Fair Debt Collection: 14.3.1 Criminal Statutes
The federal Communications Decency Act28 prohibits the following actions in interstate or foreign communications:
The federal Communications Decency Act28 prohibits the following actions in interstate or foreign communications:
The Telephone Consumer Protection Act of 1991 (TCPA)37 amended the Federal Communications Act of 1934. It added a section to protect consumers from invasions of privacy such as automated and prerecorded telephone calls, junk faxes, and telemarketing calls.38 Since the TCPA has attractive remedies,39 it can be of significant benefit to debtors to the extent it applies to debt collection.
As noted above, the TCPA prohibits the use of any automatic telephone dialing system or artificial or prerecorded voice message in a call to a cell phone, pager, or the like, or when the called party is charged for the call, unless the called party has given prior express consent to be called.54 The phrases “cellular telephone service” and “any service for which the called party is charged for the call” are alternative; it is not necessary that the cellular consumer be charged for the call.
The definition of disposable income excludes child support payments, foster care payments, or disability payments received for a dependent child to the extent reasonably necessary to be expended for the child.155 If courts exclude these payments, which may well go to expenses for the debtor’s dependents, the debtor’s income will be reduced.156 But courts might exclude expenses for the child to the extent they are covered by these payments.
Payments made on domestic support obligations by the debtor that are first payable after the petition is filed are excluded from the definition of disposable income.158 This amendment simply gives effective priority to current support payments, which were ordinarily deducted from the debtor’s budget under pre-2005 law.
Another important exclusion from disposable income consists of funds used for repayments of pension loans.
A temporary additional exclusion was enacted by the Coronavirus Aid, Relief, and Economic Security Act or the ‘‘CARES Act”.169 That provision added to the language of section 1325(b)(2) an exclusion of “payments made under Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C.
Perhaps the most dramatic change in the disposable income test in 2005 was the use of the section 707(b) means test expense calculations for some debtors. Section 1325(b)(3) provides that for debtors whose current monthly income is above the state median income for the applicable family size, reasonably necessary expenses are to be calculated using the means test formula found in section 707(b)(2)(A) and (B) in order to determine payments to unsecured creditors.
As a result of poor drafting, it is not crystal clear how administrative expenses are to be paid in a chapter 13 case. There has been some concern that the provisions incorporated from section 707(b) would limit the debtor’s administrative expenses to the ten percent cap found in those provisions.188 Such a limit would render almost every chapter 13 case impossible, because the expenses necessary to administer the case almost always exceed ten percent.
Because of poor drafting it is not totally clear how secured creditors are to be paid by debtors whose incomes fall below state median income. Section 1325(b)(1)(B) uses language that was found in the subsection prior to the 2005 amendments to describe how much is to be paid into the plan for all creditors, but now states that this amount is to be paid to “unsecured creditors.” This phrasing created a possible interpretation that debtors below median income cannot pay any money to secured creditors.
Another very significant change in the disposable income test is the number of months’ worth of disposable income that must be committed if an objection is raised. Section 1325(b)(4) sets an “applicable commitment period” for section 1325(b) objections.
Finally, the Code provides a mechanism to deal with unanticipated changes in the debtor’s income or expenses.239 Section 1329(a) permits a debtor, unsecured creditor, or trustee to seek modification of the plan, raising or lowering payments.
Many car lenders understand that economically they are far better off if the debtor continues to make payments, even without reaffirmation, than they are if they repossess the debtor’s vehicle, which is often worth far less than the amount of those payments. If they cannot scare the debtor into reaffirming, they simply accept the continued payments. Often, a creditor will let this policy be known.
Preliminarily, if the debtor seeks to deal with a secured claim through the plan, there must first be an allowed secured claim.
On the other hand, in some cases the debtor may not wish to provide for a secured claim in the plan.
Another common type of contract that could be considered executory is the purchase of credit insurance that accompanies many consumer loans.545 More often than not, credit insurance is a very bad bargain for the consumer.546 Rejection of the contract and termination of its benefits results in very little loss of real protection.
In a chapter 13 case, the debtor is not normally required to choose assumption or rejection until the time of confirmation of the plan.548 However, the other party may force an earlier election by requesting the court to set a specified earlier date by which the choice must be made.549 Additionally, although courts are split on this point, a lessor might seek relief from the stay prior to a decision on assumption or rejection, arguing that its interest in the property is not adequately protected
The property that can be claimed as exempt under the federal bankruptcy exemptions (in states that have not opted out) is listed in section 522(d) of the Code. The list itself, adopted originally by the Bankruptcy Commission, was later generally followed in the Uniform Exemptions Act.54 Although Congress made some changes in drafting the Code and in later amendments, the commentary to the Uniform Act, therefore, is a good place to look for interpretive assistance.
Each debtor is allowed to exempt up to $1875 worth of jewelry, as long as it is held primarily for personal, family, or household use of the debtor or a dependent.91 As with the household goods exemption, unused exemptions applicable to “any property” may be used to increase this amount. For example, a jewelry item worth $2000 may be exempted using the $1875 jewelry exemption plus $125 worth of the exemption applicable to any property (sometimes referred to as the “wild card” exemption).
One of the most important of the federal exemptions is the exemption that can be applied to “any property,” sometimes called the “wild card.” The amount of this exemption is $1475 per debtor,95 plus any unused amount of the homestead amount from subsection (d)(1) up to $13,950 per debtor.96 The applicability of the unused homestead exemption to any property, sometimes called the “homestead pourover,” was originally intended to equalize home owners and renters but was significantly reduced when a lim
Each debtor may exempt up to $2800 worth of implements, professional books, or tools of the trade that belong to the debtor or a dependent of the debtor.102 This exemption, too, may overlap with some of the others.
The subsection providing an exemption for unmatured life insurance, as distinguished from the subsection following it, is for those interests in life insurance owned by the debtor that do not have a cash or loan value. Thus, any interest in term insurance can be exempted in full under this subsection.
Interests in life insurance policies that do have a cash value may be exempted to the extent of $14,875 per debtor under subsection (d)(8).112 From this amount must be subtracted any amounts that are used by the insurance company to continue premium payments under a contract that provides for automatic payments out of the accrued value.113
A debtor may exempt an unlimited amount of professionally prescribed health aids for the debtor or a dependent of the debtor. This exemption clearly covers such items as wheelchairs and artificial limbs. Arguably, it is much broader, and could include specially equipped automobiles, or even normal automobiles essential to receiving medical treatments.115 It is also possible that property prescribed for therapy, such as swimming pools, could be included.116
Issues may also arise concerning the dollar-amount limitations on claims against debtors who file chapter 13 cases, limitations designed to exclude large businesses from evading the requirements of chapter 11.29 However, the discussion in this section will not be applicable for cases filed when a temporary amendment to section 109(e) remains in effect, which eliminates the distinction between secured and unsecured debt for purposes of the debt ceiling.30 If this amendment is not extended or made per