Archive for: ‘October 2013’

Student Loan Default in the U.S. and Steps the Govt. is taking to address the Problem

October 31, 2013 Posted by kingcade

With student loan debt approaching $1.2 trillion it has become a threat to our children’s futures. Senator Elizabeth Warren, D-Mass., a leading consumer activist and advocate for student loan reform in Congress recently co-sponsored a bill, “Keep Student Loans Affordable Act of 2013.” The new bill would have rolled back interest rates and frozen them for a year at 3.4 percent. During that year, Warren and her colleagues planned to reform the student loan system to eliminate profits, provide better consumer protection and address “the college affordability problem,” which, she says, forces families into debt in the first place.

The bill unfortunately failed, but Warren is continuing to press for the following changes:

– Eliminating government profits from the student loan program.

– Reducing the burden of student debt on existing borrowers by letting them refinance their loans during this period of historically low interest rates.

– Restoring basic consumer protections, such as bankruptcy relief. Under current law, student loans cannot be dismissed when someone files for bankruptcy protection.

President Obama gave his support to Warren’s key issue saying that, “government shouldn’t see student loans as a way to make money; it should be a way to help students.” The urgency from Warren and other advocates is that students and their parents are increasingly turning to loans to pay for higher education, as college costs have become out of reach for most families.

Nationally, about 11 million students take out college loans each year. One reason loan numbers are spiking is that college costs have soared since 1982-83, by 257 percent at four-year state colleges and universities and by 166 percent at four-year private colleges and universities, according to the College Board. At the same time, state support of public colleges and universities has slipped. State funding for public universities dropped by 23 percent between 2007 and 2012, Warren said.

Defaulting on student loans can have a lasting impact on your financial future. The Federal Student Aid website lists the following consequences of defaulting on your student loans: The outstanding amount of the loan-both principal and interest- becomes due immediately; the borrower loses eligibility for any additional student aid or forgiveness program; you are reported to credit bureaus; the overall debt will increase as interest keeps building, which can include late fees, collection fees and court fees. The following consequences can also result: Wages may be garnished; tax refunds may be withheld; pay can be withheld and the lender may even file a lawsuit against you.

The debt that students are taking out to finance their lives and futures is crushing! Student loans are the toughest because they start so early, when students are trying to launch their careers and gain their financial footing. This is also the time young people are the most vulnerable and have the fewest resources available to them.

If you are having trouble making your student loan payments or you have recently defaulted on your federal or private student loans, contact an experienced Miami bankruptcy attorney. Although student loans are often not dischargeable in bankruptcy court, an attorney can help you eliminate other debts and obligations so you can take control of your finances and better handle your student loan debt.

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New Finance System Provides Hispanics the Key to Homeownership

October 30, 2013 Posted by kingcade

The goal of owning a home is deeply rooted in the Hispanic culture. It’s considered a symbol of success and an important element when providing for one’s family. The housing crisis hit Hispanic families particularly hard. The Hispanic homeownership rate now stands at 45.9 percent, well below the national rate of 65 percent. Thousands of Hispanic homeowners are still “underwater” on their homes, while even more lost their homes to foreclosure.

New Directions for National Policy, the Bipartisan Policy Center Housing Commission has put forth a comprehensive plan for an entirely new system of housing finance. Under the plan, the private sector will play a far greater role in bearing mortgage-credit risk.

A key goal of the plan is to preserve the 30-year fixed-rate mortgage, which has allowed millions of low- and moderate-income families to achieve their dreams of homeownership. Stretching out the mortgage payments over 30 years helps keep monthly payments low and provides certainty to borrowers by protecting them against interest rate volatility over the life of the loan. Other elements of the plan include promoting the widespread availability of housing counseling for first-time homebuyers and adopting sound underwriting standards.

