Posts Tagged: ‘Miami Bankruptcy’

Understanding the Deceptive Practices of Student Loan Companies

June 6, 2018 Posted by kingcade

Over 44 million Americans are finding themselves in over their heads when it comes to student loan debt. It can be hard to see an end in sight when facing six figures of student loan debt following graduation, but for many, student loans are almost considered a “given” if someone wants to pursue a higher education.  Private student loan companies are now trying to make it even more enticing to take out more money to cover these costs.

In the grand scheme of things, government loans still constitute the majority of what is borrowed. Currently, private student loans account for less than 10 percent of all student loan debt, which is a relatively small percentage.

Private lenders have been hoping for this to change and have been actively lobbying for legislation that would lessen the restrictions the government has on student loans, specifically when it comes to graduate students.

This legislation, known as the Prosper Act, was written and proposed by Republican lawmakers last year. It caps the amount of federal student aid graduate students can receive. This cap on federal aid leaves a gap between what the students are able to borrow and how much tuition costs. Concerns have been expressed that students will have no choice but to seek private loan options to pay for the remainder of these costs not covered by government aid.

The next step is for these private loan companies to make their product more appealing to borrowers. What better way to do this than by making friends with the borrowers themselves? Many of these companies, in fact, are now making their product seem more like they are a lifestyle company than a lender.

One such company, Laurel Road, has partnered with MoviePass, a movie theater subscription service. The company has announced that if an individual refinances his or her student loans with Laurel Road, that person will be eligible for one year’s subscription.

Another private lender, Social Finance, Inc. (SoFi) has made small changes to its branding by changing how it refers to its borrowers. Instead of “customers,” these individuals are now referred to as “members.” It may seem like a small change, but this difference in designation also includes invitations to exclusive “member only” events, like cocktail parties and cooking classes. SoFi brands itself as more of a social club than what it actually is– a private financial institution. In 2017, SoFi offered 323 nationwide member events for its over 14,000 “members.” The company also offers an app that allows its members who meet at events to communicate to each other through the app.

The Laurel Road partnership is just one example of private lending companies trying to rebrand student loan debt as something more “fun.” The problem is further compounded when these loan companies do very little to educate their borrowers on the terms of the loans. When borrowers fail to pay back the debt as it becomes due, many of these lenders have been accused of illegally harassing their customers.  Borrowers have become so desperate to pay back their debts, in fact, that some have even resorted to game show antics to find a way out. Recently, a new game show called “Paid Off with Michael Torpey” has offered student borrowers a chance to compete on TV with the prize being having their student debt paid off. The series is premiering on TruTV in July 2018. Many have criticized this new program, saying it trivializes a very serious, growing problem.  However, it does demonstrate what lengths borrowers will go to in order to get some relief from their crippling debt.

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.

 

 

 

 

Study Finds Parent PLUS Loans to African American Families Can Be Predatory

June 1, 2018 Posted by kingcade

College is expensive and finding ways to pay for tuition and associated costs can be difficult for many students, as well as their family members. When options are limited, sometimes parents resort to taking out loans themselves to help their children pay for the costs of a higher education. Recently, one such loan has been criticized, the Parent PLUS loan for its terms and conditions, and also the effect it has on the parents who sign on the dotted line, not fully knowing what they are agreeing to.

A study recently issued by New America reports that a higher percentage of low-income African American parents rely on the use of Parent PLUS loans more than low-income whites. The study recommends making the use of Parent PLUS loans off limits to any family of limited financial means and offering additional, and affordable federal loan options for lower income families.

Families often resort to the parent PLUS loans after their children have maxed out other federal loan options. Many of the features of Parent PLUS loans have given them the reputation of being a loan of “last resort.” The limits tend to be fairly generous, the underwriting limited and the interest rates high.

The repayment options that parents are given on these loans are very limited, which only increases the risk that the borrower parents will default on the loan obligation. By having parents take these loans out, creates a level of “intergenerational debt” that can be crippling.

An additional problem with Parent PLUS loans have been the fact that lenders have issued these loans without evaluating the borrower’s ability to repay them. Without properly qualifying the borrower, issuing the loan simply puts them in a situation where he or she ends up falling behind on payments.

These loans were originally intended for families with more financial resources and in higher income tax brackets whose children may not qualify for need-based aid. In fact, most of the PLUS borrowers are from families earning more than $75,000 annually, many of them coming from upper class, Caucasian families with only 10 percent of Caucasian families earning less than $30,000 taking out these loans. However, for African American families, one-third of these individuals who have ended up taking out a PLUS loan earn less than $30,000, which is the opposite of what the study found with Caucasian families in the same tax bracket.

Because of the high fees associated with these loans, repaying the Parent PLUS loans can be difficult. If the parent is already struggling to make monthly payments, few options exist for that parent when it comes to repayment options. Currently the only income-based payment plan is an income-contingent repay (ICR) plan. To qualify, the parent must convert the loan into a federal Direct Consolidation Loan, and the minimum monthly payment in an ICR is normally 20 percent of that person’s disposable income. The monthly payment may be lower, but the interest rate does not decrease. At some point, it becomes nearly impossible for that parent to get caught up.

The study recommends making these loans off-limits to families in the lower-income categories and encourages the Department of Education to allow students from these brackets to borrow more from themselves rather than resort to having their parents take out these types of loans.

The study also recommends no longer allowing schools to characterize these loans as “aid” in financial aid award letters. They also recommend requiring parents who take these loans out to complete counseling that makes it abundantly clear to them that these loans are their sole obligation and not their children, as well as explain the terms of the loans so that they are clearly understood.

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.

When will a Bankruptcy be removed from My Credit Report?

