Posts Tagged: ‘Chapter 7 bankruptcy attorney’

Student Loans and Bankruptcy: Fixing a Broken System

May 30, 2018 Posted by kingcade

Student loan borrowers have continuously run into roadblocks when it comes to their student loan debt being discharged in bankruptcy cases. Many students graduate with well over six figures in student loan debt, causing them financial hardship for years.

The Department of Education recently solicited comments and input on what loan holders should consider when making a determination on whether to discharge student loans in bankruptcy. As a result, the Department ended up receiving over 400 comments in response to this request.

Currently borrowers have to prove that paying the student loan debt would constitute an “undue hardship” to the borrower. Traditionally, this standard has been a very hard one to meet. For student loans issued by the government, borrowers have had to jump a rather high hurdle to show this undue hardship. In addition, no set standard has been issued for determining what an undue hardship is, resulting in different courts applying different standards.

Only Congress can modify how the law handles discharging student loan debt in bankruptcy cases, but the Department of Education does have some say in making a recommendation on how these cases are handled. An official memo from the Department may go a long way in providing guidance for judges when evaluating these cases.

One possible change is clear criteria will be given to help determine what an undue hardship is. One recommendation has been establishing whether a student loan borrower is near the poverty line, has been determined to be unemployable due to a disability or whether the person is a caretaker for someone who is disabled or chronically ill.

Another recommendation was to make the standard more lenient to allow for more borrowers to be able to discharge student loans in bankruptcy. Congress has never given a clear definition for what undue hardship consists of, but many courts have used the “Brunner” test to determine what this means.

The Brunner test requires that the borrower show that he or she has made a good faith effort in repaying the debt, that the financial circumstance is such that the person cannot have a reasonable standard of living if he or she has to repay the debt, and this financial situation is likely to continue in the future. The problem is this standard is not easy to meet with each court viewing it differently. It has been recommended that courts use a more lenient standard called the totality of the circumstances test, which looks broadly at the debtor’s financial situation to determine if paying the loan(s) back constitutes a hardship.

Other comments suggested that the Department and loan issuers also consider whether the borrower finished college and whether he or she was victim of fraudulent conduct before making an ultimate determination on whether the debt should be discharged. This recommendation follows the issues that have followed students who have attended for-profit colleges who have been accused of enticing students to attend their schools with inflated job placement figures and graduation rates.

The strict standards that have been used in not allowing borrowers to have their student loan obligations discharged have kept many from pursuing bankruptcy when they arguably need this relief the most.

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. There are ways to file for bankruptcy with student loan 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 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.

 

 

Yahoo Users Can Sue Over Data Breach

May 15, 2018 Posted by kingcade

A federal court has recently ruled that a lawsuit regarding Yahoo’s recent data breach, exposing the personal information of its nearly 3 billion users can go forward. The decision was announced on May 11, after U.S. District Judge, Lucy Kohl, rejected a request from Verizon Communications to dismiss many of the claims made against the company for negligence and breach of contract. Verizon Communications purchased Yahoo’s Internet business in June 2017.

The case stems from three different data breaches that occurred between 2013 and 2016. Yahoo has been criticized with how slowly it reacted to the breaches and informed their users. The breaches were not discovered and revealed until after Verizon agreed to buy Yahoo’s business. Upon discovering this news, Verizon demanded a $4.5 billion cut in the purchase price for the company.

Customers were later informed about the release of confidential information, which increased users’ risks of identity theft. Users were then required to pay for credit freezes and continued monitoring on their credit reports.

Kohl stated that, had customers been informed about the breach sooner, they would have taken measures against identity theft and fraud. By the time the company had informed users of the breaches, many of them had already had their identities stole by hackers who used their personal data to file fraudulent tax returns and make illegal credit card charges.

Initially, the company had said that one billion users were a part of the hack, but it later came out that three billion of the users were affected by the breaches. In fact, the complaint filed by plaintiffs had to be amended in October 2017 after it was revealed that the breach ended up affecting three billion users.

Kohl said the fact the complaint had to be amended to include these additional users highlighted just how serious the issue of security was in the plaintiff’s decision to use Yahoo as an Internet service.

In March 2017, two Russian intelligence agents and two hackers were charged by U.S. prosecutors for crimes connected with the Yahoo breaches. One of the accused hackers, Karim Baratov, pleaded guilty to aggravated identity theft and conspiracy charges.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorneywho 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.consumeraffairs.com/news/yahoo-users-can-sue-over-data-breaches-031318.html

https://www.reuters.com/article/us-verizon-yahoo-breach/data-breach-victims-can-sue-yahoo-in-the-united-states-judge-idUSKCN1GO1TL

The Dangers of Co-Signing a Student Loan

May 3, 2018 Posted by kingcade

It has become common practice for parents of high school students looking to enter college in the fall to co-sign or take out private loans to help their children afford the costs associated with a higher education. Many times, the scholarships (if available to the student) have already been maximized, and the financial aid offered through federal loans simply is not enough to cover the complete costs of college.  However, according to a recent study taking on a private loan or co-signing on one to help a child go to college can seriously hurt the parent later when it comes to retirement.

