Posts Tagged: ‘Bankruptcy Chapter 7’

New Rule makes it Harder for Medical Debt to Impact your Credit Score

October 5, 2017 Posted by kingcade

Consumers are getting some good news when it comes to their credit scores.  A new set of rules have taken effect this week that will make it more difficult for medical debt to damage your credit score, it will also not hurt your chances of qualifying for new credit.

The three credit reporting agencies now have to wait 180 days before putting an unpaid medical bill onto your credit report.  Going back and forth with your insurance company over an outstanding medical bill?  Unpaid medical bills that later get paid by your insurance must be removed from your credit report as well.

This new rule builds additional time between patients and insurance companies to resolve such matters.  Up until this point, there was no grace period and medical debt could appear on your credit report as soon as it was reported as an unpaid debt.  Medical offices tend to do this on their own schedule, sometimes as early as 30 days, while insurers may take longer to fully process claims.

The new waiting period carves out time for patients, their doctors, and insurers to work through legitimate grievances, and makes it harder for unpaid bills to hurt your credit score.  It also allows much-needed time for those suffering from illness and injury to sort out who owes what.

Credit bureaus have taken steps to remove medical bill collections that are less than 180 days old.  One out of five credit reports contain overdue medical debt, according to a 2014 report by the Consumer Financial Protection Bureau. That means 43 million Americans have unpaid medical debt negatively affecting their credit.

If you are on a fixed income or struggling financially, letting the medical provider know you are not able to pay will give them a reason to offer you a discount or be placed on a reasonable payment plan.  If you cannot pay, tell them why you cannot pay.  Some states require hospitals provide free or reduced care to consumers within certain income limits.  Florida is one of these states.

Click here to read more on this story.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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 website at www.miamibankruptcy.com.

Single Mom Is Able to Discharge her Student Loan Debt in Bankruptcy

June 1, 2017 Posted by kingcade

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit (Fern v. FedLoan Servicing (In re Fern) held that a single mom of three can discharge her student loan debt in bankruptcy because it would impose an undue hardship on her family.

Typically, student loan debt cannot be discharged in bankruptcy unless the debtor can prove “undue hardship,” which is not defined in the Bankruptcy Code.

A majority of circuits follow the test adopted by the Second Circuit in Brunner v. New York State Higher Education Servs. Corp, 831 F.2d 395 (2d Cir. 1987), where the debtor must establish:

(1) That he or she cannot maintain, based on current income and expenses, a “minimal standard of living for herself and her dependents if forced to repay the loans;

(2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and

(3) that the debtor has made good faith efforts to repay the loans.”

However, the Eighth Circuit follows a more “flexible approach” under a “totality of the circumstances test,” Judge Anita Louise Shodeen wrote.

The court looked at past, present, and reasonably reliable future financial resources, a calculation of reasonable living expenses, and other “relevant facts and circumstances.”

The single mom in this case had $27,000 in student loan debt and had never made a payment. She initially took classes to become an accounting clerk, but did not finish the program and switched careers, training to be an esthetician.

She received minimal or no child support from the fathers of her three children. Her monthly take-home pay from her current job was $1,506, and she received food stamps and rental assistance. Her income had been consistent and was unlikely to improve in the future, the court said.

Her monthly living expenses are reasonable, necessary and modest, the court said. Her family monthly expenses are $2,475, and her monthly income from all sources is $2,413, resulting in a $62 per month deficit.

The Department of Education argued that she qualified for a repayment program where her payment would be nothing, which would not affect her current standard of living, but the court rejected it.

A zero monthly payment obligation does not automatically mean there is an ability to pay, the court said.

Judge Robert J. Kressel and Chief Judge Arthur B. Federman joined the opinion.

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.

