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Hi,
BACKGROUND
I owe Citibank about 3k and 7k both on seperate bank card accounts.
And I owe other banks too. I don't have the money to make payments.
Citibank has won judgment against me in court. I need time to pay this
debt but they are extremely aggressive in collecting.
I started a small business 8 years ago and incorporated it in California.
I have a patent that the collection attorneys say they will go after.
I can assign the patent to the corporation but I discovered that all the
attorneys have to do is modify the judgment to include the corporation.
They can also sue the corporation as a third party.
Until the business grows the little money I have I need to live on.
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
2. How do I turn off collection without bankruptcy.
Is there a way?
Thanks
Mark T.
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pobox3000@excite.com (mark) writes:
I started a small business 8 years ago and incorporated it in California.
I have a patent that the collection attorneys say they will go after.
I can assign the patent to the corporation but I discovered that all the
attorneys have to do is modify the judgment to include the corporation.
They can also sue the corporation as a third party.
Until the business grows the little money I have I need to live on.
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
No. The point of a corporation is to provide for limited liability to
its shareholders. In other words, if someone (an employee, officer,
another shareholder, etc.) *other* than Shareholder A incurs a
liability, Shareholder A is only liable to the extent of his
investment in the corporation.
However, if Shareholder A *himself* incurs the liability, he's
personally on the hook for all of it. And while if the corporation is
properly structured and maintained, creditors generally cannot attach
the *corporation's* assets for Shareholder A's liabilities, they can
certainly attach *Shareholder A's* assets, including A's shares in the
corporation.
Further, if Shareholder A incurred the liability while acting in some
valid, authorized capacity for the corporation, then not only is A
personally liable for what he did, but the corporation itself is
liable for the acts of its "agent".
So a one-man corporations often provide far less protection than
what "everybody knows" they do:
* The owner is (as always) personally liable for his own acts,
and so his personal assets (including his shares in the corp)
could be attached.
* Since practically by definition the owner of a one-man corp
was performing duties for the corporation, the corporation
itself is liable for the wrongdoings and could have its
assets attached directly.
2. How do I turn off collection without bankruptcy.
Is there a way?
Reaching a settlement with the creditors.
--
Rich Carreiro rlcarr@animato.arlington.ma.us
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mark <pobox3000@excite.com> wrote:
BACKGROUND
I owe Citibank about 3k and 7k both on seperate bank card accounts.
And I owe other banks too. I don't have the money to make payments.
Citibank has won judgment against me in court. I need time to pay this
debt but they are extremely aggressive in collecting.
I started a small business 8 years ago and incorporated it in California.
I have a patent that the collection attorneys say they will go after.
I can assign the patent to the corporation but I discovered that all the
attorneys have to do is modify the judgment to include the corporation.
They can also sue the corporation as a third party.
Until the business grows the little money I have I need to live on.
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
This is for discussion purposes only, and is not legal advice. I'm
not a lawyer. If you want legal advice, hire a lawyer.
The point of having a corporation is that it protects _you_ from the
debts of the corporation. If the corporation ends up owing money that
it can't pay, the creditors can't come after you. (Assuming that you
actually kept the corporations finances separate from your own.)
It doesn't work the other way around. The corporation is your
property, and they can seize (take away) your property to pay your
debts, including the stock you own in the corporation. Then they end
up owning the corporation. Which probably won't do them much good in
the case of a small business -- the real value of the corporation is
the effort you will put into running the business!
2. How do I turn off collection without bankruptcy.
Is there a way?
See the Fair Debt Collection Practices Act,
http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#805
Look at section (c), CEASING COMMUNICATION.
That is how you tell them to shut up and stop bothering you.
But they can still sue you in court if they think it's worthwhile --
which it may well be for $10K. You can get out from under if you
file bankruptcy, but you will pay a higher interest rate for credit
for up to 10 years afterward.
As for their threat to take away your patent: they may be able to do
that if they get a court judgement. But it may not be worth anything
without your intelligent application of it. It depends partly on how
much you disclosed on the patent application, and how "complete" the
invention is.
