Bankruptcy Law

The Pre-Bankruptcy Credit Counseling Requirement and What Filers Need to Know

All bankruptcy filers are required to take and complete two educational courses before receiving a final bankruptcy discharge. These courses are required for both Chapter 7 and Chapter 13 filers. It is important that individuals considering bankruptcy be aware of these requirements for their cases to be successful.  

At the start of a bankruptcy case, the individual filing must meet certain requirements. The filer must disclose his or her complete financial picture by submitting required bankruptcy financial declarations. He or she must also pay a filing fee, request a fee waiver, or request an installment payment for the fee. Lastly, the individual must submit proof that he or she received credit counseling from an agency approved by the U.S. Trustee’s office. This proof of completion must show that the course was taken within 180 days prior to filing.

Pre-bankruptcy credit counseling helps determine whether bankruptcy is necessary. Granted, bankruptcy law only requires the consumer to participate in the counseling program. This participation does not mean the person has to do everything recommended to him or her. However, if the credit counseling agency prepares a debt repayment plan for the consumer, and the bankruptcy court views the repayment plan as something the filer could feasibly do, they may use this repayment plan in an effort to push the person from proceeding with a Chapter 7 bankruptcy case to filing a Chapter 13 case.  

A list of approved credit counseling courses and agencies can be found on the U.S. Trustee’s website. These agencies can charge a reasonable fee for their services, but if the filer is not able to pay the fee and falls below a certain income threshold, the agency must either provide the services for a reduced rate or for free. 

The second credit counseling required by bankruptcy courts is called debtor education. This course must be completed after filing for bankruptcy. The purpose of this second course is to give the filer resources and tools to help him or her create a budget, rebuild his or her credit after bankruptcy, and avoid falling into the same situation again.  Proof of completion must be provided by the filer within 60 days of date first set for the case’s meeting of creditors 

Please click here to read more.  

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.   

Bankruptcy Law

Which Type of Bankruptcy Should I File to Keep My Home?

One of the biggest fears people have when filing for bankruptcy is losing their home, car, and other important assets. However, with Florida bankruptcy exemptions and depending on the type of bankruptcy being filed, it is possible for consumers to keep their home and other property. It ultimately depends on the filer’s financial circumstances.  

Protecting Home Equity  

How much equity the filer has in his or her home plays a big part in whether he or she can keep it Equity plays an important part in both Chapter 7 and Chapter 13 bankruptcies. The equity a person has in his or her home is protected through the state’s homestead exemption, and fortunately for Florida filers, the state’s homestead exemption is quite generous.  

While many states limit how much equity the filer can exempt in the bankruptcy case, Florida bankruptcy courts allow the filer to claim all the equity so long as certain circumstances are met, including:  

  1. The filer has owned the property for the last 1,215 days prior to filing; and 
  1. The property is not larger than ½ an acre in the city or 160 acres in rural areas.

The person’s ability to catch up on missed payments while staying current on future payments plays a key role in whether he or she can keep the home.  

Chapter 7 Bankruptcy  

Many filers prefer to file for Chapter 7 bankruptcy because the entire process can be completed in a matter of months, as compared to three- to five- years, a Chapter 13 bankruptcy requires.  

Under a Chapter 7 case, the filer can keep his or her home so long as he or she is current on the mortgage payments and can continue making those payments in the future. The problem is many times the individual is already well behind on his or her mortgage payments by the time he or she files for bankruptcy. Given the short amount of time a Chapter 7 bankruptcy takes, it is not always feasible for the consumer to catch up on missed payments within a few months.   

Chapter 13 Bankruptcy 

A Chapter 13 bankruptcy case may be the better choice to allow the individual to catch up on missed payments over the course of the repayment period. A Chapter 13 bankruptcy case requires the consumer to work closely with the bankruptcy trustee to create a realistic repayment plan to pay back all creditors over three to five years, including the filer’s mortgage lenders.  Depending on how far behind the filer is on his or her mortgage payments, it is completely possible to catch up on what was owed while staying current on the mortgage. So long as the filer is keeping up with the repayment plan, the mortgage holder cannot foreclose on the property during the bankruptcy case.  

