Detroit Lawyers PLLC featured in Jalopnik

The automotive blog, Jalopnik,  conducted a thorough investigation of Credit Acceptance and its practices. Jalopnik examined over twenty years of court records in the 36th District in Detroit and found that one out of every nine people facing a debt collection case was being sued by Credit Acceptance.

Attorney Drew Millitello was interviewed for the story and provided insight on how Credit Acceptance’s collection practice related to bankruptcy.

Check out the article here. The firm is proud to be a part of such an illuminating investigation into a major problem

If you have a problem with Credit Acceptance or an sub-prime auto lender, give our office a call for a free consultation at (248) 237-7979.

Brite Financial

Are you being garnished by Brite Financial?

Has Brite Financial repossessed your vehicle and attempted to sue you for the deficiency?

Do you have a high interest car loan from Brite Financial and your vehicle broke down?

WHO IS Brite Financial?

Brite Financial Corporation is an automobile financing company that works with car dealers to provide financing to high credit risk individuals at a high interest rate. At times, the interest rate provided will be just below the statutory limit at 24.99%. We have found from our experience that Brite Financial is aggressive at repossessing automobiles when an individual becomes past due. After repossession, Brite will sell the vehicle and ultimately sue the individual for the difference between the sale price of the vehicle and the amount the individual owed. This is called the deficiency balance. The deficiency balance can range from a small amount to as much as $15,000.00. Once a Complaint is filed seeking judgment on the deficiency balance, it is very difficult to succeed in court as the contract terms have already been agreed upon. In a vast majority of cases, Brite will be successful in obtaining a judgment. After Brite obtains a judgment, they can begin garnishment proceedings immediately.

Our office has worked with hundreds of individuals who have experienced financial problems as a result of their agreements with Brite.  We have found that the car dealerships that work with Brite have sold a number of vehicles that have problems resulting in the vehicle breaking down shortly after purchase.

HOW OUR OFFICE CAN HELP WITH PROBLEMS WITH Brite Financial?

Detroit Lawyers can stop a garnishment by Brite Financial immediately and discharge any obligation that was previously owed to them.  By filing a bankruptcy case, we will contact it’s attorneys to get the garnishment stopped. If it has taken over $600 within the last 90 days prior to the filing of the bankruptcy case, we will get that money back for you as well.

If your monthly payment owed to Brite Financial is too high as a result of the interest rate, we can reduce the interest rate in a Chapter 13 plan. If your vehicle is over three years old, we can reduce the amount owed on the vehicle to the fair market value of the vehicle.

BITE BACK AGAINST Brite

Don’t accept Brite Financial taking 25% of your paycheck. Do not continue to pay a high interest rate on an old vehicle that is breaking down. Contact our office today at 248 237 7979.

Changes Coming in Michigan Drivers Responsibility Fees?

Michigan Driver Responsibility Fees put the working poor in tough position that they can’t get out of. A cycle of license suspensions and fees follows resulting in a debt exceeding the worst credit card balances. These fees result in drivers saddled with debt for tickets and fees. This is compounded by the lack of a driver’s license which limits job prospects. Its no secret that drivers responsibility fees drive individuals into bankruptcy, where they can discharge fees and get their license back immediately. We have worked with families that have for the sole purpose of getting their license back. However, it appears that there are changes on the horizon in the state of Michigan.

How Did We Get Here?

In 2003, Driver Responsibility Fees were imposed to make up for a budget shortfall. The state legislature could not agree to raise taxes or limit spending, so the decision was made to take the funds from drivers. Public Act 165 of 2003 took effect October 1, 2003 and assessed a monetary penalty owed to the state to drivers convicted of a certain offense.  Offenses such as no proof of insurance or driving with expired license received a fee of $150.00. While the most common offense, driving while license suspended, received a fee of $500.00.  Driver’s Responsibility Fees have been a lucrative source of revenue for the state. Crain’s Detroit Business reports that they generated more than $100 million for Michigan’s budget.

 

Effect on the Community

Because of the fees, as many as 100,00 Michigan residents have had their driver’s license revoked. To get their license back, the drivers must pay all tickets, drivers responsibility fees and a reinstatement fee of $150.00.

Forgiveness Coming?