Personally, I think it would be worthwhile to pay a couple of hundred
to a lawyer to get some _real_ advice (which this isn't). $10K is a
lot more than the cost of an hour or two consultation with a lawyer,
plus maybe a letter or two to persuade Citibank (or its collection
agency) to leave you alone.
--
I pledge allegiance to the Constitution of the United States of America, and
to the republic which it established, one nation from many peoples, promising
liberty and justice for all.
Feel free to use the above variant pledge in your own postings.
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I have a patent that the collection attorneys say they will go after.
If it's an asset, they are entitled to do so.
I can assign the patent to the corporation but I discovered that all the
attorneys have to do is modify the judgment to include the corporation.
It's not that easy. However, assets that were yours at the time of the
judgment that you transfer to the corporation *can* be attached.
Transferring it now might also open you up to charges of fraudulent
transfer, if the corporation has no real reason for the patent and it
appears that you assigned it for the purpose of hiding it from creditors.
They can also sue the corporation as a third party.
Why? Did the corporation harm them? Did the corporation create the debt?
Until the business grows the little money I have I need to live on.
Learn what your state exemptions are.
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
The *corporation's* assets are safe until shown otherwise. The patent is
*your* asset, and currently has a judgment lien against it. If you transfer
it to the corporation, the judgement lien comes first. Had you transferred
it *before* the judgment it might be a different matter.
A corporation exists for much more than simply protecting assets- if that
were all corporations did, they wouldn't exist.
2. How do I turn off collection without bankruptcy.
Is there a way?
Pay the bill. Make a deal. Giving away stuff of value now can get you in a
heap of trouble.
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[long story made short]
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
The whole point of incorporation is to limit the risk taken by
investors; it has nothing to do with evading creditors.
You are proposing to commit a fraudulent transfer: you are insolvent
and attempting to evade your creditors by transferring an asset to a
third party (the corporation). They may simply petition the court to
disregard the transfer.
Even if you were successful in transferring the patent, or even if the
corporation already owned the patent, you would still stand to lose
all your equity in the corporation.
2. How do I turn off collection without bankruptcy.
Is there a way?
If they have a judgment against you for more than you can pay, there
may not be much short of bankruptcy that will stop them.
--
Not a lawyer,
Chris Green
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In article <66qi80lrb2jms369q1jafq1dsv1if9f30k@4ax.com>, mark
<pobox3000@excite.com> wrote:
I owe Citibank about 3k and 7k both on seperate bank card accounts.
And I owe other banks too. I don't have the money to make payments.
Citibank has won judgment against me in court. I need time to pay this
debt but they are extremely aggressive in collecting.
I started a small business 8 years ago and incorporated it in California.
I have a patent that the collection attorneys say they will go after.
I can assign the patent to the corporation but I discovered that all the
attorneys have to do is modify the judgment to include the corporation.
They can also sue the corporation as a third party.
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
There are two issues here.
First, it sounds like the patent was issued to you personally, not
the corporation. That means that it is your personal property,
not corporate property. If you now try to assign the patent to your
corporation, this is fraud since in all fairness it could be sold
to raise money to pay your creditors. If you try to slide it into
the corporate veil, you are hiding assets, which is illegal.
Second, the corporate protections only apply if you run the
corporation as a real corporation. That normally includes making
decisions at corporate meetings, keeping corporate minutes, having
an outside board of directors, and having officers that are not
related to you by blood. If you don't meet these tests, then the
corporation is essentially operating at your whim, and any decent
lawyer can punch right through that and hold you liable.
2. How do I turn off collection without bankruptcy.
Is there a way?
You can check the fair credit collections act, and see if the
creditors are doing anything illegal. If they are, you can demand
that they stop, and sue them in court if they don't stop.
But in your case, you are far beyond that. You have already been
to court, have lost your case, and a judgement has been issued
in favor of your creditors. Your creditors no longer are in the
position of collecting, they are in the position of being able to
freeze and sieze your bank accounts, garnish any wages your make,
and sieze any property that you have (except, perhaps, your home
and your personal clothes).