Please click here to read more.  

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.   

Credit, Credit Score, Financial Advice

Why Your Debt-to-Income Ratio Is So Important

A person’s credit score is not the only figure lenders look to when determining whether to approve an application for financing. Many times, lenders will also look to the applicant’s debt-to-income ratio (DTI) when making a determination to approve financing.  

A consumer’s debt-to-income ratio looks at whether the individual is bringing in enough income to meet his or her monthly bills. The actual DTI figure is computed by taking the consumer’s gross monthly income and dividing it by his or her monthly debt payments. The result is the person’s DTI.  

Every lender looks at the DTI ratio differently. For some, the credit score makes all the difference, while others will weigh the DTI ratio heavily when making a decision on lending.  

Essentially, the DTI ratio allows lenders to assess a potential borrower’s financial stability. Someone with a high DTI may indicate that a person is barely making ends meet, and lending additional financing would be a risk.

According to Wells Fargo, a stable DTI ratio range is anything below 35 percent. With a DTI of 35 percent, a consumer should have enough money left over every month after paying his or her bills.  

A DTI between 36 and 49 percent is considered manageable, which means that the applicant’s situation is acceptable. A DTI of 50 percent or higher is not acceptable. This high of a DTI shows that the individual consumer’s debt payments take up a substantial portion of his or her monthly income.

If a consumer is looking to be approved for a mortgage, the role his or her DTI plays in the approval process is a little more complicated. Mortgage lenders will look at two different types of DTI ratios when making lending determinations. One DTI ratio is called the front-end ratio, and this looks at how much of the consumer’s gross income will go towards his or her housing costs. An ideal front-end DTI ratio is 28 percent or lower.  The back-end DTI ratio looks at how much of the consumer’s gross income goes towards payment on all debts, including housing costs. Lenders look for back-end DTI ratios of 36 percent or lower.  

A person’s DTI can be improved by several methods. First, the ratio can be improved by increasing the amount of income brought in monthly. Keep in mind, this method takes time and is not an overnight fix by any means. In fact, many lenders will not count income that has just started. They look toward longevity and stability, instead.  

It may be best to work at lowering the monthly debt payments that are made every month. Consumers who are serious about reducing their monthly payments should review their spending habits to see where certain cuts can be made. It may be wise to tackle certain debts first, paying them off to eliminate debt. Credit card debts and similar revolving unsecured debts should be focused on first before tackling installment loan payments. If a consumer has multiple credit card payments, it may be wise to consider debt consolidation in an effort to reduce how many payments are made, lower the monthly payments, and reduce the interest rate paid on the debts.   

Please click here to read more.  

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.   

student loan debt, Student Loans

Debt Cancellation for Disabled Borrowers Reinstated by the Department of Education

The U.S. Department of Education announced recently that they will cancel federal student loan debt for borrowers who are no longer able to work due to disabilities. This announcement affects tens of thousands of borrowers currently paying on outstanding federal student loan balances.   

Student loan advocates say that this small step is the first of many to help reform the student lending system, including opening debt forgiveness to groups who are legally entitled to receive it but have not yet received debt forgiveness.  

According to an investigation conducted by NPR, 28 percent of eligible student loan borrowers have either had their loans completely erased or are on track to be erased through the “Total and Permanent Disability Discharge” program. This number is alarmingly low. According to the Department of Education, more than 41,000 borrowers have permanent disabilities. These 41,000 borrowers owe a collective $1.3 billion in student loan debts that would otherwise be eligible for discharge.  

Many of these disabled borrowers had previously had their loans erased. However, once the COVID-19 pandemic hit, they struggled to submit required income-monitoring documentation, resulting in these loans being restored. The Department of Education announced that borrowers who are currently required to submit income-monitoring information will not have to do this for the duration of the COVID-19 pandemic. Waiving this requirement will help ensure that borrowers who are totally and permanently disabled will not be hurt by their inability to submit required paperwork during this health crisis.  