The Michigan Legislature has recently voted to phase out drivers responsibility fees, which will completely be phased out on October 1, 2019. The House bill seeks to end collection of all fees even earlier by moving up the timeline to September 30, 2018.  This contrasts with the Senate bill which will continue collection activities for six years after assessment. Both bills would need to be approved by the acting governor to become law. Although the house bill is much more advantageous for drivers, drivers responsibility fees will be a thing of the past in the next decade.

This is great news for drivers, but most people can’t wait between one and six years to get their license back. If you have insurmountable drivers responsibility fees, our firm can get your license back immediately. Call 248-237-7979 for a free consultation.

Who is Midland Funding?

Have you received a collection letter from Midland Funding? Is Midland Funding appearing on your credit report?  Is Midland Funding garnishing you or suing you in court?

We have countless potential clients confused when Midland Funding contacts them attempting to collect a debt. These people have never entered into an agreement with Midland Funding so they are in shock when they find out that they owe them a large amount of money.

Midland Funding is a debt buyer.  A debt buyer will purchase debt from another credit card account and then begin to collect on it. Midland Funding purchases debt when the creditor no longer wishes to collect on the debt. This is usually when the account has gone 180 days without a payment or less than the minimum payment has been paid for 180 days  This is also known as a charge off.

Who does Midland Funding work with?

In most cases, credit card accounts work with Midland Funding. Synchrony Bank, who partners with large retailers such as Walmart, JC Penny and Amazon, is one of the largest credit card accounts that sells their debt to Midland Funding. In addition, Comenity Bank, Chase Bank, Citibank, Credit One Bank and Webbank also sell their debt to Midland Funding.

Midland Funding Collection Activities

Even though Midland Funding likely purchased the debt for pennies on the dollar, they will not hesitate to collect on the account for the full amount owed, including interest and fees, using all of the tools at their disposal. Midland Funding will collect via debt collection letters, phone calls and even lawsuits.

Midland Funding has relationships with law firms in the Metro Detroit area who are very skilled and aggressive in pursuing judgments and garnishments. Weltman Weinberg & Reis and Mary Jane Elliott, PC are the two largest firms in our jurisdiction who handle files for Midland Funding. These law firms will file complaints in district court to get a judgment and then immediately begin to garnish wages.  These garnishments take 25% of your paycheck and will continue until the debt is paid off in full.

Midland Funding’s History of Problems

Midland Funding has been sued in 2015 and a consent order provided that Midland Funding engaged in inappropriate collection activities and violations of the Fair Credit Reporting Act such as:

-false or unsubstantiated representations about owing a debt

-misrepresenting that they have proof that the debt is owed

-filing misleading affidavits

-collecting on time-barred debt

-excessive calls at inconvenient times

Fight Back Against Midland Funding

If you are being harassed by companies, such as Midland Funding, contact our office and we can help but a stop to it. Midland Funding must comply with the provisions of the FDCPA and we will make sure they are held to it. If you are being garnished, sued or have received any correspondence from Midland Funding, we can put a stop to it immediately. We may even be able to get some money back for you. Fill out our form to see if you qualify or call our office now at (248) 237-7979 to set up a free consultation.

DTE Energy and Bankruptcy

DTE_Energy_logoClients come in to our office due to a variety of financial issues, it could be credit cards, medical bills, collection accounts, mortgage issues or lawsuits.  The majority of our clients would be more than happy to pay their bills, but their current financial position prohibits them from doing so.  In fact, sometimes their financial position even prevents them from paying for necessary everyday living expenses such as rent, gas, electricity and water.

DTE Energy, a major provider of electric and natural gas for metro-Detroit residents, offers a variety of payment programs for those struggling to make their monthly payments.    One of the payment options, BudgetWise Billing, offers clients the ability to make the same payment each month.  The intent is to help people deal with the seasonal ups and downs of your bill.  This means, on any given month, you may have a credit or a balance with DTE even if you are current on your payment plan.

Most of our clients fit into one of the following three categories.

  1. First is the person who is current on their payment plan, but has a balance with DTE.
  2. Second is the person who is months behind on their DTE bills and facing shutoff.
  3. Third is the person who has an old DTE bill that has a balance.

Regardless of your specific situation, this blog is intended to examine how DTE Energy operates if you file for bankruptcy and have a balance on your DTE account.

