COLLECTIONS AND FORECLOSURES

DEBT COLLECTIONs

Skeeters, Bennett, Wilson, & Pike has a long history of representing various creditors for purposes of collecting delinquent accounts. The firm has a state wide practice, and is of the opinion that it has filed collection suits in all 120 counties of the Commonwealth. Some of the services which the firm can provide to creditors include the following:

FAIR DEBT COLLECTION PRACTICES ACT

The Fair Debt Collections Practices Act (FDCPA) was enacted by Congress in 1977 to prohibit abusive debt collections practices. Congress stated that the purpose of FDCPA was to eliminate abusive debt collections practices by debt collectors. Thus, under the Act, creditors, those persons or entities who extend credit in the first place and then collect their own debts, are not subject to the provisions of the FDCPA. FDCPA is directed at independent debt collectors and not creditors attempting to collect on their own debts. The FDCPA does not apply to creditors, their employees or officers, or their affiliates. It is not unusual for a creditor to hire a third-party (i.e., a collections attorney) to attempt to collect the creditor's debt. Not surprisingly, debtors have attempted to hold the creditor vicariously liable under the FDCPA where the third-party hired by the creditor commits a violation of the Act. However, cases considering this point have almost uniformly held that a creditor cannot be held vicariously liable under the circumstances. It appears that only a debt collector can be held vicariously liable under the Act, for example, where the debt collector hires another debt collector to collect the creditor's debt.

DEBT COLLECTION LETTERS

Often the most simple, least expensive, and quickest way to collect on a debt is to simply send debt collection letters from Skeeters, Bennett, Wilson, & Pike demanding payment. This simple technique results in a surprisingly high return on a small legal expense. Although not required, it is often the starting point for the firm's debt collections efforts.

OBTAINING JUDGMENT

In the event that collection is not forth coming as a result of a debt collection letter, clients are typically left with little option other then to commence litigation. Our office has several employees whose sole function is to file and follow up on litigation instituted on behalf of creditors. We are of course mindful of the various statutory obligations opposed upon outside counsel collecting debts for third parties. We strive to be compliant with the Fair Debt Collections Practices Act and other statutory provision. We fully expect to adhere to all federal and state laws which regulate creditors rights in collection practices.

GARNISHMENT, ATTACHMENT AND RECOVERY

Simply obtaining a judgment does not ensure that a creditor will receive repayment of the indebtedness in question. Typically it is necessary to institute wage garnishments or non wage garnishments. If it appears that the debtor is the owner of real estate, it is advisable to file a judgment lien which will encumber any and all property owned by the debtor. If there is collateral involved such as an automobile or other personal property, it may be advisable for the creditor to have our office take steps to gain possession of the collateral before suit is filed. In short, S, B, W & P strives to do more then simply obtain a judgment. It is our objective to ensure that the lender recoups money as opposed to simply obtaining a piece of paper in the form of a judgment.

BANKRUPTCY LAW

Bankruptcy Law

BANKRUPTCY LAW

The last major bankruptcy law reform was in 1978. This had been the first major change in this area of the law in decades. The change in the new law coincided with the explosion in consumer credit. Ever since the new Bankruptcy Reform Act of 1978, the number of consumer bankruptcies per year has set records.

President Bush signed the Bankruptcy Abuse and Prevention Consumer Protection Act of 2005 in April, 2005. Under the old law, there was two types of consumer bankruptcies, Chapter 7 which was a full bankruptcy and Chapter 13 which was a wage earners plan that consisted of repaying the debts over a period of time, usually five years. Many debtors were starting out in a Chapter 13 and then easily converting that 13 to a Chapter 7. The new law creates a means test for bankruptcy.

It now must be determined if a debtor earns more then the median income in their state. It is then determined if they would have at least $100.00 per month left over after payment of living cost, including health and disability coverage, and payment of priority items such as taxes, alimony, and child support. If they earn more then the median income in their state and if they have at least $100.00 left over at the end of each month, then they are subjected to a test. If they can repay the lesser of $10,000.00, or 25% (but not less then $6,000.00) of unsecured debt over a five year period then they must choose Chapter 13 instead of Chapter 7. Priority debts are not included in the unsecured debt calculation. Special cases such as catastrophic loss from medical problems or a sudden loss of a job over a long period of time will not prevent taking Chapter 7.

The law also requires consumers filing for bankruptcy to receive credit counseling prior to filing. Under the new law, any charges beyond $500.00 made within 90 days before filing would be considered ineligible for being included in the bankruptcy. Also any cash advances of more the $750.00 made 70 days before filing would be ineligible. The only exception is if these charges were needed to pay for food or housing.

The law now limits homestead exemptions even in states such as Florida and Texas where the homestead exemptions are limitless. Debtors filing Chapter 13 will now have to continue making payments to secured creditors during their period of bankruptcy. The law does broaden the protection for debtors in areas such as retirement and educational savings.

Creditors will be required to negotiate with debtors or have their claims reduced by as much as 20%. If creditors will not negotiate with a debtor who has gone through credit counseling and proposes a non-bankruptcy payment plan, the creditor could be penalized. The law concerning the reaffirmation of debts has also been tightened both for the creditor and debtor.

Finally, the length of time in which a bankrupt debtor can file a bankruptcy after they have previously gone bankrupt is lengthened to 8 years if it is a Chapter 7 bankruptcy.

Our bankruptcy law attorneys provides a full range of creditor right services in the event that a debtor files for Chapter 7 or Chapter 13 Bankruptcy protection. Bankruptcy law can be very complex. Our office have significant history in practicing before the bankruptcy judges for the Western District of Kentucky. We are abreast on the procedures and the law which govern this area of collection practice. S, B & W can handle anything from filing proof of claim, attending a 341 meeting of creditors, filing an adversary proceeding, or obtaining a relief from stay.

FORECLOSURE

Real estate secured loans necessitate the filing of a foreclosure action. This is a fairly complex lawsuit which varies greatly depending upon the judicial circuit in which it is filed. Our foreclosure lawyers have considerable experience handling foreclosure actions in Hardin, Meade, Grayson, Breckinridge, LaRue and surrounding counties. Our foreclosure lawyers are able to walk creditors from the point of filing suit, through the liquidation of the real estate, and obtaining and enforcing default judgments.

MECHANIC LIENS

It is not uncommon for clients who provide materials or building services in construction projects to become concerned about payment. One of the most effective ways to address this concern is through the filing of a mechanic lien. The statute governing mechanic liens contains very detailed time lines and other prerequisites necessary to file a valid and enforceable mechanic lien. Once the lien is properly filed, there are deadlines for enforcing the mechanic lien through foreclosure type litigation. Although mechanic liens can be very effective tools for building supply companies and builders, it is a very complex area of the law which requires experience. S, B, W & P has considerable experience filing and enforcing mechanic liens for various clients.

CONCLUSION

Skeeters, Bennett, Wilson, & Pike has the experience required to collect on secured and unsecured debts. It is our ultimate goal to liquidate claims as quickly as possible. For more then a quarter of a century we have been actively involved in collecting all forms of delinquent accounts, liquidating collateral, and protecting creditors through the bankruptcy proceeding. We remain committed and dedicated to our lending client's continued success in this area of the law.