November 2017 - Page 2 of 3 - FREE CONSULTATION

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

Federal Judge Sides with Debtor Finds Law Firm’s Debt Collection Notice “Misleading”

Posted on November 16, 2017by Admin

U.S. District Judge Timothy J. Savage of the Eastern District of Pennsylvania denied the Law Offices of Frederic I. Weinberg & Associates’ motion for summary judgment and granted plaintiff Ronn Homer’s motion for summary judgment, holding that the law firm in violation of the Fair Debt Collection Practices Act (FDCPA) in its validation notices.

“We conclude that the validation notice in this case violates the FDCPA because it misleads and deceives the debtor about how and when to dispute the debt,” Savage wrote in his opinion on November 9, 2017. “The notice leads the debtor to believe that he may dispute the debt orally when only a written notice of dispute is effective. It also requires the debtor to act to dispute the debt in less time than the FDCPA provides.”

The crux of the case was in the meaning of a sentence in the debt collection notice: “Unless we hear from you within 30 days after receipt of this letter that you dispute the validity of the debt, or any portion thereof, this office will assume the debt is valid,” said Savage.

The plaintiff alleged that the notice creates confusion about how to dispute the debt and the timeframe in which to do so. He argued that the letter misleads the debtor into believing that the law firm must receive the notice of dispute within 30 days rather than that the debtor must send the notice within that timeframe.

In the end, the debtor prevailed and the judge concluded, “The letter here is misleading. It creates the impression that the debtor can dispute the debt by calling the debt collector. The phrase ‘[u]nless we hear from you’ imparts the understanding that the debtor can dispute the validity of the debt orally. Contrary to Weinberg’s characterization, ‘hears from you’ is not a colloquial phrase that a reasonable debtor, let alone a least sophisticated debtor, would construe to mean that a dispute must be in writing,” Savage said.

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If you have any 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, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Most Student Loan Fraud Claims Involve For-Profits, according to recent study

Posted on November 15, 2017by Admin

An analysis of Education Department data reveals that students who attended for-profit colleges filed more than 98 percent of the requests for student loan forgiveness alleging fraud by their schools. Century Foundation found nearly 100,000 loan forgiveness claims (known as borrower defense to repayment) have been received over the past two decades, which paints a troubling picture of the state of for-profit higher education in the United States.

The study found “a disproportionate concentration of predatory behavior among for-profit colleges” that raises “serious concerns about the federal government’s current approach to providing relief to students who have been defrauded and misled.”

For-profit colleges expanded rapidly over the past two decades, with enrollment rising from around 230,000 in the early 1990s to a record 2 million in 2010. These for-profit schools recruited aggressively, targeting more “non-traditional” students, usually older people who had jobs and could only study part time.

They also heavily targeted women, people of color and veterans. But after graduating, many students struggled to find jobs they were promised or had difficulty transferring credits to other schools. This lead to a massive increase in student loan defaults. A 2010 government study found that all of the 15 for-profit colleges evaluated by undercover agents made deceptive statements to prospective students and four of them encouraged fraudulent practices.

The report comes as Education Secretary Betsy DeVos faces criticism for not moving forward with two Obama-era regulations that would have added protections for student borrowers. The rules, known as borrower defense to repayment, were developed after a series of high-profile collapses of for-profit chains such as Corinthian Colleges and ITT Technical Institute left thousands of students with worthless degrees and mountains of student loan debt. The regulations were scheduled to take effect on June 30.

However, the review of tens of thousands of claims has stalled and the AP reported last month that the department is considering abandoning the practice of full loan cancellation in favor of partial forgiveness. Student advocates are pointing to the Trump administration’s ties to the for-profit industry and accuse DeVos of putting industry over students.

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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 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, Debt Relief, Timothy Kingcade Posts

What you need to Know about Student Loan Interest

Posted on November 14, 2017by Admin

Most college students are unaware how loan interest or capitalization works, according to a recent study. Opting to delay payments after college or graduate school can determine how much you pay over the lifetime of your student loans.

When the interest on a student loan capitalizes, the accrued interest is added to the principal balance, which is the original amount borrowed. For that reason, the interest charges increase because it is now based on the new higher principal.

