Posts Tagged: ‘debt’

U.S. Consumer Debt Increases in the Month of May

July 10, 2018 Posted by kingcade

Recent data shows that U.S. consumer debt rose in the month of May by the most it had in the last six months, showing that Americans were more confident in their spending habits halfway through the second quarter.  The increase was seen in revolving debt, which includes credit card debt along with non-revolving debt like student loan debt and auto loans.

As of May 2018, Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010. That means Americans are on track to accumulate $4 trillion collectively in consumer debt by the end of this year. Americans have been accumulating more debt, particularly over the last two years, where consumer credit has grown at a rate of 5 to 6 percent annually.

Click here to read more on this story.

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.

Why Waiting to File Bankruptcy Can Hurt You

June 21, 2018 Posted by kingcade

The decision to file for bankruptcy is never an easy one to make. There are a number of myths surrounding filing for bankruptcy, which can oftentimes lead people to wait.  It often can seem like an admission of personal or financial failure, and for this reason, many filers will hold off on filing for bankruptcy for years, allowing their financial issues to only worsen. In fact, the longer people wait to file for bankruptcy, the more likely they will end up struggling, according to a law review study recently published. By the time the individual files for bankruptcy, their personal life and well-being, as well as their financial situation will be damaged to the point where getting a fresh start can be extremely difficult.

Waiting Can Be Draining

The period of time before an individual files for bankruptcy is often referred to as a “financial sweatbox.” The filers are already under an immense amount of stress, are facing debt collector phone calls and lawsuits and are going without basic necessities to avoid the inevitable: having to file for bankruptcy. This “sweat it out” period can end up lasting for years before the person finally comes to the decision that bankruptcy is best for him or her. A recent Notre Dame Law Review piece titled “Life in the Sweatbox” focused on this period of time, showing how waiting it out can be more damaging than making the leap to file for bankruptcy sooner rather than later.

The study used data from the Consumer Bankruptcy Project, which is a long-term academic research project that focus on people who end up filing for bankruptcy, reviewing the reasons why they file, as well as the consequences. The data includes information from approximately 3,200 bankruptcy cases between the years 2013 and 2016. “Life in the Sweatbox” focuses on 910 of the 3,200 filers.

Of those surveyed, over 66 percent of them were determined to be “long strugglers,” meaning they had been in the sweatbox for over two years. Approximately one-third of them waited five years or more to file for bankruptcy. They reviewed statistics from 2007 which showed that the number of people who were “long strugglers” doubled in numbers.

The problem is the longer the people waited, the worse their financial situation became. Those who waited had half the median assets compared to other debtors who did not wait or did not wait as long. In addition, the median debt-to-income ratio of these long strugglers was over 40 percent higher than other debtors. Approximately 50 percent of the long-term strugglers were facing debt collection lawsuits while only 35 percent of the others were facing them.

It was discussed that the stigma that exists around filing is what keeps people from making that decision to file for bankruptcy. However, bankruptcy laws provide the ability for debtors to get a fresh start. Prolonging the decision to file only allows for assets to be depleted making it even more difficult for the person to get a true fresh start.

When to File for Bankruptcy

If a person’s debts are more than 40 percent of his or her income, it is recommended that he or she reaches out for financial guidance. Also, if the person is using debt to pay for basic necessities or other debts, this is another red flag that perhaps that person is in over his or her head.

A bankruptcy attorney can review what debts are crippling the individual. If they are unsecured consumer debts, including credit cards, personal loans or medical bills, these can all be wiped out in bankruptcy.  Lastly, if the individual is forgoing basic necessities such as food or medical care, it is highly recommended that he or she discuss options with a consumer bankruptcy attorney.

Click here to read more on this story.

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.

 

 

 

 

Are Lawsuit Judgments Discharged in Bankruptcy?

June 14, 2018 Posted by kingcade

Some filers enter into bankruptcy with collection cases already at judgment level, with the hope that these judgments along with their other debts can be discharged through bankruptcy. However, getting a judgment discharged is not always so simple, and it depends on a number of factors, including:

  • What kind of case the judgment was for; and
  • Whether the creditor who has the judgment over the debtor has already placed a lien on the individual’s property.

Bankruptcy Discharge for Most Judgments

Generally, a judgment from a lawsuit involves unpaid debts. If the bankruptcy filer has not paid his or her medical bills, personal loans or credit cards, the next step for the unpaid creditor is usually filing a lawsuit against the borrower. If a judgment is obtained, the creditor can garnish the borrower’s wages or even go after a personal asset and have a lien placed on it to satisfy the outstanding debt.

Filing for bankruptcy activates what is known as the automatic stay, giving the filer reprieve from further collection calls and attempts.  It can also put a stop to wage garnishment and can wipe out the borrower’s obligation to pay back certain debts, even in a judgment. Once a bankruptcy case is filed, if a collections lawsuit is pending, the automatic stay in the bankruptcy will put a stop to the lawsuit. Even if a judgment has been entered against the borrower, the final discharge in the bankruptcy case will get rid of that judgment for most purposes, except in certain cases. If the judgment is for a debt that is considered nondischargeable, the bankruptcy will not get rid of the debt.