My advice is to either come up with the money, or attempt to
negotiate some kind of settlement (which would have been easier
before losing in court), or get some kind of job and start
making payments. Bankruptcy is an option, but keep in mind
that some judgements cannot be disposed of by bankruptcy (the
time to this would have been before going to court). I hope
you don't have to do this. Bankruptcy is like dropping a nuclear
bomb on your financial life, and it simply isn't worth it for
$10,000 in debt. In the long run, a bankruptcy costs you far
more than $10K in higher interest rates, additonal fees, lost
opportunity, and increased insurance rates. You simply need to
find a way to pay off these debts.
-john-
--
====================================================================
John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
====================================================================
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1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
The corporation is safe (provided that you have followed all the legal
and accounting procedures called for in law). Your shares in the
corporation can be seized, and the corporation liquidated, since you
are a controlling shareholder.
Had you thought of asset protection before, you, on the advice of a
skilled business attorney, would have set up a LLC in a state that
makes "charging orders" the only creditor remedies. Then you would
have been given time to build your business and pay your creditors out
of payments that would otherwise have gone to you as profits.
2. How do I turn off collection without bankruptcy.
Is there a way?
It may be that the value of the intellectual property is purely
speculative. The corporation may have little, or no, or negative value
now. If your creditor has not yet started proceedings to collect on
the judgment, you might be able to sell the shares in the corporation
(or have the corporation sell its assets) at auction (eBay for
example) and turn over the proceeds to Citibank. If there is no fraud
in the auction process, and certainly if it is an arms-length
transaction to someone who is not an insider (although you may prefer
that a family member or friend be the buyer, and so long as the
auction is notorious and public (as eBay is) I do not think that makes
a difference), Citibank cannot complain because you have gotten for
them exactly what they would have gotten for themselves.
That "skilled business attorney" you didn't contact when you set up
the corporation (is it really a corporation and not a LLC?) can still
help you now.
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mark wrote:
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
Transfers while in bankruptcy, while insolvent, or within 90
days of bankruptcy can be reversed in bankruptcy, if the transfer
isn't for fair value.
I am not a lawyer, but that's likely the reasoning. If the
patent had been transferred 8 years ago, or even 1 year ago,
it's likely they couldn't touch it.
(Back-dating the assignment is not wise.)
--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.
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mark wrote:
[afraid a patent he owns will be siezed to satisfy a judgement]
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
A corporation protects the individual from liablities the coporation incurs.
The coporation isn't safe from the liabilties the individual(s) who own the
corporation incurs.
2. How do I turn off collection without bankruptcy.
Is there a way?
Negotiation is, AFAIK, the only way. Every collector I know of wants the
money and not the assets which he'll have to sieze then liquidate to turn
into the money owed. Few patents are easily liquidated for cash so you
should have an eager ear when you go to your debtors to negotiate a
satisfaction of the judgement.
There are certain companies who will intercede and negotiate for you, often
reducing total debt. You can do a common Web search to find many of them.
What I suggest you do to raise money now, since you seem to need something
right off to hold Citibank off, is to find an investor in your patent who
will, for cash now, own a piece of your invention. You'll trade tomorrow
profits for survival today, but that's a trade many of have made or will
have to make.
-paul
ianal
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What I suggest you do to raise money now, since you seem to need something
right off to hold Citibank off, is to find an investor in your patent who
will, for cash now, own a piece of your invention. You'll trade tomorrow
profits for survival today, but that's a trade many of have made or will
have to make.
The cynic in me is wondering if this patent has any value at all. The original
poster has had this patent for several years, and he hasn't made enough money
from it to pay off his debts. So maybe it's not worth as much as he thinks....
*****
Tim Horrigan <horrigan@aol.com>
*****
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What I suggest you do to raise money now, since you seem to need
something
right off to hold Citibank off, is to find an investor in your patent who
will, for cash now, own a piece of your invention. You'll trade tomorrow
profits for survival today, but that's a trade many of have made or will
have to make.
