Author Topic: Getting credit lines through banks  (Read 37554 times)

Primemuscle

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Re: Getting credit lines through banks
« Reply #100 on: April 28, 2012, 05:33:53 PM »
Aside from big ticket items, such as a mortgage or an automobile loan, one should try to pay off their revolving debt monthly. Paying interest on consumable goods is ridiculous. After you've used it up, you're still paying for it plus interest. One exception might be if a company is offering an interest free loan for a certain time period. One caution is that you absolutely must pay it off within that time period or they often back charge folks for the interest. If you pay it off in time, you've effectively used their money, interest free.

My credit score is about as high as you can get and I have no debt other than a very small mortgage on my home. I use my credit cards (American Express and Visa) to pay for everything I buy and pay them off monthly without having to pay one cent in interest. Besides getting a bunch of points, I don't have to bother with carrying around cash. The most cash I ever have is about $20.

BayGBM

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Re: Getting credit lines through banks
« Reply #101 on: April 30, 2012, 10:18:39 AM »
Should Debt Outlive a Student?
April 27, 2012
By Mitch Smith

KeyBank will now take a case-by-case approach in deciding whether to collect when a student loan debtor dies, almost certainly a response to a Change.org petition that criticized the lender for not forgiving tens of thousands of dollars in loans made to a late Rutgers University student.

Christopher Bryski, then a Rutgers junior, was injured in 2004 in a recreational accident. After two years in a vegetative state, Bryski died with about $50,000 in student loan debt. His father had co-signed for those loans.

The federal government forgives all debts when students die. Most private lending agencies do the same, said Harrison Wadsworth, special counsel to the Consumer Bankers Association’s Education Funding Committee.

“The general practice is that the bank would relieve the co-signer,” Wadsworth said after the CBA conducted an informal survey of several members Thursday afternoon to learn about their policies. “I think it’s just that the banks want to do the right things in these cases and that’s why these policies are in place.”

But because Bryski’s father had co-signed the loan, KeyBank was not required to write off Christopher’s debts. For six years, it didn’t.

"Some banks take the position that you took out the loan, you co-signed for it, you’ve got to pay it back," said a KeyBank spokeswoman, Lynne Woodman. "Some banks take the position that we will always forgive the loan if a student dies and there's a co-signer. Others do it case by case."

Bryski’s father came out of retirement to meet the monthly payments while the family campaigned for KeyBank to forgive the loans. Family members also asked Congress to pass legislation requiring lenders to make clear whether they’d excuse student loans in the event of death or incapacitation. Bills are pending in both the House and Senate.

But for years, the family's pleas to KeyBank went unanswered. It wasn't until more than 75,000 people signed the Change.org petition this month deriding KeyBank’s “ghoulish” practices that the bank eliminated the remaining debts. The family, which didn't respond to a message seeking an interview, still owed about $30,000 on Christopher’s  loans.

Woodman declined to comment on Bryski’s case, citing privacy laws, but speaking broadly said the bank would now review cases involving deceased student loan debtors on an individual basis. Woodman wouldn’t say when that policy was instituted, nor would she say how such cases were handled in the past.

Woodman also couldn’t say exactly what “case by case” would mean in practice, though she suggested KeyBank might look at whether a deceased student is leaving a substantial estate in deciding whether to collect.

That didn’t seem to be the case with Christopher Bryski. “When Christopher died, my family didn't just lose a loved one -- we inherited debt for an education that will never be used,” writes his brother Ryan on the Change.org petition. “[E]very month we're reminded of my brother's death in the worst way every time dad puts a check in the mail to a heartless bank.”

At a time when student loans are a hot political issue and the subject of late-night comedy routines, Bryski's story resonated with Change.org visitors. This isn’t the first time the site, which allows anyone to create a petition on just about anything and circulate it worldwide, has been at the center of higher education news. Arizona State University blocked access to the site in February, saying it contained viruses. Skeptics suspected the real cause of the block might have been a petition critiquing the university’s “corporate culture.”

In a statement released by Change, Ryan Bryski expressed gratitude for the online supporters but disappointment that it took that sort of public pressure to persuade KeyBank to relent.

"My family tried for years to get KeyBank to forgive my brother Christopher's loans after he died, and for years they ignored us,” Ryan said. “Thankfully, they couldn't ignore the 75,000 people who signed our petition. It's sad that it took so much to finally get a response, but my family and I are just so grateful that it worked."

Even after the longstanding disagreement between the Bryski family and KeyBank, Woodman said the bank is sympathetic to the family’s loss.

“This is heartbreaking,” she said. “This is real tragedy that these parents have been through and a number of us are holding them in our hearts and our prayers.”


