Archive for: ‘May 2016’

Don’t think you can buy a home after bankruptcy? Actually, you can.

May 24, 2016 Posted by kingcade

There are a number of myths associated with bankruptcy; the inability to purchase a home is one of them. Bankruptcy is certainly not the end of homeownership.  In fact, all major mortgage programs available today- conventional, USDA, VA and FHA home loans-have established guidelines that allow post-bankruptcy buyers to qualify for a mortgage.

Each loan type has its own waiting period requirement after bankruptcy. Waiting periods for the four major types of loans are as follows:

  • FHA loans: 2 years
  • VA home loans: 2 years
  • Conventional mortgages: 4 years
  • USDA home loans: 3 years

While these are the “standard” guidelines, you may qualify for a conventional or FHA loan even sooner.  Both of these loans have exceptions for “extenuating circumstances” or one-time events that caused income loss and were outside of the homeowner’s control.

In this case, an applicant can be approved for a conventional loan just two years after bankruptcy, and an FHA applicant can receive approval after one year in the “Back to Work Program.”

Below are some quick and easy ways to re-establish your credit after bankruptcy.

  • Re-establishing your credit involves opening credit accounts and paying them on-time for at least 12 months. These credit accounts must be kept open and active.
  • Begin with a credit card. Use it for gas and groceries and pay it down every month.  Keep a small balance on it so the credit bureaus can see that it is active, but keep the balance below 30% of your available balance.
  • The credit bureaus value a diverse credit profile, more than just credit card accounts. Personal loans, student loans and car loans are other types of credit.  Credit bureaus want to see that you can manage your credit responsibly.
  • Lenders may look for non-traditional credit. For example, 12 months of cell phone bill, gym membership, car insurance, cable bill, etc.

With proper planning, you can re-establish your credit to the level at which you can qualify for a home loan.

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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.

Bankruptcy Judge Rules that Bitcoin is Property, Not Convertible Currency

May 23, 2016 Posted by kingcade

On February 19, 2016, a Northern District of California bankruptcy judge ruled in In re Hashfast Technologies LLC that, for purposes of valuation under the fraudulent transfer provisions of the U.S. Bankruptcy Code, Bitcoin is not the equivalent of U.S. dollars.

The case involved an adversarial proceeding brought by the bankruptcy trustee against a medical doctor who had been paid 3000 Bitcoin in 2013 by Hashfast Technologies LLC to promote Hashfast’s Bitcoin business. Evidence showed that, although the 3000 Bitcoin had an approximate value of $360,000 when “paid” to the defendant in 2013, it had since appreciated to a present day value of $1.2 million.

Hashfast filed for bankruptcy in May 2014, and the trustee sued to avoid the Bitcoin transfer under the fraudulent transfer provisions of the Code. The dispute that led to the ruling was how the Bitcoin should be valued for purposes of recovery to the estate should the transfer be successfully avoided. Was Bitcoin property (to be valued at its current value) or currency (to be valued as of the time it was transferred)?

Under Section 550(a) of the Code, if a transfer is successfully avoided, the trustee is entitled to recover “the property transferred, or, if the court so orders, the value of such property.” Thus, the trustee argued that the Bitcoin were property and that the estate was entitled to recover either the 3,000 Bitcoin or their current appreciated value of $1.2 million. The defendant in turn argued that Bitcoin were not property for purposes of Section 550(a), but rather the equivalent of their lower U.S. dollar value.

The judge concluded that Bitcoin were “clearly property.” He ruled that “[t]he court does not need to decide whether bitcoin are currency or commodities for purposes of the fraudulent transfer provisions of the bankruptcy code. Rather, it is sufficient to determine that, despite defendant’s arguments to the contrary, bitcoin are not United States dollars. If and when the Liquidating Trustee prevails and avoids the subject transfer of bitcoin to defendant, the court will decide whether, under 11 U.S.C. § 550(a), he may recover the bitcoin (property) transferred or their value, and if the latter, valued as of what date.”

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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.

Eight Signs your Landlord is Breaking the Law

May 20, 2016 Posted by kingcade

From non-refundable security deposits, which are technically illegal, to the lousy upkeep of rental properties, some landlords refuse to adhere to the landlord-tenant law. If you encounter any of these warning signs, it may be a sign you need to keep looking.

  1. Your landlord will not let you see a Certificate of Occupancy (i.e. – CO). Some rentals require landlords to have a certificate of occupancy (CO), but in certain circumstances — like when you are renting a condo or a single-family home, for example — you are probably safe to assume that your new home is covered by one. But if you are considering renting a basement, attic, or garage apartment, you should make sure it is a legal dwelling before you enter into a lease agreement. If it is not, there is a chance that it may not be up to code, meaning it is not safe. Dangers can include potential fire hazards.
  2. Your landlord asks if you were born in another country. Landlords cannot legally ask about your national origin, how many children you have, if you have a girlfriend (or boyfriend), or any other questions that could point to ulterior motives. Denying applications for discriminatory reasons, like race, religion, sex, sexual orientation, or disability are illegal.
  3. You are expected to pay a nonrefundable deposit. This should raise a red flag. A deposit is always refundable unless there are reasons not to refund it. For example, a pet deposit is refundable if no pet damage is done when the tenant moves out.
  4. The security deposit is REALLY high. Most landlords charge a security deposit before a tenant moves in, and that is perfectly legal in all states. However, landlords are often limited as to how much of a security deposit they can charge. The security deposit is a way for a landlord to cover any damages that may occur during a tenant’s stay, but make sure you shop around before simply handing over too much cash up front.
  5. The terms of the lease do not sound right. You should understand everything in your lease agreement. If not, you need to ask for an explanation from your landlord.  Just because it is in the lease, does not make it legal. For example, saying a tenant waives the right to sue or has to pay the landord’s attorney fees in the event of any type of dispute is unlawful.
  6. Your landlord stops by… a lot. Beware of a landlord who lives nearby and stops by often. Outside of an emergency, under no circumstances can landlords use their keys to enter your apartment.  When you become a tenant, you have a right to privacy.  Landlords are allowed only after they have given you notice, which is usually 24 hours.
  7. Your landlord raised the rent in the middle of your lease. Raising the rent is not illegal, if it is done the right way. If you have a signed lease, your landlord cannot raise the rent until lease-renewal time. And if you live in a rent-controlled unit or are a Section 8 tenant, your landlord has further limitations on how much rent can be raised.
  8. Your landlord wants to sell and wants you to move out immediately. Property owners can sell their property at anytime. But if they are also renting it out, they cannot simply kick their tenants out whenever they like. They must give tenants proper notice. If you have a lease, for example, unless there is an early-termination clause that allows your landlord to break the lease early, you have the right to live out the lease in the unit.

