Bankruptcy Law, Debt Collection

Can a Debt Collector Try To Collect on Debts Discharged in Bankruptcy?

A bankruptcy discharge gives a person a fresh financial start, freeing him or her from the stress of collection calls and aggressive debt collection practices. However, the fact that a debt has been discharged successfully in a bankruptcy case does not necessarily mean debt collectors will still not try and attempt to pursue collection of the debt. What happens in these situations?  

Under the U.S. Bankruptcy Code, a discharge is a permanent court order that prohibits creditors from pursuing any type of collection on discharged debts. These prohibited actions include filing legal cases to collect on the debt, as well as communications with the consumer via personal contacts, letters, and phone calls. Essentially, the discharge in a Chapter 7 or Chapter 13 bankruptcy case relieves the filer from any personal responsibility to pay off the debt.  

Not all consumer debts are dischargeable in a bankruptcy caseCertain debts are prohibited as a matter of public policy from being discharged, including government-backed student loans, child support, alimony, tax debt, and any debts incurred because of improper or illegal behavior.  Creditors for these debts can continue collecting on them even after the bankruptcy case is finalized.  

Once the bankruptcy discharge is granted, any creditors on debts that were a part of the final order are notified by the court that the debts owed to them have officially been discharged and that they will be in contempt of court if the creditor continues to collect on them. Even if, for some reason, a creditor is left out of the notice and never receives the paperwork from the court, he or she is still bound by the discharge order.  

Some debt collectors can be persistent and may continue to contact the consumer. Other creditors may argue they are not bound by the court’s order even though they are, making false claims in hopes they will fool the consumer. 

If this happens, it is best to report the debt collector to the bankruptcy court.  Depending on the communications, the collector could face sanctions from the court for violating the discharge order. These sanctions could involve payment of damages to the consumer, as well as attorney fees.   

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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   

Debt Collection

Venmo’s Debt Collection Practices Under Investigation by the CFPB

Popular digital money-transfer service, Venmo, is finding itself at the center of a Consumer Financial Protection Bureau (CFPB) investigation. The company that is owned and operated by PayPal Holdings, Inc. received a “Civil Investigative Demand” from CFPB with respect to Venmo’s debt collection processes and unauthorized fund transfers.  

Venmo has been the subject of a series of investigative articles by The Wall Street Journal in both 2019 and 2020 with respect to their aggressive debt-collection tactics. It reported that Venmo made threats to users who overdraw their accounts. These threats were also made to users who were the victims of scams. Even during the difficult financial times brought on by the COVID-19 pandemic, the company has reportedly continued its aggressive collection  practices.

Venmo remains one of the more popular digital money-transferring services. In 2020, Venmo’s user base jumped 32 percent to approximately 70 million active accounts. It is estimated that roughly $47 billion was transferred via Venmo’s platform in the fourth quarter of 2020, which is a 60 percent increase from the previous year. The company anticipates they will generate somewhere around $900 million in revenue in 2021. 

Venmo transfers and transactions are instantaneous through the Venmo app. However, actual transfer of money from the sender’s bank account can take between one to two days. Many times, Venmo will front the payment to the fund recipient, allowing him or her to transfer money to other Venmo users on the app or pay a small fee to transfer the money to their bank accounts.   

Unfortunately, like many online platforms out there, scams do exist. A Venmo user may send money through the app to a scammer who immediately withdraws it, never to be heard from again. If this situation occurs, or if the sender’s bank stops the transaction before it is settled, Venmo will be out the money. It is not uncommon for a Venmo user to be carrying a negative balance in these types of situations or carrying a negative balance in general. The company has not disclosed just how many Venmo users have a negative balance, but it has been reported that over $270 million in negative customers balances exist where Venmo does not expect to be repaid. According to securities filings from PayPal, the company writes off these losses from negative balances in the month that they move past the 120 days past due mark. 

