Archive for: ‘June 2015’

Private Student Loans May Prove Too Risky for Students

June 30, 2015 Posted by kingcade

When we think of student loans, we often think of federal loans offered by the government. However, private student loans are another type of loan that students should be wary of. Private loans, which have been termed as the “Wild West” of student borrowing, represent a potentially dangerous trap for consumers. These make up a significant yet often overlooked part of the nation’s $1.2 trillion of student loan debt. Approximately $150 billion of U.S. student debt comes in the form of private loans, which can be issued by banks and directly from schools.

According to a recent investigation by the Miami Herald, many students attending for-profit colleges claimed to have been lied to and lured into enrolling in their school’s loan program. Interestingly, many for-profit colleges were reported to have extremely high private loan default rates. Recently, the U.S. Secretary of Education unveiled the outline for a massive student loan forgiveness plan. The option will focus on the long-overlooked provision of federal law that allows borrowers to seek a clean slate if their school is guilty of misconduct.

According to financial aid experts, private loans should be utilized only as a last resort. Unlike federal student loans, private student loans:

  • Often demand their own separate monthly payments;
  • Have far less flexible repayment options;
  • Have extremely high interest rates;
  • Are NOT eligible for loan forgiveness programs;
  • Will NOT not be included in the newly introduced option, which allows relief from student loan debt if a student is defrauded by their college.

A predatory-lending lawsuit has been filed by the federal Consumer Financial Protection Bureau (CFPB), against ITT Technical Institute. Some of their private loans had interest rates as high as 16.25 percent, with an origination fee as high as 10 percent. While the college disputes the CFPB’s allegations of fraud, the U.S Securities and Exchange Commission sued ITT’s top executives last month. Allegedly, ITT tried to hide its high rate of private loan defaults from auditors and investors.

The American Student Financial Group (ASFG), which has helped administer Dade Medical College’s private loans, is also facing a lawsuit. Dade Medical College of Coral Gables had more than 2/3 of their students with private loans in default. One student was instructed to drop her monthly payments at the campus, only to later receive a “delinquent” letter from ASFG, stating that she was more than six months behind on her payments.

Students taking out private loans often do not realize that these are far riskier than federal loans. A report by the Consumer Financial Protection Bureau found that many borrowers who took out private loans had not maxed out on federal loans, which should always come first before private loans are even considered. Even though for-profit school default rates are nearly twice as high at non-profit schools, students still take out private loans. Some for-profit students complained that they were even pressured into taking out private loans they did not want.

Many colleges have convinced students to accept a “forbearance,” where the student temporarily postpones any payments, the past due balance is added to the loan principal, and the account is made current. Unfortunately, forbearance is a short-term solution that does not solve the larger issue of students who cannot afford to pay back their loans. It also increases the student’s total amount of debt because of accruing interest.

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 of 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.

Source:

http://www.miamiherald.com/news/local/education/article25678696.html

 

Florida Reported to Have the Highest Foreclosure Rate in the Nation

June 29, 2015 Posted by kingcade

There are 13 states reported to have a higher foreclosure rate than the nation’s average. Of the states that held higher foreclosure rates than the U.S. average, most were located in the Midwest and the South. Florida ranked number one on this list. A recent report by the housing-data company RealtyTrac, sheds more light on these figures.

According to the report, our nation’s foreclosure rate has increased by 1%, from April to May of this year. Compared with May 2014, we have seen a 16% increase. For every 1,041 homes in the U.S., one has had a foreclosure filing for May 2015. This includes notices of default, scheduled auctions and bank repossessions. With the highest foreclosure rate of any state, including the District of Columbia, Florida has remained in this position for the past three months. In Florida, 1 out of every 409 housing units was in foreclosure.

Rising foreclosure rates can be attributed to annual increases in bank repossessions, as states across the nation continue to sift through the multitude of distressed properties. Both lenders and courts have been pushing through stubborn foreclosure cases that have been remained stagnant for years, but these efforts have been exhausted.

Foreclosure starts (the the first foreclosure filing on a property) have also increased by 4% from 2014, but they remain lower than reported pre-crisis levels from 2005 and 2006. Foreclosure starts did show a decline in May, but completed foreclosures continued to increase.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source:
http://www.usatoday.com/story/money/personalfinance/2015/06/21/credit-dotcom-states-highest-foreclosures/71264498/

Medical Debt Collector Held Accountable for Handling Disputes Improperly

June 26, 2015 Posted by kingcade

Expensive and unexpected medical bills combined with relentless debt collectors often leads to unfair collection practices. According to the Consumer Financial Protection Bureau (CFPB), improper practices were employed by Syndicated Office Systems, LLC – also doing business as Central Financial Control. They apparently affected the credit scores of thousands of individuals and caused consumers distress and confusion through a series of improper collection practices.

Syndicated Office Systems, who primarily collects medical debt on behalf of hospitals, doctors, and other healthcare providers, must pay $5.4 million in relief to consumers for allegedly mishandling credit reporting disputes and preventing individuals from exercising their debt collection rights.

The company had initially made collection efforts through letters and telephone calls to consumers, the CFPB’s complaint states. Within five days of their initial communication, debt collectors are generally required to send debt validation notices to notify consumers of their right to request proof that a debt is valid or dispute the debt, under the Fair Credit Reporting Act. The complaint also stated that they failed to provide consumers with a “debt validation notice” within five days of its initial communication with the consumer, in connection with the collection of a debt.

