The Legal Scoop - Oregon

Common Bankruptcy Questions & Myths

Common Bankruptcy Questions & Myths

Part 3. If I file for Bankruptcy will I lose my tax refund?

Short Answer: It depends.

If you are filing for Chapter 7 Bankruptcy Protection, then you are likely able to keep your tax refund. Your attorney will list your refund in your bankruptcy schedules and then claim an exemption to protect your refund for you. In other words, you are allowed to have certain values of assets when you file for bankruptcy. Depending on your other assets, such as money in the bank, personal property, and more, you may be entitled to keep some or all of your tax refund. The rules around exemptions can be technical and complicated. It is best to consult with an attorney to ensure that your property is protected to the fullest extent possible. There could be situations when you must pay some or all of your refund towards your debts for the success of your Chapter 7 bankruptcy filing. Usually and in most cases, you will get to keep your full tax refund when you file for bankruptcy.

If you must file a Chapter 13 Bankruptcy, then the answer depends on your income and your bankruptcy plan. Generally, you are required to pay the full amount of your refund into your Chapter 13 Bankruptcy case when you are in a Chapter 13 Bankruptcy. This is part of your bankruptcy plan and required to be done to ensure the success of your Chapter 13 Bankruptcy. In some cases, you may be able to protect a certain value of your tax refund each year while you are in the Chapter 13 Bankruptcy. You can talk to your bankruptcy attorney to determine whether you are eligible for this protection of your tax refund. If you are eligible for this protection, then your attorney will discuss the details and requirements with you, including at what point you might be required to pay some of your refund into your Chapter 13 Bankruptcy.

Since the rules around refunds and exemptions of your property can be complicated, you should consult with an attorney before filing for bankruptcy to determine whether you will be entitled to keep your tax refund.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

Common Bankruptcy Questions & Myths

Common Bankruptcy Questions & Myths

Part 2.  I need to file for bankruptcy protection.  Will I lose my car?

Short Answer: No.  It is not true that you must give up your car if you file bankruptcy.  When you file, you have the option to keep your car.

I’ve met with countless people who have stated that they’ve prolonged considering bankruptcy because they cannot “afford” to lose their vehicle.  The truth is, if you file for bankruptcy then in most situations you have the option to keep your vehicle.

If you own a vehicle and are considering bankruptcy, the first question I would ask you is whether your vehicle is secured by a loan.  In other words; is your car paid off? 

If you still owe money on your vehicle, then you would have the option to retain your vehicle in the bankruptcy and enter into a reaffirmation agreement with the lender.  You can also choose to surrender, or “give up”, your vehicle.  The choice is yours

If you choose to keep your vehicle and your vehicle is secured by a loan, then you would elect to retain your vehicle in your Statement of Intention which is part of your bankruptcy filing.  Your creditor would then send you (or your attorney) a reaffirmation agreement for you to sign and to be filed with the Court.  A reaffirmation agreement is essentially a new contract between you and your creditor that will survive the bankruptcy.  Simply put, you get to keep your car.

If your vehicle is secured by a loan and you do not want to retain your vehicle then you would indicate your intent to surrender your vehicle in your Statement of Intention.  In this situation, the creditor can obtain permission from the Court to repossess the vehicle while you are in the bankruptcy, or may choose to wait until your bankruptcy is over before repossessing the vehicle.  In either case, once the vehicle is repossessed and sold, the deficiency, or unpaid amount on your loan would be a discharged debt in your bankruptcy.

In some instances, you might have equity in your vehicle.  If your vehicle is paid off, then you have equity in your vehicle.  Similarly, if your vehicle is worth more than what is owed on it, then you also have equity in your vehicle.  In these situations, we would discuss the value of your vehicle.  In Oregon you are allowed to have $3,000 of equity in your vehicle that can be exempted in your bankruptcy schedules.  Under federal law, the exemption is $3,775.  In other words, your car can be worth up to the amount of the exemption and be protected.  If your equity in your vehicle is more than the allowable exemption, then you may qualify for a “wildcard” exemption to protect the remainder of the equity in your vehicle.  

There are situations when you might run into problems with the allowable exemptions.  For example, if you have a significant amount of equity in your vehicle, or if you own multiple vehicles. 

Even though it is a myth that you cannot keep your car when you file for bankruptcy, the bankruptcy rules are complicated.  If you have one or more vehicles and you are planning to file for bankruptcy, then you should consult with a bankruptcy attorney to determine your options regarding your vehicle and to discuss the best ways to protect your assets when you proceed with bankruptcy.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

 

Common Bankruptcy Questions & Myths

Common Bankruptcy Questions & Myths

Part 1. I stopped paying my bills.  Can my creditor garnish my wages immediately?

Short answer:  No. A creditor must first sue you in court and get a judgment against you before they can issue a garnishment to your bank or your employer.

It’s a common misconception among consumers that I speak to, that as soon as they stop paying a debt, that their paycheck or bank account can automatically be garnished by a creditor.  While a creditor might scare you into believing that you must make a payment or else your next check will be garnished; the truth is that they cannot do this without first getting a judgment against you in Court.