For several decades, federal law has made it possible for borrowers who are no longer able to work and earn an income to support themselves due to a severe and permanent disability to receive relief from their student loan debt. While the goals behind the law are admirable, the execution has left much to be desired. Between March 2016 and September 2019, NPR reported that only 28 percent of those eligible for debt forgiveness actually received it.  

NPR also reported that of the 365,000 borrowers who are eligible for this relief, 225,000 had defaulted on their student loan obligations.  

Many argue that the problem with the system has to do with the fact that disabled borrowers have the actively seek out the loan forgiveness. The requirements placed on these borrowers to respond to eligibility notices and report their income qualifications have left many of them to fall through the cracks. Requiring someone who is already struggling with a debilitating disability, such as chronic memory loss or other illness, to keep up with required paperwork places a substantial burden on these individuals.  

NPR also reported that in 2019, tens of thousands of borrowers asked for assistance, had their student loans conditionally discharged, and then had them reinstated due to the failure to keep up with the annual paperwork. Critics argue that this paperwork requirement forces the borrowers to do too much just to prove that they are not able to work. In fact, income-monitoring has consistently been a problem for many disabled borrowers. 

Representatives from the Department of Education say that they hope this change will alleviate some of that pressure, at least temporarily.  Student loan reform advocates believe that this change needs to be a permanent one, at least when it comes to requiring permanently disabled borrowers to continually provide proof of their inability to work.  

Please click here to read more.  

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. 

student loan debt, Student Loans

Student Debt Cancellation Bill Scheduled to be Signed into Law this Week

Congress has passed a $1.9 trillion stimulus package that includes important provisions concerning student loan cancellation, as well as increased federal regulations on for-profit colleges.   

Several different objectives were met by Congressional leaders through the passing of this legislation. One of the biggest goals was to address the tax burden that student loan borrowers face when receiving any portion of their student loan debt forgiven. Up until now, whenever a borrower received forgiveness for any portion of his or her student loan debt, the amount that was forgiven was considered taxable income. Under this legislation, tax forgiveness will be treated as tax free for the next several years.  

The tax relief portion of the bill is good through January 2026. Lawmakers believe that this is a good first step in cancelling the estimated $1.5 trillion in federal student loans currently held by nearly 45 million American consumers. 

Essentially, these measures are seen as a good first step in accomplishing the goal set by President Biden to cancel $50,000 in student loan debt for all borrowers. Without this tax-free benefit, financial analysts were concerned as to how this forgiven amount would be treated for tax purposes.  

Additional financing from the legislation will be distributed directly to both public and private institutions. Colleges and universities that receive these funds are required to spend at least of what is disbursed on emergency grants to students.  

Another provision in the relief bill includes a measure closing the 90-10 loophole which governs how GI Bill money is counted by public and private institutions. For years, for-profit schools have been criticized for how they have recruited both active military service members and veterans. Colleges and universities are currently required to receive in at least 10 percent of their revenue from sources other than the federal government. If the institution is not able to meet that requirement, they are barred from receiving some of the $100 billion the federal government issues annually in student aid. 

For-profit institutions were taking advantage of a loophole that would otherwise allow them to count money received from service members and veterans as part of that 10 percent and not part of federal funding. Advocates have argued that this loophole caused for-profit institutions to aggressively recruit military service members and veterans in an effort to meet the requirement. As many of these for-profit institutions have ended up shuttering and leaving their students high and dry with no diploma and out money, this included these same service members and veterans who they actively recruited.  

Under this new legislation, GI Bill dollars will now be counted as federal money. Due to the pushback lawmakers received from conservative lawmakers, a bipartisan amendment was made to the bill, changing the date for when GI Bill dollars will be counted as federal money to October. Additionally, this change will not occur until the institutions’ 2023 fiscal year. 

Controversy aside, this legislation is being heralded as the largest federal effort made thus far to help both students and families who are struggling during this pandemic due to reduced wages and/or lost jobs. Further, the funds will assist colleges and universities who are facing their own struggles, seeing higher expenses and a sharp decline in revenues as a result of the COVID-19 pandemic.   

Please click here to read more.  

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. 