Read more: http://www.insidehighered.com/news/2012/04/27/after-online-petition-bank-forgives-dead-students-loans#ixzz1tXrH9QPn
Inside Higher Ed

apply85

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Re: Getting credit lines through banks
« Reply #102 on: April 30, 2012, 01:33:15 PM »
it's a tragedy that people have to pay their bills?

Primemuscle

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Re: Getting credit lines through banks
« Reply #103 on: April 30, 2012, 02:02:11 PM »
Not to be a hard case or anything, but seems to me when you cosign on a debt, if the main debtor defaults for whatever reason, you are on the line to repay that debt. If it is decided all lenders be required to forgive debts in the event of death or incapacitation, lenders will find other ways to cover their loses. Often when these things happen, the burden of the loss is assumed by other borrowers. It is unrealistic to think that banks and investors will suffer the loss. Another outcome will be that student loans will become more difficult to acquire. Remember, if the government guarantees these loan and they go into default, our tax dollars are what is used to cover the losses.

BayGBM

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Re: Getting credit lines through banks
« Reply #104 on: October 02, 2014, 05:38:49 PM »
Beware Groink!

Millions Of Americans' Wages Seized Over Credit Card And Medical Debt
by Chris Arnold, NPR and Paul Kiel, ProPublica

Millions of Americans are still grappling with debt they've accumulated since the recession hit. And new numbers out Monday show many are having a tougher time than you might think.

One in 10 working Americans between the ages of 35 and 44 are getting their wages garnished. That means their pay is being docked — often over an old credit card debt, medical bill or student loan.

That striking figure comes out of a collaboration between NPR and ProPublica. The reporting offers the first available national numbers on wage garnishment.

A 'Roundhouse' Punch

Back in 2009, Kevin Evans was one of millions of Americans blindsided by the recession. He had a 25-year career selling office furniture, but suddenly, companies stopped buying furniture. His income collapsed. He sold his three-bedroom home outside Kansas City that he could no longer afford.

For the next several years he worked a string of low-wage jobs: at a lumber yard, at a 24-hour fitness center. He rented a room from a friend. He never collected unemployment. But with a daughter in college and basic living expenses, he ended up with a $7,000 credit card debt that he says he couldn't pay. Evans, 58, had fallen from middle-class life into basic subsistence living.

Then late last year, he found a better-paying, full-time customer service job in Springfield, Mo. Things were finally getting better, until early this year, when he opened his paycheck and found a quarter of it missing. His credit card lender, Capital One, had garnished his wages.

Twice a month, whether he could afford it or not, 25 percent of his pay — the legal limit — would go to his debt, which had ballooned with interest and fees to more than $15,000. "It was a roundhouse from the right that just knocks you down and out," Evans says.

The recession and its aftermath have fueled an explosion of cases like Evans'. Creditors and collectors have pursued struggling cardholders and other debtors in court, securing judgments that allow them to seize a chunk of even meager earnings. The financial blow can be devastating — more than half of U.S. states allow creditors to take a quarter of after-tax wages. But despite the rise in garnishments, the number of Americans affected has remained unknown.

At the request of ProPublica, ADP, the nation's largest payroll services provider, undertook a study of payroll records for 13 million employees. ADP's report, released Monday, shows that among employees in the prime working ages of 35 to 44 who had their wages garnished in 2013, roughly half, unsurprisingly, owed child support. But a sizable number had their earnings docked for consumer debts, such as credit cards, medical bills and student loans.

Actually, for workers earning $25,000 to $40,000 a year, more people were garnished for consumer debt than for child support. This marks a dramatic change. In the past, the vast majority of wage garnishments went to secure child support payments or to collect on unpaid taxes. In recent years, though, debt collectors have been filing millions of lawsuits against people for just basic consumer debt: medical bills, student loans and credit card debt.

Extended to the entire population of U.S. employees, ADP's findings indicate that 4 million workers — about 3 percent of all employees — had wages taken for a consumer debt in 2013. People in some geographic regions and income groups had twice that rate of garnishment.

Carolyn Carter of the National Consumer Law Center says these findings are "alarming."

"States and the federal government should look on reforming our wage garnishment laws with some urgency," she says.

The increase in consumer debt seizures is "a big change," largely invisible to researchers because of the lack of data, says Michael Collins, faculty director of the Center for Financial Security at the University of Wisconsin, Madison. The potential financial hardship imposed by these seizures and their sheer number should grab the attention of policymakers, he says. "It is something we should care about."

High Garnishment Rates In The Midwest

ADP's study, the first large-scale look at how many employees are having their wages garnished and why, reveals what has been a hidden burden for working-class families. Wage seizures were most common among middle-aged, blue-collar workers and lower-income employees.

