October 2015 - Page 2 of 3 - FREE CONSULTATION

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Reality TV star Indicted on Bankruptcy Charges

Posted on October 16, 2015by Admin

A federal grand jury has indicted “Dance Moms” star Abigale “Abby” Lee Miller, 50, on 20 counts of bankruptcy fraud. The indictment alleged she concealed about $755,000 in assets and made false bankruptcy claims. If guilty, Miller could be sentenced to five years in prison for each count.

According to the indictment, Federal bankruptcy judge Thomas Agresti was ready to approve Miller’s Chapter 11 voluntary bankruptcy reorganization when he suddenly ordered a new hearing that required Miller to fully disclose her income and contracts.

The new hearing was prompted after he was channel surfing one night and saw ads for Miller’s upcoming, “Ultimate Dance Competition,” “The Maniac is Back,” and her appearance on “American Idol.” If it weren’t for the judge seeing the commercials, he said he would have never known about the contracts and additional income.

Miller is going to have to do some fancy footwork to get out of this one. Lying to a federal bankruptcy judge is a crime, which undermines a process that is designed to give honest, hardworking individuals who are overwhelmed by debt, a fresh financial start.

When Miller filed for voluntary bankruptcy reorganization, she listed about $325,000 in assets — mostly consisting of her dance studio in Penn Hills and a house in Davenport, FL— and listed about $356,000 in debts. But according to prosecutors, she hid more than $755,000 in income from her reality TV show, “Dance Moms,” several TV spin-offs and her merchandise and apparel sales.

Miller’s biggest debts were the mortgages on the two buildings, a $5,400 credit card debt and unpaid property and other taxes, according to court records. While she owed money to several vendors, the debt amounts owed were all less than the credit card debt.

During the three years of the bankruptcy proceeding, Miller was supposed to deposit her income into a special account and report that income to the court. Instead, she set up separate bank accounts and funneled her income from the TV show and other ventures into those accounts, prosecutors said.

Click here to read more on this story.

If you have any questions on this topic or are in a 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.

Credit, Debt Relief, Foreclosures

The Fight Continues to Change the Federal Govt. Policy on Sales of Distressed Loans

Posted on October 15, 2015by Admin

Senator Elizabeth Warren, Democrat of Massachusetts has joined other lawmakers and advocates in the fight to change the federal government’s policy of selling distressed mortgages at a discount to private equity firms and hedge funds. The senator has called on the Department of Housing and Urban Development and the Federal Housing Finance Agency (that oversees Freddie Mac and Fannie Mae) to make it easier for nonprofit organizations to bid for bundles of distressed mortgages put up at auction.

The sale of these distressed mortgages by HUD has come under increased scrutiny recently as critics are concerned that private buyers of distressed mortgages are moving quickly to foreclose on borrowers, instead of modifying the loan terms. Oftentimes, the investors are purchasing the loans at a discount of up to 30 percent.

Ms. Warren has accused HUD and the F.H.F.A. of “lining up with the Wall Street speculators.” “Wall Street is interested in profits, not in working out a way for people to stay in their homes,” she continued.

In a blog posted last week, we discussed the disadvantages of these private equity firms’ practices in dealing with delinquent borrowers. One of the biggest buyers of distressed mortgages is Lone Star Funds, a $60 billion private equity firm. Housing advocates say that in addition to the rally with elected officials, they plan to protest outside Lone Star’s offices in Washington.

Click here to read more on this story.

Choosing the right attorney can make the difference between whether or not you can keep your home. 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 website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Student Loans

Widespread Servicing Failures Reported by Student Loan Borrowers

Posted on October 14, 2015by Admin

The Consumer Financial Protection Bureau (CFPB) has released a report outlining the widespread servicing failures reported by both federal and private student loan borrowers. Consumers claim loan servicers’ incompetent practices create obstacles to repayment, raise costs, cause distress, and contribute to borrowers going into default.

Student loans make up the nation’s second largest consumer debt market, which has grown rapidly in the last decade. The total volume of outstanding student loans has more than doubled, increasing to more than $1.2 trillion today. One in four student loan borrowers are currently in default or struggling to stay current on their loans, despite the availability of income-driven repayment options for the majority of borrowers.

Loan servicers are a critical link between borrowers and lenders. They manage borrowers’ accounts, process monthly payments, and communicate directly with borrowers. When facing unemployment or other financial hardship, borrowers must contact student loan servicers to enroll in alternative repayment plans, obtain deferments or forbearances, or request a modification of loan terms. Consumers have reported problems with servicers, such as them losing paperwork and misapplying payments. Borrowers claim that when errors like this arise, it’s difficult to have them corrected.

