F.A.Q.
Q: How will Cornerstone Legal work with you?
A: If you would like more information about the Cornerstone Legal Group we are happy to provide it. We do not charge for an initial consultation and you will pay no legal fees unless you hire us. Our legal and support staff strives to satisfactorily meet client objectives and goals by focusing on your unique financial or personal situation. Should you choose to have us represent you, we will do the following:
- Perform an initial analysis by our experienced case managers
- Meet with you face to face in our local office or through one of our trained paralegals at a location works for you.
- Review your financial situation in order to obtain a full understanding of your unique situation.
- Answer all of your questions related to our recommended approach for you.
- Keep you advised and informed about the progress of your plan or case.
Q: What is bankruptcy?
A: Bankruptcy is a proceeding under federal law that grants partial or complete relief from the payment of your debts. Upon filing the bankruptcy petition all creditor collection activities should stop. The Bankruptcy Court may enter an order discharging you from responsibility for paying certain debts. There are different types of bankruptcy for individual consumers and most businesses, the two types of consumer bankruptcy proceedings available are Chapter 7 and Chapter 13. Chapter 11 is filed by businesses; usually it is a larger corporation that is seeking to reorganize debts and continue operations.
Q: What is financial workout?
A: It is a debt resolution program designed for businesses as well as consumers which involves negotiating with your creditors to settle your debt for amounts less than you currently owe. This can save you sizable amounts of money on debt principal and interest. If you are a consumer it also may provide you with the opportunity to pay off your debts faster than a traditional credit counseling program or chapter 13 bankruptcy. Additionally, if a consumer debtor files chapter 7 bankruptcy, the creditor will receive nothing. In order to prevent this from the happening, creditors are often willing to lower the outstanding balance and set up a payment plan.
Q: What types of debt are eligible for a financial workout?
A: Any type of unsecured debt can be resolved through our debt resolution program. This includes credit card debt, personal loans, revolving lines of credit, medical bills and other types of unpaid bills. Some forms of secured debt may also be able to be negotiated, but this is on a case-by-case basis.
Q: Can you stop creditors from harassing me?
A: Whether you are in a financial workout program or bankruptcy we cannot physically restrain creditors to keep them from doing what they please, but we can employ a variety of legal measures to end creditor harassment. When you become our client, depending on your unique situation we will direct creditors to cease direct contact with you and to contact us, instead, as your legal counsel. If you are a bankruptcy client the filing of the bankruptcy petition serves as an automatic order to all creditors to stop all collection activity. If creditors continue to harass you after this, we will exercise your right to demand creditors to cease and desist under federal and state laws.
Q: When in a financial workout program do negotiations with my creditors begin, and how long does it take?
A: Each client's unique situation will determine our approach. After you have retained us as your legal counsel, we will notify your creditors that we are your legal representatives at the time that makes the most sense in negotiating the best possible settlement for you. Negotiations typically begin soon afterward. Although we do our best to hasten negotiations, we cannot control the response time from your creditors and you also must be in the position through your savings to fulfill a settlement agreement.
Q: Will Chapter 7 bankruptcy wipe out all my debts?
A: Most debts may be wiped out in a Chapter 7 bankruptcy; there are some debts that cannot be included in bankruptcy. Examples of debts that are not or may not be discharged are student loans, child support, some back income taxes, property taxes, and traffic tickets or government fines. Secured debts such as cars and homes are discharged if you want to surrender the property.
Q: Will a financial workout or bankruptcy lower my credit rating?
A: Agreeing to and abiding by the terms of any financial workout, bankruptcy, or debt management program can have a negative impact on your credit score. Any company or law firm claiming otherwise is not disclosing the full truth. Because you are not immediately fulfilling your debt obligations, your credit rating may become lower before it can be become better. As you fulfill your debt obligations or in the case of chapter 7 bankruptcy legal discharge your debt, each creditor will report this to the credit bureaus. As your debts are reported as paid or legally discharged, repairing your credit rating may become possible.
