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Lender Requirements in Loan Modifications Related to COVID-19

 Posted on August 20, 2021 in Debt Collection


Cook County Debt Collections LawyerFor most of 2020 and 2021, mortgage lenders have been unable to pursue foreclosures in cases where homeowners have federally-backed loans. The CARES Act placed a moratorium on foreclosures, and it also allowed borrowers who have been affected by the COVID-19 pandemic to receive a forbearance of mortgage payments. This moratorium ended on July 31, 2021, allowing lenders to pursue foreclosures in certain cases. However, the Consumer Financial Protection Bureau (CFPB) has created new rules requiring lenders to meet certain requirements before initiating foreclosure proceedings, including providing loan modification options for borrowers.

Requirements for Mortgage Loan Servicers

Under the CFPB’s rule, mortgage lenders and servicers will need to meet certain requirements before they can initiate a foreclosure prior to January 1, 2022. A borrower must be given the opportunity to complete a loss mitigation application, and after an application has been submitted, a lender can only pursue foreclosure if the borrower is not eligible for loss mitigation, rejects all loss mitigation options, or does not meet their requirements to complete a loan modification. Foreclosures can also be initiated if a property has been abandoned or if a borrower does not respond to a lender’s loss mitigation outreach attempts for 90 days.

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When Can Creditors Use Detinue When Repossessing Property?

 Posted on August 10, 2021 in Creditor's Rights


Will County Debt Collections LawyerWhen a borrower defaults on a loan, a creditor has the right to repossess the collateral used to secure the loan. This option may be used by auto lenders or other creditors, and a vehicle or other property may be repossessed if a borrower fails to make the required payments. However, a debtor may attempt to avoid repossession by hiding a vehicle or other property, keeping it locked inside a garage, or moving it to a location where it cannot be accessed. In these situations, a creditor may be able to file a detinue complaint against the borrower, asking the court to require the debtor to turn over the property or face consequences.

When Is Detinue Appropriate?

Typically, creditors use the legal process of replevin to repossess property. In these cases, a creditor will be required to post a bond, and a court order will be issued giving the sheriff the authority to seize the property. A representative of the creditor will usually need to accompany the sheriff when executing the repossession order. However, if the property cannot be located, a replevin action may not be appropriate. 

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Bankruptcy and Cramdown Loans

 Posted on July 27, 2021 in Debt Collection

Chicago Debt Collections LawyerOne of the most frustrating issues a creditor faces is when a customer stops paying their bills and their past due balance begins to accumulate despite the creditor’s attempts at collecting. That frustration can rise even more if the customer files for bankruptcy. When a person files for bankruptcy, the courts issue an injunction, referred to as an automatic stay, that halts all debt collection activity. Creditors who face this situation should speak to a Chicago debt collection attorney to find out what rights they have when it comes to collecting what the customer owes them.  

Bankruptcy Options

When an individual files for personal bankruptcy, they usually have two options, Chapter 7 or Chapter 13. A Chapter 7 bankruptcy is often recommended for people who do not own a home since it involves selling off any property the person has in order to pay off debts, although there are some exemptions to what type of property can be sold. It is often referred to as liquidation bankruptcy.

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Benefits of Hiring a Chicago Debt Collection Attorney vs. Collection Agency

 Posted on July 12, 2021 in Debt Collection

chicago debt collection lawyerAt one time or another, most businesses will find themselves dealing with a client or customer who – for whatever reason – refuses to pay a bill. No matter what attempts the business makes to collect what is due them, the debtor still will not pay. There are several options a company has at this point, including hiring a collection company or retaining the services of a debt collection attorney.

Given the state and federal laws that have been put in place to protect debtors, it is important for creditors to make the right choice when turning to a third party for assistance.

What Is the Difference Between a Debt Collection Attorney and a Collection Agency?

When deciding which is the best choice, a business needs to determine how far they are willing to go to collect the debt. Is this debt something your company will pursue in civil litigation, if necessary? Although both a collections attorney and a collection agency have the same end goal, there are several critical differences to be aware of on their ability to reach that goal.

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How to Collect Money Owed After a Judgment Has Been Issued Against Your Debtor

 Posted on June 28, 2021 in Debt Collection

chicago creditors rights attorneyWe have all heard the saying “money is not everything” at some point in our lives. While the phrase is a classic adage for a reason, there are situations in which money is, in fact, the most important thing. It is not uncommon for people to borrow money for a variety of purposes, such as purchasing a home or buying a vehicle. However, when they do not follow their promise to repay that money, they can find themselves in trouble. As a creditor, you have the right to take action against anyone who does not abide by the terms of your repayment agreement. In some cases, this may lead to filing a lawsuit against the debtor. If you are successful, you can then have a judgment entered against your debtor, providing you with several options for collecting the money owed to you.