According to CFPB, the company failed to respond within 30 days to consumer disputes about the inflation furnished to consumer reporting agencies. The investigation revealed that Syndicated Office Systems had not sent these validation notices to nearly 10,000 consumers. Despite this, the company had collected over $2 million from consumers.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of 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.

Source:
http://consumerist.com/2015/06/18/medical-debt-collector-must-pay-consumers-5-4m-for-improperly-handling-disputes
http://www.consumeraffairs.com/news/medical-debt-collector-hit-with-hefty-penalty-061915.html

Four Habits that Contribute to a Poor Credit Score

June 25, 2015 Posted by kingcade

For consumers with less than average or poor credit, it is often difficult to obtain the necessities that can give us a comfortable living. For those with bad credit, it may be difficult to see what you might be doing wrong. Researchers have discovered that there are certain habits that consumers with lower credit scores tend to practice.

Below are some habits you should stop immediately:

1. Making Late Payments.

Payment history is one of the most important factors when determining one’s credit score. Late payments or missing payments will generate a severely negative impact on your credit score. Most lenders utilize the FICO credit score when they are assessing your risk as a potential borrower.

If you regularly fail to make payments on time, this can have a bad effect on your credit score; lowering it substantially. This can also stop you from being approved for certain lines of credit like an auto loan, mortgage loan, personal loan, or credit cards. Making payments on time is crucial to improving your credit. Missing even one payment can spiral out of control quickly, as late fees and interest charges accumulate. It can take up to seven years to remove defaults or delinquent payments (30 days or more past due) on your credit report.

2. Maxing out Your Card.

You should never max your your card. If you use credit to pay for things you are unable to afford, this is a bad habit that will ruin your credit score. Lenders will view you as a consumer with financial struggles and they will most likely decline your application for further credit.

This will also negatively affect your credit utilization ratio. Consumers with poor credit typically use more than 30% of their available credit, which is a bad habit to take on. By maxing out your credit cards, the utilization teeters near 100%, which will have a significantly negative impact on your credit score.

3. Applying for too much Credit.

Many consumers make the common mistake of applying for multiple lines of credit or credit cards. Each time you apply for a line of credit, a hard inquiry will reflect in your credit report. A hard credit inquiry is a negative mark against your credit, and it remains on your credit report for up to two years.

Credit inquiries do not carry a detrimental impact on credit scores, but applying for multiple credit cards or loans will notify lenders that you may have financial trouble. Before you apply for a new line of credit, first research your chances of being approved.

4. Not Utilizing Your Credit.

Having no credit is truly seen as worse than having bad credit. One cannot improve their credit if they do not have it. This may seem hard to believe but you are far less likely to obtain a lender if you have no credit to show for. The upside is that there are credit cards available to those with all credit types—even with no credit. They may require a deposit to get started but this will help you build the credit you need for the future.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of 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.

Source:
http://www.huffingtonpost.com/comparecards/4-habits-of-consumers-wit_b_7613690.html

Items you Should Avoid Buying with Your Credit Card

June 24, 2015 Posted by kingcade

For many consumers, credit cards are seen as tools that will only harm their credit. Oftentimes we forget that credit cards can be very beneficial and rewarding, when used correctly. By following some simple and valuable tips, you can successfully build your credit while conveniently improving your score. Below, we will look at some smarter ways to use our credit cards. This begins with recognizing certain items that you should NEVER purchase with your credit card.

Large Purchases

Having a credit card with a high credit limit does not mean you should exhaust that limit quickly. One of the biggest mistakes you can make is putting an extremely large purchase on your credit card. As you pay back this amount, you will also be paying an exorbitant amount of interest along with it.

If you miss a payment, you are subject to harsh penalties and this can put you further in debt, thus ruining your credit. This is known as the “Snowball Effect.” Instead, make small, semi-regular purchases and be sure to pay off the entire balance each month. This activity will reflect very positively on your credit score.

Hospital Bills

Never pay your medical bills with your credit card. Medical bills are expensive and paying them with your credit card will only add unnecessary interest fees to your bills. Credit card interest rates may range anywhere from 10% to 30%.

Instead, speak to the medical billing or collections department and ask about your options. Many hospitals and medical facilities can offer you a payment plan directly with them, which will often have much lower interest rates. Sometimes, dependent on your financial situation, you may even be eligible for a “write-off” where the bill is cleared and you may not need to pay it at all.

Student Expenses

Student debt is another expensive bill that should never be put on your credit card. Much like medical bills, student loan interest rates are significantly lower than the average credit card interest rate. Using credit cards to repay these expenses will only prolong the process and add extra interest fees to your balance. Some lenders also charge a “processing” or convenience fee to those paying with credit cards.

Instead, set money aside that you can use expressly toward your student loans. You could set up a bank account for monthly student loan deductions. There is also the option of an income-based repayment (IBR) plan, where if you qualify, your student loan payments will be recalculated based on your income and family size. If you are facing financial hardship, are enrolled in further schooling or the military, you may be eligible for deferment or forbearance. You can also find out if loan forgiveness is an option for you as well.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of 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.

Source:
http://time.com/money/3929085/credit-card-hospital-bills-student-loans-online-shopping/?xid=gonewsedit