How is a DTE Bill Handled in Bankruptcy?

Once a bankruptcy is filed, the automatic stay goes into place.  The automatic stay prevents DTE from collecting on any balance owed to them.  More importantly, especially in the winter months, it prevents DTE from shutting off your service.

In order to prevent violations of the automatic stay, which can have serious consequences, DTE uses a database to see if any of their clients who have an outstanding balance have filed for bankruptcy.  If they find a person who has a balance, their current account will be closed and DTE will open a new account.  Next, DTE will then send a notice requesting a client put down a deposit on the new account.  This may seem like a violation of the automatic stay.  However the bankruptcy code, specifically 11. U.S.C. §366, permits DTE to request adequate assurance payments in exchange for continued service.  DTE claims the deposit amount is based on the last 2 months average usage.  However, in our experience we have found that is not always the case and DTE may ask for more.

Receiving a bill for a security deposit payment frequently comes as a shock to clients who are current on their BudgetWise plan.  The client typically does not list DTE because they do not believe a debt is owed, but due to the month their account is currently carrying a balance.

Understandably, this can be frustrating for our bankruptcy clients, but there are options.  First, you can pay the deposit amount and the utility service will be kept on.  Second, you can file a motion with the court to determine what the security deposit for DTE should be.  If DTE responds to the motion, the judge will make a determination of what the security deposit is.

Thankfully, it is not all bad news.  The deposit will be returned if you make all of your payments on time for 12 consecutive months.

 

Michigan Suspended License Due To Judgment

DLClients call our office for a variety of debt related issues.  Most of the time the client is aware of the debt and the standard ramifications of a judgment.  A judgment in Michigan can result in creditors garnishing your wages, bank account, or Michigan state tax refund.  It may also result in a seizure of property or a lien being placed on property.  Very few clients realize that under Michigan law their license may be suspended due to an unsatisfied judgment that arose out of the ownership, maintenance, or use of a motor vehicle.  Therefore, it comes as a shock when they get pulled over and the police officer explains to them that they are driving on a suspended license.

Suspended License Due to Debt

Under MCL 257.511, if a person fails, within 30 days, to satisfy a judgment, the plaintiff can request the court to forward an abstract of the court record of the judgment to the Michigan Secretary of State.  The Secretary of State may then suspend your license.  Your license will remain suspended and will not be reinstate or renewed until (1) notification that an installment payment agreement is received, and (2) you file proof of financial responsibility or the judgment has been satisfied.  Once the Michigan Secretary of State receives the judgment from the court they will send you a letter.  You will have 30 days from the date of the letter before your license is suspended.

Penalties for Suspended License

There are severe penalties for driving with a suspended license.  MCL 257.904(1), (2), and (3) and 904b provides that a person convicted of Driving While License Suspended, Revoked or Denied or any unlawful operation of a motor vehicle while the person’s license is suspended, revoked, or denied may be sentenced to imprisonment for up to 90 days, or fined up to $500, or both, and for a second or subsequent conviction may be imprisoned for up to 1 year and fined up to $1,000 or both.  Such conviction or convictions will result in the confiscation of the person’s license plates and the impoundment of the person’s vehicle for at least 30 days.

As you can see, there are some serious ramifications for failing to pay a judgment which was the result of a vehicle accident.  If you are in a lawsuit which arose out of the ownership, maintenance or use of a motor vehicle, then it’s important to know your options.  Give our office a call so we can review your case and help determine the best way to prevent your license from being suspended.  Or, if it has already been suspended, figure out the best way for it to be reinstated.

Bankruptcy May Help

Depending on the amount of the judgment, one of the best ways to satisfy a judgment is to clear the debt in bankruptcy.  The filing of a bankruptcy, either chapter 7 or chapter 13, will eliminate the underlying debt from the judgment against you.  As a result, the Michigan Secretary of State will reinstate your license or not suspend your license in the first place.  If the filing of the bankruptcy takes place after your license has already been suspended then you may need to pay reinstatement fees to the Secretary of State’s office.  If you file a bankruptcy before your license is suspended then it’s important to contact the Michigan Secretary of State and let them know you filed for bankruptcy so they do not suspended your license.