May 31, 2018 Posted by kingcade

Making the decision to file for bankruptcy is never an easy one. Many people hold off on filing for fear of what bankruptcy will do to their credit once all is said and done. However, having a bankruptcy filing on a credit report does not necessarily mean the end of your finances or your ability to access new credit in the future. It is possible to begin rebuilding credit after filing for bankruptcy.

What Type of Bankruptcy?

The most common types are Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy is also known as a liquidation bankruptcy. This type of bankruptcy involves the bankruptcy trustee liquidating assets that are not otherwise exempt and paying off the qualified debts with the proceeds. Chapter 7 bankruptcy allows you to get a fresh start financially and erase past debts, but a legitimate concern consumers have is the effects it will have on their credit score and their ability to take out credit again.

A Chapter 7 bankruptcy filing will take approximately 10 years from the date of filing before the case will come off of the filer’s credit report. On the other hand, a Chapter 13 bankruptcy is known as a reorganization bankruptcy. This case allows the filer to work with the bankruptcy trustee to put together a repayment plan to pay for some or all of the filer’s debts over the course of three to five years. A Chapter 13 bankruptcy case will be automatically deleted from the person’s credit report seven years from the date of filing.

Can the Process Be Faster?

It is possible to have the bankruptcy removed from the person’s credit report sooner than is normally allowed.  There is a big misconception that bankruptcy cannot be removed from a credit report and that you will be penalized for 10 years, not being able to access new credit.  The truth of the law or the way law is written, there’s a maximum amount of time a bankruptcy can remain on your report, but there is no minimum amount of time.

This is done by filing a dispute with all three of the credit bureaus. It is recommended that the person reviews the bankruptcy filing and the specific debts related to the bankruptcy that appear on the credit report. If any incorrect items are found, the person can file a dispute.

When a credit dispute is filed with one of the bureaus, it must be verified and validated for it to stay on that person’s credit report. If the disputed items are not verified within 30 days of the dispute, they must be removed from the credit report, including bankruptcies.

Getting Back on Your Feet.

Chapter 7 bankruptcy allows you to get a fresh start financially and erase past debts, but a legitimate concern consumers have is the effects it will have on their credit score and their ability to take out credit again.

One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit score and your financial future.  To the contrary, after filing for bankruptcy you can begin restoring your credit right away.

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://blog.credit.com/2018/05/when-can-i-get-a-bankruptcy-off-my-credit-report-65750/

Cancer Patients Twice As Likely to File for Bankruptcy

May 24, 2018 Posted by kingcade

A recent study reveals the devastating financial toll a cancer diagnosis can bring.  Even for those with health insurance, the consequences can be financially devastating. The ongoing treatments can quickly deplete savings accounts and rack up credit card debt, eventually making it difficult to cover basic living expenses.

Cancer has always been an expensive diagnosis to treat, but recently several factors have made the costs more intense, prompting more patients to cut back on their medications, even delay treatment. Insurance companies are tightening prescription drug coverage and raising deductible costs.  This means for some, paying thousands of dollars a year for a drug like the leukemia treatment Gleevec, which is a pill that is taken daily, sometimes for the rest of a person’s life.

The Affordable Care Act sets limits as to how much people can spend on healthcare each year.  Cancer treatments often extend beyond a year and coverage does not always apply to the increasingly narrow network of doctors and hospitals that are considered ‘in-network.’

Duke Cancer Institute oncologist, Dr. Yousuf Zafar, who also studies financial distress among cancer patients, surveyed 300 adult, insured patients at the cancer institute.  Nearly 40 percent reported a higher-than-expected financial burden, while 16 percent dealt with what he called ‘overwhelming financial distress.’

More than a quarter of that patient population said they did not take their medicines as prescribed, skipped doses and took smaller amounts than prescribed to save on costs.  Some did not even get their prescriptions filled.

Additional research found that cancer patients are more than twice as likely as those without the diagnosis to file for bankruptcy.

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.

Millennials Struggle to Keep up Financially with Previous Generations

May 22, 2018 Posted by kingcade

The financial crisis may have hit the ’80s generation the hardest. Americans who were born in the 1980s, otherwise known as “millennials,” are finding themselves struggling financially more than generations before them. Following the Great Recession, which began in 2007, individuals born in the ‘80s are at wealth levels which are 34 percent below where they would be had the financial crisis not occurred. Most millennials have to save longer to buy a home, struggle with student loan debt and rising home prices.

The generation known as “millennials” is categorized as being born between 1981 and 1996. According to a report issued by the Federal Reserve Bank of St. Louis, people in this generation are at risk of being termed “the lost generation.”

“Not only is their wealth shortfall in 2016 very large in percentage terms, but the typical 1980s family actually lost ground in relative terms between 2010 and 2016, a period of rapidly rising asset values that buoyed the wealth of all older cohorts,” the report says.

This can be attributed to a number of factors. One major setback this generation faced was entering the workforce as the financial crisis was beginning. In fact, this generation seems to have been hit the hardest for this very reason. Entering the workforce at the time of a recession put these young workers at an immediate disadvantage for earning an income, as well as saving money towards big purchases or retirement.

Once the recession passed and the economy began to improve, these individuals faced difficulty in recovering from the hard hit.

Millennials have been on the receiving end of a 67 percent increase in wages since 1970, but this increase in pay has not kept up with the rising costs of living, including rent, home prices, college tuition, costs for childcare, healthcare, and entertainment.

This generation also has to deal with large amounts of credit card debt, on top of six figure student loan debt. After graduating from college at a time when jobs are not as prevalent, these individuals have had to resort to credit to pay for these expenses.

If you 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.businessinsider.com/1980s-millennials-wealth-the-great-recession-2018-5

https://blogs.wsj.com/economics/2018/05/21/crisis-hits-1980s-generation/