DUTY OF CREDITORS TO PROVIDE A NOTICE OF DISPUTE TO CREDIT REPORTING AGENCIES INVOLVING CLIENT'S PAYMENTS

Many of the Lawyers United for Debt Relief (LUDR) Debt retirement schedules call for less than the minimum payments required by creditors. We take the position that when the creditor accepts the first LUDR payment, the terms and conditions of the original contract is changed. Therefore the client should not be assessed late fees for payments that are made on time, even though those payments are less than the minimum amount required under the original contract. Some creditors refuse to accept our proposals, but we continue to mail payments to them. They cash the checks and have changed the contract. This situation has obviously created a "dispute" between our clients and the creditors, collection agencies or third party collectors. If any of these creditors are reporting to the credit reporting agencies that our clients are not in compliance with their original contract, they must now report that the information about the debt is "disputed by the consumer". This should improve the accuracy of our clients' credit reports and should effect efforts by creditors, collection agencies or third party collectors to report only derogatory information to the credit reporting agencies.

We will do whatever we can to assure full compliance by all creditors with the amended Fair Credit Reporting Act.

Because the act is new we will soon conduct a test to see whether the creditors have provided a NOTICE OF DISPUTE as they are required to do under the federal law. If we learn from some of our clients that they have not complied, we will take appropriate action to protect our clients' rights under the Fair Credit Reporting Act.

If you have any questions concerning this new law, please give us a call at (312)939-2221.