The cynic in me is wondering if this patent has any value at all. The
original
poster has had this patent for several years, and he hasn't made enough
money
from it to pay off his debts. So maybe it's not worth as much as he
thinks....
well, the odds are certainly against it with about 300,000 issuing annually
from the USPTO
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Transfers while in bankruptcy, while insolvent, or within 90
days of bankruptcy can be reversed in bankruptcy, if the transfer
isn't for fair value.
I am not a lawyer, but that's likely the reasoning. If the
patent had been transferred 8 years ago, or even 1 year ago,
it's likely they couldn't touch it.
The above is incorrect and confuses a number of points of law.
For one thing, once bankruptcy has commenced under Chapter 7,
virtually all assets of the debtor become property of the estate and
nothing can be disposed of without the involvement of the trustee and
the court. In other chapters, court action is also required to dispose
of assets.
Sec. 548 of the Bankruptcy Code, mirroring the Uniforn Fraudulent
Transfer Act (in effect in most, but not all, states) gives the
trustee powers to recover property transferred in fraud of creditors
(a term of art) within one year of the bankruptcy filing.
Sec. 544 of the Code gives the trustee the rights of a hypothetical
creditor and thus the power to recover property transferred in fraud
of creditors within the limits of state law. Typically 4 years under
the UFTA, but indefiinitely in CA and NJ (there is a 7-year SOL in CA
but its effect has not been defined by the courts yet).
Other rules apply to preferences and "insiders".
Creditors' remedies, notably Citibank's, are -- in the absence of
bankruptcy -- purely state-law remedies. The UCC and other laws
determine the rights of a bona fide purchaser for value (someone who
is unaware of any claims by Citibank).
Whatever the enquirer does, Citibank will typically claim that the
transaction was not at arm's length unless it is at public auction.
Since auction would presumably yield rather little, it would seem to
be the best bet in this case. Charging order protection would have
been an appropriate asset protection move, but it's now too late for
that. With Citibank threatening the corporation, the enquirer is
probably best advised to face them down, sell the assets at auction
(as I suggested) and pay the money to Citibank. The enquirer can then
either seek employment with the corporation, now owned by the buyer (a
friend, perhaps), or buy the patent through a LLC properly set up to
offer charging order protection. The LLC itself could be majority
owned by a discretionary trust set up with the enquirer as
discretionary beneficiary.
This is a not a project for amateurs. See, e.g.,
http://www.fraudulenttransfers.com
This is scam-buster Jay Adkisson, Esq.'s terrific web site on the
subject.
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Tam wrote:
The above is incorrect and confuses a number of points of law.
For one thing, once bankruptcy has commenced under Chapter 7,
virtually all assets of the debtor become property of the estate and
nothing can be disposed of without the involvement of the trustee and
the court. In other chapters, court action is also required to dispose
of assets.
Agreed. I don't recall if he said which chapter we were
talking about, but the difference between a transfer being
void (as you state), voidable or reversable (as I stated)
only makes a difference if the transfer was not detected
by the creditor.
By the way, I can't find any reference in the original post
to the poster being in bankruptcy. "I don't have the money
to make payments." may only indicate a temporary cash flow
problem, although I'd bet on insolvency.
Sec. 548 of the Bankruptcy Code, mirroring the Uniforn Fraudulent
Transfer Act (in effect in most, but not all, states) gives the
trustee powers to recover property transferred in fraud of creditors
(a term of art) within one year of the bankruptcy filing.
For it to be "transfer in fraud of creditors", the debtor must
have been insolvent or expecting to become insolvent. So, I
DO assert that, if the transfer was made a year ago, and the
poster was generally solvent after the transfer, that transfer
would hold.
....
This is a not a project for amateurs. See, e.g.,
http://www.fraudulenttransfers.com
This is scam-buster Jay Adkisson, Esq.'s terrific web site on the
subject.
Look -- I agree that what the poster was proposing
wouldn't work. I was stating that, if things had been
different, and transfers had been made at a time he
WASN'T in financial trouble, then those transfers
might (I said WOULD, so I'm backpedalling) hold.
--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.
