Thomas F. Miles, Attorney and Counselor at Law
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To avoid debt collection, many seek Chapter 7 bankruptcy

When creditors and debt collectors begin to aggressively pursue collection efforts, many California consumers feel overwhelmed. Letters begin pouring in, and the phone begins to ring. In some cases, debt collection lawsuits are even filed. All of these factors combine to leave many consumers in desperate need of relief, which some find in the form of Chapter 7 bankruptcy.

Consumers who are now or have previously been subjected to aggressive debt collection may be interested in a recent lawsuit against the nation's largest banking institution. JPMorgan Chase & Co. was sued over illegal debt collection practices. The bank recently agreed to a settlement in the matter, and will now pay $100 million divided between national and state levels.

JPMorgan Chase & Co. was accused of violating California law by using improper methods to collect from more than 125,000 credit card account holders. Among those methods was the collection of incorrect amounts, selling bad debt and using an automated service to sign court documents. As part of the recent settlement, the bank has agreed to change those practices to comply with California law.

More than 528,000 former JPMorgan Chase & Co. clients will no longer receive collection efforts as part of the settlement. The extent to which any individuals who were subjected to illegal collections efforts will be compensated for those actions was not reported. In some cases, aggressive collection tactics are the driving force behind a decision to seek Chapter 7 bankruptcy, which can give many California consumers a fresh financial start.

Source: U.S. News & World Report, "California settles JPMorgan Chase suit alleging illegal credit card collection practices", Nov. 2, 2015

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