Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. How to spot violations How to preserve a claim when filing for bankruptcy

Transcription

1 Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. What is the FDCPA? How to spot violations How to preserve a claim when filing for bankruptcy

2 Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. What is the FDCPA? The purpose of the Act It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses. 15 U.S.C. 1692(e).

3 Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. What is the FDCPA? Important Definitions 15 U.S.C. 1692a (3) Consumer (4) Creditor (5) Debt (6) Debt collector

4 Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. What is the FDCPA? A statute that protects consumers against debt collection abuses A statute that protects debt collectors who refrain from abusive practices from competitive disadvantage A statute that relates to actions debt collectors take while collecting debts

5 Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. How to spot violations Read the Statute! Talk to your client Get a copy of collection letters, correspondence, call logs, and answering machine messages Read the collection letters, correspondence and call logs Listen to the answering machine messages.

6 Fair Debt Collection Practices Act 15 U.S.C. 1692, et seq. Preserving an FDCPA claim when your client is filing for bankruptcy File the case before the Bankruptcy List the claim on Schedule B, line 21 Exempt the claim if possible Chapter 7 v. Chapter 13

7 What is a Wage Garnishment? What else is subject to Garnishment? How to stop or reduce a garnishment outside of bankruptcy. How to stop and possibly recover a garnishment when filing for bankruptcy. Applicable Exemptions

8 What is a Wage Garnishment? A debtor s earnings are subject to garnishment by a judgment creditor. This is defined as: The term earnings as used herein means compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program. R.S.Mo (2)

9 What can be garnished by a Wage Garnishment? R.S.Mo (2) defines how much can be garnished. Generally, it is the lesser of the following: 1. twenty five percent of gross income 2. The amount of gross earnings for that week, minus required deductions, that exceeds 33% of the federal minimum hourly wage 3. 10% of gross income if the employee is the head of a family and a resident of Missouri

10 What else is subject to Garnishment? Rule (d) "Property subject to garnishment" is all goods, personal property, money, credits, bonds, bills, notes, checks, choses in action, or other effects of debtor and all debts owed to debtor. "Property subject to garnishment" does not include funds of the debtor on deposit with a bank or other financial institution in an account in which all funds are: (1) Deposited electronically on a recurring basis, and (2) Resonably indentified as funds exempt from garnishment pursuant to Section (10)(a), (b), or (c), RSMO.

11 How to stop or reduce a garnishment outside of bankruptcy: EXEMPTIONS! They re more than just something used in a bankruptcy. A sheriff or other levying officer has a duty to inform a judgment debtor of their statutory exemptions If an exemption applies, the debtor must inform the sheriff of this exemption

12 How to stop or reduce a garnishment outside of bankruptcy: Other issues that can be raised to defend a garnishment (Motion to Quash): Any matter effecting the Court s jurisdiction relating to the person or property at issue The validity of the judgment or write under which the garnishment was issued

13 How to stop and possibly recover a garnishment when filing for bankruptcy: Automatic Stay: 11 USC 362 Suggestion of Bankruptcy Preferences: 11 USC 547 Disclose the garnishment on Schedule B and SOFA Exempt the garnished funds on Schedule C File a Motion to Avoid Judgment Lien

14 Exemptions R.S.Mo , includes but not limited to: A $600 wildcard, which applies to any other property (3) A Social Security benefit, unemployment compensation or a public assistance benefit (10)(a) A vereran s benefit (10)(b) A disability, illness or unemployment benefit (10)(c) Alimony, support or separate maintenance, not to exceed seven hundred fifty dollars a month (10)(d) Pension and Retirement (10)(e)

15 Exemptions R.S.Mo Head of Household: Exemption allows $1250 exemption for the head of a family, plus an additional $350 for each dependent child under the age of 21 years old. Exemption allows the head of a family to reduce a wage garnishment to 10% of gross income

16 Exemptions Property held Jointly, Bank Accounts this is a tracing issue Tenancy by the entireties Funds held jointly in a bank account by spouses cannot be levied by a creditor of one spouse. (Exception when the judgment creditor spouse is the only spouse who actually puts funds into the account)

17 Exemptions Social Security, 42 U.S.C. 407 Any exemption allowed by federal law may be claimed at any time prior to the sale of property or disbursement of funds. Mo. R. Civ. P (b).