Q: How long after beginning the financial workout program does it take to complete a program?
A: The amount of time it takes to resolve your debts is largely dependent on your current financial circumstances. Every situation is unique. During your initial and subsequent consultation with our attorneys will determine a plan of action that we believe is in your best interest. However, most of our clients are debt free after 36 to 48 months. Some of our clients become may even complete the program much sooner if their financial situation improves from the original hardship.
Q: How do you know my creditors will settle?
A: In keeping with our policy of full disclosure, we are not certain that a particular creditor will settle. However, creditors very rarely refuse to settle after negotiations have begun. They may not take our initial offer, but they usually make a very reasonable counteroffer. Your creditors know that one of the options available to you is bankruptcy, and they would like to see that this does not happen because when you file bankruptcy, they may not be repaid. If your creditors do not agree to reduce the balance of your debt by at least 35 percent, we will not charge you a fee for that account.
Q: Can I be sued for defaulting on my debt?
A: Yes. It is possible for creditors and third-party collection agencies to use legal means as a way to collect debts. Even though credit card debt is not secured, you can be sued for defaulting on it and be taken to court. If you qualify, our law firm provides legal representation, which may reduce the likelihood of getting a suit or at least allow the law firm time to negotiate a reasonable settlement.
Q: What can I do to stop a foreclosure on my house?
A: You may have a different options, one may be filing Chapter 13 bankruptcy. This will stop a foreclosure proceeding immediately. The amount you are behind on your mortgage payments will be placed in your payment plan and paid back over a manageable three to five year period. Another option may be to do a mortgage modification that allows you to reduce your mortgage payments to a manageable level.
Q:What is the Fair Debt Collection Practices Act (aka FDCPA)?
A: The FDCPA is a set of law found at 15 U.S.C. § 1692 et seq., a United States statute added in 1978 as Title VIII of the Consumer Credit Protection Act. 15 USC 1692
Q: What is the purpose of the FDCPA?
A: In the most simply terms, the law was passed to protect consumers from abusive debt collectors. Its purpose is to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. 15 USC 1692
Q: Are all debts subject to the FDCPA?
A: No, only debts that arise out of a transaction in which the money, property, insurance or services were primarily for personal, family or household purposes. In other words, not business debts. 15 USC 1692a
Q: Who or what is a debt collector?
A: A debt collector is anybody who regularly collects debts owed to another, including those who purchase debts owed to another when the debt was in default at the time of purchase. 15 USC 1692a This also includes lawyers and attorneys who regularly collect debts of another. What is not a debt collector, is the originally creditor collecting its own debt.
Q: What type of actions are illegal under the FDCPA?
A: The FDCPA and case law have developed a wide body of actions which are illegal, if fact to many to list here. Simply, if what a collector or lawyer is saying to you just doesn't make sense it probably should not have been said. Even if you owe the debt or some portion of the debt but have fallen behind, that does not give anyone the right to threaten and embarrass you. The following types of behavior by a debt collector toward a consumer over the telephone, in writing, or in person will likely be a violation of the FDCPA: Disrespectful, Undignified, Unfair, or Untrue
Q: What can I do if I believe the debt collector violated the FDCPA?
A: If you feel that you have been treated in such a manner, you may have a right to sue the debt collector and get money back from THEM for their misconduct. If a debt collector has left a voice mail for you or discussed your matter with co-workers or other family members they may have violated the FDCPA.
Q: What is the difference between secured and unsecured debt?
A: A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold. However, the laws regarding secured debt vary from state to state.
Unsecured debt is debt that is borrowed from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property. Unsecured debt is commonly given in the form of credit card debt, commercial debt, medical debt, and personal loans. It is possible for a secured debt to become an unsecured debt when the property that is securing the loan has already been repossessed and sold by the creditor. Traditionally, if the sale of the property does not cover the full amount of the debt, it will result in a deficiency balance, which is still the responsibility of the consumer. This deficiency balance is now considered an unsecured debt because no property is securing it. In many cases, this balance can be successfully resolved through a financial workout program.