Citations to Discover

In most cases, the first step taken to recover payment is filing a citation to discover, which is a tool that allows creditors to uncover, freeze, and recover assets from a debtor. A citation to discover creates a continuing lien or freeze on all of the debtor’s eligible property, preventing them from using or disposing of the assets. The main benefit of the citation to discover is that it can uncover all of the assets a debtor has. You will determine which assets you can and cannot focus on recovering to satisfy the amount owed to you.

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What Property is Exempt From Illinois Bankruptcy Proceedings?

 Posted on June 08, 2021 in Creditor's Rights

chicago bankruptcy lawyerFor many people who are struggling with overwhelming debt, one of the things that holds them back from filing for bankruptcy is the myth that they will lose everything that they own as a result. While it is true that there may be some assets that must be given up during the bankruptcy process, many of these assets are considered exempt property, or property that is not able to be included in the bankruptcy estate. As a creditor, you should know which property is and is not able to be used to repay debts.

Illinois Property Exemption

When a person files for bankruptcy, they will be assigned a bankruptcy trustee who is responsible for gathering, overseeing, distributing, and/or protecting the debtor’s property that is contained in the bankruptcy estate. The bankruptcy estate contains nearly everything that the debtor owns and is used to pay back creditors in some situations. However, certain property is excluded from being used to repay creditors. This is called exempt property and varies from state to state, in addition to federal exemptions.

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When Is it Time to Send a Debt to a Collections Agency?

 Posted on May 27, 2021 in Debt Collection

Chicago creditor’s rights lawyer for using debt collection agenciesThe COVID-19 pandemic has affected the world in horrific ways. Many people are still experiencing financial difficulties because of the pandemic. Various types of businesses across the country were shut down for months at the height of the pandemic, leaving millions of people without a job and without income. Now, a year later, the economy is slowly starting to pick back up, but many people are still struggling financially and missing payments on debts they owe. As a lender, not receiving payments can also be financially burdensome, forcing you to take action. In many cases, a lender will send an individual’s debt to a collection agency. However, sending a debt to collections is a big decision to make that could greatly affect the borrower and have an impact on the amount you receive. How do you know if sending a debt to collections is the right call?

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3 Ways Banks Can Stay Proactive to Prevent Debtor Delinquency

 Posted on May 11, 2021 in Bank Collections

Illinois debt collection lawyer for banksThis past year has been difficult for many people because of the ongoing COVID-19 crisis. Across the country, people and businesses alike have had trouble making ends meet, with many comparing this situation to the Great Recession in the late 2000s. According to the American Bankers Association (ABA), consumer credit delinquencies rose at the end of 2020, despite those numbers decreasing in the prior two quarters. All 11 loan categories saw an increase in the number of delinquent accounts, with home equity and mobile home loans seeing the largest increase. Nobody likes a late-paying customer, but there are ways banks can help keep the number of your delinquent accounts to a minimum. 

Be Proactive With Your Customers

The best way to deal with delinquent customers is to try to prevent them from becoming past-due. You can do this by implementing a number of practices, like email communications, notices through the mail, or phone calls. Giving your customers multiple reminders about upcoming payments may help prevent their accounts from going delinquent.

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Understanding the Laws Governing Actions Taken by Debt Collection Agencies

 Posted on April 29, 2021 in Debt Collection

Chicago creditors’ rights attorney for debt collection agenciesThose who always pay off their credit card balances at the end of every month and pay all of their other debts on time may never come into contact with a debt collection agency. A debt collection agency is a separate company that many lenders and creditors use to facilitate the retrieval of unpaid debts from consumers. Most of the time, hiring a debt collection agency is used as a last resort, after a creditor has already tried and failed several times to recover the payments themselves. A debt collector can be a good choice for some lenders and finance companies, but there are federal rules and regulations that they are subject to. Before hiring a debt collection agency, you should be aware of the limitations they have.

Rules for Debt Collection Agencies

Debt collection agencies will typically try various methods to retrieve past-due debt, including calling the debtor, mailing delinquent notices to the debtor’s address, and even visiting the debtor’s residence in extreme circumstances. The Federal Trade Commission (FTC) is the governing body that oversees the practices of debt collection agencies to ensure everyone is in compliance with the Fair Debt Collection Practices Act (FDCPA). According to the FDCPA, forbidden actions by debt collection agencies include:

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Can a Creditor Lift the Automatic Stay During a Bankruptcy Case?

 Posted on April 23, 2021 in Bankruptcy

Chicago, IL creditors’ rights lawyer for motion to lift automatic stayFor many people, one of the fairly attractive parts of filing for bankruptcy is the automatic stay that takes place when they file a bankruptcy petition. This automatic stay will require creditors to cease all collection activity while the bankruptcy case is ongoing. This means that you, as a creditor, can no longer contact the debtor in any way or have another agency or individual contact them on your behalf for purposes of collecting debt. The discharge of debt through bankruptcy typically results in some sort of financial loss, which can put stress on any business. If your debtor has filed for bankruptcy, there are certain cases in which you can file for a motion to lift the automatic stay with the bankruptcy court, which would allow you to continue collection practices.

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