Archive for: ‘October 2017’

Student Loan Debt Forgiven, but Tax Bill Remains

October 24, 2017 Posted by kingcade

Wounded war veteran Will Milzarski’s student loan debt was forgiven, but the IRS wants him to pay $62,000 in income taxes on the loan cancellation.  The retired 1st Lt. is a lawyer specializing in disability rights and took a leave from his state job to return to the Army to attend Officer Candidate School.

His two tours of duty in Afghanistan left him with a traumatic brain injury, post traumatic stress disorder and hearing loss. The Department of Veterans Affairs considers him totally and permanently disabled, which lead to a cancellation of $223,000 in student loan debt.

But what he didn’t expect was the IRS notice that followed.  Milzarski is facing $8,000 in Michigan taxes, penalties and interest in addition to federal taxes- that’s $70,000 in total. Milzarski’s high student debt is largely attributed to his law degree, which he earned in 2002 from Cooley Law School.

He was able to subtract his other debts to bring down the amount of income attributed to the loan forgiveness to $161,000. But that pushed him into the top tax brackets.

While there are some exceptions, canceled debt is often considered income.  Milzarski said he is facing garnishment of his disability pay and a lien against his home.  Milzarski led soldiers on 244 combat missions and 43 engagements with the enemy. Among his 18 awards are Purple Heart and Meritorious Service medals.

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 McMaken, 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 McMaken website at www.miamibankruptcy.com.

South Florida Federal Court Shuts Down Student Loan Debt Forgiveness Company, Freezes all Assets

October 23, 2017 Posted by kingcade

A student loan debt forgiveness company has been ordered to stop doing business by a South Florida federal court. The court issued a temporary injunction against Student Debt Doctor and its president, Gary Brent White Jr., and froze all assets of the corporation.

The Federal Trade Commission (FTC) has accused Student Debt Doctor and White of violating federal trade and telemarketing laws by promising to reduce or eliminate student loan debt for an upfront fee.

The FTC filed its complaint Oct. 2 seeking an injunction as well as financial relief for the victims. The defendants operated an unlawful student loan debt relief business since January 2014, preying on borrowers’ anxiety in repaying their loans, according to the complaint.

“Defendants often have promised falsely to reduce or eliminate consumers’ monthly payments and principal balances by enrolling them in repayment or debt-forgiveness programs,” the complaint said.

The consumers who signed up for the services discovered that Student Debt Doctor failed to enroll them in a program or reduce or eliminate their debt, even after charging an upfront fee of $750, according to the complaint.  Telemarketers promised borrowers enrolled in the program student loan debt forgiveness in five years or less.

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 McMaken, 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 McMaken website at www.miamibankruptcy.com.

Key Differences Between Chapter 7 and Chapter 13 Bankruptcy

October 20, 2017 Posted by kingcade

There are two main bankruptcy options available to people who are drowning in consumer debt, Chapter 7 or Chapter 13 bankruptcy. Choosing the right one is critical for success in wiping away your debts. Below is a guide that shares the basic attributes of both options to help you decide which option will work best for you.

Chapter 7 is a form of liquidation. This means the debtor’s assets are allocated among each of the creditors. In most Chapter 7 cases, debtors do not have assets above the legal threshold, which is set by state law and therefore they do not have to give up anything. The average Chapter 7 bankruptcy case lasts approximately three and a half months from filing to discharge. Approximately 96 percent of debtors who file under Chapter 7 receive a discharge of their debts.

When a debt is discharged, it is no longer legally owed. Unsecured debts such as credit cards and medical bills are typically dischargeable, with the exception of student loans. Secured debts such as mortgages or car loans are typically either relinquished or kept by continuing payments.

Chapter 13 is a form of a repayment plan. The debtor’s obligations are combined in one, regular payment calibrated to the debtor’s income. However, certain obligations such as utility bills might be paid outside the plan.

Chapter 13 plans can last anywhere from three to five years, but most are five-year plans. Approximately 41 percent of debtors who filed under Chapter 13 received a discharge of their debts and another 10 percent first tiled under Chapter 13 and later converted to Chapter 7 and received a discharge that way.

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 McMaken 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 McMaken website at www.miamibankruptcy.com.

What is Considered Harassment by a Debt Collector?

October 19, 2017 Posted by kingcade

According to the Fair Debt Collection Practices Act (FDCPA), debt collectors cannot harass, oppress or abuse consumers or anyone else they contact. Harassment by a debt collector can come in different forms.

Here are some examples of harassment:

  • Repetitious phone calls that are intended to annoy, abuse or harass you or any person answering the phone
  • The use of obscene or profane language
  • Threats or violence or harm
  • Publishing lists of people who refuse to pay their debts
  • Calling you without telling you who they are
  • Threats of arrest
  • Calling you before 8 a.m. and after 9 p.m.

If you have been harassed by a debt collector, you can sue for violations of the FDCPA. If you sue and win, the debt collector must pay your attorney’s fees and may also have to pay damages.

Debt collectors are also prohibited from using false, deceptive or misleading practices including misrepresentations about the debt.

Here are some examples of misrepresentations of debt:

  • The amount owed
  • That the person is an attorney if they are not
  • False threats to have you arrested
  • Threats to do things that cannot legally be done
  • Threats to do things that the debt collector has no intention of doing

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 McMaken 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 McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.consumerfinance.gov/ask-cfpb/what-is-harassment-by-a-debt-collector-en-336/

http://timothykingcade.com/?p=6622

What you Need To Know Before Cosigning a Loan

October 18, 2017 Posted by kingcade

Co-signing a loan puts more than your name on the line.  It is an all too common practice that gives you the opportunity to help another person, usually a loved one.  But it is important to remember that when you co-sign a loan, you essentially agree to repay the loan yourself. For example, you might co-sign for a car you never drive, a house you never live in or even a student loan for someone else’s college education.  Nearly 40 percent of cosigners found themselves paying some or all of a loan when the primary borrower they co-signed for was unable to make the payments, according to a survey conducted by creditcards.com.

Here are some important facts you should know before you co-sign a loan:

  • The effect it will have on your credit report. Once you cosign a loan, the debt appears on both of your credit reports.  This means, the loan can help both the primary borrower and the co-signer build a positive credit history if payments are made on time.  It can have the opposite effect if the primary borrower begins to miss payments.  These late or missing payments will land on your credit report and remain there for several years.  You can even end up paying late fees and have your wages garnished as a co-signer.  This may also limit your ability to borrow in the future.
  • You will be treated the same as the primary borrower. As a cosigner, the lender will expect you to pay the loan just as the primary borrower agreed to and will come after you for the payments.  Typically, lenders will target the person with the better potential to pay.
  • A warning about private student loans. These type loans are particularly difficult for the co-signer to escape.  Unlike federal student loans, private student lenders frequently require a cosigner since student borrowers are often young and without credit history or income.  Approximately 90% of borrowers who request cosigner release are rejected, according to a report from the Consumer Financial Protection Bureau (CFPB).

Here are some tips for managing your risk as a co-signer:

  • Know the borrower. And know them well.  Know their credit history and ability to repay the loan.
  • Review your budget carefully. If the primary borrower defaults on the loan, can your budget handle the added strain of another monthly payment?
  • Get copies of everything. In addition to the loan signing documents, request to have duplicate statements sent to you as well so you can keep track of the loan and confirm the primary borrower is not falling behind on any payments.
  • Get out as fast as you can. Have the primary borrower agree to refinance the loan under his or her name at some point in the future, as soon as their credit history and finances are better established.

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 McMaken, 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 McMaken website at www.miamibankruptcy.com