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Illinois Consumer Law Blog

  • Millions of Americans struggle with old debts they can’t pay back, and live with the uncertainty of knowing that at any moment, they could have their bank accounts or wages seized by collectors. ProPublica has spent years gathering data on how often debt collectors use the courts to secure judgments against debtors – a tactic that affects millions of Americans. They sought to find out who is filing lawsuits, how many lawsuits are ...
  • The Supreme Court recently threw out the decision made by the Ninth Circuit Court in the case of Spokeo Inc. v. Thomas Robins, which held that a plaintiff does not have a legal right to sue simply by alleging bare, technical violations of statute. On Monday, May 16, 2016, SCOTUS ruled 6-2 in favor of the business community, including the collection and credit industry. As you may recall from our previous blogs, the key issue in the Spokeo case ...
  • Supreme Court Backs Privacy Rights of Consumers

    According to a recent United States Supreme Court decision, consumers can file lawsuits for statutory damages if a corporation commits an unlawful act even if consumers have not lost finances or suffered injury. The decision also stated that the corporation must also pay fixed amounts. Of course, the Supreme Court did not reach this decision without a debate. Corporate advocates argued that consumers alleging false statements should not hold the ...
  • Justices Wrestle with Debt Collection Tactics

    The Supreme Court recently heard oral arguments in a case involving an Ohio law that allows the state attorney general to use “special counsel” (independent contractors) to collect tax debts. This law has been in effect as far back as the Great Depression. Federal law, however, prohibits abusive and deceptive representation to collect debts as a way to protect consumers from predatory practices. Using any name other than the true name ...
  • According to an article published by Time, the federal Consumer Financial Protection Bureau ordered two different firms to discontinue an illegal collection process that utilized an automated lawsuit generator. The CFPB stated that New Century Financial Services, Inc. and Pressler & Pressler, LLP have been filing lawsuits against people while using nonexistent or insubstantial evidence to back their claims. According to the Director of CFPB, ...
  • Father Wins Student Loan Debt Relief

    A federal appeals court has urged a bankruptcy judge to consider a settlement that would allow a Duxbury father to erase more than $246,000 in student loan debt. Fourteen years ago, now 65-year-old Robert Murphy lost his $165,000-per-year job as president of a manufacturing company and since then has been unable to find new employment. Without income, the student loan debt he amassed to send his three children to college continued to grow with ...
  • How Judges Can Help Prevent Zombie Foreclosures

    According to RealtyTrac, 25 percent of foreclosures in the U.S. are “zombies” – homes with no clear ownership of title. This happens when the owner has vacated the property, but the lender has not yet closed the case and taken over ownership. During this period of unclear ownership, the property falls into disrepair and hurts the value of surrounding homes in the neighborhood. Zombie mortgages can be found all over the country, ...
  • Rapper 50 Cent’s flamboyant displays of wealth on social media were recently taken to task yet again by a bankruptcy judge. At the beginning of this month, the rapper, whose real name is Curtis Jackson, was ordered to stop showing off wealth he apparently doesn’t have. Jackson filed for Chapter 11 bankruptcy last year, although it has been suspected that he has been lying about his financial situation after posting a number of photos ...
  • This March, The Wall Street Journal reported that law school graduates who file for bankruptcy can receive a discharge of the debt they racked up while studying for the bar exam. This ruling contradicts the widely accepted idea that federal student loan-related debt can only be discharged under circumstances of exceptional financial hardship, during a time when student loan debt has more than doubled over the past decade. According to U.S. ...
  • Every day, a countless number of Americans receive unwanted phone calls to their cellphones from banks, debt collectors, and other companies. However, this act is considered unlawful under the Telephone Consumer Protection Act, which states that persons must give their consent to receive these types of calls from companies. If an individual receives an unwanted call from a debt collector or various other types of companies, the individual may be ...
  • Lenders Make Mistakes, Too

    According to an article published by The Wall Street Journal, Ocwen Financial Corporation, a business that specializes in risky loans, will become the ninth-largest servicer out of all servicers in the industry, tripling its size since 2009. Recently, the company has agreed to purchase Litton Loan Servicing from Goldman Sachs Group Incorporation for $264 million and Saxon Mortgage Services from Morgan Stanley for $59 million. But, why is the ...
  • Beware of This New Debt Collection Scam

    The Federal Trade Commission is warning consumers of a new debt collection scam involving fake collection notices for phantom debts. According to the FTC website, criminals are putting a creative – and scary – twist on an old scam by impersonating judges, court officials, and law firms. These fake debt collectors are using intimidation to try to get consumeres to send them money for debts that they don’t actually owe. ...
  • How Courts Punish People for their Poverty