Divorce Court Cannot Decide on Bankruptcy Obligations

May 23, 2017 Posted by kingcade

A Superior Court judge in Georgia could not order that a divorce settlement be wiped out in bankruptcy, a federal bankruptcy judge has ruled.  Even though the divorce decree provided that “the property division payments to the Plaintiff shall not be dischargeable in bankruptcy,” Judge W. Homer Drake of the Northern District of Georgia makes it clear that the Georgia court lacked jurisdiction to decide the effect of bankruptcy on the divorce.

There are certain kinds of debts that are non-dischargeable in bankruptcy.  However, these bankruptcy exceptions include support obligations arising from divorce, but do not include property settlements distinct from support.

The divorce decree included provisions that the defendant would pay his ex-wife $1,300 a month for child support and $53,000 “as part of the property division,” the court said. But the decree also said that “the property division payments to the plaintiff shall not be dischargeable in bankruptcy,” it said.

The bankruptcy court rejected the Georgia court’s decree that the obligation would not be dischargeable because it violated public policy. In addition, it found that the state court lacked jurisdiction to make that call.

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.

How the Affordable Healthcare Act Had an Impact on Personal Bankruptcy Filings

May 4, 2017 Posted by kingcade

As legislators and the President focus their efforts on the repeal and replacement of the Affordable Care Act, they may want to keep in mind the financial consequences.  Since its inception, far fewer Americans have filed for personal bankruptcy.  Personal bankruptcy filings are down 50 percent since 2010.  Coincidentally, those same seven years represent the time frame when the 2010 federal law designed to provide health insurance coverage for the majority of Americans took effect.

Personal bankruptcy filings have dropped from 1,536,799 in 2010 to 770,846 in 2016.  Medical bills remain the leading cause of personal bankruptcy.  Unlike other debts, medical bills are often unexpected, involuntary, and can be for very large amounts.

Two other contributing factors add to the decline: an improved economy and changes to bankruptcy laws in 2005 that made it more difficult and costly to file. However, expanded health coverage played a significant role in the recent decline of personal bankruptcy filings.

Some of the most important financial protections of the Affordable Care Act apply to all consumers, whether they get their coverage through Obamacare or the private insurance marketplace. These provisions include mandated coverage for any pre-existing conditions, an end to annual and lifetime coverage caps.  It also allows young people to be covered by a family policy until age 26.

The first attempt to repeal and replace the Affordable Care Act was in March, failed to gain enough Congressional support and never came to a vote. Then in April, details of a new replacement plan were released. Although President Trump has said that the new version will cover pre-existing conditions, the revised law gives states discretion to allow insurance companies to increase rates for consumers with an existing illness.

Click here to read more on this story.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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.

 

Student Loan Forgiveness Letters May be Invalid

April 20, 2017 Posted by kingcade

More than 550,000 student loan borrowers who signed up for a federal program that promised to repay their student loans after they work 10 years in a public service job may be invalid, according to the Department of Education.

In a court filing last week, the Education Department suggested that borrowers could not rely on the program’s administrator to say accurately whether they qualify for student loan debt forgiveness. Even more appalling, the thousands of approval letters sent out by FedLoan Servicing are considered to be non-binding and can be rescinded at any time.

The filing adds to questions and concerns about the student loan forgiveness program, which offered major benefits and incentives for student loan borrowers who took public service jobs instead of more lucrative work in the private sector.

The American Bar Association and several borrowers have filed suit in the U.S. District Court in Washington against the department.  The plaintiffs in the case held jobs that they initially were told qualified for the debt forgiveness program; only later to find out the decision was reversed. The lawsuit seeks to have their eligibility for the forgiveness program reinstated.

The student loan debt forgiveness program covers people with federal student loans who work for 10 years at a government or nonprofit organization, and includes public school employees, museum workers, doctors at public hospitals and firefighters. The federal government approved the program back in 2007.  The first potential beneficiaries of the program reach the end of their 10-year commitment this October.

Approximately 25 percent of the nation’s workforce may qualify for the program, according to the Consumer Financial Protection Bureau.

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.