. Title 11 of the United States code contains nine chapters. Six of these will require you to file a petition. The remaining three have rules to govern these petitions.
Chapter Seven is the most well known form of bankruptcy. This involves a trustee who is appointed to obtain the property of the debtor that is not protected by law. Then, they sell it and distribute the proceeds to the creditors. Every state lets debtors keep essential property, so most Chapter 7 cases will let the debtor keep all of their property.
A Chapter Nine bankruptcy is only available to municipalities. It’s a form of reorganization, not liquidation. One notorious example of this was when Orange County, California filed. Bankruptcy under Chapter 11, Chapter 12, or Chapter 13 is more complicated. It involves letting the debtor keep some, or all of their property, and reorganization. They will use future earnings to pay off creditors. People generally file Chapter 7 or Chapter 13. Sometimes an individual will file for Chapter 11, but this is rare. Chapter 12 is similar to Chapter 13, but is only available to “family farmers” and “family fisherman” in some situations. Generally, chapter 12 has is more generous for debtors than a similar Chapter 13 case.
In 2005, Chapter 15 was tacked on to the list. It deals with foreign companies with U.S. Debts.
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If You Have A Debt Collector On The Phone….
If you owe money to a creditor debt collectors are permitted to report your debt to credit bureaus, file lawsuits against you, and should be taken extremely seriously. The best way to protect yourself and your financial situation is a methodical approach. First, know why you are being contacted. Know where the debt is from and exactly how much it costs.
Request the name of the person that is calling, the name of the agency, the name of the creditor, and the agency’s address and fax number. You have the right to tell a collector over the phone that you want all future contact to be in writing. Follow up all requests with a written request.
Keep in mind if you tell the debt collector that they are not permitted to contact you at all it the agency is entitled to contact you once more to inform you how it plans to proceed. Another request that can be made is that you are the only person that can be contacted. It might be a good idea to keep a file including dates and details of phone conversations and when you mail out or receive letters.
If you do send any correspondence to the collections agency you should do this by Certified Mail, Return Receipt Requested. This means that the letter reached the collector, providing you with a signed receipt as proof that it did. If you negotiate a re-payment plan over the phone, ask for the terms of the plan in writing. Additionally, any promise to remove or adjust credit history should definitely be documented.
Make sure that you pay the right party; payments should be made to the debt collector, not the creditor, unless otherwise instructed to do so. Carefully look over the amount you are being asked to pay. Get an assessment of any interest, fees or charges that have been added.
If you feel that your collector is being abusive, be certain to complain to the agency and keep this complaint on file. Finally, never ignore a collector even if you feel that the debt isn’t yours; they will continue to contact you and it may mean more trouble and time in the long run.
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When Do I Call In A Medical Collection Agency
Do you know how much debt your medical collection agency collected last year? If you don’t, how can you evaluate their effectiveness or your return? How could you possibly be aware?
Most patient balances forwarded to a medical collection agency are often considered “lost causes,” there would be little point in using such services if that were always the case. Logic dictates this much. Some of the reasons are as follows: Some patients simply do not respond to practice statements or internal collection letters. They will, however, respond when a collection agency states it will report their failure to pay to credit bureaus. Collection agencies have a number of resources on their hands. If reporting a debt to a credit bureau does not work, there are attorneys on hand that can assist you with problem consumers who refuse to pay.
It is a given that most medical practices acknowledge the need for collection agency services but they should evaluate and manage this collection method just like any other. Practices should have a full understanding of the terms of the agreement with their collection agency and the results of such arrangements; they must also understand how their own internal processes affect the agency’s success. And internal processes do have an enormous effect on the amount of money that you can collect.
Here are six questions you should ask when evaluating your current collection agency.
What is the total dollar value of accounts placed with the collection agency last year?
What is the protocol for turning accounts to collection?
What is the average age of transferred accounts?
What percentage of transferred accounts had balances less than $50?
How much did the agency collect last year?
What fees does the collection agency charge?
What reports does the agency provide?
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Protecting Yourself Against Debt Collection Scams
The government is stepping up as debt collection scams rise. In recent news, Buffalo New York has been home to a number of unlawful debt collection practices, and authorities have arrested at least twelve people. Even though the vast majority of debt collection companies are good for the economy and very much legitimate, there has been a rising amount of deceptive and illegal practices.
In Buffalo, collections agents have been caught calling up people that owe money and posing as law enforcement. They have threatened to send people that owe money into jail, or even take child custody away from them. But it doesn’t stop there.
A recent civil case imposed a $675,000 penalty ever imposed on a debt collection business, for illegal and deceptive practices. This includes harassing and lying to consumers, cashing in on post dated checks early, and disclosing their debt to third parties. These tactics came by deceptive claims from agents saying they were lawyers or other figures of authority.
In addition to refusing to reveal the address or phone number of the “company” these agents even went as far as to call people who were not in any debt at all and attempted to collect money from them. Even though the owners of said companies alleged that it was individual workers acting fraudulently, the Federal Trade Commission went after the business owners and won a case that imposed the biggest penalty ever for debt collection agencies.
To skirt around the issue of being a victim to fraudulent debt collection agencies, it is crucial that you know your rights. A debt collection company is never permitted to seize a debtor’s assets, bank accounts, or paychecks. They are unable get a debtor fired from their occupation, and can’t make any kind of public disclosures concerning the debt, and they can definitely never threaten or engage in violent acts.
To be more informed, refer to the Fair Debt Collection Practices Act, which will list the rules and regulations of collections.
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