There are a few different reasons to file for Chapter 13. Probably the first one is if you are not qualifying for the Chapter 7.
Jan. 12, 2023
Consumer Financial Protection Bureau Issues Its Highest Fine to Date Against Wells Fargo
CFPB fined Wells Fargo $100 Million for the illegal practice of opening unauthorized accounts for its customers. Wells Fargo incentivized its employees to sell customers on opening more deposit and credit card accounts, by offering employee bonuses for new accounts.
This resulted in widespread fraud by Wells Fargo employees boosting sales figures by secretly opening more than two million accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges.
Wells Fargo will pay full restitution to all victims (estimated to total at least $2.5 million) and a $100 million fine to the CFPB’s Civil Penalty Fund. The bank will also pay an additional $35 million penalty to the Office of the Comptroller of the Currency, and another $50 million to the City and County of Los Angeles.
“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences,” said CFPB Director Richard Cordray.
The full text of the CFPB’s Consent Order can be found at: http://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB’s order requires Wells Fargo to 1) Pay full refunds to consumers; 2) Ensure proper sales practices by hiring an independent consultant to conduct a thorough review of its procedures; and 3) Pay a $100 million penalty to the CFPB’s Civil Penalty Fund.
The three common triggers for bankruptcy are unemployment, medical expenses, and divorce. Unemployment can trigger bankruptcy, which is pretty straightforward.
The trustee has a duty to conduct due diligence, and that basically means reviewing the documents that are filed by the debtor and then holding a hearing called a Section 341 hearing in which the trustee asks some standard questions of the debtor.