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Consumer Credit Law
The MMI Online Articles are designed to inform, assist, educate and alert consumers.
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Truth In Lending Act - Requires creditor to provide the consumer with accurate and complete credit costs and terms.
Equal Credit Opportunity Act (ECOA) - Prohibits a creditor from discriminating against a consumer on the basis of age, sex, or marital status, reliance on income from a public assistance program, and race, color, religion, or national origin.
Fair Credit Reporting Act (FCRA) - The purpose of this act is to insure that information contained in a credit report is accurate and that it will be used in a confidential manner. Consumers have a right to dispute information that may be derogatory of erroneous, inaccurate information must be corrected or deleted, and a consumer explanation statement of 100 words or less can also be included in the report. A credit bureau must also delete adverse information which is more than seven years old and information on bankruptcy which is more than ten years old.
The Fair and Accurate Credit Transactions Act (FACTA) - The FACT Act was signed into law at the end of 2003. This Act amends the Fair Credit Reporting Act and gives every consumer the right to a free credit report every year from each of the three major credit bureaus: Equifax, Experian and TransUnion. To get your free report, visit www.annualcreditreport.com or call 877-322-8228.
- Using abusive language to coerce a consumer into making payments.
- Calling at unreasonable hours (before 8:00am and after 9:00pm) or making excessive calls.
- Threatening to notify the employer or friends that the consumer has not paid his bills.
- Using false pretenses to gain entry to the home with the intent to identify or take something of value.
- Attempting to collect more than what is owed.
- Sending the consumer misleading letters that may appear to be from a government agency or a court of law.
The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) - These Acts can help consumers resolve mistakes on credit billing and electronic fund transfer account statements. The Acts outline procedures for correcting several types of errors including unauthorized charges and the failure to properly reflect payments.
Bankruptcy - A legal proceeding declaring that a consumer overextended and is unable to pay obligations. Some loans may be excused and assets may be distributed among the creditors. Bankruptcy remains on a credit report for up to ten years and makes securing credit and other loans with favorable terms challenging during that time. Remember that even after the ten year period you may never again answer "no" to the question "Have you ever filed bankruptcy?"
Chapter 7 – A type of bankruptcy that is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. The purpose is to obtain a discharge (i.e. elimination) of their existing debts.
Chapter 13 – Intended for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time. The bankruptcy courts will approve a repayment plan that will repay their debts in no more than five years.
Chapter 11 – This type of bankruptcy is designed primarily for the reorganization of a business and generally does not apply to individuals.
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