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By the way, I can't find any reference in the original post
to the poster being in bankruptcy. "I don't have the money
to make payments." may only indicate a temporary cash flow
problem, although I'd bet on insolvency.
As a practical matter, the original poster's patent probably has little or no
resale value, and will be assigned a very low value (maybe as little as one
dollar!) on the bankruptcy paperwork. Probably, the trustee will accept this
value, and the patent will be protected under one of the original poster's
exemptions.
If he can sell the patent for a reasonable amount of cash, it might not be a
bad idea to do so, even if it's not enough to wipe out the debt--- as long as
he uses the proceeds either to repay the debtors (without giving undue
preference to any debtor in particular) or to pay essential expenses.
*****
Tim Horrigan <horrigan@aol.com>
*****
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Hi,
BACKGROUND
I owe Citibank about 3k and 7k both on seperate bank card accounts.
And I owe other banks too. I don't have the money to make payments.
Citibank has won judgment against me in court. I need time to pay this
debt but they are extremely aggressive in collecting.
I started a small business 8 years ago and incorporated it in California.
I have a patent that the collection attorneys say they will go after.
I can assign the patent to the corporation but I discovered that all the
attorneys have to do is modify the judgment to include the corporation.
They can also sue the corporation as a third party.
Until the business grows the little money I have I need to live on.
QUESTIONS
1. What is the point of having a corporation if assets are not safe?
I thought that was the whole point of incorporation.
2. How do I turn off collection without bankruptcy.
Is there a way?
Thanks
Mark T.
Thank you everyone for your advice it really helps.
I have discovered more ways to protect assets. What do you think
about these. An (ABC) Assignment to Benefit Creditor and the
Dump/Buyback.
1) Will these work for personal debts or only for business debts
even though my personal debts are from the business, remember I
have a corporation.
2) Must I have a court involved to execute these techniques?
3) How do you find an assignee?
Is it a waste of time to protect assets when bankruptcy is the
only legal way to stop the collection process? Selling on Ebay,
ABC, Dump/Buyback may protect assets but does nothing to stop
freezed bank accounts or stop writs of execution or growing
costs they will want me to pay someday.
More information about me. The total debt is 85-90k and the
patent is being used to make money but not much. Income of
150K+ is very likely in about a year.
I have to continue in business using the patent. I must use
my corporate/merchant bank account which allows me to make
sales using Visa/MC/Amex. I must keep my corporation name,
trademark, and patent.
Mark T.
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The cynic in me is wondering if this patent has any value at all. The
original poster has had this patent for several years, and he hasn't made
enough money from it to pay off his debts. So maybe it's not worth as
much as he thinks....
well, the odds are certainly against it with about 300,000 issuing annually
from the USPTO
On this subject, see:
http://news-info.wustl.edu/tips/page/normal/852.html
"Push toward creditor protectionism in bankruptcy law may damage
intellectual property rights; special purpose entities are 'essential'
....
"Bankruptcy raises a central problem for IP rights that it does not
raise for other assets such as land or commercial paper."
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More information about me. The total debt is 85-90k and the
patent is being used to make money but not much. Income of
150K+ is very likely in about a year.
I have to continue in business using the patent. I must use
my corporate/merchant bank account which allows me to make
sales using Visa/MC/Amex. I must keep my corporation name,
trademark, and patent.
When you assigned the patent to the company, what did the company give you in
return? And if you got a significant cash payment from the company, did you
use any of it to retire some of your debt?
It sounds like both you AND the company are bankrupt. Even if the "$150k
income" is a net income rather than a gross, and even if you don't run up more
debts before this income starts coming in, it will take you at least nine
months to pay the debts.
However, you may be able to avoid liquidating the company, depending on which
Chapter you file you and your company's bankruptcies under. It sounds like you
need a bankruptrcy lawyer.
*****
Tim Horrigan <horrigan@aol.com>
*****
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mark wrote:
Thank you everyone for your advice it really helps.
I have discovered more ways to protect assets. What do you think
about these. An (ABC) Assignment to Benefit Creditor and the
Dump/Buyback.
