Archive for: ‘December 2015’

5 Financial Lies that keep you in Debt

December 31, 2015 Posted by kingcade

To get out of debt and start planning for the future, you need to take an honest look at your financial situation.  Start by owning up to these five common financial lies in the New Year.

I’ll put back the money I took out of savings.  If you have to tap into to your savings to afford a new pair of shoes, a TV or other item- you probably can’t afford it.  It’s even more unlikely you will put the money back into your savings account.  Avoid impulse purchases and save for the future, instead.

I still have time to save for retirement. When it comes to retirement, the earlier you start the better. Timing is key.  For example, if you’re 30, and save 10 percent of your $50,000 salary in a tax-deferred account, you will have $1.1 million by age 67, assuming a 6 percent rate of return and salary growth of 1.5 percent and including Social Security.  However, if you start at age 35, you will only have $717,021 by age 67.

I don’t need to worry about my credit score.  While you shouldn’t obsess about your credit score on a daily basis, you should check it once a year.  Look for any discrepancies, like suspicious activity or inaccurate reports of late payments.  Fixing these issues can make a BIG difference when it comes to the interest rate you’re offered on a mortgage, car loan, or even on a washer and dryer you choose to finance.

The bank is the best place to keep my money. Having a savings account set aside for emergencies is a sound choice.  However, many people put far too much money into these low-interest savings accounts.  With these type accounts, when you take into consideration inflation, you’re actually losing money.  Consider alternatives such as money market accounts that yield higher interest rates.

I will never be able to pay off my debt.  As you consider your budget, put additional money toward paying down your loans and debts.  Consider alternatives like transferring your current credit card debt to a zero percent introductory interest rate.

If you are in financial crisis and considering filing for 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.

Related Resources: http://www.startribune.com/5-financial-lies-that-keep-you-from-getting-out-of-debt/363434071/

Student Loan Debt Discharge- Another WIN for Consumers in Bankruptcy Court

December 30, 2015 Posted by kingcade

Another consumer has successfully had their federal student loans discharged in bankruptcy court.  The topic of student loans and bankruptcy is gaining more attention and although not every court district offers the same considerations as this one- it should not be assumed that discharging your student loan debt in bankruptcy is impossible.

Bankruptcy can help mitigate your student loans in a variety of ways, including a full discharge of the debt owed.  There are even private student loans that can be easily discharged in bankruptcy; for example, loans for schools or education that was obtained at an “ineligible education institution.”

In this specific case, the debtor was an unmarried woman in her mid-thirties with no dependents.  She had suffered a variety of mental issues since her mid-teens, including eating disorders, anxiety, depression and self-harm (i.e. – cutting), which had adversely affected both her academic endeavors and her ability to maintain employment.  She obtained educational loans totaling approximately $204,525.00, which included $57,489.11 owed to the U.S. Dept. of Education, $47,900.00 owed to Educational Credit Management Corporation, and $99,136.00 owed to Iowa Student Loan.

She filed for Chapter 7 bankruptcy on April 15, 2010.  On July 23, 2010, she filed a complaint to determine whether her student loans could be discharged.  The matter was tried, and on December 1, 2010, the bankruptcy court entered a memorandum decision in which it concluded, “excepting the educational loan debts Debtor owed to the United States Department of Education, Iowa Student Loan, and Educational Credit Management Corporation from discharge would impose an undue hardship on Debtor and a judgment determining those debts were discharged.”

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.

How to Get Rid of Holiday Debt FAST

December 29, 2015 Posted by kingcade

We all have a vision of what constitutes “the perfect holiday.”  For many of us, it means countless presents under the tree, our children’s smiling faces on Christmas morning and that perfect meal with our family and loved ones all gathered around the table.  For some of us, making that vision a reality means putting it on credit cards.

If that was you this year, you’re probably wondering the next steps to take before the bills arrive and the interest starts mounting.

Here are some immediate steps you can take to help manage holiday debt in the New Year:

Make January and February lean months for spending.  With the plentiful holiday season behind us, it’s a good idea to start reeling in the spending and extravagance.  That doesn’t mean starve yourself, but it does mean sacrificing on splurges you would normally enjoy (i.e. – dinners out, visits to the salon, shopping, vacations, etc.)

Channel savings directly into those big credit card payments. Take a look at all of your credit card bills and determine which one has the highest interest rate. Make the biggest payment you possibly can afford towards that card, while still allotting enough money to pay your other bills and cover monthly expenses.

