The rights of creditors under the Fair Debt Collection Practices Act are being reviewed by the United States Supreme Court. Currently, the law prohibits creditors from filing claims for time-barred debts. However, a recent split between the Circuit Courts means that this may change.
Archive for August, 2016
Chapter 7 bankruptcy is a useful tool for some individuals to discharge most of their debt. Chapter 7 bankruptcy, or “straight bankruptcy,” allows the filer to keep certain property exempt, while the rest is liquidated to satisfy the debt. Liquidation is the forced sale of an asset to satisfy an obligation, like loans or credit. The Bankruptcy Trustee would liquidate all of the filer’s non-exempt property to satisfy outstanding debts.
The credits then accept the payments in satisfaction of the debt; often it can be pennies on the dollar. Anything that is unpaid is discharged by the bankruptcy court.