PayPal received the CFPB’s request on January 21, just one day after President Biden was inaugurated as the country’s 46th president. The CFPB is expected to return to stricter consumer protections under the new administration after four years of more lenient consumer protection policies during the Trump administration.     

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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   


Foreclosure Defense, Foreclosures

Foreclosure Report 2021: What to Expect in the Coming Months

Foreclosures have been essentially at a standstill due to the moratorium issued by state and local governments on foreclosures and evictions, as well as forbearance programs to help keep families remain in their homes during this difficult time. However, these efforts will expire at some point, which has many worrying about what will happen once these programs end.  

According to the Federal Reserve Bank of St. Louis, approximately 500,000 borrowers avoided foreclosure during the last quarter of 2020 due to various relief programs available to them, including the forbearance program offered through the CARES Act.

At the end of 2020, around 2.7 million loans were still in mortgage forbearance programs. This figure comes out to roughly 5.5 percent of all active mortgages. That figure is down somewhat from the eight percent reported in March 2020.  

However, just because this many mortgages are currently in forbearance does not mean that this many will eventually end up in foreclosure. It is possible to exit these programs successfully. According to data from the Mortgage Bankers Association, in July 2020 when borrowers begin to exit the forbearance programs, 87 percent of those did so successfully with a repayment plan in place, their mortgage loans reinstated, missing payments deferred to the end of the loan, the loan paid off in full, or a loan modification successfully entered.  

Financial analysts warn that the remaining 13 percent of homeowners who exited the forbearance program with no viable repayment plan in place are the ones at risk of going into default. It is estimated that around 325,000 people will be leaving the forbearance program over the next six to nine months with no payment plan in place.  

At the start of 2020, between 0.5 and 0.6 percent of loans were at some stage in the foreclosure process. However, once the pandemic hit, approximately 40 million American workers either lost their jobs or suffered from some type of pay cut, forcing these numbers to inevitably increase. Many of these job losses occurred in industries centralized in Florida, including travel, tourism, and hospitality, all industries which tend to have younger, hourly workers with lower homeownership rates. Not all these employees are back at work and many businesses have been forced to shut down due to the pandemic, which has hit certain markets, including the Orlando area, more than others. It is for this reason that analysts fear that a spike in foreclosures will be seen, especially in the areas where employment is focused on entertainment and tourism.  

Defaults do not always lead to foreclosures, however. Currently, the housing market is showing hat homeowner equity is at a high. According to figures from ATTOM Data, around 70 percent of homeowners have more than 20 percent equity in their homes. Additionally, over 90 percent of borrowers who are currently in foreclosure report having at least 10 percent equity in their properties. What these equity figures show is that even if the number of defaults increase, it is likely most of these homes will be sold before foreclosure auction even occurs. A larger wave of defaults may be coming down the pipeline in 2021, but this does not necessarily mean a huge wave of foreclosures will follow. 

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Choosing the right attorney can make the difference between keeping your home or losing it in foreclosure. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure, please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at 

Debt Relief, student loan debt, Student Loans

White House Considering Executive Action to Cancel Portion of Nation’s Federal Student Loan Debt

The Biden administration is considering issuing an executive order that would effectively cancel some portion of the $1.6 trillion in federal student loan debt held by 43 million Americans. This statement comes as no surprise as student loan forgiveness and student loan reform were consistently topics of discussion during the 2020 Presidential campaign.  

The statement came last Thursday from White House press secretary Jen Psaki. She indicated the administration was looking into whether President Biden had the executive authority to cancel a portion of the nation’s outstanding student loan debt. However, they also indicated that they would welcome any legislation brought forth by Congress to do the same.  

Bankruptcy Law, Credit Score

When Can I Apply for a Credit Card after Bankruptcy?

The type of bankruptcy can affect how soon someone can apply for a credit card after bankruptcy. A Chapter 7 bankruptcy case allows the consumer’s debts to be discharged fairly quickly, within a few months, after non-exempt assets are liquidated and used to pay off the filer’s debts.

