Auto Loans & Default Rates on the Rise

May 26, 2017 Posted by kingcade

According to data released this week by the Federal Reserve Bank of New York a record 107 million Americans have auto loan debt.  That accounts for approximately 43% of the adult population in the U.S.

Auto loans have been increasing rapidly. In early 2012, only 80 million Americans had car loans. But now more Americans have auto loans than home loans- and according to recent numbers, many are having trouble affording their monthly payments. There are currently 6 million people who are 90 days or more behind on their car payments.

After the financial crisis, so-called “sub-prime” auto loans were routinely given to borrowers with less than perfect credit. Low quality loans spiked to pre-crisis levels in 2015 and 2016, according to federal data.

Many of the consumers qualifying for these loans do not understand the terms and conditions. The interest rates can be astronomical- sometimes as high as 20% and penalties for default can be severe.

Santander Consumer USA Holdings Inc., which is counted among the biggest subprime auto-loan firms, verified income on just 8% of borrowers.  Limited verification of loan applicants’ stated incomes and employment “creates more uncertainty around whether borrowers will be able to afford their monthly payments, which becomes particularly important if they have poor credit records and risky loan terms,” the analysts wrote.

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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources: http://www.marketwatch.com/story/auto-lender-santander-checked-income-on-just-8-of-subprime-loans-bundled-into-bonds-2017-05-23

Student Loan Debt is Not Just a Millennial Problem- Baby Boomers Reportedly Struggling, too

May 25, 2017 Posted by kingcade

Student loan debt has increased eight-fold among Americans aged 60-64 over the last decade.  Moms, dads and even grandparents are shouldering more of these debts. From 2005 to 2015, the amount of student loan debt held by those ages 60-64 has increased from $4.85 billion to $38.35 billion.

For those aged 55-59, the increase is about five-fold, from $13.9 billion to $65.47 billion.  Many seniors are having trouble paying these loans off or making payments at all: 12.6% of debt held by 60- to 64-year-olds was in default at the end of 2015, a higher default rate than anyone under 40.

To make matters worse, the Trump administration is not shaping up to be particularly friendly towards people struggling to pay off these debts.  Most recently, education secretary, Betsy DeVos,  scrapped an Obama-era plan to streamline the government’s system for servicing student loans. And just this week, an education budget obtained by the Washington Post revealed a proposal to end a student loan-forgiveness program for public servants, creating uncertainty for some 400,000 borrowers.

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

A New Credit Card that Helps Consumers Repair their FICO Score and Avoid Pay Payday Loans

May 24, 2017 Posted by kingcade

If you have a credit score below 600, chances are you will have difficulty qualifying for a credit card.  However, Americans with poor credit scores are oftentimes the ones who need credit the most.  Many are forced to turn to alternatives like payday loans that come with exorbitant interest rates and penalties.  In rare circumstances, these loans can help but most times it ends up in a cycle of debt and borrowers are never able to recover.

FS Card  is a start-up whose sole product right now is a credit card targeting those with “less than perfect” credit histories. The card, which is called “Build” and has MasterCard branding, allows consumers to avoid the local payday lender’s sky-high rates and gradually improve their FICO sore.

FS Card’s strategy is to target “deep subprime customers” in the 550 to 600 credit score range, offering transparent rates and fees and low spending limits to start, said the company’s CEO.

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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Divorce Court Cannot Decide on Bankruptcy Obligations

May 23, 2017 Posted by kingcade

A Superior Court judge in Georgia could not order that a divorce settlement be wiped out in bankruptcy, a federal bankruptcy judge has ruled.  Even though the divorce decree provided that “the property division payments to the Plaintiff shall not be dischargeable in bankruptcy,” Judge W. Homer Drake of the Northern District of Georgia makes it clear that the Georgia court lacked jurisdiction to decide the effect of bankruptcy on the divorce.

There are certain kinds of debts that are non-dischargeable in bankruptcy.  However, these bankruptcy exceptions include support obligations arising from divorce, but do not include property settlements distinct from support.

The divorce decree included provisions that the defendant would pay his ex-wife $1,300 a month for child support and $53,000 “as part of the property division,” the court said. But the decree also said that “the property division payments to the plaintiff shall not be dischargeable in bankruptcy,” it said.

The bankruptcy court rejected the Georgia court’s decree that the obligation would not be dischargeable because it violated public policy. In addition, it found that the state court lacked jurisdiction to make that call.

Click here to read more on this story.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Government Pays $1B a Year on Student Loan Debt Collectors

May 22, 2017 Posted by kingcade

According to a recent report, the federal government has spent $1 billion a year to pay debt collectors to help struggling borrowers make regular monthly payments on their student loan debt.  But based on the data, their efforts have been a waste of money.

Nearly half of the student loan borrowers who had defaulted on their student loan payments and worked with the debt collectors defaulted again in three years, according to a report in Bloomberg News.

The data came from the Consumer Financial Protection Bureau (CFPB), which also found that debt collectors get up to $1,710 in payments from the Department of Education in the U.S. each time a borrower makes good on a debt after working with a debt collector through a process known as “rehabilitation.”  The debt collector keeps the money, even if the borrower defaults again.

The CFPB told Bloomberg that the government should reexamine whether the program and the contractors awarded to private debt collection are working to truly help the millions of Americans suffering with crippling student loan debt that now stands at $1.4 trillion.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.