Know About US Federal Bankruptcy Law in Detail

Bankruptcy is a serious economic down turn for an individual or an organization where the dispensation of debts simply becomes next to impossible because there's hardly any finance left in the kitty. Federal bankruptcy Laws are there to help the individual or an organization to file under Chapter 7 Bankruptcy, or Chapter 13 Bankruptcy or Chapter 11 Bankruptcy. The Bankruptcy Law, which is also popular as the Bankruptcy Code of the United States of America, quotes the 1978 Bankruptcy Reform Act as Codified in The Unites States Code under Title 11. Anyone filing under the Chapter 7 Bankruptcy will have to sell of his or her assets so that all the debts can be paid off. Assets are classified as exempt and non-exempt. The non-exempt assets are meant for the creditors.

Chapter 13 Bankruptcy is for those individuals and organizations who have insufficient assets to pay back to the creditors, but who are still making the money. The creditor will put the claims on hold until it is decided by the debtor. The debtor will hold the possession of his/her assets as decided mutually by the creditors and the court. The Chapter 11 Bankruptcy aims at restructuring and providing the remedies to the bankrupt individuals and the organizations. The repayment methodologies are similar to Chapter 13 Bankruptcy.

Get ready to avail the benefits under the federal government's bankruptcy law. But, before you actually do it, you have to be pretty sure that all the terms and conditions are known to you. Whether you are applying for Chapter 7 or Chapter 13 or Chapter 11 bankruptcy, you have to be pretty sure about all the clauses delineated in it. If you miss any of the clauses, then you will miss your eligibility requirements. If you find that the terms and conditions of bankruptcy are not understandable to you, the best thing to do is hire the services of efficient bankruptcy lawyer or attorney. In this way, you will not only be saving your time and money, but also be progressing in the right manner to file your bankruptcy application. Do your homework right in the beginning as bankruptcy judge may ask you quite a number of questions before actually qualifying your candidature.

File Federal bankruptcy depending on your financial condition and as per the court's decision. Hire the services of an efficient bankruptcy lawyer to help you in consummating the Bankruptcy successfully and quickly.

The Fair Debt Collection Practices Act

The Fair Debt Collection Practice Act (FDCPA) is a statute that was added to the Consumer Credit Protection Act by Congress in 1978. The FDCPA sets forth guidelines for debt collection practices in order to protect consumers from abuse, allow for the validation of alleged debts, and ensure the rights of consumers. The FDCPA governs many different types of debt collectors, whether they be a dedicated agency, an individual, or a practicing attorney.

Practices Forbidden by FDCPA:

The FDCPA prohibits debt collectors from engaging a variety of behaviors or practices considered to be abusive or unethical. For example, debt collectors may only contact a debtor during "normal" hours, defined as the time between 8 AM and 9 PM, unless permitted to do otherwise by the debtor.

In general, consumers' rights are heavily guarded by the FDCPA. Under the statute, a debtor can force a collection agency to refrain from further contact by a simple written notice. The only exceptions to this rule are a) notifying the consumer that collection efforts have ceased, and b) notifying the consumer of any further action, such as a lawsuit, that the creditor intends to pursue.

Protocol Required by FDCPA:

The FDCPA also obligates debt collectors to provide certain information about themselves and the creditor they represent. They must identify both themselves and the creditor, including both name and address, inform the consumer of their right to dispute the debt, and provide validation of a debt in the case of a formal dispute.

Debate over FDCPA:

The process of debt collection is stringently regulated and highly technical. The FDCPA's provisions are enforced by the Federal Trade Commission. Furthermore, violations of the FDCPA also allow the affected private citizen(s) to sue to recover compensation up to $1,000, plus any damages caused by the violation.

Not everyone is happy with the FDCPA as it stands, however. In fact, the FDCPA has come under fire from both consumer advocates and industry representatives. In the former case, consumer advocates feel that the penalties allowed by the FDCPA are not sufficient deterrents to abusive collection practices, partially due to the fact that fines have not been scaled to inflation. On the other hand, the collection industry complains that the heavy regulations of the FDCPA promote frivolous and time-consuming lawsuits over minor technical details, and thus impedes their ability and right to collect on valid, legitimate debts.