Proposed New Rules for Payday Lenders

The federal agency responsible for monitoring the banking industry, The Consumer Financial Protection Bureau, is proposing new rules to protect the American public from some of the unscrupulous lending practices of the payday lenders. The Agency is trying to find the right balance between predatory lending and the free flow of credit for people in need of short-term loans. Different options according to the New York Times may require lenders to actually evaluate a borrower’s income and expenses for feasibility of repayment.

They may also require lenders to set limits on the amount that may be lent to a given individual. Other rules may put a cap on the actual interest rate charged, possibly 28%. In New York, the cap is 16%. All of these proposed measures are designed to regulate an industry where so many borrowers are caught in a vicious trap of rolling one loan into another with no way out, but bankruptcy.

Payday loans are now considered a major reason why people look to bankruptcy laws to provide relief from these exorbitant loans and the aggressive conduct of these creditors and their collection agents. If you are caught in one of these payday loan dilemmas and need a Bronx/Westchester bankruptcy attorney, call our office for a free telephone consultation.

Some relief in sight for Consumers regarding the Credit Reporting agencies

Experian, Equifax, and Transunion have come to terms with New York’s Attorney General’s office concerning the reporting of debt to its bureaus. The agencies will be required to hire specialists to handle consumer disagreements when a complaint has not been successfully resolved. It will no longer be enough to discount a consumer allegation of wrongful entries or simply refer it back to the lenders. The bureaus will need to evaluate the complaint by consumers and accept or reject the findings of the creditor based upon its own investigation.

The reporting agencies have accepted the need to provide greater accuracy because of the importance of credit scores in our society, be it for auto loans, mortgage loans, lines of credit, credit card issuance, and rental housing, to name a few.

As well, the agreement will have national implications because many of the provisions will not only apply to New York State but will apply to the rest of the country. This will eliminate a dual system of resolving issues. A unified approach will allow their policies to be implemented based upon a singular rule.

All this is good news for consumers who struggle to have errors corrected in a timely manner. If you have debt that has become unmanageable, consult a Bronx/Westchester bankruptcy attorney and get a free telephone consultation.

Chapter 7 Bankruptcy and Spending Your Tax Refunds

This is the time of the year that you may be filing your taxes early to obtain a tax refund. If you are in financial debt and are considering bankruptcy as an option, your tax refund monies may enable you to pay an attorney to assist you with the process. An often overlooked issue is how you spend the remainder of your refund. It is important to note that if you are contemplating filing a bankruptcy, you need to avoid repaying or gifting monies to family or friends on the eve of or in close proximity to a bankruptcy filing without consulting an experienced bankruptcy attorney. If you have already done so prior to speaking to an attorney, you still may fully protect the refund but only a competent attorney will be able to guide through the process. A Trustee is appointed under the rules of bankruptcy to evaluate your assets and liabilities and income and expenses. Monies paid to family or paid to friends in the scenario are frowned upon under the bankruptcy preference rules. As a general rule, no creditor or family and friends may be given special treatment with respect to monies transferred to them within one year of the filing of the case for $650 or more. If so, this may result in a demand from the Trustee to your family or friends to return those monies for the benefit of all creditors. For a thorough analysis of this issue whether you have a preference problem when you file a bankruptcy and the strategies for defending yourself against this, including solvency (an asset versus liabilities analysis yielding a positive result), consult an experienced Bronx/ Westchester attorney.