Posts Tagged: ‘CFPB’

New Payday Loan Rules

November 2, 2017 Posted by kingcade

The Consumer Financial Protection Bureau (CFPB) announced new rules on payday loans this week that will help low-income borrowers and families trapped in a cycle of debt. Payday loans are typically between $200 and $1,000 and must be paid back as soon as the borrower receives his or her next paycheck.

On average, a fee of $15 for every $100 borrowed is charged, according to the Community Financial Services Association of America (CFSA). That is an annual interest rate of 391%.

The CFPB argues that most customers who take out the loans are already in financial trouble and cannot afford the fees and penalties associated with these loans.  Approximately four out of five payday loan customers re-borrow their loan within a month.

Here is what the new payday lending rules will do:

Qualify borrowers– Lenders will need to check a borrower’s income, living expenses and their major financial obligations, like their mortgage and car payment, to qualify them for the loan.  In most cases this will involve pulling their credit report.

Rules for loans under $500– Borrowers will not necessarily need to be qualified for these, but they must pay at least one-third of their loan back before they can take out another. Frequent borrowers and those who cannot afford to pay back the loans will be prevented from borrowing, again.

Limits on the number of loans– If a borrower takes out three payday loans back-to-back, lenders must cut them off for 30 days.  Also, unless they can prove an ability to pay it all back, borrowers cannot take out more than one payday loan at a time.

Penalty fee prevention. Lenders cannot continue trying to withdraw payments from a borrowers’ account if they do not have sufficient funds. After two payment attempts, lenders will be required to re-authorize a payment method with the borrower.

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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.

Just How Often Do Debt Collectors Harass People? The Answer Might Surprise You

October 26, 2017 Posted by kingcade

According to the Consumer Financial Protection Bureau (CFPB), debt collectors are required to stop calling once an official request has been made to cease communication. However, approximately 75 percent of consumers who have asked for debt collection calls to stop say that the calls kept coming.

The CFPB released a report earlier this year that surveyed over 10,800 consumers in 2014 and 2015 about their recent experiences with debt collectors. They received approximately 2,000 responses that revealed that over one in four consumers have felt threatened by the debt collector that most recently contacted them. Although debt collection agencies are not allowed to abuse or harass consumers, many collectors do not play by the rules. Approximately 40 percent of consumers surveyed said they asked a creditor or debt collector to stop contacting them, however; only one out of four people reported the collector actually stopped.

Debt collection is a $13.7 billion industry in the U.S. and the most frequent topic of complaint fielded by the CFPB. Approximately 70 million people have been contacted by a creditor attempting to collect on a debt in the past year, according to the CFPB.

The CFPB recently issued proposed rules that would strengthen consumer protections by limiting how often debt collectors can contact consumers. The rules would also require these companies to get the details right and offer an easy dispute process.

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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 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.

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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

How Can I Verify Whether or Not a Debt Collector is Legitimate?

September 12, 2017 Posted by kingcade

Debt collection scams are becoming more difficult for Americans to detect. However, the Consumer Financial Protection Bureau (CFPB) offers consumers a few ways to recognize a real debt collector from a scammer.

According to the CFPB, the first thing you should ask the caller is for their name, company name, street address, telephone number and professional licensing number. The next thing you should do is tell the caller is that you refuse to discuss any debt until you receive a “validation notice” in writing, which debt collectors are required to provide. An important thing to keep in mind is do not give out any personal or financial information to the caller until you have confirmed it is a legitimate debt collector.

Below are a few warning signs that could indicate a debt collection scam:

  • The caller threatens you with criminal charges. If the caller is a legitimate debt collector, they should not claim they will have you arrested.
  • The caller refuses to give you information about your debt. You have the right to ask a debt collector about the debt.
  • The caller is trying to collect a debt that you do not recognize. If you do not recognize the debt, this is a red flag, the caller might be involved in a scam.
  • The caller refuses to give you a mailing address or phone number for the company.
  • The caller asks you for sensitive personal financial information. Do not provide your financial or personal information unless you are certain the caller is legitimate.

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.

Regulators able to get $192 million in Student Loan Debt Settlement from Aequitas

September 5, 2017 Posted by kingcade

Aequitas Capital executives believed they had purchased a gold mine when they began buying student loans from Corinthian Colleges- instead, the debt proved to be the company’s downfall.  Following the for-profit college’s decent into bankruptcy and liquidation; Aequitas also collapsed amid accusations the company’s top execs were running a Ponzi scheme.

However, Aequitas continued to collect payments on the debt- until now. The U.S. Consumer Financial Protection Bureau and several state attorneys general and the Aequitas receiver reached a deal in which about 41,000 former Corinthian students whose debt is held by Aequitas could get more than half- possibly all, of their debt eliminated.

In July 2015, Aequitas became a key ally and vital source of liquidity for Corinthian by buying massive amounts of student debt. By helping finance Corinthian’s in-house private loans, Aequitas enabled Corinthian to access billions in student loan money from the U.S. government.

The bureau recently filed a lawsuit against Aequitas as part of the settlement. It claims Aequitas employees privately expressed anxiety about the huge percentage of Corinthian students who were failing to make their loan payments. “With defaults this high, how can we defend our practices,” the unidentified employee wrote in a 2011 note.

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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.