What does this mean? The creditor must first file a lawsuit in court against you, serve you with that lawsuit and then go through the court system to get a judgment against you.  Once they have done all of that, then they need to find out where you bank or where you work.  Assuming they have (1) gotten a judgment in court; and (2)  found out where you bank or work, then they can send a garnishment to your bank or employer.  This process at the absolute quickest speed would take 2-3 months.

The bottom line is that, without a judgment, your creditors cannot issue a garnishment.  It’s as simple as that. 

You might ask, what about when your debt is transferred to a collection agency?  The answer is still no; not until they go through the courts to sue you and get a judgment against you.

Please note that for almost any rule there is always an exception.  It’s important to keep in mind that when you owe money to a government agency, such as the Internal Revenue Service or your state taxing agency, they do not have to sue you first.  They can immediately contact your employer to start garnishing your wages.

If you can’t keep up with your bills, have stopped paying bills, have been served with a lawsuit or even a garnishment, or are not sure what kind of debt that you owe, then you should consult with an attorney about your options.  The sooner that you consult with an attorney, the better positioned you are to protect yourself from the harsh reality of a bank or a wage garnishment.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

Do you need a contract?

Do you need a contract?

In Oregon, most verbal contracts are binding. Does that mean that you don’t need a written contract1? I’d venture to say that if you are engaged in a business deal or arrangement with another person or business then you should have a contract that outlines the terms of your agreement.

You can think of a written contract as insurance. If all goes well you might feel you didn’t need it, but if something goes wrong then the contract is like your insurance. A well written contract will document all material terms of your agreement, including price, scope, payment arrangements, default, remedies, etc.

What does this mean for you? There are many situations that you have likely heard of that can arise to cause a contract dispute. Often times one party is not satisfied with the work that the other party did, or unhappy because the other party did not do the work at all.  Another common dispute between parties is when one party does the work that was agreed to and sends a bill, but does not receive payment at all, or at least not for several months or without bickering about the amount of the bill.  What do you do in situations like these?

If you have a written contract then ideally you can look at your contract to determine your options.  A well written contract will document what to do for payment if one party doesn’t complete the work or it will detail what happens if payment is submitted late, or a bill is not paid at all; or the contract might document whether a late fee or interest can be assessed  and if so, then when?

While the fact of having the contract might not resolve your dispute or compel the other party to do what they agreed to do when they signed the contract, it at least is written documentation of the intent of the parties when you first entered into agreement and can potentially help you enforce your contractual rights and remedies should you need to consult an attorney and/or take legal action.  While anyone can write a contract, it’s probably a good idea to consult with an attorney who is experienced in the field to assist you with your contract.

Ultimately you might feel that you do not need a contract because “a man is good for his word”, you “shook on it”, or you are dealing with family or friends.  These are all reasons you might feel inclined to keep things informal.  However, even family and friends can disagree, forget what they agreed to, or change their minds. It doesn’t hurt to have your “insurance” just in case.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

What is consumer law?

What is consumer law?

If I had a penny for every time someone asked me “what is consumer law?” I wouldn’t be rich, but I’d sure have a lot of pennies.

Consumer law is the label we’ve given the area of law that protects people like you and me – consumers – by imposing legal requirements designed to protect us from a variety of abuses, including unfair debt collection practices, unfair lending practices and fraud.

What is a consumer?  A consumer is someone who purchases items, such as a car, TV, couch, or even a pencil sharpener, and uses it for personal and/or household use.  This means that you are not labeled as a consumer when you buy these same or similar items for your business.

There are many situations that would be considered a potential consumer law claim:

Have you ever applied for credit and then at the very end of the application, or even after you accept the terms, you find out about hidden fees that weren’t disclosed to you before you applied?  Or perhaps you have been harassed by debt collectors who are trying to collect money from you. It could be that you told a debt collector not to contact you anymore, and yet they continue to do so. You might have applied for credit based on promises that were made in the advertisements, only to find out that what was promised is not available to you. Do you feel that you were discriminated against when you applied for credit based on your race, gender or where you live?  Maybe you applied for credit but discovered inaccurate delinquencies on your credit report so you want to contact the credit bureaus and creditors to correct the inaccurate reporting.  Did you purchase a vehicle but later learned that the dealer/seller failed to tell you about hidden defects in the car? You might have been the victim of falling for a scam or identity theft and are now in need of help.

This article is not intended to be an exhaustive list of the scenarios that could be consumer law; it is merely offered to provide examples and to create a better picture for you of what consumer law really is.  If you think you have a consumer law claim, you should contact an attorney immediately.

What laws apply? There are multiple federal regulations that have been implemented to protect consumers and to give consumers legal rights when they have been wronged.  In some states, there are even state level regulations that offer the same, and often times more, protections for consumers. You should contact an attorney who is licensed in the state where you live if you think you have a consumer law claim.  If you are an Oregon resident, like me, you are protected by the many federal regulations, as well as Oregon’s Unlawful Trade Practices Act, which was implemented to protect consumers from fraud.