The Bureau has made it its mission to take action against these student loan servicing companies that are engaging in illegal practices. To address these harmful servicing practices, The Joint Statement of Principles includes the following recommendations:

Create consistent, industry-wide standards for the entire servicing market.
Hold servicers accountable.
Provide access to clear, timely information.
Improve publicly available data.

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.

Related Resources:

http://www.consumerfinance.gov/newsroom/cfpb-concerned-about-widespread-servicing-failures-reported-by-student-loan-borrowers/

http://files.consumerfinance.gov/f/201509_cfpb_student-loan-servicing-report.pdf

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

BEWARE: The Dangers of Private Student Loans

Posted on October 13, 2015by Admin

Many student loan borrowers accept the financial aid packages placed before them by their school’s financial advisors. These funds can include numerous private loans covering what federal loans do not. What many borrowers do not realize is that these private loans come with higher interest rates and few relief options if they cannot afford the payments upon graduation. Parents and relatives who co-sign on these loans are also unaware of the consequences.

That’s why when a borrower runs into financial trouble; the problem can quickly become a family affair, leaving parents and grandparents on the hook if they co-signed on these loans. Many co-signers incorrectly think of “co-signing” as the equivalent of providing a reference. They could not be more wrong. In fact, the loan is just as much the co-signers loan as it is the borrowers. Many times, they do not realize the loan is their loan until they try to refinance their mortgage only to have the lender refuse the request because they have too much debt. Unlike federal loans, which typically have the protections of income-based repayment plans and forgiveness programs, private loan borrowers are at the mercy of their lenders.

Private loans make up only an estimated 7 to 10 percent of the $1.27 trillion student loan debt. But with the cost of college increasing, borrowers are left to rely more on these loans as federal loans are not enough to cover all expenses. For the past three years, the Consumer Financial Protection Bureau has been collecting consumer complaints on private loans and has found that borrowers are hitting road blocks when they ask their lenders for help. This should serve as a flashing “buyer beware” sign for prospective borrowers and co-signers.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan System Stacked Against Borrowers

Posted on October 12, 2015by Admin

In a recent report issued by the Consumer Financial Protection Bureau, student loan borrowers are experiencing high levels of distress compared with borrowers with other types of consumer debt. Even with the economy and job market improving, more than one in four student loan borrowers are delinquent or in default on their debt obligations.

Approximately 41 million Americans owe $1.2 trillion in student loan debt. The median debt burden among borrowers was $20,000 in 2014, up from $13,000 in 2007.

Among the biggest loan service providers are Navient, Great Lakes and Discover Banks. These companies manage borrowers’ accounts, process payments and enroll them in alternative repayment plans- including those based on a fixed share of the borrowers’ income.

With no federal standards governing these organizations, the student loan servicers have great leeway in their practices. What’s worse is that borrowers are not allowed to choose their servicers. So if problems occur, the student loan borrower cannot take their business elsewhere.

One of the common borrower complaints among the roughly 1,200 people surveyed was that servicers simply failed to follow instructions. Borrowers hoping to reduce the cost and length of their repayment period often asked servicers to apply payments to their higher-cost loans, first. In numerous incidences, these requests were ignored.

Improper levying of late fees, losing paperwork and making repeated requests for documentation were other practices cited. Perhaps the biggest complaint by borrowers was the failure of student loan servicers to advise them of all their repayment options. In many cases, it meant the borrowers not knowing they were eligible for student loan debt relief.

These relief options include: repayment plans for federal loans based on a borrower’s income and family size or debt forgiveness programs for borrowers who work in public service. Members in the military also have the right to lower interest rates while on active duty.

A recent government report revealed that 51 percent of student loan borrowers nationwide are eligible for income-based repayment plans, but only 15 percent are enrolled. Rather than offer these programs, servicers are quick to recommend forbearance, which stops payments temporarily- but not the interest from piling on. This is an expensive alternative. Some private student loan servicers charge a $150 fee to put an account in forbearance.

This has been compared to the aftermath of the housing crisis, where mortgage servicing companies made it harder for homeowners trying to repay or renegotiate their loans. Borrowers and tax payers deserve better. Repaying student loans is challenging enough without servicers adding to the burden with incompetence and questionable practices.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Court of Appeals Rules Foreclosure Service Challenges are getting old

Posted on October 9, 2015by Admin

The Fourth District Court of Appeal is losing its patience when it comes to homeowners having to prove they were properly served court documents in foreclosure cases. In one of its recent rulings, the court took an extra step by saying, “We…write to address the issues raised here because this court has received numerous other appeals raising the same or similar issues recently,” Judges Robert Gross, Spencer Levine and Alan Forst wrote in the unsigned opinion.

