Big banks still trying to collect

[Slingerland]

Nice to know the big banks are so diligently obeying the law...

http://dealbook.nytimes.com/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?_r=1

[justbroke]

I think most of the issue is that banks sell "portfolios" of debt that contain all non-performing accounts. When they are bundled with discharged debt, that is where the problem begins. Debtors that have had these accounts discharged in bankruptcy have recourse. It's a pain, but there are significant sanctions available to debtors when this happens. I think a core part of the problem is that very few Debtors ever complain. By complain, I mean that they re-open their closed case and file a Complaint (Adversary Proceeding). I have said this time and time again; if you let them do this, they will continue to do this. As a community, we debtors must pounce every single time any creditor violates the discharge injunction (or automatic stay). When the creditors start getting hit with multi-million dollar sanctions, that will be the time they take corrective action.

Reminds me of a case here in Florida. A woman was getting called by Bank of America several times a day after filing. On a final evidentiary hearing, Bank of America never showed up to answer the call for sanctions. The Judge awarded over $84,000 in sanctions to the debtor, not including attorney fees! The bank stopped calling. You see, it took the judge issuing an $84,000 judgment and the threat ONE SINGLE additional call would be met with punitive and severe sanctions. The Judge ever mentioned that those were actual damages ($1,000 per call and letter) and that there were no punitive or coercive amounts in the judgment.

Think about it... up until the date of trial BOA called this woman. After getting hit on the trial date with $84,000 in sanctions, the calls mysteriously stopped. This is why I ask every single debtor to pounce on the creditors even for a simple violation. The creditors may feel it's cheaper for them to not perform any due diligence and pay the $1,000 sanction if one gets away. (These portfolios sell for millions, so what's $1,000?)

[Drazil65]

The practice — a subtle but powerful tactic that effectively holds the credit report hostage until borrowers pay — potentially breathes new life into the pools of bad debt that are bought by financial firms.

For the debt buyers and the banks, the people briefed on the investigations said, it is a mutually beneficial arrangement: The banks typically send along any payments that they receive from borrowers to the debt buyers, which in turn, are more willing to buy portfolios of soured debts — including many that will wind up voided in bankruptcy — from the banks.

And once the JDB get ahold of that debt they are relentless and the banks don't care and wash their hands of the obligation to report the discharge at the CB's....

But the banks routinely fail to do that, according to the people briefed on the investigation, as well as interviews with more than three dozen borrowers who have discharged debts in bankruptcy and a review of bankruptcy records in seven states.

The errors are not clerical mistakes, but debt-collection tactics, current and former bankruptcy judges suspect. The banks refuse to fix the mistakes, the borrowers say, unless they pay for the purged debts. And many borrowers end up paying, given that they have so much at stake — the tarnished credit reports showing they still owe a debt can cost them a new loan, housing or a job.

And this is one of the main reasons why we will not get into a position to take out a another mortgage and owe the banks big money as they got you coming and going, make up their own rules, hold us hostage as a nation to bail them out and then spit all over us when the consumer needs the help or just asks them to abide by the law and report the discharge, they will hold you hostage any way they can to keep the power and as long as people keep paying them in cases like this (and living for the credit score) or bowing to the banks then it will continue....no thank you, I will stick with cash....life is good

[Slingerland]

Reminds me of a case here in Florida. A woman was getting called by Bank of America several times a day after filing. On a final evidentiary hearing, Bank of America never showed up to answer the call for sanctions. The Judge awarded over $84,000 in sanctions to the debtor, not including attorney fees! The bank stopped calling. You see, it took the judge issuing an $84,000 judgment and the threat ONE SINGLE additional call would be met with punitive and severe sanctions. The Judge ever mentioned that those were actual damages ($1,000 per call and letter) and that there were no punitive or coercive amounts in the judgment.

This makes me wonder... did BofA actually pay the sanctions? Or did they appeal it to death?

[justbroke]

This makes me wonder... did BofA actually pay the sanctions? Or did they appeal it to death?

They entered into a confidential settlement. There were other things that Bank of America was doing, such as attempting to get relief from the Stay. The details of the settlement are not public, so I don't know what is in the settlement. The judge wrote "The Motion for Rehearing or Relief from Order Granting Sanctions (Doc. No. 31) is denied as moot in light of compromise between the parties".

So no appeal, although they did try to get a rehearing.

[spidge]

An AP costs $2k in my district, so there would have to be quite a few violations to make it worth the effort. Yes?

What constitutes proof of all violations? Logging and keeping a diary of sorts? Phone records?

[justbroke]

An AP costs $2k in my district, so there would have to be quite a few violations to make it worth the effort. Yes?

An AP costs nothing for a Debtor to file for either a Complaint to Determine Secured Status or a Dischargeability Complaint (violation of injunction). Did I miss something?

The rules from the US Courts web site it quite clear... "For filing a complaint, $350, except... This fee must not be charged if - the debtor is the plaintiff..." It was designed like this to make filing a complaint not punitive for a debtor that just filed bankruptcy. That would be self-defeating. http://www.uscourts.gov/FormsAndFees...eSchedule.aspx

So, I don't understand how there are any fees. Now, if you're saying that an attorney wants a minimum $2K retainer, I could understand that retainer.

The debtor in this case logged the calls. Along with the sworn testimony and sworn affidavit, that was enough for the judge. Of course, business records such as phone records would be even better evidence.

[spidge]

And here I thought an AP was an AP was an AP. Makes sense and thanks for the explanation JB. Next time I will look up the districts fee structure before typing away. I was gauging off what the attorney fee for an AP the new judge is now demanding to perfect the service on a lien strip.

[justbroke]

I figured it was the attorney retainer/fee. I was just trying to clarify the filing fee. I think it's lousy that the rules changed in the middle of your case. I don't recall, but do you recall if the new rule is "retroactive"? Is the wording for "cases filed after XXX" or is it for "case receiving a discharge after XXX"? Could make a difference if you're grandfathered. (Back when the BAPCPA changes kicked in on October 15, 2005, all cases filed before that date were grandfathered. I truly disapprove of retroactive rules/legislation.)

[spidge]

I don't recall any wording concerning the topic of it being retroactive. I have a link hidden on my bookmarks somewhere that shows my judge is the only one that uses the AP requirement. So lucky am I.