Criminal Fines and Prison Debts

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Currently there is a surge in public interest in the American prison system due to revelations of a disproportionately high prison populations compared to other countries. This interest is guided by concerns over racial factors and minor drug offenses contributing to the high numbers.  However, one of the aspects of the prison experience that is largely ignored is the debt associated with incarceration. It is not uncommon for an individual to get out of jail only to find out he is saddled with a large amount of debt , including criminal fines and prison debt, that even a bankruptcy cannot take care of.

Bankruptcy is provided to debtors to get a fresh start from their debts. Bankruptcy can be used to discharge or get into favorable payment plans for debts, including criminal fines and penalties. In this blog, we will outline a few types of criminal debt and how bankruptcy can help.

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy often discharges all of a Debtor’s unsecured obligations absent some exceptions. The most relevant exception here is those debts that are a “fine, forfeiture, or penalty, payable and for the benefit for a governmental unit that is not compensation for actual pecuniary loss”. This statute, 523(a)(7) of the bankruptcy code effectively takes most criminal debts out of a Chapter 7 discharge.

Below is a breakdown of criminal debts dischargeable in a Chapter 7:

  • Parking fines
  • Costs as a result of a victims loss (such as condition of probation to repay debt not part of restitution order)
  • Juvenile restitution owed by parents
  • User and service costs not part of sentence
  • Costs of Prosecution (not in restitution order)
  • Collection costs not owed to government agency
  • Pre-trial incarceration debt
  • Bail bonds owed to private company
  • Interest to the extent the underlying debt is dischargeable

Below is a breakdown of criminal debts not dischargeable in a Chapter 7:

  • Criminal Fines (ie. Fines owed to the court related to a misdemeanor or civil infraction, traffic tickets)
  • Victim restitution
  • Costs (if part of the sentence)
  • Costs of Prosecution (if part of the restitution order)
  • Costs of Incarceration
  • Bail bonds owed to a state agency
  • Interest to the extent the debt associated with the interest is non-dischargeable

Chapter 13 Bankruptcy

A Chapter 13 Bankruptcy is a payment plan where Debtors pay what they can afford for three to five years and get a discharge after the plan. A Chapter 13 bankruptcy gives debtors a “super discharge” which has a less amount of exceptions to discharge if the debtor completes their Chapter 13 Plan. A Chapter 13 Bankruptcy is a good idea for a debtor with large amount of criminal debts that are non-dischargeable in a Chapter 7. All criminal justice debt is dischargeable in a Chapter 13 except punitive fines or restitution as part of a sentence. This includes court costs, costs of prosecution and civil court and traffic fines.  Even debt nondischargeable in a Chapter 13, such as punitive fines or restitution, can be paid in a favorable 36 to 60-month payment plan in a Chapter 13 bankruptcy

If you are experiencing any debt related to a crime, don’t hesitate to contact an experienced bankruptcy professional to determine the best route to take care of it. Often individuals don’t realize that there are number of great solutions to take care of their criminal debts. Give our office a call at 248-237-7979 or fill out a form for a free consultation. 

 

Social Security and Bankruptcy

 

Today we will look at a few of the ways social security benefits and bankruptcy overlap. A number of recent studies have found that older people are making up an increasing amount of bankruptcy filers.  Many elderly people either receive social security benefits already, have social security benefits pending, or will become eligible for social security benefits in the near future. The result is an increasing overlap between social security benefits, creditors and bankruptcy.

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Different ways Social Security Income impacts Bankruptcy

Social Security Income (SSI) needs to be considered in a number of different areas on the bankruptcy petition.  It will impact Schedule B/C, Schedule F, Schedule I/J, and the means test and it will impact each of these areas very differently.

Schedule B and Schedule C

Schedule B is the area of the bankruptcy petition where your personal property assets need to be listed.  Schedule C is the area of the bankruptcy petition where you are able to exempt personal property from the reach of creditors or the trustee.

A bank account that only consists of social security income should be listed on schedule B and exempted on schedule C.  If the social security income was never co-mingled with any other funds then they will be completely exempt in bankruptcy.  Additionally, outside of bankruptcy, if the social security income has never been co-mingled with any other funds then creditors are prohibited from garnishing that account as your social security income is exempt from garnishment.  Although creditors can use other means of collection such as liens and seizures, this makes it much for difficult for them to collect on a judgment.