The homeowners in the above case want to overturn the summons and return-of-service documents filed with the court to confirm the process server properly delivered the papers and informed them of the litigation filed against them by JPMorgan Chase Bank, N.A., which inherited the account from Washington Mutual.

The Florida Rules of Civil Procedure allow private companies and deputies to provide service of process. Under the rules, process servers must provide a return-of-service form with several details, including when the process server received the court documents, the date and time the papers were served, the manner of service and the name of the person served.

The couple claims they were never served- even though the process server said otherwise, there was no evidence to show the return-of-service documents were properly executed and complied with Florida law. The couple argues these documents were inadmissible hearsay.

The appellate panel on the case suggested the homeowners arguments were nothing new and had been resolved by at least seven previous rulings. It rejected the couple’s argument that the documents were hearsay. The court also rejected claims that the wife was not home when the process server served her the papers because the process server “described her by race, height, weight and hair color.”

The attorney for the homeowners says this is not the issue. The issue is what the process server did when he delivered the papers. What is often seen on the forms is the process service companies have access to background information software. It is easy for them to run that software, which has access to a driver’s license photo and description. It does not mean they actually saw the person.

Click here to read more on this story.

Bankruptcy Law, Credit, Foreclosures

Pilot Program – Selling Homes in Bankruptcy to Skip Foreclosure

Posted on October 8, 2015by Admin

Senior U.S. bankruptcy trustee for the Southern District of Florida, Kenneth Welt, says strong demand is consuming the inventory of distressed real estate sold through a pilot program to avoid foreclosure. The program was launched in September 2014. Welt said it took nearly a decade to convince lenders to sell properties directly out of bankruptcy court in short sales instead of moving cases directly into foreclosure.

In the last six months, he has closed the sale of 15 houses after borrowers surrendered the properties in bankruptcy. New cases in the past week generated five more potential deals.

In September, one sale turned a no-asset bankruptcy case into a deal that partially satisfied the first mortgage and generated $13,000 for unsecured creditors and $10,000 for a nonfiling spouse. By arranging the bankruptcy sale, marketers generated $345,000 for a three-bedroom waterfront house with patio, pool and tiki hut on a 9,563-square-foot lot in Pompano Beach. In another case, Nationstar Mortgage, was owed $934,524 on a property that last sold for $560,000 in 2004. It authorized the trustee sale and accepted a $291,453 payoff.

Welt said, “It’s a win-win and gives debtors a fresh start. That’s what bankruptcy is. From a people standpoint, it’s a good thing for the homeowner, for the neighborhood and for the lender.”

Instead of letting foreclosures drag on as bankruptcies play out, the program aims to subtract years off the sales process and deliver payments to unsecured lenders that would likely have ended up with nothing in the case.

Last year, Welt received approval from Fannie Mae, Freddie Mac and several major lenders to create a program that would accelerate sales in cases where homeowners surrendered their property. The Federal National Mortgage Association and Federal Home Loan Mortgage Corp., which are linked to about 60 percent of foreclosures, signed on to the pilot program covering the Southern and Middle Districts of Florida, New Jersey and the Eastern District of New York.

Under the program, lenders must agree to allow a percentage of home sale proceeds for general unsecured creditors in bankruptcy.

Click here to read more on this story.

Foreclosures, Timothy Kingcade Posts

Florida Slowest State to Administer Foreclosure Aid

Posted on October 7, 2015by Admin

According to a report by federal regulators, the Sunshine State is behind other states when it comes to disbursing foreclosure relief. Florida has $1 billion set aside in Troubled Asset Relief Program (TARP) funds, supplied by taxpayers. The federal government created the Hardest Hit Fund (HHF) that has $7.6 billion in TARP funds, to help families in the states that were hardest hit following the housing market crash.

In a new report, TARP finds that “Florida has the lowest homeowner admission rate for relief funds offered by the organization, one of the highest withdrawn application rates and has consistently denied homeowners at higher rates than the national average.” With these findings, the report says that HHF Florida has not been as effective in helping homeowners in distress as the funds in other states.

According to the report, only 20 percent of the applicants for relief are accepted in Florida. The national average acceptance rate is about 48 percent. Florida is supposed to disburse its $1 billion in taxpayer loans by December 2017. However, five years into the program’s existence, Florida has spent only half of the funds, leaving many homeowners still in “critical need,” according to the report.

Florida homeowners were some of the hardest hit following the housing market crash; 18.3 percent of the 2.8 million homeowners who received foreclosure filings were in Florida. Nearly 6 percent of Florida households were in foreclosure- about three times the national average.

