Consumer Bankruptcy

Questions to Ask Yourself Before Filing for Bankruptcy

The decision to file for bankruptcy is never an easy one. It takes careful consideration and depends on a number of factors. Before making the decision to file for bankruptcy, ask yourself these questions.

Have All Other Options Been Exhausted?

Bankruptcy is not the only option when it comes to debt relief.  It often helps to first meet with a bankruptcy attorney to discuss your options. A budget is one tool a consumer can use to see what unnecessary expenses can be eliminated, freeing up additional funds to pay off debts. The consumer may also have luck in selling some of his or her assets to pay off various debts. Another option is for the consumer to reach out to his or her lenders to see if some type of payment plan or debt settlement can be reached on the debt.

The consumer may also consider credit counseling. This step should be taken even if the consumer is considering filing for bankruptcy since credit counseling, including a two-hour financial management course from a government-approved agency, must be completed at least 180 days before a bankruptcy discharge is issued.

Consumer Bankruptcy, Tax Debt

Does Bankruptcy Eliminate Tax Debt?

By the time an individual reaches the point of filing for bankruptcy, he or she is likely inundated with all types of consumer debt, ranging from medical debt to credit card debt and possibly, tax debt. While a consumer bankruptcy case will eliminate a large portion of this debt, tax debt is not normally included in this list.

Taxes fall into the category of “non-dischargeable priority debt,” which means that the bankruptcy case will not eliminate them. Additionally, repayment of these claims is given priority over other creditors’ claims. However, circumstances do exist where tax debt can be discharged with a bankruptcy filing, but certain requirements must exist before that can happen.

Consumer Debt, Consumer News

Survey Shows 1 in 5 Workers Run Out of Money Before Payday

As the cost of living rises and inflation is at an all-time high, many American households have been pushed to the brink. According to a recent study from Salary Finance, 1 in 5 workers cannot make it from paycheck to paycheck.

As the cost of living continues to rise, many Americans are finding themselves struggling to make ends meet.  According to Salary Finance, approximately 20 percent of employees run out of money before their next paycheck. This is up five percent from the previous year.

Bankruptcy Law, Consumer Bankruptcy

Do I need a lawyer to file bankruptcy in Florida?

Filing for bankruptcy can be an uncertain and intimidating process. Going through it alone can make the process that much more daunting. While an attorney is not a requirement for filing for bankruptcy, it certainly helps ensure that a bankruptcy case proceeds smoothly.

A bankruptcy attorney will meet with the client first during a consultation to discuss the person’s financial situation to determine whether he or she needs to file for bankruptcy. Occasionally, it can be in the client’s best interest to wait before filing, but he or she may not realize that until talking through the situation with an attorney.

Consumer Bankruptcy, Debt Collection

Should I Hire a Debt Relief Agency to Avoid Bankruptcy?

Consumers often resort to seeking the assistance of a debt relief company in an effort to avoid filing bankruptcy. However, hiring a third-party debt relief company is not always a wise decision for the consumer if bankruptcy is inevitable.

Some consumers decide to retain the services of a debt settlement company to negotiate payments on their outstanding debts. However, often the better option ends up being either having the consumer directly settle his or her debts without hiring another company or having the consumer move forward with filing for bankruptcy.

Debt settlement companies say they can work directly with the consumer’s creditors to settle their outstanding unsecured debts. In order to accomplish this, most debt settlement companies tell their clients to stop making payments on their debts, thereby pushing the debts into collections. The debt settlement company will then tell the consumer to pay them a monthly fee, which will be set aside into a savings account for future settlement of the person’s debts.

Unfortunately, there are many things a debt settlement company fails to tell the consumer when they are hired to negotiate the consumer’s debts. Ultimately, debt settlement is a business, and the company is looking out for their bottom line, not the consumer’s best interest, which is why so many debt relief scams exist.