A Chapter 13 bankruptcy case takes longer than a Chapter 7 case since it involves a three-to-five-year long repayment plan where the consumer works with the bankruptcy trustee on paying down qualifying debts while discharging what is left at the end of the repayment period.

Bankruptcy Law, Credit Score

Tips for Rebuilding Credit After Bankruptcy

Sometimes people hold off filing for bankruptcy for fear of what it will do to their credit and financial future. While filing for bankruptcy will impact a person’s credit score, this damage is not irreparable. In fact, with good financial habits a consumer can rebuild his or her credit to better than it was before filing for bankruptcy. 

After the consumer’s debts are discharged at the end of a bankruptcy case, it is recommended that the consumer monitor his or her credit report to ensure that any outstanding or past-due balances are reported as zero if they have been successfully discharged. If any discrepancies are found, these errors should be reported right away to the credit bureaus via a formal dispute.  

Bankruptcy Law, COVID-19, Medical Debt, student loan debt

Bankruptcy Reform Bill Proposed that will Discharge Student Loans and Medical Debt

The Medical Bankruptcy Fairness Act of 2021 was unveiled by Democratic Senators this week in response to the economic impact of the Covid-19 pandemic. The bill would make substantial reforms to the current bankruptcy code, making it easier for those struggling with student loan debt and medical debt to discharge the same in bankruptcy.

Currently, the bankruptcy code treats student loan debt differently from other types of consumer debt. Borrowers must show they meet the ‘undue hardship’ requirement in order to discharge their student loan debt in bankruptcy.

Medical Debt

The Reasons to Avoid Paying Medical Bills with Credit Cards

Most people hope to avoid having long-term medical debt on their credit report, which is why it can be tempting to want to pay off medical debt with a credit card. However, the consequences that come along with using one form of debt to pay off another can be enough to want to keep anyone from taking this route.   

Medical debt is reported to be the number one cause of U.S. bankruptcy filings. It has been reported that over two-thirds of all bankruptcies between 2013 and 2016 involved medical debt. According to a 2019 study, one in every three households carried credit card debt after using credit to pay off medical bills.  

Debt Relief, student loan debt

Freeze on Student Loan Payments Extended Through September 2021

The U.S. Department of Education has placed a pause on student loan payments through September 2021. This is among the 17 executive actions President Biden has signed since taking office. This Order, along with the extension on eviction and foreclosure moratoriums, are an effort to relieve the economic impact caused by the coronavirus pandemic. Prior to the Order, payments were scheduled to resume at the end of January.

Student loan debt continues to be a national crisis, as debt tops more than $1.6 trillion. What was once a looming financial crisis, has now been exacerbated by job losses and pay cuts caused by the pandemic. Approximately 1 in every 5 student loan borrowers are in default, according to the U.S. Department of Education. Many are struggling to pay for basic necessities and provide for their families. With the extension of the forbearance agreement, borrowers will not be forced to decide between paying their student loans and putting food on the table.

Kingcade Garcia McMaken, Lawyers in the News

Miami Bankruptcy Attorney Timothy S. Kingcade Receives the Prestigious AVVO Clients’ Choice Award 2021 for the Eighth Consecutive Year

Managing Shareholder, Timothy S. Kingcade of the Miami-based bankruptcy law firm of Kingcade Garcia McMaken has received the 2021 AVVO Clients’ Choice Award. To obtain this award, an attorney must receive five or more exceptional client reviews in the same year. Kingcade has been awarded the Clients’ Choice Award for the following years: 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021.

One of attorney Kingcade’s clients had this to say on AVVO: Mr. Kingcade helped me 20 years ago, and I went back to him 20 years later. He provides amazing service, promptly gets back to you with the answers to your questions. Hands down this is the place to go for all your Bankruptcy needs.