Fair Credit Billing Act Revisited

Thank you so much for your website!! 

I use this blog for not only myself, but also for my husband, my father (he just purchased a new home thanks to your tips!!) and now I have a question from my Mother. 

She has been with a certian credit card company for 10+ years.  About 6 months ago she had mailed her payment to this CC Company and it got posted 10 days later than the due date.  They ended up reporting this as a 30day late on her credit report. 

Since then, they have raised her interest rate to 24.99% because of the one late payment.  When this CC Co raised her rate, the rates on all her other CC went up to 24.99% as well.

She also had swiched jobs and is making less money and has ended up greatly in debt. ($20,000 worth) 

Her min payment on 3 credit cards is $300.00each so she is paying $900.00 a month in credit card debt. 

My mother is thinking about filling for BK even though her FICO is above 750. 

She disputed the late payment, and they will not delete it. 

So my question is how can she get the rates dropped on her cc and pay it off to avoid BK?

Thanks  Paul you’re awesome!!

Amanda 

———————

Hi Amanda,

First off, only God is awesome.  Paul is just some guy typing answers on a blog.

Secondly, in a more perfect world, the consumer would identify the payment posting error within sixty-days of receipt of the bill containing the error and therefore file a timely dispute through the Fair Credit Billing Act.  Specifically, the FCBA requires the following:

§ 164. Prompt crediting of payments

Payments received from an obligor under an open end consumer credit plan by the creditor shall be posted promptly to the obligor’s account as specified in regulations of the Board. Such regulations shall prevent a finance charge from being imposed on any obligor if the creditor has received the obligor’s payment in readily identifiable form in the amount, manner, location, and time indicated by the creditor to avoid the imposition thereof.

Amanda, has your Mom requested the cancelled check from the bank?  Look at the back of the check to determine the date stamp evidencing when the check was processed.  Compare that with her monthly due date.  Here is how credit bureaus determine thirty-days late based on Metro 2 standards. 

After completing the above, you’ll know for certain whether or not you have an airtight dispute through the CRA.  For what it’s worth, your Stump the Experts question reads to me like a classic FCRA case with a large jury award for Mom. 

Now, if on the other hand, you find that the payment was in fact thirty-days late then I agree that bankruptcy may be something to consider.  Another viable option may be debt settlement.  Later this week the Broken Credit Blog will (or at least should, I hope) have a form specific to debt settlement for any Broken Credit Bloggers who want Paul’s referral to a legit debt settlement company.

Thanks for the questions and lots of work for you to do!  Mission: save Mom!

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.