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7 Steps Creditors Must Take to Avoid Violating the Rights of Debtors

 Posted on July 31,2023 in Debt Collection

Illinois Debt Collection AttorneysWhen it comes to collecting debts, creditors have certain rights and responsibilities. However, creditors must understand that debtors also have rights that must be respected. Violating the rights of debtors can lead to legal consequences, as well as damage to the reputation of the creditor. To avoid these issues, creditors should follow these steps:

1. Understand the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) is a federal law that sets guidelines that creditors must follow when collecting debts from consumers. Creditors will need to familiarize themselves with the provisions of the FDCPA to ensure compliance. The act prohibits creditors from engaging in harassment of debtors, making false or misleading statements, and or using other unfair practices.

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Bank of America Ordered to Pay Millions of Dollars for Illegal Practices

 Posted on July 17,2023 in Debt Collection

Illinois Bank Collections LawyersBanks and financial institutions often face scrutiny of their business practices. Since the financial crisis of 2008, multiple banks have been accused of engaging in illegal practices, and government agencies such as the Consumer Financial Protection Bureau (CFPB) may impose fines and other penalties against institutions that have taken actions to cause financial harm to customers. Bank of America, the second-largest bank in the United States, is one of the latest institutions to face these issues, and it was recently ordered to pay $250 million in fines, penalties, and customer refunds after investigators found that it had taken a number of illegal actions. To prevent similar penalties, banks will need to make sure they are following the correct practices when collecting debts or performing other types of transactions.

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3 Strategies for Finding a Car You Must Repossess

 Posted on June 30,2023 in Asset Recovery

Chicago Repossession AttorneyMost auto lenders would prefer it if every buyer simply made their payments on time, every time - or at least were able to catch up with their past-due bills. However, the fact is that some borrowers become so far behind on their payments that repossession becomes a creditor’s best option for recovering what is owed to them. While there are some legal concerns to be addressed before beginning the repossession process, one of the more challenging parts may be locating the car itself. Some borrowers do not give an accurate address, while others move without updating their address. This can make it a bit difficult for repossession workers to carry out their job duties. Before you repossess a car, it is best to speak with an attorney who can ensure that the process is completed according to legal standards in Illinois. 

Tips for Locating Cars You Must Repossess

Most repossession workers begin looking for a car by checking the borrower’s home, often in the evening or on a weekend day. However, even when the car is found there, there is a high risk of the borrower noticing the tow truck and causing problems. If the car is not at the borrower’s home, some strategies for locating the vehicle include: 

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How Should a Creditor Respond to a Proposed Chapter 13 Repayment Plan?

 Posted on June 16,2023 in Debt Collection

Chicago Creditor Representation LawyersCreditors need to be able to recover the money owed to them by debtors. Unfortunately, when a debtor files for bankruptcy, a creditor may not be able to recover the full amount owed. However, creditors may receive some payments during the bankruptcy process, and the amount they can receive will depend on the type ofbankruptcy filed. In a Chapter 13 bankruptcy, a debtor will propose a repayment plan in which they will make ongoing payments over a period of three to five years, and these payments will be distributed among their creditors by the bankruptcy trustee. In these situations, creditors will need to understand how to respond to a debtor's proposed repayment plan and the steps they can take to protect their financial interests.

Steps Creditors Should Follow During a Chapter 13 Bankruptcy

  1. Read and review theproposed plan thoroughly - It is important for a creditor to examine the proposed Chapter 13 repayment plan carefully. The repayment plan should include detailed information about how much the debtor will pay, how frequently they will do so, and the duration of the plan. A creditor should ensure that the proposed plan complies with the rules and regulations governing Chapter 13 bankruptcy while also ensuring that the plan is accurate and realistic based on the debtor's income and expenses.

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When Can Creditors Use Lift Stay Motions in Bankruptcy Cases?

 Posted on May 30,2023 in Bankruptcy

b2ap3_thumbnail_shutterstock_1018623748-1-min-1.jpgWhen a person or business files for bankruptcy, an automatic stay is imposed to protect their finances and ensure that they will not experience additional losses due to creditors' attempts to collect debts. While the automatic stay is in effect, creditors are not allowed to make any collection efforts, including calling or otherwise contacting a debtor, sending bills or notices, filing lawsuits, collecting judgments, foreclosing on a home or other real estate property, or repossessing a vehicle or equipment. However, there are some situations where creditors may believe that they could experience significant losses due to actions taken by debtors during the bankruptcy process, and they may be able to file a motion to lift the automatic stay, giving them the ability to collect what is owed to them. It is important for creditors to understand how lift-stay motions are handled in bankruptcy cases.