Foreclosure Defense, Foreclosures

10 Percent of American Families at Risk of Eviction, Foreclosure

More than 11 million American families are facing a crisis when it comes to housing, specifically when it comes to making their rent and mortgage payments, according to a new report released by the Consumer Financial Protection Bureau (CFPB).

The CFPB conducted a survey of the housing market during the coronavirus (COVID-19) pandemic and found that approximately 2.1 million American families are at least three months or more behind on their mortgage payments. Approximately 8.8 million of them are late on paying their rent.  

A collective $90 billion in missed housing payments is owed. Figures this high have not been seen since the Great Recession when a massive number of families fell behind on the rent or mortgage payments. Financial experts fear that a wave of foreclosures could be coming unless something is done to help.  

Unfortunately, homeowners and renters are not the only ones struggling. Many small landlords are also struggling, making it even harder for renters to receive assistance or a break from their them to remain in their homes. Without some type of financial stimulus or assistance, it is uncertain whether evictions and foreclosures can be prevented. 

Certain socioeconomic groups are being hit harder than others, according to the CFPB figures. African American and Hispanic families are two times as likely to be late on their housing payments. Nine (9) percent of renters surveyed said that they were likely to be evicted. Of those worrying about eviction, African American and Hispanic households were more likely to be at risk of eviction.     

Please click here to read more.  

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 www.miamibankruptcy.com.

Debt Relief

Credit Counseling vs. Bankruptcy- Which one is right for you?

When it comes to dealing with debt, you have options.  Debt relief can ease the burden of overwhelming debt, but it’s not right for everyone. Given a person’s financial and personal circumstances, certain considerations should be kept in mind when making the determination between credit counseling and bankruptcy.

If the consumer has a steady income and can pay back his or her debt within a few months to a year, credit counseling may be the wise choice for him or her. However, if the person has an overwhelming amount of debt in comparison to his or her income, filing for Chapter 7 or Chapter 13 bankruptcy may be the better option.  

Credit counseling involves consumer education from a certified credit counselor regarding a variety of topics, including improving a credit score, managing money, preparing, and sticking to a budget, and improving the person’s credit score. The goal is to educate the consumer and prepare him or her to handle his or her finances independently to avoid the need to file for bankruptcy.  

Credit counselors can be found through the assistance of the consumer’s bank or credit union, as well as a consumer protection agency. It is extremely important that the consumer does his or her research before selecting a credit counseling agency. The National Foundation for Credit Counseling (NFCC) can also be an excellent resource for finding credible nonprofit credit counseling agencies.

This type of credit counseling should not be confused with the credit counseling that is required when filing for bankruptcy. Bankruptcy courts require filers to receive debt and credit-related financial counseling at least 180 days before filing for bankruptcy. 

A legitimate nonprofit credit counseling agency should offer free credit counseling services and should not charge a fee upfront before offering these services. These free consultations normally last up to an hour and should provide long-term solutions for the consumer on how to handle his or her debt. 

Unfortunately, credit counseling scams do exist. It is important that the consumer does his or her research to ensure that the agency selected is not one of them. Never provide personal or financial information to the agency until the consumer is sure the credit counseling agency is legitimate.  Research the company with the Better Business Bureau to see if any scams have been reported.

It is equally as important that the consumer realize when enough is enough and when bankruptcy is the better course of action. Many times, the financial burden becomes too much to handle through counseling along. At this point, it may be wise to move forward towards formally filing for bankruptcy. Before making this decision, the consumer should consult an experienced bankruptcy attorney and talk to him or her about the situation. An experienced bankruptcy attorney will be able to help the individual make the decision of whether to pursue credit counseling first or file for bankruptcy. Additionally, the attorney will be able to guide the person as to which form of bankruptcy, Chapter 7 or Chapter 13, would be best.

Please click here to read more.  

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.   

Foreclosure Defense, Foreclosures

How to Save Your Home from Foreclosure in Florida

Many Americans have been able to utilize the federal and state mortgage foreclosure moratoriums during the COVID-19 crisis to stay in their homes. But a record number of homeowners have fallen behind on their mortgage payments. According to statistics from the Consumer Financial Protection Bureau, the number of Americans who have fallen three or more months behind on their mortgage payments increased by 250 percent in 2020, reaching a record of over two million households nationwide. These figures have not been seen since the Great Recession.  