If I have any idea what you mean by Dump/Buyback, it's
bankruptcy fraud if you are insolvent or in bankruptcy
or expect to be in bankruptcy within 90-180 days. Most
of the do-it-yourself asset protection schemes are fraud
and/or don't work.
More information about me. The total debt is 85-90k and the
patent is being used to make money but not much. Income of
150K+ is very likely in about a year.
If a potential buyer of the patent would agree, then,
you would be able to sell the patent to a third party,
and pay off your creditors with the proceeds.
You might even be able to sell a license to your
patent for enough to pay off your creditors. If
that was done, everyone would be happy.
If what you say is true, then a personal
reorganization bankruptcy might be in order. If
you're NOT insolvent, but have a cash flow problem,
and could pay off all creditors, including interest,
within a few years, that might be the way to go.
I don't remember which bankruptcy Chapter that is,
and you DO need a lawyer, even if there are bankruptcy
shops that will prepare the paperwork for you.
I believe that Chapter bankruptcy doesn't appear
on your credit reports after it's discharged.
--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.
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If what you say is true, then a personal
reorganization bankruptcy might be in order. If
you're NOT insolvent, but have a cash flow problem,
and could pay off all creditors, including interest,
within a few years, that might be the way to go.
I don't remember which bankruptcy Chapter that is,
and you DO need a lawyer, even if there are bankruptcy
shops that will prepare the paperwork for you.
I believe that Chapter bankruptcy doesn't appear
on your credit reports after it's discharged.
yes, it will appear for 10 years for most purposes; what many people don't
realize is that it remains visible indefinitely where a transaction in
excess of $50k is involved or if the credit inquiry is made for employment
purposes and the annual salary will exceed $20k (see 15 USC 1681c)
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Liz wrote:
I believe that Chapter bankruptcy doesn't appear
on your credit reports after it's discharged.
yes, it will appear for 10 years for most purposes; what many people don't
realize is that it remains visible indefinitely where a transaction in
excess of $50k is involved or if the credit inquiry is made for employment
purposes and the annual salary will exceed $20k (see 15 USC 1681c)
That appears to be $150K and $75K, respectively, unless I'm misreading
the code. Furthermore, I've heard that consumer credit reports
(requested under 1681g) usually DON'T have that information, but are
supposed to contain "the complete file". (Not that I've ever
had a bankruptcy, so I can't confirm this from personal knowledged.)
Furthermore, my believe (which I'll now restate as a question) is
that certain bankruptcy chapters aren't "bankruptcy" under the
the provisions of 1681xxx.
--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.
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Liz wrote:
I believe that Chapter bankruptcy doesn't appear
on your credit reports after it's discharged.
yes, it will appear for 10 years for most purposes; what many people
don't
realize is that it remains visible indefinitely where a transaction in
excess of $50k is involved or if the credit inquiry is made for
employment
purposes and the annual salary will exceed $20k (see 15 USC 1681c)
That appears to be $150K and $75K, respectively, unless I'm misreading
the code.
you do not misread the code; there have been recent amendments to the act
and I stand corrected; the updated version reads:
1681c. Requirements relating to information contained in consumer reports
(a) Information excluded from consumer reports. Except as authorized under
subsection (b), no consumer reporting agency may make any consumer report
containing any of the following items of information:
(1) Cases under title 11 of the United States Code or under the
Bankruptcy Act that, from the date of entry of the order for relief or the
date of adjudication, as the case may be, antedate the report by more than
10 years.
(2) Civil suits, civil judgments, and records of arrest that, from date
of entry, antedate the report by more than seven years or until the
governing statute of limitations has expired, whichever is the longer
period.
(3) Paid tax liens which, from date of payment, antedate the report by
more than seven years.
(4) Accounts placed for collection or charged to profit and loss which
antedate the report by more than seven years.
(5) Any other adverse item of information, other than records of
convictions of crimes which antedates the report by more than seven years.
