Archive for: ‘November 2016’

Bankruptcy History Suggests Intent to Hinder and Delay Creditors

November 22, 2016 Posted by kingcade

The Tenth Circuit Court recently heard the Rupp v. Pearson case where the debtor’s historical use of bankruptcy filings suggested improper purpose to hinder and delay creditors.

Mrs. Pearson had filed nine, mostly unsuccessful, bankruptcies since 1993. In 1997, she filed two unsuccessful chapter 13 cases before filing a chapter 7 petition and receiving a discharge. She later filed two more unsuccessful chapter 13 cases and had one pending chapter 13 case. She then filed another chapter 7 case seeking another discharge of her debts. The second chapter 7 case was filed two weeks after the dismissal of her chapter 13, and immediately upon the passage of the eight-year period.

The bankruptcy court inferred that Ms. Pearson was a “system-gamer.” This means that she routinely filed chapter 13 cases simply to stall collection efforts and with no actual intention of complying with the terms of her own plans. She then filed for chapter 7 relief as soon as the law allowed.

During one of Ms. Pearson’s filings, she agreed to contribute her expected tax return to the extent it exceeded $2,000. However, she kept the entire $4,829 refund and spent it on non-exempt personal items. This resulted in the bankruptcy court dismissing one of her chapter 13 cases. When she filed a chapter 7 case two weeks later, the trustee filed an adversary complaint seeking to have Ms. Pearson’s discharge denied due to her misappropriation of the tax refund with intent to defraud creditors, in violation of section 727(a)(2)(A). “In our view, the (trustee’s) complaint states a plausible claim that Ms. Pearson’s failure to turn over to the Chapter 13 bankruptcy estate the required portion of the tax refund was part of a scheme to hinder and delay creditors.”

However, the Tenth Circuit Court rejected the reasoning of the lower courts in finding that the complaint failed to state a claim for relief due to an absence of “fraud markers” and the fact that the complaint failed to negate the possibility of innocent uses of the tax refund. Rather, the circuit court noted that cases under 727(a)(2)(A) are fact-specific and not subject to rigid formulas.

Click here to read more on this story.

If you have any questions on this topic or 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.

How Trump’s Presidency Will Affect Consumers

November 21, 2016 Posted by kingcade

The battle for consumer rights against powerful corporate and special interests has always been an uphill battle, but the road ahead just got considerably more difficult with this month’s election results.  President-Elect Donald Trump released a statement on his website saying that he plans to “dismantle” the Dodd-Frank Act, which would be detrimental for consumers’ protection rights.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Obama in 2010 in order to protect consumers from irresponsible lenders who used hidden fees and fine print to take advantage of them. The purpose of the Dodd-Frank Act is to prevent the excessive risk-taking that led to the Great Recession and the housing bubble burst in the mid-2000’s.

One of the greatest threats consumers’ face during Trump’s presidency is the fate of the Consumer Financial Protection Bureau (CFPB). The CFPB was one of the most significant outcomes of the Dodd-Frank Act. The Bureau is a consumer watchdog that protects American families from unfair and abusive financial practices. It sets clear rules and ensures that the highest financial standards are met. The CFPB monitors the actions of mortgage lenders, banks, credit unions and other financial companies.

Unfortunately for consumers, the future of the CFPB during Trump’s administration is unclear. While he spoke out against the Dodd-Frank Act, saying that it “has made it impossible for banks to function,” he has not mentioned his plans for the Consumer Financial Protection Bureau. However, the Republican Party has called for repeal of the Dodd-Frank Act and abolishment of the CFPB. Opponents of consumer protections clearly feel empowered to push the agenda of predatory lenders, abusive debt collectors and others who target struggling individuals and low-income families.

If you have any questions on this topic or 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:

https://consumerist.com/2016/11/09/from-healthcare-to-financial-protection-how-will-the-trump-white-house-affect-consumers/

https://www.greatagain.gov/policy/financial-services.html

https://www.whitehouse.gov/economy/middle-class/dodd-frank-wall-street-reform

 

 

How does debt affect survivors after a loved one’s death?

November 18, 2016 Posted by kingcade

It is a common occurrence that creditors start contacting grieving relatives to nudge them into paying their deceased loved one’s lingering debts. If you ever find yourself in this situation, here is what you need to know.