Most private student loans require a co-signer since most high school students do not graduate with well-established credit. Parents will often jump to co-sign, not even thinking of the potential consequences.

“It’s portrayed to them as if they’re going to simply be a reference or endorser, when the truth is they‘ll be obligated to pay this loan if something happens and the primary borrower can’t pay,” said Seth Frotman, Student Loan Ombudsman at the Consumer Financial Protection Bureau (CFPB). “We now see more and more cosigners going into retirement facing unprecedented levels of student debt.”

According to a survey released by the website LendEDU, a site that specializes in student loan refinancing and private student loan borrowing, of the 500 parents who co-signed on their children’s loans, one-third of them did not fully understand the consequences of co-signing. Out of that number, 35 percent of them later said they regretted doing it. More than half of them said their credit scores took a hit after co-signing. More than one-third of them said that the lower credit scores later hurt their chances of qualifying for any financing in the future.

The parent’s credit can be negatively affected if the child later misses payments or fails to pay the loan on time. The survey also showed that more than one-third of the parents picked up the loan payments for their children.

However, what happens if the parent is unaware their child is keeping up on the loan payments? Many cosigners are not informed of the status of their co-signed loans until it is too late- many times to the point where interest had accumulated and fees had been assessed.  The survey also showed that more than half of the parents worried that their child’s student loan debt would jeopardize their retirement plans.

Every student is different, and while some may naturally be responsible, get a job straight out of college and make payments on the loans without any issue, many students fail to understand the responsibility of paying back these loans and are not so fortunate with their job prospects upon graduation.

One option available is a Tuition Installment Plan (TIP). Through a TIP program, the college may divide tuition into equal monthly payments with no interest added. If the parent or child can afford it, this avoids making one lump sum payment and avoids taking out the additional private loan to cover costs. However, look into whether the student’s specific college offers this option.

We have written previous blog postings on the dangers of co-signing a loan – which puts more than your name on the line.  If you have any questions on this topic, feel free to contact our firm.

There are ways to file for bankruptcy with student loan debt.  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 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.nbcnews.com/business/consumer/cosigning-loan-your-credit-score-will-drop-you-ll-retire-n739366

 

Miami Bankruptcy Attorney Timothy S. Kingcade is proud to announce the release of his new e-book

April 25, 2018 Posted by kingcade

Miami Bankruptcy Attorney Timothy S. Kingcade is proud to announce the release of his new e-book, Restart Rebuild and Recover: Filing Bankruptcy in Florida.  FREE to download on TimothyKingcade.com and MiamiBankruptcy.com.

It is a must-read for anyone considering filing bankruptcy in Florida.

Here is what the book covers:

  • THE TOP 3 DANGERS OF FILING BANKRUPTCY WITHOUT EXPERIENCED LEGAL COUNSEL

DANGER 1: Beware of Filing Bankruptcy Pro Se

DANGER 2:  Beware of “Do-It-Yourself” Bankruptcy Kits in Florida

DANGER 3: Without experienced legal counsel, you may not receive the best advice on which type of bankruptcy is best for your particular situation – Chapter 7 or Chapter 13?

  • HOW TO PAY? We will show you how you can afford to hire experienced legal counsel and strategies to cover your legal fees.
  • CHARTING YOUR PATH TO A BRIGHTER FINANCIAL FUTURE We discuss what happens after you file and the steps you can take to rebuild your credit, your savings and your peace of mind.

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.

 

New Study Reveals- 24 Percent of Americans have more Credit Card Debt than Savings

February 8, 2018 Posted by kingcade

The new statistic comes from a 2017 Bankrate study, which also revealed only 52% of Americans have emergency savings that exceed their outstanding credit card balances.  Meanwhile, the average U.S. household owes $7,136 in credit card debt and an estimated 57% have less than $1,000 in the bank.

There are ways to break the cycle of debt and boost savings simultaneously.  It starts by creating a budget. Without a budget, you will have no idea where your money is going each month and where you can cut corners.  Downsizing your living space can free up several hundred dollars a month.  But keep in mind, cutting back on leisure purchases, eating out and clothing can do the same.

Taking on a side-job to earn extra income is another way to pay down debt and boost savings.  Of the 44 million Americans who currently have a second job for supplemental income, more than one-third bring home upwards of $500 a month as a result.

Getting out of the debt cycle begins with creating a realistic budget and getting a grasp on your current financial situation.  There are specific ways you can deal with high interest credit card debt.   If you are struggling with insurmountable debt, whether it is credit card debt, medical debt or student loan debt, consider sitting down with an experienced Miami bankruptcy attorney for a free consultation who can assess your financial situation in more detail and let you know if bankruptcy is right for you.

Click here to read more on this story.

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.