It is estimated that the total amount owed is nearly $90 billion in deferred principal, interest, insurance, and tax payments. Financial analysts predict that the nation will soon see a wave of foreclosure lawsuits hitting the court system. However, it is possible for a consumer to stop the process from getting out of control and allow the individual to stay in his or her home.  

The first step should always be for the homeowner to reach out to his or her mortgage lender. Pursuing a foreclosure costs the lender money. In fact, they end up losing more money through that process than they would gain if they worked on a deal with the homeowner to stay in the home, which is why so many of them are more than willing to negotiate 

Many mortgage lenders are offering loan deferral programs or are either lowering or deferring interest payments for a temporary period. They may also be willing to waive late fees and penalties. The key is the homeowner needs to ask, first. The lender is not going to proactively reach out to the homeowner to see if he or she needs assistance. Ultimately, it is up to the homeowner to request this.

If the consumer has already reached out to the lender and is not able to realistically catch up on payments and late fees, it may be best to sell the property to pay back what is owed. For this plan to truly succeed, the borrower needs to price the property to sell. The longer the home stays on the market, the longer the homeowner will be behind on his or her payments, making the home even more difficult to sell.   

While the home is in default or foreclosure, the homeowner will likely be receiving mail from the court or lender regarding important dates and opportunities to make a deal on his or her payments. It is extremely important that all mail related to the home be opened immediately, be read, and if a response is required, be responded to quickly. The last thing the homeowner wants to do is miss an important court date or fail to take advantage of an opportunity if the lender is offering lower payments or a deal that could allow the person to remain in his or her home 

Lastly, to keep the home, it is important to continue making mortgage payments, if possible. Many people will take the idea of a moratorium and assume it means he or she does not have to pay on the mortgage debt during that periodThe problem is, during a moratorium, mortgage bills continue to incur, and if payments are not made, the homeowner will fall behind even more than he or she was at the start of the moratorium. The mortgage bill is arguably one of the most important payments the homeowner makes, even above other bills or debts, such as credit cards or medical debt.

Filing for bankruptcy can help. It may seem counter-intuitive, but when someone is facing foreclosure and is in the middle of a major financial crisis, bankruptcy can be a viable option to help save that person’s home. Ultimately, it depends on your specific financial situation and the type of bankruptcy you file – but bankruptcy can be used as a tool to help keep your home.

The Power of the Automatic Stay

If your home is already set for a foreclosure sale, you may be asking, “how can I make it stop?” Filing for bankruptcy can put a stop to the process or at the very least postpone it. As soon as a petition for bankruptcy is filed, the court issues an order called an “automatic stay,” which puts an immediate halt to all collection activities that were happening to the homeowner before the petition was filed. This automatic stay also applies to foreclosure cases.  Creditors (including your mortgage lender) must immediately cease collection attempts. Even if the mortgage lender has the home scheduled for a foreclosure sale, the sale will be postponed during a pending bankruptcy.

Please click here to read more.  

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 www.miamibankruptcy.com 

 

Bankruptcy Law, Business Bankruptcy

The Impact the Coronavirus has had on Bankruptcy Filings in Miami Beach

The economic impact caused by the coronavirus (COVID-19) pandemic has been substantial throughout the country, and Miami Beach is not excluded. Countless businesses have been forced to close temporarily and many even permanently. While technically the number of bankruptcies were down at the end of 2020 nationwide, financial experts fear that the number of bankruptcy filings will increase over the next several years.  

While the number of consumer bankruptcies were down nationwide, the number of Chapter 11 business bankruptcies saw an increase of 18.7 percent when compared to 2019. This form of bankruptcy is normally used by businesses that hope to stay in operation through the Chapter 11 bankruptcy process that allows them to renegotiate their debts. Several larger businesses, including Neiman Marcus and J.C. Penney filed for Chapter 11 in 2020.  

