News
Federal Trade Commission (FTC) Halts Debt Relief Scheme That Bilked Millions From Consumers While Leaving Many Deeper In Debt
Credit & Collection 12/1/22 e-newsletter reports that the FTC has temporarily shut down a credit card debt relief scheme operated by Sean Austin, John Steven Huffman, and John Preston Thompson and their affiliated companies that allegedly took millions from people by falsely promising to eliminate or substantially reduce their credit card debt. “These defendants preyed on older Americans already struggling with credit card debt and caused them to fall into even worse debt, with lasting harm to their credit,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We will continue going after companies that take advantage of…
U.S. Supreme Court To Review Biden Student Debt Relief Plan In February 2023
Can a president (here President Biden), by executive order, cancel $400 billion dollars of student loan debt? Or can only the US Congress, by legislation passed by US Congress, and signed into law by the President, cancel that $400 billion dollars of student loan debt. The U.S. Supreme Court said Thursday it will hear oral arguments in February 2023 on this issue: Six Republican-led states have sued in federal court, saying that President Biden’s so called “student borrower relief plan” (cancelling $400 billion dollars of student loan debt by an executive order, without legislation passed by the US Congress, allowing…
Mortgage Rates Hit 6.02%, Highest Since the 2008 Financial Crisis
Mortgage rates topped 6% this week [9/15/22] , a jolt to home buyers who last year were paying less than half that. The average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis in 2008, when the U.S. was deep in recession. [reported by Wall street Journal on 9/15/22]
Jurist Noted for Bankruptcy Expertise Will Weigh J&J Talc Appeal
Johnson & Johnson’s use of bankruptcy to shift mass talc lawsuits against the company to chapter 11 will meet its most serious test yet before a federal appeals judge whose influential bankruptcy rulings shape one of the nation’s top corporate restructuring hubs, WSJ Pro Bankruptcy reported. Judge Thomas Ambro sits on the three-judge panel that will hear arguments Monday in a Philadelphia courtroom over an emerging corporate restructuring strategy where companies facing mass personal-injury litigation use a Texas law to create a new subsidiary with minimal business operations and make it responsible for tort liabilities before filing for bankruptcy. The…
SB 1099
Description: On August 30th, California Senate Bill 1099 was delivered to Governor Newsom’s desk for signature. NACBA is very proud to be the official sponsor of SB 1099. Join NACBA’s California working group as they walk you through the significant improvements to CA’s bankruptcy exemption laws & how you can apply them for your clients. WHY YOU SHOULD ATTEND: NACBA’s California working group assisted Senator Bob Wieckowski, the bill’s author, in getting these significant improvements to California’s bankruptcy laws. Highlights of SB 1099 that will be discussed include: “Ride through” option restored for vehicles (no more repos for failure to…
The federal Consumer Financial Protection Bureau (“CFPB”) Adds New Debt Collection Rule FAQs
Last week, the CFPB published additional frequently asked questions on Regulation F, its debt collection rule. The new FAQs address third-party communications, electronic communications, and unusual or inconvenient time and place provisions. Prohibitions on Third-Party Communications. The FAQs address the following questions: What is the Debt Collection Rule’s general prohibition on third-party communications? Are there exceptions to the general prohibition against third-party communications? Does the general prohibition on third-party communications apply to electronic communications from a debt collector about a debt? Electronic Communications. The FAQs address the following questions: Does the Debt Collection Rule require debt collectors to communicate electronically…
Commentary: The Aging Student Debtors of America
Americans aged 62 and older are the fastest-growing demographic of student borrowers, according to a commentary in the New Yorker. Of the 45 million Americans who hold student debt, one in five are more than 50 years old. Between 2004 and 2018, student loan balances for borrowers over 50 increased by 512 percent. Perhaps because policymakers have considered student debt as the burden of upwardly mobile young people, inaction has seemed a reasonable response, as if time itself will solve the problem. But in an era of declining wages and rising debt, Americans are not aging out of their student…
President Biden Signed Into Law the Bill Raising the Debt Limit for Subchapter V of Chapter 11 and Chapter 13
On 6/21/22, President Biden signed into law the bill raising the debt limit for Subchapter V of Chapter 11 back to 7.5 million dollars, permanently, and raising the debt limit for ch13 to $2.75 million (total 2.75 million secured and unsecured debt, together). This is a beneficial and necessary change, including because the 2.75 million debt limit for Subchapter V of Chapter 11 was too low, and the debt limit for Chapter 13 (the individual wage earner repayment plan chapter of bankruptcy) was also too low, including because of high inflation.
In Older Americans, Rising Debt May Adversely Affect Health
The New York Times Newspaper reported on 6/5/22, updated 6/6/22, that research shows that debt has risen among older people, and those who owe are more likely to have multiple diagnosed illnesses. Denise Revel had a history of developing blood clots, so in 2011, when her leg grew painfully swollen and hot to the touch, she knew what to do. She headed for the emergency room. She recovered from the clot but could not pay the medical bill. Working as a fitness instructor, she had no health insurance. “I’ve always been financially challenged,” said Ms. Revel, 62, who lives with…
$5.8 Billion in Loans Will Be Forgiven for Corinthian Colleges Students
In its largest student loan forgiveness action ever, the Education Department said on Wednesday, 6/1/22, that it will wipe out $5.8 billion owed by 560,000 borrowers who attended Corinthian Colleges, one of the nation’s biggest for-profit college chains before Corinthian College collapsed in 2015, the New York Times reported.