Nearly 5 percent of those earning between $25,000 and $40,000 per year had a portion of their wages diverted to pay down consumer debts alone in 2013, ADP found. More people in that income group were garnished to pay off consumer debt than to pay child support.

Perhaps due to the struggling economy in the region, the rate was highest in the Midwest. There, more than 6 percent of employees earning between $25,000 and $40,000 — 1 in 16 — had wages seized over consumer debt. Employees in the Northeast had the lowest rate. The statistics were not broken down by race.

Currently, debtors' fates depend significantly on where they happen to live. State laws vary widely. Four states — Texas, Pennsylvania, North Carolina and South Carolina — largely prohibit wage garnishment stemming from consumer debt.

Most states, however, allow creditors to seize a quarter of a debtor's wages — the highest rate permitted under federal law. Evans had the misfortune to live in Missouri, which not only allows creditors to seize 25 percent, but also allows them to continue to charge a high interest rate even after a judgment.

By early 2010, Evans had fallen so far behind that Capital One suspended his card. For months, he made monthly $200 payments toward his $7,000 debt, according to statements reviewed by NPR and ProPublica. But by this time, the payments barely kept pace with the interest piling on at 26 percent. In 2011, when Evans could no longer keep up, Capital One filed suit. Court records show that Evans was served a summons, but he says he didn't understand that the stack of paperwork he received included a summons with a hearing date to appear in court.

If Evans had lived in neighboring Illinois, the interest rate on his debt would have dropped to below 10 percent after his creditor had won a judgment in court. But in Missouri, creditors can continue to add the contractual rate of interest for the life of the debt, so Evans' bill kept mounting. Missouri law also allowed Capital One to tack on a $1,200 attorney fee. Some other states cap such fees to no more than a few hundred dollars.

Evans has involuntarily paid over $6,000 this year on his old debt, an average of about $480 each paycheck, but he still owes more than $10,000. "It's my debt. I want to pay it," Evans says. But "I need to come up with large quantities of money so I don't just keep getting pummeled."

Capital One says in a statement that legal action is always a last resort. The company says it tried to work with Evans but that he was unable to keep up with the payments on a payment plan that he had agreed to.

The Garnishment Process

Companies can also seize funds from a borrower's bank account. There is no data on how frequently this happens, even though it is a common recourse for collectors. Among the people interviewed by NPR and ProPublica who were having their wages garnished, more often than not, debt collectors had also made attempts to seize money from their bank accounts. Some people we interviewed say they had stopped keeping money in banks as a result.

The garnishment process for most debts begins in local courts. A company can file suit as soon as a few months after a debtor falls behind. A ProPublica review of court records in eight states shows the bulk of lawsuits are filed by just a few types of creditors and companies. Besides major credit card lenders such as Capital One, medical debt is a major source of such suits. High-cost lenders who deal in payday and installment loans also file suits by the thousands. And finally, an outsized portion comes from debt buyers — companies that purchase mostly unpaid credit card bills.

When these creditors and collectors go to court, they are almost always represented by an attorney. Defendants — usually in tough financial straits or unfamiliar with the court system — almost never are.

In Clay County, Mo., where Capital One brought its suit against Evans in 2011, only 7 percent of defendants in debt collection cases have their own attorneys, according to ProPublica's review of state court data. Often the debtors don't show up to court at all: The most common outcome of a debt collection lawsuit in Missouri (and any other state) is a judgment by default.

Millions of debt collection lawsuits are filed every year in local courts. In 2011, for instance, the year Capital One went to court against Evans, more than 100,000 such suits were filed in Missouri alone.

Despite these numbers, creditors and debt collectors say they only pursue lawsuits and garnishments against consumers after other collection attempts fail. "Litigation is a very high-cost mechanism for trying to collect a debt," says Rob Foehl, general counsel at the Association of Credit and Collection Professionals. "It's really only a small percentage of outstanding debts that go through the process."

Experts in garnishment say they've seen a clear shift in the type of debts that are pursued. A decade ago, child support accounted for the overwhelming majority of pay seizures, said Amy Bryant, a consultant who advises employers on payroll issues and has written a book on garnishment laws.

"The emphasis is now on creditor garnishments," she says.

Bryant also says the rise in garnishments has become an unanticipated burden for employers.

"It becomes very complicated," she says, particularly for national employers who must navigate the differences in state laws. "It's very easy to make a mistake in the process." If an employer does not correctly handle a garnishment order, she says, it can become liable for a portion or even the entirety of the debt in some states.

