Posts Tagged: ‘National Consumer Law Center’

The South has the highest rates of personal bankruptcy filings in the country

August 25, 2016 Posted by kingcade

Personal bankruptcy filings fell to levels not seen since before the Great Recession of 2007, according the American Bankruptcy Institute.  However, this is not the case for some parts of the country.  Recent federal data from U.S. courts reveals the median bankruptcy rate among the 587 counties examined was 224 filings per 100,000 residents. Among the 50 states and Washington, D.C., the median bankruptcy rate was 226 filings per 100,000 residents.

Six of the 10 states and eight of the 10 counties with the highest personal bankruptcy filings were in the South. Many of the areas had lower to median annual incomes. Eight of the 10 states with the highest rates of bankruptcy filings had annual household incomes lower than the 2014 U.S. median of $53,657.

Another downside, states with the highest bankruptcy rates offer the least amount of protections for consumers. For example, Alabama and Kentucky, allow debt collectors to seize nearly everything a debtor owns, according to the National Consumer Law Center.

These are the states with the highest rates of personal bankruptcy filings:

Tennessee, 553 bankruptcy filings per 100,000 residents

Alabama, 529 bankruptcy filings per 100,000 residents

Georgia, 483 bankruptcy filings per 100,000 residents

Illinois, 432 bankruptcy filings per 100,000 residents

Utah, 392 bankruptcy filings per 100,000 residents

Indiana, 387 bankruptcy filings per 100,000 residents

Mississippi, 361 bankruptcy filings per 100,000 residents

Kentucky, 345 bankruptcy filings per 100,000 residents

Arkansas, 344 bankruptcy filings per 100,000 residents

Ohio, 322 bankruptcy filings per 100,000 residents

While seeking relief through bankruptcy may not have been your first choice, it may be your best financial strategy, when compared to the alternatives of wage garnishment, lawsuits and endless collection calls. In addition, depending on the type of bankruptcy filing, there is no more overwhelming debt. The majority of personal bankruptcy filings are for Chapter 7, which erases most unsecured debts, such as your credit card debt and medical bills.

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, 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.

Related Resources:

http://www.csmonitor.com/Business/Saving-Money/2016/0816/The-South-has-the-highest-bankruptcy-rates-in-the-country

 

CFPB Stops Illegal Practices by Student Loan Servicers & U.S. Dept. of Education Debt Collectors

August 24, 2016 Posted by kingcade

The Consumer Financial Protection Bureau (CFPB) has taken action against debt collectors and servicers who took advantage of student loan borrowers by making illegal garnishment threats and using illegal auto default provisions in loan contracts.

The violations include:

1. CFPB examiners found that one or more debt collectors threatened wage garnishment against federal student loan borrowers who were not eligible for garnishment. The National Consumer Law Center (NCLC) documented abuses by private collection agencies that the U.S. Dept. of Education hires to collect federal student loans in its 2014 report.

2. CFPB examiners found that one or more servicers of private student loans were unfairly invoking “auto-default” clauses to treat both the borrower and the co-signer in default if either of them died or filed bankruptcy. Auto-default clauses allow the servicer to demand payment of the entire loan balance even if all payments on the loan are up to date.

The Department of Education terminated the contracts of five private collection agencies after finding abuses in February 2015, but more needs to be done through enhanced monitoring and guidance for all private collection agencies to ensure they are consistently providing borrowers with accurate information regarding their loans.

Too many student loan borrowers have already been harmed by this abusive practice, which penalizes student borrowers who are current on their payments, simply because the co-signer has died or filed bankruptcy.

NACBA President Ed Boltz said: “This positive step by CFPB puts an end to an outrageous guilty-until-proven-innocent situation where individuals faithfully paying off student loans are thrown into default because of the status of their co-signer. The fact that a co-signer on a student loan has filed for bankruptcy to deal with other debts is in no way a basis for putting into default a student loan that is being paid on time. It is time that the federal government stands up for student loan borrowers who are doing everything right but nonetheless could see their credit ruined as the result of an unrelated action of a co-signer.”

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.