(6) [Redesignated]
(b) Exempted cases. The provisions of subsection (a) are not applicable in
the case of any consumer credit report to be used in connection with--
(1) a credit transaction involving, or which may reasonably be expected
to involve, a principal amount of $ 150,000 or more;
(2) the underwriting of life insurance involving, or which may reasonably
be expected to involve, a face amount of $ 150,000 or more; or
(3) the employment of any individual at an annual salary which equals, or
which may reasonably be expected to equal $ 75,000, or more.
(c) Running of reporting period.
(1) In general. The 7-year period referred to in paragraphs (4) and (6)
of subsection (a) shall begin, with respect to any delinquent account that
is placed for collection (internally or by referral to a third party,
whichever is earlier), charged to profit and loss, or subjected to any
similar action, upon the expiration of the 180-day period beginning on the
date of the commencement of the delinquency which immediately preceded the
collection activity, charge to profit and loss, or similar action.
(2) Effective date. Paragraph (1) shall apply only to items of
information added to the file of a consumer on or after the date that is 455
days after the date of enactment of the Consumer Credit Reporting Reform Act
of 1996 [enacted Sept. 30, 1996].
this is also of interest (note that Title 11 is the Bankruptcy Code):
(d) Information required to be disclosed [Caution: For effective date of
Dec. 4, 2003 amendments to this subsection, see 3 of Act Dec. 4, 2003,
P.L. 108-159, which appears as 15 USCS 1681 note.].
(1) Title 11 information. Any consumer reporting agency that furnishes a
consumer report that contains information regarding any case involving the
consumer that arises under title 11, United States Code, shall include in
the report an identification of the chapter of such title 11 under which
such case arises if provided by the source of the information. If any case
arising or filed under title 11, United States Code, is withdrawn by the
consumer before a final judgment, the consumer reporting agency shall
include in the report that such case or filing was withdrawn upon receipt of
documentation certifying such withdrawal.
(2) Key factor in credit score information. Any consumer reporting agency
that furnishes a consumer report that contains any credit score or any other
risk score or predictor on any consumer shall include in the report a clear
and conspicuous statement that a key factor (as defined in section
609(f)(2)(B) [15 USCS 1681g(f)(2)(B)]) that adversely affected such score
or predictor was the number of enquiries, if such a predictor was in fact a
key factor that adversely affected such score. This paragraph shall not
apply to a check services company, acting as such, which issues
authorizations for the purpose of approving or processing negotiable
instruments, electronic fund transfers, or similar methods of payments, but
only to the extent that such company is engaged in such activities.
Furthermore, I've heard that consumer credit reports
(requested under 1681g) usually DON'T have that information, but are
supposed to contain "the complete file". (Not that I've ever
had a bankruptcy, so I can't confirm this from personal knowledged.)
not sure what you're saying here; 1681g covers what must be disclosed to
*consumers*
Furthermore, my believe (which I'll now restate as a question) is
that certain bankruptcy chapters aren't "bankruptcy" under the
the provisions of 1681xxx.
again, not sure what you are referring to here ...
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Liz wrote:
not sure what you're saying here; 1681g covers what must be disclosed to
*consumers*
1681g requires "the complete file" to be disclosed to
consumers. The INSTRUCTIONS for rhe consumer to
request a change in the file state that "negative items should
be removed after 7 years, except for bankruptcies which should
be removed after 10 years, and (some other items I don't remember)
which remain in the file indefinately.
If, as you state and the law seems to indicate, bankruptcies are
to remain indefinately for some purposes, should they also remain
in the consumer copy of the file. In the unlikely event that an
15-year bankruptcy is falsely entered into the consumer's file,
and that bankruptcy is used as part of the reason for denying
a person employment or a large loan, then the consumer would
never know the reason, which seems contrary to the intent of
the law.
Furthermore, my believe (which I'll now restate as a question) is
that certain bankruptcy chapters aren't "bankruptcy" under the
the provisions of 1681xxx.
again, not sure what you are referring to here ...
There are 3 possible chapters for an indvidual bankruptcy.
One of them is a "restructuring" bankruptcy in which all
creditors are paid in full, but not necessarily with all
additional accured interest. I'm not SURE that's defined
as a "bankruptcy" for the purpose of these laws.
--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.
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