Minneapolis Bankruptcy Law Blog

It is not unheard of for a business venture to sound like a good idea in theory, but then turn into a bust when trying to put it into play. For the person behind the business, when this happens and a lot of money has already been tied up, this can lead to a personal bankruptcy.

A perfect example of this recently happened when the founder of SportsQuest filed for Chapter 7 bankruptcy. This personal bankruptcy was filed less than a year after SportsQuest filed for a liquidation bankruptcy.

There is no doubt that a medical crisis can lead to sudden and unexpected debt for any Minnesota resident. This is particularly troubling, as not only is the actual medical condition stressful enough, but so is dealing with a seemingly constant stream of bills and calls from bill collectors.

When talking about medical debt, the No. 1 question is just what else a person was supposed to do? Faced with a medical crisis, many of which could have been life-threatening, a patient simply listens to their doctors and goes through whatever treatments are necessary in order to get better. When a person does have insurance, this can mean using out-of-network providers, which are costly. Without insurance, it just means going through the procedures and having to deal with the costs later. Even with insurance, deductibles can be financially tough to take care of.

The Federal Reserve recently released numbers for December, which showed an increase in student loan and auto loan borrowing. This increase coincided with a decrease in credit card debt, which points to the fact that many Americans are continuing to financially struggle and not making as many purchases as they once did when the economy was stronger.

According to the Federal Reserve, consumer borrowing as a whole -- between credit cards, student loans and auto loans -- rose by $14.6 billion in December. This brings the grand total of consumer borrowing in these categories to $2.78 trillion.

The Consumer Financial Protection Bureau (CFPB) recently announced that it will begin to supervise large debt collection agencies on January 2, 2013. This is the first time that the federal government has agreed to do on-site investigations of debt collection agencies.

While the investigations would only impact four percent of the consumer debt collection firms in the U.S., these 175 firms are the largest in the nation, representing nearly 63 percent of the market. This includes companies such as West Asset Management, Asset Acceptance Capital Corporation, Asta Funding Inc. and CMI Group.

The Federal Trade Commission (FTC) has authority to investigate debt collection agencies, and has increased its scrutiny in recent years. It cannot, however, write rules to protect consumers or perform on-site investigations. The CFPB, on the other hand "can go in and conduct examinations and find out if a debt collector is breaking the law," the Consumers Union senior policy counsel, Pamela Banks, said.