If you are owed social security back pay, this will also need to be listed on schedule B and exempted on schedule C.  Even if you have never received the back pay, but there has been a determination made that funds are owed to you, then it must be listed on schedule B.  Social Security back pay are completely exempt from the reach of creditors, but it is important to still list and exempt the asset.

Schedule I and Schedule J

Social security income also needs be considered when filling out schedule I and J.  Schedule I lists household monthly income.  This includes employment income, pension income, retirement income, and social security income.  This is important is because the Bankruptcy Court considers your ability to repay your creditors based on your current monthly income (schedule I) and currently monthly expenses (schedule J). After deducting your monthly expenses from your monthly income, there is too much money leftover, the court may require you to use a portion of that money to fund a chapter 13 plan.

Means Test

The Means Test is another area of the bankruptcy petition where social security income plays a role.  The means test is used to determine whether or not there is a presumption of abuse of the bankruptcy process.  It is based on your household income over the last six months in relation to your household size.  However, social security income is excluded from the means test.

This means there may not be a presumption of abuse of the bankruptcy process based on the means test, but schedule I and J show there is enough income leftover every month to pay back your creditors.  This creates quite a predicament and should be analyzed by an experienced bankruptcy attorney.

Overpayment of Social Security Benefits

Social security overpayment is considered an unsecured, non-priority debt.  This is similar to credit cards and medicals bills and should be listed on Schedule F of the bankruptcy petition.

Upon filing of a bankruptcy case, the collection activity must stop immediately against those owing overpayment of social security benefits.  The automatic stay also prevents the collection action against a co-debtor.  Therefore, even if a child or spouse has a debt listed in the petition the recovery against the child or spouse’s debt must stop also.

If an amount is received by the social security administration after the case is filed (which is not uncommon) it must be refunded to the client.

As with all debts, if the social security administration thinks the debts were obtain through fraud or false pretenses then the social security administration has the option to file an adversary proceeding to exclude the debt from being discharged in the bankruptcy.

As you can see, there are a number of different ways social security and bankruptcy overlap.  Please contact an attorney at our office if you have any questions.

Possible Changes in Debt Collection

elizabeth-warren

Senator Elizabeth Warren initiated the CFPB in 2010 as a response to the Late 2000’s recession and financial crisis.

On July 28, 2016 the Consumer Financial Protection Bureau (CFPB), the arm of the federal government responsible for consumer’s rights, issued an outline of proposals that would result in major changes to the debt collection process if accepted.

Documentation and Proof of Debt Requirements

Often correspondence received by borrowers is not even from the original creditor. Collection agencies routinely purchase debt at a fraction of the amount owed and begin collecting on the debt through phone calls and mailings. The CFPB proposals make it more difficult for the collectors by requiring documentation to prove the debt is still owed by the individual they are contacting. They must provide details such as the borrower’s complete contact information and specifically when the debt went to collections and the payment history. Further, these collectors cannot file suit until evidence is given that shows “the evidence of the amount of principal, interest, or fees billed, and the date of each payment made after default.”

Right to Dispute Debt

The CFPB makes it easier for borrowers to contest the collection notices by not having to jump through hoops to contact the collector. The proposal requires the collectors to provide a form that the borrower can fill out to dispute a debt. If the borrower disputes the debt, the burden of proof shifts to the collector to prove that the borrower is incorrect on his dispute.

Zombie Debt

At times borrowers get collection notices on debt that is so old that the statute of limitations has expired for a lawsuit on the debt. For this type of debt, the CFPB has proposed that that the collector must indicate that the debt is “too old for a lawsuit” in their correspondence. Further, the collector is not allowed to take the borrower to court on the old debt.

Limitation on Contact

The CFPB proposes that the collector can only contact borrowers six times a week in any form of correspondence, including phone calls, regardless if picked up, mailings, and emails. After initial contact is made, the collector is only allowed one additional contact per week with no more than three attempts.  At any point, if the borrower requests that they not be contacted, the collector must cease and is prevented from making further contact.

Although these proposals have not been accepted, it is good news for borrowers who are facing a barrage of phone calls and are confused about what entity they owe and for how much.

If you are experiencing debt collection that is against the law or are overwhelmed, contact an experienced debt professional at (248) 237-7979.