First, while the debt settlement company is working on the consumer’s behalf, the total amount of debt will continue to grow thanks to interest accruing and fees being assessed when the consumer stops making payments. The consumer will also find his or her credit score taking a significant hit during this time since defaulting on a financial obligation is reflected poorly on someone’s credit report. Additionally, the creditor is under no obligation to work with the debt settlement company. They may be successful in settling a debt, the creditor is not obligated to take a settlement offer just because one is made. The creditor is always within their rights to pursue the full amount owed.

The consumer’s credit score will definitely be impacted by debt settlement. Essentially, entering debt settlement is an admission of the consumer not paying his or her debts as originally agreed. Additionally, the debt settlement will stay on the consumer’s credit report for seven years.

Ironically, debt settlement can also leave the consumer in an even worse situation than when he or she started, especially if the efforts to negotiate the debts are unsuccessful. For many consumers, going through debt settlement is essentially delaying the inevitable filing for bankruptcy. It is usually best for the consumer to first sit down with a bankruptcy attorney and analyze his or her situation to see which route is the best one to take.

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If you have 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.

Debt Relief

What is Debt Relief and When Should I Seek It?

Debt can seem like an insurmountable burden, impossible to escape once a consumer has gotten too far in. Different options are available for dealing with credit card debt, student loan debt, and other consumer debts.  

Many times, consumers find themselves overwhelmed with several different types of debt in differing amounts.

Bankruptcy Law, Credit Card Debt, Debt Collection

Important Tips to Know about Credit Card Debt Forgiveness

Credit card debt plagues so many today. Even with the economic stimulus relief, some consumers are having to utilize credit cards to make ends meet. Escaping the load of credit card debt can seem like an impossible feat. Whenever someone offers a way out or credit card debt forgiveness, it can be easy to jump to accept the offer. The problem is credit card debt forgiveness can be more complicated than simply having the debt forgiven.   

Not All Debt Forgiveness Strategies Are Equal  

Credit card debt is forgiven usually from two strategies, namely debt settlement or bankruptcy. Many consumers try a third strategy, which involves ignoring the amount owed until the statute of limitations has passed for collecting on the debt.  However, the damage that can result to the consumer’s credit score as a result of this failed strategy make it often not worth the wait.  

Bankruptcy Law, Kingcade Garcia McMaken

What to Look for When Choosing a Bankruptcy Lawyer

Making the decision to file for bankruptcy can be a difficult one, but having the right bankruptcy attorney in your corner can make the process a seamless one. It helps to do your research, not only online but in person, too. The following tips can help someone who is considering filing for bankruptcy choose the best attorney for the job.

Experience Matters

Many people will start their search on the Internet, looking online to find a bankruptcy attorney. Experience is one factor that should always be considered when choosing an attorney. Experience does not just mean years practicing law. It is important to find someone who has filed cases in bankruptcy court and handles bankruptcy matters regularly. It helps a great deal to find someone who focuses his or her practice solely on bankruptcy law and who handles the specific type of bankruptcy the filer is pursuing instead of a general practice attorney who handles a little bit of everything. Many attorneys will handle only Chapter 7 bankruptcy cases, while others will handle corporate bankruptcies, restructuring and reorganization.

Credit Card Debt

What to Do After Paying Off Your Credit Card Debt

Credit card debt is a source of stress for many consumers. Once a large balance is accrued, the high interest rates can make credit cards nearly impossible to pay off.  Whether you have been able to pay off your credit card debt or have had the debt discharged in bankruptcy, it is important to modify your financial behavior moving forward.   

Monitor Your Credit Score 

Consumers should monitor their credit reports on an annual basis to ensure that there are no inaccuracies. Once a credit card is paid off in full, that should reflect on the person’s credit report. Additionally, paying down a large sum of debt will have a positive effect on the consumer’s credit score. As the person’s credit score goes up, his or her chances of being approved for financing in the future also improves. After paying off debt, the consumer should check his or her credit report to ensure that this payment is reflected on his or her score. To make sure that the consumer’s credit score improves, periodic monitoring of his or her credit report should also occur.