What are federal consumer protection laws?

There are many federal consumer protection laws.  To name a few of the most common laws please see the list below, but keep in mind that there are other laws out there to protect consumers:

     –  Fair Debt Collection Practices Act (FDCPA) – dictates what a third-party debt collector can and cannot do when attempting to collect a debt from you.

     –  Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) – to ensure that advertising and marketing from lenders is not misleading to consumers.

     –  Fair Credit Reporting Act (FCRA) – dictates how a credit reporting agency can use your information to ensure that your credit reporting is accurate.

     –  Truth in Lending Act (TILA) – dictates how businesses and creditors treat a consumer in lending, and what information must be provided to a consumer regarding the cost         of credit.

     –  Telephone Consumer Protection Act (TCPA) – creates restrictions for telephone solicitations and for the use of auto dialer systems.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

Billing Error Disputes

Billing Error Disputes

It’s important to review your monthly bank and/or credit card statements soon after receiving them. You might discover errors in that statement. The Fair Credit Billing Act offers protections to consumers like you, in the event that you notice an error in your statement and take appropriate action to correct the error within the designated period of time. This article will provide information for how to assert a billing error dispute when you notice an error on your monthly statement.

What is a billing error dispute?

A billing error could include many different situations, such as the charge for a return that remains on your statement, a charge for an item that you did not receive, double charge for an item that you purchased, an amount that is different than what you authorized or paid, or perhaps even a transaction that you did not authorize at all[1]. These are just a few examples of a billing error, but there could be other scenarios that might arise, so if you believe you have identified an error in your billing statement, you might consider asserting a billing error dispute with your creditor.

How do you assert a billing error dispute?

You have 60 days within the time when the statement with the error was mailed to you, or made available to you online. What this means, is that within 60 days you must (1) send a written letter or note to the creditor that (2) identifies your name and account number and (3) that describes what you believe is incorrect, including date and amount of the error.

Remember to send your letter to the address that is designated on your statement for sending “billing inquiries.” Do not send your letter to the same address where you send payments.

Helpful Tip: Send your notice by certified mail. You will receive a postcard back confirming the creditor received the billing error dispute notice and indicating the date when it was received.

Note, if you notice the error on your statement but do not send notice to the creditor before that 60 day window expires, then while your creditor may choose to honor your dispute as a courtesy to you, they will not be under a legal duty to respond to your billing error dispute, unless it also constitutes some other type of legal dispute that is not discussed in this article.

What are the legal requirements of the creditor?

The creditor must send you a letter that acknowledges receipt of your billing error dispute within 30 days of receipt of your dispute. The creditor is not required to have a response to your dispute at this time, because the regulation gives them two full billing cycles (but not longer than 90 days) to investigate your dispute.

The creditor is required to conduct an investigation to determine whether there was an error, or not. This investigation must be completed and a written explanation of the creditor’s decision must be sent to you within two full billing cycles (but not more than 90 days).

In other words, if the creditor determines that an error did occur, then they must send you a letter to let you know their conclusion and they must fix the error. If the creditor determines that an error did not occur or that a different error occurred, then they must send you a written explanation along with documentation that supports their conclusion.

What if the creditor does not meet these requirements?

If a creditor fails to comply with the legal requirements for handling a billing error dispute then you are not out of luck. There are legal remedies available to you in that situation.  You may be entitled to damages pursuant to the Fair Credit Billing Act.  In addition, you may be able to file a claim against the creditor with the Federal Trade Commission and/or State Attorney General.

What are your rights after you send a billing error dispute?

–  You are not responsible to pay the disputed portion of your bill while the dispute is pending.  The creditor cannot try to collect payment for the disputed portion of your bill from you during this time.

–  The creditor is prohibited from providing a negative credit reporting as a result of your failure to pay the disputed portion of the bill during the dispute period.

–  The creditor is prohibited from accelerating payment of your debt for the disputed portion of the bill.

–  The creditor is not able to assess late fees, interest charges, penalty fees, etc. for the unpaid disputed portion of your bill during the dispute period.

Remember that while you are allowed to not pay the disputed portion of your bill, you are still obligated to pay the portion of the bill that you do not dispute. The restrictions on a creditor that were explained regarding the disputed portion do not apply to undisputed portions.

Other information:

If the creditor determines that you are responsible for payment of the disputed portion then they must notify you by writing that they believe no error occurred. In that situation, you will be obligated to pay the amount that was previously disputed. In their letter to you, the creditor must tell you when your payment is due and the amount that is now due.

If you have a dispute about the quality of the goods or services that you received, these are not billing error disputes.  Other remedies and procedures may apply, but they are not covered by this article.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.


[1] Depending on the facts surrounding your dispute, there may be other legal claims or disputes available to you. If you have questions or concerns you can contact an attorney for help.