As the housing market continues to recover, the National Association of Hispanic Real Estate Professionals (NAHREP), reports why Hispanics will be a dominant force in the housing market for years to come- First, the Hispanic community is growing dramatically, with some experts predicting the Hispanic share of the overall population climbing to 29 percent by the year 2050. Second, the purchasing power of Hispanics is on the rise and exceeded $1 trillion in 2012. Third, Hispanic educational levels are increasing, with Hispanics now the largest minority group on our nation’s college campuses.

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Foreclosure Attorney David J. Stern Faces Disbarment

October 29, 2013 Posted by kingcade

Former foreclosure attorney David J. Stern may ultimately be disbarred for violations related to his role in the highly publicized “robo-signing” scandal. Stern is still a licensed lawyer in good standing with the Florida Bar. In April, two years after the scandal broke, the Bar filed an 80-page complaint that includes 17 counts that Stern violated the Bar’s rules of professional conduct. The Bar alleges that “Stern failed to properly supervise lawyers and non-lawyers at his firm and failed to halt regular violations of the Florida Bar rules.”

Stern earned the name the “foreclosure king” when his Plantation law firm rapidly expanded during the foreclosure crisis in 2006. He was a lead attorney for home mortgage provider Freddie Mac and several other big banks. Accusations were reported to the Florida Bar and local courts that the firm was filing false and inaccurate documents in those cases. Stern’s office was forced to close and thousands of employees were laid off.

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More Repeat Bankruptcy Filers in 2012

October 28, 2013 Posted by kingcade

1.1 million Americans filed for bankruptcy this past year, and for many it was not their first time. These filers had a median monthly income of $2,743 and most filed under Chapter 7. An annual report by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) released the following data:

o Approximately 69 percent of consumer bankruptcy petitions filed in 2012 were filed under chapter 7, down from 70 percent in 2011.

o In 30 percent of the chapter 13 cases filed during 2012, debtors reported that they had filed for bankruptcy protection during the previous eight years, 2 percent more than in 2011.

o Consumer debtors seeking bankruptcy protection reported holding total assets in the aggregate amount of $140 billion. Total assets reported fell 18 percent over the comparable 2011 numbers. Aggregated liabilities totaled $218 billion, falling 22 percent over comparable data for 2011.

o Median average monthly income reported by all debtors was $2,743, one percent lower than in 2011. Filers in the Northern District of California had the highest median average monthly income at $3,673.

o Median average monthly expenses for individuals that filed were $2,769. Filers in the U.S. Virgin Islands had the highest median average expenses with $4,715.

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BAPCPA Renews Bankruptcy Option for Thousands

October 25, 2013 Posted by kingcade

The eight year anniversary date of the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) has restored the opportunity for thousands to file for Chapter 7 bankruptcy. Prompted by fear and uncertainty, hundreds of thousands of Americans impulsively filed for Chapter 7 bankruptcy before BAPCPA went into effect on October 17, 2005.

Many consumers filed for bankruptcy too early for his or her particular situation, accruing debt following their filing date and ending up even deeper in the hole financially. Because BAPCPA restricted an individual’s right to file Chapter 7 bankruptcy to once every eight years, these consumers lost homes and assets because preventative financial tools were not available to them.

Those consumers are now able to get a fresh start, as the eight years has now passed! Here are some points to consider before filing for Chapter 7 bankruptcy:

• Know that the following debts are non-dischargeable in bankruptcy court: Student loans, child support, spousal support and income tax debt.

• If you are considering filing a Chapter 7 bankruptcy, do not attempt to hide money or assets. This can include transferring money to a family member or opening a hidden bank account to hide funds. These actions can greatly affect the outcome of your case and can land you in jail.

• You will not be able to file for Chapter 7 bankruptcy again for another eight years.

At Kingcade & Garcia, P.A. we have been helping people from all walks of life build a better tomorrow! Our attorneys help thousands of people each year take advantage of their rights under bankruptcy protection. We offer FREE consultations and affordable rates. The day you hire our firm, we stop the creditor harassment and put you on the path to financial freedom. You can find useful consumer information by visiting

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