April 2014 - Page 2 of 2 - FREE CONSULTATION

Bankruptcy Law, Credit, Timothy Kingcade Posts

U.S. Supreme Court to decide Bankruptcy Case Involving Inherited Retirement Funds

Posted on April 8, 2014by Admin

Clark v. Rameker, a bankruptcy case having to deal with inherited retirement funds could have an impact on future bankruptcy cases across the U.S. The case involves a personal bankruptcy filed in 2010 by a husband and wife after the pizza shop they opened failed. It left the couple nearly $700,000 in debt to their landlord, mortgage lenders and business creditors.

The wife inherited approximately $450,000 from her mother’s IRA when she passed away. The couple argued that these funds were protected from their creditors. Federal bankruptcy code allows up to $1.3 million in retirement funds (i.e. – Roth IRA’s, 401K’s, etc.) be exempt from creditors. However, the issue before the Supreme Court is whether someone else’s IRA that was inherited by the debtor is allotted that same protection.

The bankruptcy trustee in this case argues that the funds should be made available for repaying the couple’s creditors and that once the IRA money is passed down to an heir, the money no longer functions in the same way the retirement money once did (i.e. – it is no longer subject to penalties and taxes).

The trustee appealed to a three-judge panel and the appellate court held that the funds ceased to be protected when they were inherited. The appellate court’s decision conflicts with the two other court decisions holding that retirement funds remain protected even if they are passed down through inheritance.

The Supreme Court’s decision will settle the dispute. The Court noted that retirement funds are the only ones listed in the Bankruptcy Code that do not specifically note that it has to be the petitioner’s property. In order to settle the matter, the Court must interpret Section 521(b)(3)(C) of the Bankruptcy Code, which states that “retirement funds to the extent that those funds are in a fund or account that is exempt from taxation” are protected in bankruptcy cases. This decision is seen as an important one because it will have an impact on future cases, but experts say it will be months before the Court issues its ruling.

If you have any questions on this topic or are in a financial crisis and are considering filing 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.

Bankruptcy Law, Timothy Kingcade Posts

Divorce often tied to Bankruptcy

Posted on April 2, 2014by Admin

A recent study from the Minnesota Population Center at the University of Minnesota revealed that the age-standardized divorce rate has grown by 40 percent since 1980. The age-standardized divorce rate is an important factor in calculating divorce risk, because the U.S. had a younger population in 1980 and statistically younger couples are at a higher risk of divorce. The study also revealed that since 1990, the divorce rate for those ages 60 to 65 has tripled.

Divorce can be costly for a variety of reasons and is a common cause of many bankruptcy filings. Considering the court costs, attorney fees and similar expenses, the divorce process can cause financial hardship. Not to mention splitting into two households, the financial strain of alimony or child support payments and the loss of certain economic benefits associated with marriage.

Depending on your unique circumstance, bankruptcy may be better to file before or after divorce. In some instances it can be advantageous to file for bankruptcy before divorce. Eliminating your debts can simplify the divorce settlement process. On the other hand, filing a joint bankruptcy can save on court costs and legal fees. Incomes generally decrease after a divorce so while you may not qualify for bankruptcy prior to divorce, you may qualify for it afterwards.

The best way to determine if and when bankruptcy is the right option for you before a divorce is to speak with 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.digitaljournal.com/pr/1826759

Bankruptcy Law, Timothy Kingcade Posts

How to get your Student Loan Debt Erased

Posted on April 1, 2014by Admin

Two-thirds of college students in the U.S. are graduating with some level of debt. According the Institute for College Access and Success, the average borrower will graduate $26,600 in the red. That’s a staggering number! Getting student loan debt erased in bankruptcy court is difficult, but not impossible. Several recent court decisions have challenged the notion that only the worst-off borrowers, typically those who are permanently disabled, can get student loan debt erased.

In many cases, borrowers filing for bankruptcy do not even ask about their student loan debt being discharged because they figure it’s a rare possibility. A recent study published in the American Bankruptcy Law Journal, found that only 213 out of 170,000 student loan debtors tried to have their education debt discharged by filing what’s known as the “adversary proceeding.”

Of those who tried to get their student loan debt discharged, two out of five received at least some relief. Based on the characteristics of those who were able to get discharges, the researcher who conducted the study calculated that an additional 69,000 people who filed for bankruptcy that year would have a “good chance” of erasing their student loans after filing adversary proceedings.

The study concluded that one reason so few student loan borrowers seek to discharge their student loan debt is because they have been convinced that it is a hopeless fight. A borrower must prove that repaying his or her student loans would be an “undue hardship.” This means meeting following requirements:

1.) A current inability to pay the loans, because doing so would not allow you to maintain a minimal standard of living given current income and expenses;

2.) A future inability to repay the money, because your financial situation is likely to continue;

3.) A good-faith effort to repay what you owe.

In two recent decisions, courts granted relief to borrowers who had not made voluntary payments on their debt and who refused to enroll in income-based repayment plans. The appeals court judges in both cases said enrolling would have been pointless given the women’s incomes. In a third case, the borrower was both employed and healthy, but wage garnishments by his student lenders left him unable to support his wife and two children.

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 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.