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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.

Court Revives Lawsuit over Fraudulent Student Loans

May 19, 2016 Posted by kingcade

A federal appeals court has determined that former beauty school students can pursue claims that the U.S. Department of Education violated federal law by collecting student loans it knew may have been fraudulently obtained.

The U.S. Court of Appeals for the Second Circuit brought back the lawsuit by former students of Wilfred Academy over the Department of Education’s alleged failure to abide by two federal laws requiring student loan holders to be told that their loans could be discharged if issued under fraudulent premises.

Plaintiffs in Salazar v. King, 15-832-cv, claimed the agency had knowledge, as evidenced by its conclusion in 1996 that misconduct at Wilfred Academy was widespread and that students enrolled improperly. As early as 1988, the U.S. Justice Department brought charges against Wilfred employees for misuse of federal funds and falsifying loan applications.

The plaintiffs argue that to this day they are burdened with loans from education and job training that did not prepare them for a profession.

Judge Gerard Lynch, writing for the panel, found that the Department of Education did not provide notice about the possibility of discharge that is required by the Federal Family Education Loans and Direct Loans statutes.

“Plaintiffs plausibly argue that the fact that the DOE has already determined that any Wilfred borrower who presents a facially valid application alleging false certification will automatically receive a discharge is powerful evidence that the DOE has in its possession reliable information all such Wilfred borrowers ‘may’ be eligible for discharge,” Lynch wrote.

Plaintiffs are also asking the court to compel the department to do something that is not a discretionary function of the agency: comply with the two loan laws and stop collecting loans from the students.

“The presumption in favor of judicial review applies to this case, because plaintiffs challenge what they contend are unlawful actions that the agency has taken, and continues to take, against the plaintiffs themselves,” Lynch wrote. “Such challenges are at the core of the judicial review function.”

According to the Department of Education’s investigation of Wilfred Academy in the 1990s and to the circuit’s ruling, the question of fraud surrounding the student loans focused on whether the school ever certified that students who did not graduate high school had an “ability to benefit” from its program. The plaintiffs allege that they were never asked if they had a high school diploma or given any test to determine if they had an “ability to benefit.”

It is unclear how many former Wilfred students would be involved in the putative class, or how many are still paying loans arranged through Wilfred that could be discharged. More than 61,000 Federal Family Education Loan program loans were issued to Wilfred students between 1986 and 1994. When the action before the Second Circuit was filed in 2014, lawyers for the plaintiffs estimated that there were 40,000 or more students who took out federally guaranteed loans to attend Wilfred campuses.

At its height in the late 1980s, Wilfred operated 58 schools and had an annual enrollment of 11,000 students. Its advertisements featured an eager young student promoting the tagline, “That Wilfred winner—she knows where she’s going.”  The Wilfred American Educational Corporation filed for Chapter 11 bankruptcy in May 1990 and the last Wilfred school shut down in 1994.

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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.

 

FBI Arrests 8 in Miami accused of hiding assets before filing bankruptcy

May 18, 2016 Posted by kingcade

Eight people were arrested this week and charged with concealing more than $3 million in assets from federal bankruptcy court in Miami.  The five cases allege that eight individuals hid or illegally transferred assets out of their name before filing for Chapter 7 bankruptcy.

The neighbors of one of the couples could not believe a small army of FBI agents arrived at their Miami high rise condo building early Tuesday morning, and escorted them out in handcuffs.

One of the accused couples liquidated a certificate of deposit worth approximately $141,829 in 2010, then filed a joint petition for Chapter 7 bankruptcy in 2011, according to the allegations in the indictment. Another one of the indictments allege a Pinecrest man transferred and concealed a Jeep Wrangler, a 34-foot boat, The Isabella, approximately $41,200 in cash and his interest and roles in companies he owned.  The fraudulent transfer of these assets was valued at more than $160,000.

A Boca Raton woman is accused of liquidating approximately $102,445 from her IRA account and transferring the money into a family member’s account.  A Miami couple is accused of concealing assets they held in a divorce settlement.  Among the assets concealed: Properties in North Carolina, valued at $336,300; $36,000 in cash to purchase a Jaguar valued at approximately $80,000; and $100,257 in cash from the sale of a condo in the Bahamas.

This should come as a warning to anyone who plans to hide assets from the bankruptcy court. Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to hide assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you listed in a subsequent bankruptcy filing. In addition, the potential penalty for bankruptcy crimes includes fines and imprisonment of up to five years.

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.