You do not need to worry about inheriting debt. In most situations, debt does not get passed down to heirs. However, creditors typically won’t tell you that. In fact, they are oftentimes depending on your sense of duty to pay off those debts. They may seem kind and sympathetic, but their ultimate goal is to persuade you into paying.

There are exceptions to the rule. Below are four instances in which you might still be on the hook for a debt after your loved one dies:

  • You co-signed on the debt.
  • You live in a community property state.
  • You are the spouse, and state law requires you to pay certain debts such as medical bills.
  • You were responsible for resolving the estate and did not follow state laws.

 

Estates may be liable. Although you are not personally responsible for your loved one’s debts, the estate may be. The estate is made up of your loved one’s remaining assets and may be required to cover the costs of outstanding debts left by your loved one. Creditors may file a claim in probate court. In which case, the money from the estate is used to pay those claims. What is left is what gets distributed to heirs.

If the estate does not have enough money to pay off creditors, it is considered insolvent. In that case, the unpaid debt should disappear. However, that might not stop some companies from calling you for payment.

Click here to read more on this story.

If you have any questions on this topic or 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.

Credit Card Companies want you to give up Your Right to Sue. Here’s how to protect your Rights

November 17, 2016 Posted by kingcade

Before signing up for a new credit card, scan through the fine print and search for the word “arbitration.”  What you will find is that the company requires you to resolve all conflicts through a binding dispute resolutions process, rather than going to court.

These clauses are common among cell phone carriers, financial institutions and online service providers such as Netflix and Amazon.  Some companies provide the option to opt-out of mandatory arbitration, if you act quickly enough.  In fact, more than a quarter of the more than 400 credit card contracts analyzed by the Consumer Financial Protection Bureau included an opt-out provision.

For Citi Card customers, you may even have gotten a chance for a do-over.  This past year, the issuer revised its customer agreements, giving them a new opportunity to opt-out of the company’s standard arbitration agreement.

As with many opt-out notices, instructions can be vague and time is of the essence.   Here are some guidelines consumers should follow when requesting an opt-out.

  • Follow instructions. Read the opt-out provision carefully and follow the instructions exactly. It is necessary to include enough information to identify the person and convey their intent to opt-out.
  • Identify yourself. If the directions are vague, use a standard business letter format, with the date and address at the top.  Include all pertinent details such as your account number, customer ID and your contact information.
  • Be direct. Be as clear and concise as possible in your writing. If you go to court, the lawyers for the company will try and argue that you were not clear or did not mean what you said.
  • Keep records. If an email option is given, use that.  An email automatically generates a time stamp.  If you do not need to send a physical letter, keep a copy for your records.  Save any responses you receive and send the letter certified mail, so you receive confirmation of its receipt.

Click here to read more on this story.

If you have any questions on this topic or 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.

Four Ways President Trump Could Affect Your Student Loans

November 16, 2016 Posted by kingcade

President-elect Donald Trump has plans to address student debt and college affordability, but many of the details remain unclear.  Trump and the Republican Party did not emphasize higher education in their campaign platforms and any changes to the current federal student loan system would require congressional backing.

Here’s what we may be able to expect:

  1. Income-driven repayment changes are likely. According to Trump’s proposed student loan program, he would cap repayment at 12.5% of a borrower’s income. He did not indicate whether this repayment cap would apply to all federal loan borrowers or only for those who apply for income-driven repayment, as is the current standard.
  2. Private Banks may begin issuing federal student loans. Trump wants to restore a system where private banks issue federal student loans as opposed to the government.  This was a process that occurred up until 2010, when the federal government revamped the program and began originating all federal student loans through its Direct Loan program.  The Obama administration cited billions of dollars in cost savings as a result of the switch, and used the savings to offer more Pell Grants for low-income students.
  3. Students’ prospective earnings could dictate their ‘loan worthiness.’ Trump wants to let colleges have a say in lending decisions and make them share the risk of student borrowing with lenders.  It would be up to colleges and banks to decide together which students could take out student loans.
  4. College costs could be reduced by limiting the ‘administrative bloat.’ Trump said in an October speech that he would take steps to cut tuition costs.  In that same speech he said he planned to reduce the tremendous ‘bloat’ in college administration.  By reducing the unnecessary costs of compliance with federal regulations, colleges would be able to pass the savings along to their students.

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.

Related Resources:

http://www.latimes.com/business/la-fi-trump-student-loans-20161111-story.html