The burden was enough to prompt the American Payroll Association to request in 2011 that the Uniform Law Commission draft a model state law on wage garnishment. Bryant said employers are hoping that the new law, which is still being drafted, will be adopted by a large number of states and reduce complications.

BayGBM

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Re: Getting credit lines through banks
« Reply #105 on: April 20, 2015, 03:49:28 PM »
for MethylMike

7 things you need to know about the statutes of limitation for debt
By Gerri Detweiler

If you have old unpaid debts, it can be helpful to know the statute of limitation that applies to those debts. If the statute of limitation (SOL) has expired, a debt is said to be "time-barred," and a creditor or debt collector is not supposed to sue you to collect.

Here are the seven most common questions we've received from readers about this topic.

1. How long is the statute of limitation for my debt?

The time period typically either starts when you fall behind on a debt, or from the date of your last payment, and the length of time depends on state law for that type of debt. This chart is a guide to state statutes of limitation. Unfortunately, it is not always clear-cut. So it's a good idea to check with your state attorney general's office, a consumer law attorney or legal aid, especially if you are being threatened with legal action. 

2. Can a debt collector try to collect after the SOL has expired?

In many cases, yes. However if you tell the debt collector not to contact you again, they must stop. It's a good idea to put your request in writing. Once they've received it, they can contact you only to confirm that they have received your request or to notify you of legal action they are taking to collect. In some states, however, trying to collect a time-barred debt is illegal and a creditor who attempts to do so is breaking the law.

3. If the SOL has expired can I still be sued?

It is not uncommon at all for consumers to be sued for time-barred debts. If you are sued for an old debt and the statute of limitation has expired, you can raise the expired statute of limitation as a defense against the lawsuit (here are some other debt collection defenses you can use, too).   However, many consumers do not appear in court and therefore the creditor or collector gets a judgment against them. That is why you should not ignore a legal notice about a debt, even if you think the debt is too old. A consumer law attorney or bankruptcy attorney can help you figure out how to respond.

4. Should I pay an old debt?

That's something only you can decide. However, keep in mind that if you pay anything — even a small amount — on an old debt, you may restart the statute of limitation. That's why it can be risky to pay an old debt if you can't afford to pay it in full. You could open yourself up to collection efforts, or even a lawsuit, for the entire amount the collector says you owe.

5. Can a debt still appear on my credit reports after the SOL has expired?

In many cases, the answer is yes. The length of time that negative information may be reported is governed by the federal Fair Credit Reporting Act. Most negative information can be reported for seven years. The statutes of limitation for most consumer debts, on the other hand, is four to six years. So you could have a situation, for example, where the statute of limitation expired on a debt in four years but the related collection account still appears on your credit reports for another three years after that. Collection accounts can do serious damage to your credit scores. You can get a free credit report summary on Credit.com to see if an old debt is affecting you.

6. I took out a debt in one state but then moved. Which state's SOL applies?

That can be a difficult question to answer. Consumers can generally be sued in the state where they took out the loan or the state where they currently live. Sometimes the statute of limitation will be based on the laws of the state described in the contract (in the case of credit cards, that will be spelled out in the credit card agreement).

When it's not clear which state's SOL applies, it is often up to the court to decide. In a number of court cases, the statute of limitation that was shortest was applied. But that's not true in all cases. That's why it is helpful, if you are being sued for a debt, to consult with a consumer law attorney who can help you understand whether the statute of limitation has likely expired.

7. What is the SOL for court judgments?

If a creditor or collector has obtained a court judgment there is often a separate statute of limitation that applies to judgments. (Tip: If you have unresolved debts, be sure to at least get your free annual credit reports to see if any judgments are listed.) In many states, that time period is 10 years or longer, and judgments may be renewed.

http://finance.yahoo.com/news/7-things-know-statutes-limitation-090002068.html

BayGBM

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Re: Getting credit lines through banks
« Reply #106 on: May 22, 2015, 04:24:56 AM »
It is now six years later... since we learned that college student, GroinkTropin, decided his credit card debt was old and didn't need to be paid.  He had a plan to rebuild his credit that did not involve paying his old debts and he did not want to hear the "harsh" judgments of anyone who thought he needed to pay his old bills.  He obtained a secured credit card and was about to have the limit raised to $500.  Most importantly, we learned that he had "morals."

With the passage of time, presumably GroinkTropin has completed his degree and is now gainfully employed.  So, has he paid off his $6k in old credit card debt?  Does he have new credit card debt?  Is he making conscientious payments on any student loans?  Does he have car payments and is he making them?  Reliably paying his rent?  We learned previously that, in his view, owing money to a creditor and an individual is not the same thing (he will pay the latter debts but may not pay the former). So, how is he managing his credit and finances these days?

Would you loan him money or hire him?