Consumer Protection Agency Makes Debt Horror Stories Public

Posted on July 8, 2015 at 12:00pm by
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The Consumer Financial Protection Bureau (CFPB) has publicly released thousands of complaints filed against banks, credit card companies and other financial institutions. Over 7,700 complaints are now part of an online database of people who wanted to air their grievances publicly.

Although the CFPB does not vet the posts before they go into the database, some of the stories show tales of horrendous abuse by financial institutions. In some of the stories, posts describe credit card companies attempting to collect nonexistent debts, collection agency harassment and threats of legal action against consumers. One woman wrote about her young son being given a credit card with a $4,500 limit.

Some bank industry leaders have criticized the move as being a “public shaming” of banks and other financial institutions. However, if the stories of attempts to collect nonexistent debts and harassment are correct, the complaints are justified.

According to the CFPB, they have received more than 627,000 complaints in the last four years- a far larger number than the 7,700 plus posted online. Mortgages were the most common reason consumers issued complaints against banks and other financial institutions.

Can Debt Horror Stories Have Happy Endings?

Homeowners facing mortgage problems or foreclosure can benefit from speaking with a bankruptcy attorney. By filing for Chapter 13 bankruptcy, homeowners in trouble with their mortgages may be able to put a stop to foreclosure proceedings, allowing time to make past-due payments current.

Many other complaints listed by the CFPB centered on student loans and credit cards, with stories of harassment from debt collectors and threats of legal action. Chapter 13 and Chapter 7 bankruptcies can put automatic stays on debts, which can temporarily suspend most collection attempts. Under an automatic stay, creditors must end attempts to collect debts and cannot initiate or continue lawsuits.

Depending on the situation and types of assets involved, some debts can have monthly payments reduced and others can be discharged.

Curious readers can view the CFPB complaint database for more information.

The Sader Law FirmKansas City Bankruptcy Attorneys