Specifically, in Florida, a total of 37,776 bankruptcies were filed in 2020, which is 19.26 percent lower than the 46,786 filed in 2019. Of all the bankruptcy cases filed in 2020, businesses accounted for four percent of these cases. This number may seem small, but business bankruptcies tend to have a significant effect far past the bankruptcy case alone, including the effect these closures and filings have on the individual employees who lost their job as a result.  

Many times, a ripple effect can be seen on other businesses after one or more close.  

According to figures from the U.S. Courts Administrative Office, a total of 7,430 bankruptcies were filed in Miami-Dade County in 2020. This figure is slightly less than the 8,705 filed in 2019.  

While consumer bankruptcies were down in Miami-Dade County, the number of business bankruptcies saw a slight increase. It is reported that 322 Miami area business bankruptcies were filed in 2020, as compared to 215 filed in 2019. Of these cases filed in 2020, 188 of them were filed under Chapter 7, commonly referred to as a liquidation bankruptcy. Only 129 Chapter 7 business cases were filed in 2019.  

Miami-Dade County did see an increase in the number of Chapter 11 bankruptcy case filed in 2020. Approximately 120 were filed in 2020, as compared to the 62 filed in 2019.  

Individual consumer bankruptcies in Miami-Dade County did not see the same increase, however. According to court filings, a total of 7,108 non-business consumer bankruptcy cases were filed in 2020, as compared to the 8,490 filed in 2019. Of these cases, 4,841 were Chapter 7 filings and 2,260 were Chapter 13 filings. In comparison, 5,067 Chapter 7 cases were filed while 3,414 Chapter 13 cases were filed in 2019.  

Despite the decrease between 2019 and 2020, financial experts predict these numbers will continue to increase through 2021 and beyond. As the COVID-19 pandemic continues, more and more businesses and individuals will continue to feel the economic impact of this crisis.  

Please click here to read more.  

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.   

Credit Card Debt, Debt Relief

The Best Way to Conquer Credit Card Debt

Many consumers find themselves still struggling with large amounts of credit card debt. Much of this credit card debt is carried over from previous years. Certain steps can be taken to tackle credit card debt and either pay it off in full or reduce the amount owed to a more reasonable number.   

The first step is to push the pause button on spending and inventory the situation. The consumer’s debt cannot be conquered until the spending stops. It is important to review what has been purchased the past few months, determining how much has been spent and what is owed. It also helps to write down what the interest rate is for each card, noting the balance owed and the minimum monthly payment. Taking this first step will allow the consumer to be able to put together a budget and a plan to pay off the debt over time.  

Once the consumer has a chance to review his or her debt situation, the next step is to select a strategy to pay down the debt. Two of the most common methods include the snowball method and the avalanche method.  

With the snowball method, the consumer arranges his or her credit card balances from smallest to largest balances. The consumer focuses his or her attention on the card with the smallest balance first, paying down as much as possible on that card while continuing to make the minimum monthly payments on the other cards. Once the first card is paid in full, the consumer focuses on the card with the next smallest balance until all cards are paid off in full. The snowball method requires a great deal of patience and discipline, but it can be an effective way to pay down debt. However, this method does involve paying more in interest over time since credit cards with higher balances tend to have higher interest rates. 

The avalanche method works similarly to the snowball method, but the consumer focuses on the credit card with the highest interest rate first. This method allows the consumer to get out of debt quicker than the snowball method since it focuses on the larger balances with the higher interest rates first, but it can be hard to stay motivated with this method since seeing the results of the consumer’s efforts can be harder to immediately see. 

Another method to pay down credit card debt involves consolidating the debt through a personal loan or balance transfer.  Many credit card companies offer balance transfers, allowing the consumer to transfer multiple credit card balances to one card with a zero or low introductory interest rates. It is important that the consumer pay the balance down before that promotional period expires, however. Otherwise, the interest rate can skyrocket at the end of the promotional period, leaving the consumer in a worse position than before. A personal loan can also be used to pay off all the consumer’s credit card balances. This method allows the consumer to focus his or her attention on one, fixed monthly payment over time in lieu of multiple credit card payments.      

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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 www.miamibankruptcy.com.