Bankruptcy Law, Credit, Timothy Kingcade Posts, Uncategorized

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

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.

Related Resources:
http://www.edsource.org/today/2013/make-student-loans-less-interest-ing-says-sen-elizabeth-warren/40151#.UnKvl_go5jo

Credit, Foreclosures, Timothy Kingcade Posts

New Finance System Provides Hispanics the Key to Homeownership

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.

Click here to read more on this story.

Foreclosures, Timothy Kingcade Posts

Foreclosure Attorney David J. Stern Faces Disbarment

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.

Click here to read more on the story.

Bankruptcy Law, Timothy Kingcade Posts

More Repeat Bankruptcy Filers in 2012

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.

Click here to read more on this story.
http://news.uscourts.gov/2012-report-shows-more-repeat-bankruptcy-filers

Bankruptcy Law, Credit

BAPCPA Renews Bankruptcy Option for Thousands

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 www.miamibankruptcy.com.

Related Resources: http://www.digitaljournal.com/pr/1530118

Foreclosures, Timothy Kingcade Posts

Foreclosure doesn’t have to mean the End of Homeownership

When the housing bubble burst in 2007, Americans were hit hard. According to RealtyTrac, 4.8 million borrowers lost their homes to foreclosure and 2.2 million gave up their homes in short sales. The recovery has been slow, but finally the housing market is re-emerging and showing signs of strength. Many former homeowners have learned difficult lessons and gained a new perspective on saving and making wise investments.

Following these tips will help set prospective buyers who have previously faced a foreclosure or short sale on the right path to homeownership:

• Work with a reputable lender. Make sure that person has the experience and knowledge to help you make an informed, affordable lending decision. They can also explain the time limits that affect buyers who have previously faced a foreclosure or short sale. There is generally a set amount of time that needs to pass before you are eligible to be considered again for a mortgage loan.

• Make an honest assessment of your credit situation. Having a foreclosure or short sale on your financial record will affect what options you may have for loan approval. Be an informed borrower. Access your credit report from all three credit agencies by visiting www.annualcreditreport.com. It’s free!

• Save up for a down payment. Homebuyers re-entering the housing market after a foreclosure or short sale typically need to have a 20% down payment before purchasing a home. Keep in mind the additional expenses you may have to cover, such as closing costs. Properly handling financial responsibilities of homeownership beyond the monthly mortgage payment like taxes, homeowner’s insurance, utilities and other household expenses will be important in earning your loan approval.

• Get preapproved. It’s a good idea to work with a lender who offers a pre-approval program. The preapproval process helps borrowers determine their budget, first before getting into their home search.

Click here to read more on the steps to take to achieve homeownership after facing a foreclosure or short sale.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Bankruptcy Fraud and its Consequences: Don’t Let this Happen to You

A 55 year old woman from Barron, Wis., has been charged with bankruptcy fraud. The indictment alleged that in December 2008, she concealed $18,977 in U.S. currency. The indictment also charged her with making material false declaration in a bankruptcy proceeding, by stating that she had only $100 cash on hand and fraudulently omitting a $12,000 transfer of U.S. currency to relatives and a $3,650 payment to a creditor. She is also charged with falsely testifying under oath in a bankruptcy proceeding on February 3, 2009, about the concealed currency and the transfer of currency to relatives.

If convicted, Cynthia Barlow faces a maximum penalty of five years in federal prison on each count. The charges against her are the result of an investigation by the FBI. If you are considering filing 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 conceal funds. Do not attempt to hide or destroy property from a creditor. These actions can greatly affect the outcome of your case and land you in jail.

Click here to read more on this story.

Bankruptcy Law, Credit, Timothy Kingcade Posts

The Dangers of Medical Credit Cards

We all know that medical bills can be costly, especially when insurance only covers a small portion of the procedure. But recently, some doctors have been offering a solution to this problem- a special line of credit to help cover your bill. What seems like a perfect solution is becoming a credit nightmare for many. This “buy now pay later” option comes at a cost- high interest rates and severe penalties if payments are late or missed.

A growing number of health care professionals are urging patients to pay for treatment not covered by their insurance plans with credit cards and lines of credit that can be arranged quickly in the provider’s office. The cards and loans, which were first marketed about a decade ago for cosmetic surgery and other elective procedures, not typically covered by insurance, are now victimizing older Americans.