The report also reveals that the Treasury relies on homeowners to comply with a federal regulation prohibiting anyone convicted of a mortgage-related crime within 10 years from receiving HHR funds, which means homeowners must self-report if they have been convicted of a mortgage-related crime. This makes the fund “vulnerable to fraud and thwarting the intent of the Dodd-Frank Act,” according to the report.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

5 Credit Cards you can get after Bankruptcy

Posted on October 6, 2015by Admin

Deciding to file for bankruptcy is not an easy decision, but those who emerge from it are often thankful for a fresh financial start and the opportunity to rebuild their finances. While one of the fastest ways to rebuild your credit is through opening up new credit, there are few cards available to those who have recently filed for bankruptcy.

The exception is secured credit cards. Applicants who have recently filed for bankruptcy are generally approved by providing proof of identity. These cards require a refundable security deposit be submitted, first. Secured card holders are required to make monthly minimum payments and are subject to interest charges if the card is not paid off in full every month. These payments are reported to the three major credit bureaus, giving you the opportunity to improve your credit score as you make on-time payments.

Below are five credit cards you can be approved for after your bankruptcy is fully discharged:

Capital One Secured MasterCard

This is one of the only secured credit cards with no annual fee. Cardholders must give a refundable security deposit of $49, $99 or $200 in order to receive an initial credit line of between $200 and $3,000. The standard interest rate for purchases is 24.9% APR.

Wells Fargo Secured Visa Credit Card

New card holders must submit a $300 refundable security deposit, which then becomes their credit limit. Benefits to this card include: auto rental collision damage waiver coverage, emergency card replacement and a roadside dispatch service. In addition, cardholders have a cell phone protection policy that covers theft or damage up to $600 (with a $25 deductible), when you charge your phone bill to the card. This card comes with an annual fee of $25 and a standard interest rate of 18.99%.

BankAmericard Secured Credit Card

There is a minimum refundable security deposit of $300 to open an account. The maximum credit limit (up to $4,900) is based on income, the ability to pay and the size of the security deposit. After 12 months, the account will be reviewed and cardholders may qualify to have their security deposit returned, without any interruption of their existing account. There is a $39 annual fee for cardholders and the standard interest rate is 20.24% for this card.

US Bank AeroMexico Visa Secured Card

This card doubles as a rewards card. Cardholders can receive double miles on gas and grocery purchases and a mile per dollar spent anywhere else. New card holders earn a 5,000-mile bonus and a complimentary companion certificate after their first use of the card, as well as a $99 companion certificate each year with renewal. Additional benefits include a complimentary checked bag on AeroMexico flights. There is a 22.99% APR and a $0 introductory annual fee for the first year, which is $25 per year after that.

USAA Secured Card American Express

This card requires a $250 deposit, which is placed in a two-year, interest-earning certificate of deposit (CD). The amount of your deposit, which can range from $250–$3,000 establishes your credit limit. This card includes benefits such as auto rental collision damage waiver, extended warranty coverage and travel accident insurance. This card is open to active and retired members of the military, as well as their families. There is an annual fee of $35 and the standard interest rate is 9.90%–19.90.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

New Push on Bankruptcy Protections for Student Loan Debt Relief

Posted on October 5, 2015by Admin

Borrowers struggling with student loan debt may be getting some much needed relief. The Obama administration has reached out to Congress in an attempt to make it easier for some student loan borrowers to discharge their debt through bankruptcy. A recent report released by the U.S. Department of Education outlined a proposal for improving the nation’s student loan system, which will require congressional action.

The most significant change is for Congress to ease the process for private student loan borrowers seeking to have their loans discharged through bankruptcy. The administration is proposing that Congress re-enact a 2005 law, which allowed bankruptcy filers to discharge their private student loan debt.

For consumer advocates and some congressional Democrats, this has been a long time coming, but this is the first time the Obama administration has supported a revision to the rules governing how student loans are processed in bankruptcy.

According to Under Secretary of Education Ted Mitchell, “All other types of consumer debt are dischargeable in bankruptcy and we think private student loans are a glaring exception.” “We think it’s important to do what we can to create those protections, and we think starting with a bankruptcy provision is the way to go,” he continued.

The administration’s proposal would extend borrower protections to private student loans that do not offer flexible repayment plans like those granted to federal loan borrowers. The report states that “there are strong grounds for maintaining different standards for federal student loans.”

Federal student loans are not underwritten and typically have generous terms and protections. Monthly payments can often be limited based on income. By contrast, private student loans tend to lack those protections and can leave borrowers in financial distress with few options.

Along with changes to federal bankruptcy laws, the administration has proposed adding other consumer protections to private student loans, such as barring private lenders from automatically declaring a loan in default when a co-signer dies.

Click here to read more on this story.