The Bankruptcy Law Firm, Prof. Corp.
Car Loan Delinquencies Surge To Highest Point Since 2010
Car Loan Delinquencies Surge To Highest Point Since 2010, reports Credit & Collection e-newsletter of 2/27/19 Borrowers are behind in their auto loan payments in numbers not seen since delinquencies peaked at the end of 2010, according to the Federal Reserve Bank of New York. More than 7 million Americans were 90 or more days behind on their car loans at the end of last year, 1 million more than eight years ago, according to a report from the bank. That’s a potential sign of trouble for the auto industry and perhaps the broader economy. The New York Fed reported…
FTC v. Federal Check Processing, Inc., ___F.3d ___(2nd Cir. 2019)
The US Court of Appeals for the Second Circuit held that Individual Owners Of Debt Collector Companies Personally Liable For Companies’ FDCPA And FTCA Violations The Second Circuit recently held that it was proper to find two individual co-owners and co-directors of several corporate debt collector entities personally liable for $10,852,396 after such entities violated the Federal Trade Commission Act (FTCA) and the Federal Fair Debt Collection Practices Act (FDCPA). In FTC v. Federal Check Processing, Inc., the FTC brought suit against thirteen corporate debt collector entities and the two co-owners and co-directors of such entities, alleging that the defendants’…
Federal Trade Commission vs. AMG Capital Management, LLC
Federal Trade Commission vs. AMG Capital Management, LLC, ___F.3d___, 2018 Westlaw 6273036 (9th Cir.): The Ninth Circuit Court of Appeals holds that a trial court correctly ordered equitable restitution of $1.27 billion due to a payday lender’s deceptive practices. Comment: seems unlikely that 1.27 billion can be collected from a payday lender, regardless of the amount stated in the judgment against the payday lender.
Williams vs. American Honda Finance Corp.
Williams vs. American Honda Finance Corp., 907 F.3d 83 (1st Cir. 2018): The federal court of appeals for the First Circuit recently decided a case regarding whether, when a car borrower defaults on paying, and the car lender repossesses and sells the car at auction, is the “deficiency” that the car borrow owes calculated as amount owed minus fair market value of car, or as amount owed minus auction price car sold for at a wholesale auction. NOT a 9th Circuit case, NOT on CA law, but still could have effect in how 9th Circuit would rule on this issue,…
In re Maust Transport, Inc., 2018 Westlaw 4488712 (Bankr. W.D. Wash.)
A bankruptcy court in Washington has held that when a creditor assisted a bankruptcy trustee’s prosecution of a fraudulent transfer claim against a bank, the creditor was entitled to seek an award of administrative expenses for its “substantial contributions” to the Chapter 7 estate. FACTS: Following the filing of an involuntary Chapter 7 petition, one of the petitioning creditors suspected that the debtor’s secured lender had received a fraudulent transfer. The Chapter 7 trustee had no funds to pursue the case and could not locate contingent fee counsel to handle the matter. The petitioning creditor then assembled some evidence and…
The US Government Consumer Financial Protection Bureau May Scrap Underwriting Requirements For Payday Loans
The Consumer Financial Protection Bureau (CFPB) may scrap some underwriting requirements for payday loans, which would make it easier for payday lenders to provide the loans and easier for some borrowers to procure them. The underwriting requirements in question are part of the CFPB’s payday lending rule, which the bureau spent five years working on and which the last director and the current one, Mick Mulvaney and Kathy Kraninger respectively, seek to backtrack. This part of the rule requires payday lenders to underwrite loans for borrowers who obtain more than six payday loans in a year. Lenders must verify the…
Obduskey v. McCarthy & Holthus LLP, U.S. Supreme Court case No. 17-1307: Meaning of the Term ‘Debt Collector’ in Foreclosure Protections Case Debated in Supreme Court Oral Argument
On 1/7/19, the US Supreme Court heard oral argument in Obduskey v. McCarthy & Holthus LLP, U.S. Supreme Court case No. 17-1307. A decision is expected to be issued by the US Supreme Court by June 2019. According to CNBC.com, depending what the US Supreme Court rules, the case may resolve a legal question that could have broad ramifications on hundreds of thousands of Americans who are foreclosed on without a judicial process each year. A key issue in the matter is who or what can be considered a “debt collector.” The case centers on Dennis Obduskey, a Colorado man…
In re OGA Charters, LLC, 2018 Westlaw 4057525 (5th Cir.)
In re OGA Charters, LLC, 2018 Westlaw 4057525 (5th Cir.): The Fifth Circuit Court of Appeals recently held that when a bankruptcy estate is subject to mass tort claims, the estate has an equitable interest in the insurance proceeds, thus precluding extrajudicial settlements by the tort victims. FACTS: A thinly-capitalized bus charter company owned an insurance policy providing $5 million in liability coverage. One of the company’s two buses suffered an accident, killing nine passengers and injuring 40 others. The passengers filed claims against the bus company. Some of the passengers quickly entered into settlements with the insurance carrier, which…
New California Debt Collection Laws Take Effect Jan. 1, 2019
Three new CA state laws take effect on 1/1/2019, and these laws all favor debtors, and disfavor debt collectors. The three bills are A.B. 1526, which amends sections 1788.14 and 337 of the California civil code adding requirements for time-barred debts; A.B. 38, which clarifies the definition of a “student loan servicer”; and A.B. 1974, which provides parameters for collecting debts owed to public schools, ACA International’s Compliance Analyst Laura Dadd reports. Just like several other states, the amendments to sections 1788.14 and 337 of the California civil code will require debt collectors to provide consumers with a notice that…
Judge Tells Government Debt Collectors They Can’t Collect From A Broke 58-Year-Old Woman
In 1991, Vicky Jo Metz borrowed $16,613 to pay for tuition; now she’s 59, and has paid back 90% of that money – and she still owes $67,277. Metz is broke and has filed for bankruptcy. But thanks to a law signed by Bill Clinton, it’s almost impossible to discharge your student debt through bankruptcy. That’s why the US government sent their most notorious knuckle-breaking debt-collectors, the Educational Credit Management Corporation to argue against Metz’s debt being forgiven. ECMC had a counteroffer: Metz could pay $203 per month for 25 years – until she was 84 years old – and…