Patrcia Gannon, 78, learned the hard way when she signed up for Dr. Knelinnger’s medical credit card to cover her partial denture. The cost for the procedure was more than $5,700. She pays roughly $214 a month, which eats up about a third of her Social Security check. If she is late, she faces a penalty of $50. The interest rate for the card is 23 percent and she receives a 33 percent penalty rate if a payment is missed or late.

Doctors, dentists and other medical professionals have a financial incentive to recommend the financing because it encourages patients to opt for procedures and products that they might otherwise forgo because they are not covered by insurance. It also ensures that providers are paid upfront — a fact that financial services companies promote in marketing material to providers.

While medical credit cards resemble other credit cards, there is a critical difference: they are marketed by caregivers to patients, often at vulnerable times, such as when those patients are in pain or when their providers have recommended care they cannot afford or insurance will not pay for.

The problem has become so severe that attorneys in several states have filed lawsuits claiming that certain dental practices and other medical professionals have misled patients about the financial terms of the cards, employed high-pressure sales tactics and overcharged for treatments and billed unauthorized work.

The New York attorney general’s office found that health care providers had pressured patients into getting credit cards from one company, CareCredit, a unit of General Electric, which gave some providers discounts based on the volume of transactions. The investigation found that patients were misled about the terms of the credit cards, and in some instances, tricked into believing that they were agreeing to a payment plan with the medical provider when, in fact, they were being pushed into high-cost credit.

Click here to read more on this story and the dangers of medical credit cards.

Bankruptcy Law, Credit, Timothy Kingcade Posts

TODAY marks the eight year anniversary date! Many consumers eligible to file Bankruptcy, again.

Today, October 18, 2013, marks eight years since the country’s bankruptcy laws received a huge makeover, in an attempt to reduce the abuses of the system and shift more debtors into repayment plans, rather than have their slate wiped clean. The timeline is significant because when the Bankruptcy Abuse Prevention and Consumer Protection Act took effect on Oct. 17, 2005, it changed the countdown clock to eight years — from six years previously — before a debtor is eligible to file bankruptcy again. Now, anyone that filed under the old law is eligible to file, again.

The Bankruptcy Abuse Prevention and Consumer Protection Act changed far more than just the waiting period to re-file. It also established a “means test” to determine whether a debtor had the ability to repay. It also required that filers take pre-bankruptcy credit counseling and post-bankruptcy money-management courses. It also required lengthier documentation and increased fact verification by bankruptcy attorneys.

The goal of the reform law was “to prevent abuse and make the bankruptcy act fair.” Some experts contend that the reforms were partly intended to decrease bankruptcy filings, and as predicted, filings have dropped. In 2004, the year before the reforms were enacted, annual business and consumer filings totaled nearly 1.6 million. Other than 2005, when there was a rush to beat the Oct. 17 deadline, filings have not topped that 2004 figure and in 2012 totaled 1.2 million cases. Others attribute the decline in filings to the pullback by the credit markets to extend credit to risky clients, giving fewer people credit to default on.

Many people who filed before the law changed in October 2005, may have suffered a job loss, foreclosure or another economic hardship that has put them in the position to file, again. Back in 2005, the economy was much different than it is today. Due to their previous filing, they have been unable to file- until now!

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.toledoblade.com/Economy/2013/10/06/At-8-insolvency-reform-act-falls-short-of-goals.html

Foreclosures, Timothy Kingcade Posts

National Foreclosure Settlement Rules Revised Following Complaints

The $25 billion national mortgage foreclosure settlement is getting tweaked following numerous complaints that mortgage servicers are falling short on the promises made to struggling borrowers. When the settlement was originally announced in February 2012, its goal was to compensate borrowers for the wrongs they experienced in the foreclosure process. It also put into place new servicing requirements that applied to the nation’s five largest servicers: Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally/GMAC.

However, recent complaints from homeowners, housing counselors and state attorneys contend that banks are not complying with the set standards agreed to as part of their pact with the Justice Department, attorney generals and the banks.

The new procedures put into place include:

• All five banks will give homeowners 60 days, instead of 30, to submit additional documents that might help them secure a loan modification before their home moves into foreclosure.

• Banks have promised to do a better job of overseeing employees who work with borrowers.

• Bank of America and Wells Fargo have agreed to be more specific about what missing information they need from homeowners.

• Bank of America and Wells Fargo have agreed to escalate loan modification applications when a customer is being asked repeatedly for more documents.

• Bank of America and Wells Fargo will now use an online portal to submit documents and create a direct contact for the housing counseling agencies working with struggling homeowners.

Click here to read more on the new changes in the national foreclosure settlement rules.