Nondischargeable Judgments

Some debt is non-dischargeable in bankruptcy. If the creditor has gotten a judgment against the bankruptcy filer for a debt obligation that includes one of the following debts, a bankruptcy discharge will not get rid of that judgment. These categories include:

  • Judgments connected to domestic support obligations, including child support or spousal support/alimony;
  • Judgments for criminal penalties, fines and/or restitution;
  • Most tax judgments;
  • Most student loan obligation judgments;
  • Judgments for any debts that were acquired under false pretenses or by fraud;
  • Judgments for injuries that were willful and malicious caused by the debtor; and
  • Judgments for any injury or death that was caused by the debtor’s drunk driving.

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.

Related Resources:

http://www.alllaw.com/articles/nolo/bankruptcy/lawsuit-judgments-discharged.html

 

Floridians Hold Some of the Highest Amounts of Credit Card Debt in the Nation

June 8, 2018 Posted by kingcade

Credit card debt is a problem for many Americans, but according to a recent study, it seems to be a more significant problem in Florida.  In fact, the Sunshine State has been ranked among the top three states where residents hold the highest amount of credit card debt.

Florida residents carry a total balance of $59.2 billion in credit card debt, as of the end of 2017. The State of California tops the list with its residents holding $106.8 billion in credit card debt, followed by Texas at $67.3 billion.

Interestingly enough, California has traditionally been known to be a state where individuals need to earn the most income to be considered “wealthy” by most standards. Considering the high level of credit card debt residents in California carry, this leads one to conclude that this “income” involves resorting to the use of credit cards, instead of solely relying on earnings.

According to the report, the states with the highest amounts of credit card debt in 2017 were:

  1. California $106.8 billion
  2. Texas $67.3 billion
  3. Florida 59.2 billion
  4. New York $58.1 billion
  5. Pennsylvania $33.2 billion
  6. Illinois $32.2 billion
  7. New Jersey $29.6 billion
  8. Ohio $26.7 billion
  9. Virginia $26.5 billion
  10. Georgia $26.3 billion

Florida residents were also in the top ten for credit card delinquency rates, meaning balances were left unpaid for 90 or more days. Nationally, approximately 7.5 percent of credit card debt was delinquent by these standards. Florida was above this average figure and ranked third in terms of delinquency reported.

The report stated that credit card balances on a national level declined between the years 2008 and 2013 but began to rise again in 2014. As of 2017, more than 470 million credit card accounts were open, totaling $3.5 trillion. The total debt figures were compiled by the Federal Reserve Bank of New York.  The full report can be viewed here.

If you are struggling with credit card debt 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://patch.com/florida/southtampa/florida-among-states-highest-credit-card-debt

 

Steps to Take if Your Personal Debt Goes to Collections

June 5, 2018 Posted by kingcade

When someone is facing serious amounts of debt, it can feel like there is no end in sight. Odds are the individual is fielding continuous calls from debt collectors, all of whom are threatening legal proceedings if the person does not pay the debt owed. However, certain steps can be taken to help handle personal debt issues and hopefully avoid a lawsuit.

1. Review the Debt in Question.
The first step is to review the debt amount. Do not automatically trust what the debt collector is telling you, the debt they are attempting to collect could be expired or past the statute of limitations. It is recommended that the person facing the debt collection action first examine the information provided, research the collection agency that is reporting the debt and see if any discrepancies exist. The debtor has 30 days to verify that the amount is correct after the collection agency has contacted him or her. Take advantage of this time and carefully review the debt before making any payments.

2. Dispute an Incorrect Debt.
If, during this 30-day period, the individual discovers any figure that is inaccurate or unusual, it is recommended that he or she report this and provide proof that it is inaccurate. It is possible that the debt collection agency will clear up any discrepancy and adjust it as necessary.

3. Be Aware of the Fair Debt Collection Practices Act.
Not many individuals are aware that they do, in fact, have rights when it comes to collections. Simply because someone has missed a payment and has fallen delinquent does not mean that he or she has no rights. The Fair Debt Collection Practices Act is a federal law that protects the rights of consumers against harassment and aggressive collection practices by third-party collection agencies. Take the time to review the law and to understand what these rights include.

4. Discuss Payment Options.
If the debt is valid, it can help to talk with the collection agency about payment options. At the end of the day, these companies would rather be paid than have the debt be discharged in bankruptcy. Talk with the company to see what payment options are available. The consumer should examine his or her household budget to see what can be done to make payments to repay this debt.

5. Negotiate the Debt.
Another option that many consumers do not realize they have is to negotiate the debt. Many debt collectors or creditors are quite open to discussing other options for payment. If the individual is facing extreme circumstances or hardships, the creditor or collector may be willing to at least reduce the amount of debt owed or extend the deadline for payment.

6. Know the Statute of Limitations.
Every legal matter comes with its own set deadline for when legal claims can be made. Every state has its own statute of limitation for how long debts can be pursued. It is important that the consumer research what his or her timeline is and know what actions affect this timeline.

7. Be Aware of the Timeline.
After the collection proceeding is over, the debt will stay on the person’s credit report for seven years. This seven-year timeline does not start from when the delinquent account was originally opened but rather seven years from the time it became delinquent. Being aware of this fact can help when negotiating a payment on the debt since a paid debt will be viewed more favorably than one that continues to remain unpaid.

8. Understand the Consequences.
It is equally as important that the individual know what the consequences are to leaving a debt unpaid for too long. It also helps to know what the consequences are of ignoring a legal action if one is eventually filed. If the person is sued, it is extremely important that he or she at least appear in court and respond. It can be tempting to just ignore the matter, but by not appearing in court, the individual is likely to lose by default judgment and could have their wages garnished.

Click here to read more on this story.

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.