    Think debtors prisons no longer exist? Think again. One way that court systems commonly raise revenue is to impose fees and fines on those who commit minor offenses. For many people, these expenses can pile up, driving them into poverty. Often, people who fail to pay their fees are jailed illegally by local and state governments, further perpetuating the cycle of poverty when these people lose their jobs and homes. This is a huge problem in many ...
  • Fannie Mae and Freddie Mac have announced the first-ever principal reduction loan modification program for homeowners with underwater mortgages – excellent news for both homeowners and investors. The implementation of this program is an important reversal of a poorly-conceived FHFA policy that has been in place since the government bailout of Fannie Mae and Freddie Mac during the housing market collapse. Since then, the agency has strictly ...
  • One of the largest debt collectors in the United States, Midland Credit Management, Inc. is facing a potential class action lawsuit from consumers accusing the company of trying to force payment of old debts that are no longer legally enforceable. The company is accused of violating the Fair Debt Collection Practices Act (FDCPA) by mailing out collection letters without informing consumers that the statute of limitations expired, which means that ...
  • It is extremely important to check your credit report on a yearly basis. The three major credit reporting agencies, Equifax, Experian, and TransUnion all offer a free report once a year. You should look through your report for any errors and take action to fix them as soon as possible. Even an error that seems small or insignificant can have an impact on your credit health, potentially negatively affecting your loan eligibility, ability to obtain ...
  • Thanks to a supercomputer owned by data analytics company LexisNexis, your insurance company can find information on just about every aspect of your life, allowing them to predict, assess, and manage the risk involved in offering you services. The program can also use the information in order to get you to increase your coverage, market new products to you, or raise your premium or drop your coverage if it finds that you have done something ...
  • New changes from Fannie Mae will make it easier for people to get approved for a mortgage after a bankruptcy, foreclosure, or short sale. The mortgage-backer has reduced the mandatory waiting period for reapplying for a loan, which used to be four years, down to only two years with documentation of extenuating circumstances. This is one year longer than the FHA’s minimum waiting period through the FHA Back to Work program, in which certain ...
  • Recently, our Chicago consumer law attorneys, Attorney Paul M. Bach and Attorney Penelope N. Bach asked the bankruptcy court to review a case for our client, Renato Casali. Casali filed for Chapter 7 bankruptcy on July 31, 2013. Prior to filing, Casali opened a home equity line with Parkway Bank & Trust, a local financial institution. Upon discovering Casali’s choice to file for bankruptcy, the institution filed a lawsuit against him. ...
  • How Did Three Credit Agencies Gain a Monopoly?

    The practice of extending credit dates back to the 19 th century when industrialization led to the mass production of expensive machines that most consumers were unable to afford in a single payment. Credit reporting agencies were created as credit became more widely used. The oldest of these reporting bureaus that is still around today is Equifax (formerly Retail Credit Company, founded in 1899). The agency reported all kinds of information on ...
  • Myths & Facts About Payday Loans

    It is pretty common for those who are considering bankruptcy to have taken out one or more payday loans in the past. Payday loans, also called cash advance loans, are small loans that are meant, in theory, to be paid off by the time the borrower receives their next paycheck. Here’s how it works: the borrower goes to the payday lender and provides them with some sort of proof of employment, and then gives the lender a check, postdated, for ...
  • HANGUP Act to End Unwanted Robocalls

    Two House Democratic Lawmakers introduced a new law that would roll back a budget bill provision of the Bipartisan Budget Act of 2015 allowing unsolicited autodialed collection calls to borrowers of government-backed loans. According to Congresswomen Tammy Duckworth and Anna Eshoo, ranking member of the House Energy and Commerce communications subcommittee, the HANGUP Act (Help Americans Never Get Unwanted Phone Calls) will forbid debt collectors ...
  • U.S. Supreme Court Justice Antonin Scalia’s unexpected death in February at the age of 79 threw into disarray the fate of many of the Supreme Court’s most high profile cases, including those involving hot-button topics like immigration, abortion, class action standards, and affirmative action. With his passing, there is now a clear opening for the high court to split evenly on whether consumers are allowed to sue companies for ...
  • TCPA Exemption for Fed-Backed Loans Circulated to FCC

    On February 17, a draft rule to exempt robocalls to collect federal debt from TCPA rules was circulated to the FCC. This proposal is looking to create a balance between consumer protections and a directive by Congress allowing companies servicing federally issued mortgages or student loans to autodial borrowers without the consumer’s permission. If the item were ultimately approved, companies like Navient Solutions, Inc. and Nelnet Inc. may ...
  • A bankruptcy judge has ordered 50 Cent into her courtroom to explain a number of photos of the rapper posing with large stacks of cash, suggesting that he could be lying about his current financial situation after filing for Chapter 11 bankruptcy last summer. According to the judge, bankruptcy is supposed to be a transparent process meant to help “honest, but unfortunate” people achieve a fresh start. These photos suggest that 50 ...