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UPDATE: Using Non-Wage Garnishment to Collect Debt

 Posted on May 15,2023 in Debt Collection

Using Non-Wage Garnishment to Collect DebtsOriginally published: April 19, 2017 -- Updated: May 15, 2023

Update: As described below, there are options available for creditors who need to collect debts from debtors who have limited income that may be recovered through wage garnishment. However, it is important to understand what limits may apply to the amounts that can be garnished from a debtor’s wages. This may help creditors determine what avenues to pursue when collecting debts following a legal judgment against a debtor.

Illinois law states that one of the following methods may be used to determine the amount that can be deducted from a debtor’s wages:

  • Multiply a person’s gross weekly wages by 15 percent. This is usually the maximum amount that may be garnished from a person’s wages.

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5 Types of Loan Modifications Creditors May Negotiate With Debtors

 Posted on April 27,2023 in Loan Modification

Chicago Creditor Loan Modification LawyersThere are a variety of situations where creditors may need to deal with borrowers who have defaulted on loans or are struggling to make payments. While there are many debt collection options available to creditors, it can sometimes be beneficial to work with a debtor to find solutions that will allow them to continue making ongoing payments. Loan modifications may involve changes to a lending agreement that will make it easier for the debtor to adhere to the terms of repayment. By understanding the different types of loan modifications that may be available, creditors can take steps to protect their financial interests.

Options for Modifying Loans

To address delinquent loans or defaults, creditors may reach agreements with debtors that may include:

  • Forbearance - A creditor may agree to suspend or reduce a debtor's monthly payments for a specific time period. This can be a good option for borrowers who are experiencing temporary financial difficulties due to unexpected changes in their lives, such as health issues, job loss, or divorce. However, forbearance is not a long-term solution, because the debtor will be required to resume payments at some point in the future. The missed payments may be added on to the end of the loan term, or future payments may be temporarily increased, and this may mean that the borrower will owe more in the long run.

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How Can a Creditor Protect Their Rights During a Foreclosure?

 Posted on April 14,2023 in Creditor's Rights

Cook County Creditor Foreclosure LawyersWhen debtors default on mortgage payments and fail to pay what is owed to a lender, foreclosure proceedings may be necessary. The foreclosure process can be lengthy and confusing, and it is important for mortgage lenders or other creditors to understand their rights and responsibilities. By taking steps to protect these rights and resolve any issues that may arise during a foreclosure, a creditor will be able to minimize their losses and recover as much of what is owed to them as possible.

Issues to Address as a Creditor During a Foreclosure

Creditors, including primary mortgage lenders, mortgage servicers, and second mortgagees, can protect themselves during foreclosures by doing the following:

  • Follow the law - It is important for creditors to follow all applicable laws and regulations throughout the foreclosure process. Depending on the type of loan, there may be specific notice and filing requirements, mediation procedures, and other legal requirements under state law. Failure to follow these requirements can result in delays or even dismissal of the foreclosure. An attorney can provide guidance on the laws that apply in a specific situation, and they can help address any legal issues that may arise during a foreclosure.

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Protecting Creditors’ Rights When Negotiating Settlements With Debtors

 Posted on March 27,2023 in Debt Collection

Chicago Creditors' Rights Lawyers

Creditors have certain rights when it comes to collecting debts owed by debtors. While there are a variety of debt collection options available, there are some situations where it may be beneficial for both creditors and debtors to negotiate settlements that allow a debtor to pay less than the full amount owed to a creditor. In these situations, it is important for creditors to know how to protect their rights and ensure that any settlements reached with debtors are fair while protecting the creditor's best interests. By understanding the potential strategies that may be used when negotiating settlements with debtors, creditors can take steps to minimize their financial losses and ensure that settlements can be completed successfully.

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How Can Creditors Avoid Violations of the Fair Credit Reporting Act?

 Posted on March 15,2023 in Creditor's Rights

Cook County Creditors' Rights Lawyers

The Fair Credit Reporting Act (FCRA) is a federal law that establishes rules and regulations for the collection, maintenance, and use of consumer credit information. This law was designed to protect the privacy of consumers and their credit information. It requires creditors to treat consumer credit information with care, accuracy, and responsibility. If a creditor fails to abide by these laws when collecting debts or taking other actions, they may face serious legal consequences.

Understanding Creditor Requirements Under the FCRA

The FCRA governs how creditors must handle consumer credit reports, as well as any other information related to a consumer’s creditworthiness. For example, it requires that any creditor who obtains a consumer’s credit report must have a “permissible purpose”—which means they must be able to show that there is a legitimate business reason for obtaining the report. It also restricts creditors from reporting inaccurate or outdated information about consumers and requires them to provide consumers with access to their own files if requested.

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