Look for zero-interest balance transfers.  BEFORE you send off that big payment, research credit card offers for balance transfers that allow you to pay 0 percent interest on the transferred balance for a certain period of time.  Just make sure you get the transferred balance paid off before the zero interest offer expires.

Sell unwanted items.  You will likely find that after the dust settles, you have some unwanted items and gifts around the house you no longer use or want.  Utilize Craigslist and eBay to sell these items and earn some extra cash.  This money can go towards making bigger payments towards your high-interest credit cards.

Start a savings plan for next holiday season. The best time to start saving for the next holiday season is right now!  If you save just $10 a week (the equivalent of a lunch out or a week’s worth of Starbucks runs) for 50 weeks, you will have more than $500 saved for next year’s shopping.   If you save $20 a week, you will have over $1,000 set aside for holiday shopping next year.  The easiest and most effective way to do this is by setting up weekly automatic transfers through your bank.

Make the holidays more realistic.  Discuss sensible downsizing when it comes to purchasing gifts next year.  Have a budget for gifts and stick to it.  Move to drawing names with family members for gift giving purposes (i.e. – Secret Santa) and discuss arrangements that reduce the challenges on travel for everyone.  The spirit of the holiday season should be about togetherness and giving thanks for all of the blessings we have- not something that causes you to go into debt.

If you are in financial crisis and considering filing for 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.

Related Resources: http://money.usnews.com/money/blogs/my-money/articles/2015-12-22/how-to-quickly-get-rid-of-holiday-debt

The Jury is still out on the New Student Loan Repayment Solution REPAYE

December 28, 2015 Posted by kingcade

The new federal student loan pay-off solution known as REPAYE (Revised Pay As You Earn) is supposed to fix the shortcomings its predecessor, PAYE (Pay As You Earn) failed to do.  The new program allows borrowers to cap their monthly payments at 10% their discretionary income regardless of when they borrowed or how much they owe.  Another benefit is that after making 20 years of payment- 25 years for graduate students- any outstanding loan balance will be forgiven under the program.

The goal is to ease financial stress and subsequent loan default. The effect of defaulting on student loans can last long after graduation.  It can impact a borrower’s credit history; make qualifying for any new loan (for example, a mortgage or car loan) more expensive or flat out impossible.

But like all new plans, just because it’s new does not mean it’s a perfect fit for all borrowers. The downside to this repayment option is that for some borrowers, the monthly payment may not cover both interest and principal payments, which mean the loan balance, could keep growing. That makes it harder to obtain other personal credit (i.e. – credit cards, mortgages, etc.) because the borrower’s credit capacity is exhausted.

Another risk is that the lower monthly payments will lead the borrower to pay substantially more over the life of the loan when compared to a standard repayment plan.  Borrowers must also be aware of the consequences of REPAYE if their salary eventually increases. With REPAYE, payment will always be 10% of your monthly discretionary income, even if it amounts to more than the original payment under the ten-year plan as income rises.

There are now a total of eight income driven repayment plans to choose from. The key is to select the one that’s best for your situation and know the pros and cons of each.

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.

 

Three Questions to Ask about the New Student Loan Repayment Program

December 24, 2015 Posted by kingcade

Some financial counselors are advising caution when it comes to the federal government’s new income-based student loan repayment program.  If you do not plan ahead, the lower monthly payments under this option could have long-term financial consequences.

The REPAYE program (Revised Pay As You Earn), which launched December 16, gives those Americans with Federal student loans the option of capping monthly payments at 10% of disposable income.  For example, someone earning $30,000 a year would see payment capped at around $103 a month. It also includes a forgiveness feature- Any loan balance remaining after 20 years of payments will be wiped away for undergraduate loans.  If you have loans from graduate school, the forgiveness comes after 25 years.

To make sure you weigh all the costs and benefits of the new plan, here are three questions to ask before you sign up for REPAYE:

Will your monthly payment reduce your balance? Check to see whether your monthly payment will cover both the principal and interest due on the loan. If it does not, your balance will keep growing, which can mean financial trouble in the long run.

How much more in interest will you pay? By stretching out your loan, you inevitably pay more in interest, which is money that could have been saved for your financial goals.  This can also hurt your credit score if the loan balance keeps growing.

Will you be able to handle a large tax bill? Under current law the loan amount that is wiped out will be treated as taxable income. If the forgiven debt is a large amount, wiping it out may push you into a higher tax bracket, so you could end up paying the tax at an increased rate.

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.