William G. Schwab and Associates
811 Blakeslee Blvd. Dr. East (PA Route 443) PO Box 56 Lehighton, PA 18235
Tel 610-377-5200 Fax 610-377-5209
NEWSLETTER
Bankruptcy September 2, 2014
 
Personal Injury
Bankruptcy
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Elder Law
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Actions to Punish Debt Collection Harassment

In 1977, Congress enacted the federal Fair Debt Collection Practices Act (FDCPA).  Even though many states have enacted similar laws, ...(more)

 

Criminal Penalties for Bankruptcy Fraud

Bankruptcy fraud has become a common way for debtors to abuse and manipulate a system that was intended to help ...(more)

 

House Passes the Involuntary Bankruptcy Improvement Act

Although seldom used, a creditor can force an individual into Chapter 7 or Chapter 11 bankruptcy by filing an involuntary ...(more)

 

Supervision of Bankruptcy Cases

A United States bankruptcy judge has the ultimate discretion whether to grant requests for bankruptcy relief. In addition, the judge can issue ...(more)

 

Bankruptcy Law In The News

Former NFL Quarterback Vince Young Files For Bankruptcy

Central California Diocese Files for Bankruptcy

Duke Energy settles suit over Crescent bankruptcy

Detroit water department mediation to continue next week

Detroit bankruptcy plan threatens survivor benefits of families of fallen cops, firefighters

The CROA and Prohibiting Credit Repair Organizations From Deceptive Practices


Credit repair clinics generally promise consumers that they will permanently remove negative information from credit reports, for a fee. A record of bankruptcy will appear on an individual's credit report for 10 years, which can make the promise by credit repair clinics to remove such negative information from consumer reports seem rather alluring.

To address the concern that credit repair clinics were misleading the public by deceiving them with false promises, Congress passed the Credit Repair Organizations Act (CROA) in 1996 which became effective April 1, 1997.

Prohibited Practices Under the CROA
Pursuant to Title 15 of the United States Code Section 1679, the CROA prohibits credit repair organizations from the following:

  • Making any statement which is untrue or misleading with respect to a consumer's credit standing
  • Making any statement to alter a consumer's identification for the purpose of either preventing the display of the consumer's credit history or concealing negative information
  • Making any untrue or misleading representation with regard to the organization's services
  • Engaging in any act of fraud or deception in connection with the offer or sale of services
Among the acts that would constitute fraud or deception by a credit repair organization are receiving payment before the full performance of a promised service, or promising to remove information that cannot legally be removed (such as a record of bankruptcy before 10 years have expired).

The Institutions and Individuals Subject to the CROA
The aforementioned prohibitions apply to:

  • Any consumer reporting agency, or
  • Any person who has extended credit to a consumer, or
  • Any person to whom the consumer has applied or is applying for an extension of credit
Written Requirements of the CROA
The services that a credit repair organization promises to perform must be detailed in a written contract, including how long it will take to fully perform the services. In addition, the organization is obligated to inform consumers of their rights in a separate written disclosure statement, before entering into a contract.

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