Here are 5 examples of when capitalization occurs with federal student loans:

Not making interest payments during school and during the grace period. For undergraduate and graduate unsubsidized Stafford loans, interest begins to accrue immediately after the loan is dispersed. Subsidized loans are the best option for students, where the federal government pays the interest while the borrower is in school.
Switching from an income-driven repayment plan. It is important borrowers know that just because they are enrolled in an income-driven repayment, Income-Based Repayment Plan or Pay As You Earn (PAYE), this may not be covering all of the interest accruing on the loan. While some income-driven plans stop capitalizing interest after 10 percent of the original loan balance has been paid, there are consequences from switching out of these plans. For example, unpaid accrued interest will capitalize when a borrower no longer qualifies for a financial hardship, fails to provide proper documentation for the plan’s annual enrollment or exits the plan.
Forbearance or deferment. A borrower needs to be careful when selecting these options and know the consequences. Interest is still accumulating on student loans even though the loans are in forbearance or deferment. This loan interest can accumulate quickly.
Consolidation of federal loans. Consolidating multiple loans into one direct loan, means you are creating an entirely new loan. It is important to consolidate right after graduating as a measure to reduce the capitalization interest that comes with federal loan consolidation. Waiting longer to do so typically increases the principal balance.
Defaulting on a student loan. Interest that was outstanding at the time of default will be capitalized. The principal amount will not only become larger, but the entire balance will be due and payable immediately.

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Bankruptcy Law, Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

Appellate Court Rules Miami-Dade Judge Erred in Denying Foreclosure

Posted on November 13, 2017by Admin

“The trial court was not authorized to deny foreclosure merely because it believed the borrower signed a ‘bad bargain,’ ” wrote Third DCA Judge Richard Suarez, with Chief Judge Leslie Rothenberg and Judge Vance Salter concurring. “ We thus reverse the entry of involuntary dismissal and remand for entry of final judgment of foreclosure.”

The appellate panel ruled the court improperly excluded evidence and based judgment partially on a defense the homeowner’s counsel did not raise. The homeowner, Alfredo Brito was making his monthly mortgage payments as usual when in June 2008 his payment was rejected by his loan servicer. From then on no more payments were made.

Two years later, the loan servicer advised Brito he was in default and demanded $60,000 as a remedy. Lender Deutsche Bank National Trust Co. then brought a foreclosure proceeding. Brito’s original loan servicer was absorbed by Ocwen Loan Servicing in 2012. Miami-Dade Circuit Senior Judge Judith Kreeger excluded the demand letter and the payoff printout when she should have admitted them, the appellate court ruled.

“Brito was elderly, suffered from dementia and paid religiously and was forced into foreclosure because of the predatory financial product,” said his attorney. “Under the circumstances, it’s appropriate to require Ocwen to comply with the rules of evidence and Florida Supreme Court precedent. No court is authorized to grant the equitable relief of foreclosure if there is unclean hands or insufficient evidence of standing to foreclose merely because the borrower defaulted on their mortgage,” he continued.

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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 McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Increase in Personal Bankruptcy Filings among LuLaRoe Consultants Spark Speculation

Posted on November 10, 2017by Admin

A number of women who currently or formerly sold clothing through LuLaRoe have seen income from their “small businesses” decline dramatically in recent months, forcing some of the women to file for bankruptcy.

The personal bankruptcy filings- from January 2016 to October 2017- came up during a search of court records because the women or couples filing said they were “doing business” as Lularoe or LuLa Roe.” At least 24 have been identified, but it is estimated the number is much higher.

Experts noticed on average that the families reported a “quick downward fall” in income from their business from around 2015 to when they filed. For example, one woman, a single mom in California reported she made $61,330 in 2016 from “operating a business,” which is presumed to be her LuLaRoe business since it is the only one she says she owns.

But from January to July 2017, she had only made $10,547.42 from her business, less than half she had made midway through the year before. She reported her average net income in 2017 from her business was $184.39 a month.

She was spending just as much in some months, if not more, on “operating expenses” for her business as she was making, according to the filing. For example, in May 2017 she earned $1,796.12, but spent $2,666.13 to keep her business afloat.

She lists $28,991 in assets and $8,000 worth of “inventory.” Her $85,253.43 in debts include thousands of dollars on multiple credit cards and almost $1,000 owed to her Paypal merchant account. She filed for bankruptcy in July of 2017.

Some of the other women identified, listed unpaid unsecured business loans, which shows a “clearer tie to the LuLaRoe” business.”

The co-founders of LuLaRoe appeared on CBS This Morning to speak out against the recent allegations the company is facing about merchandise quality and refund policy complaints. A $1 billion lawsuit was filed on October 23 by two former consultants on behalf of all LuLaRoe consultants alleging the company is operating a pyramid scheme.

Related Resources:

https://www.cbsnews.com/news/lularoe-clothing-retailer-founders-speak-out-against-pyramid-scheme-accusations/

https://www.buzzfeed.com/stephaniemcneal/lularoe-bankruptcy?utm_term=.bjkXAJ1kn#.vva5gXLwK

Debt Relief, Foreclosures, Timothy Kingcade Posts

Phony South Florida “Lawyers” Face Prison Time after Scamming Distressed Homeowners

Posted on November 9, 2017by Admin

A number of South Florida homeowners were recent victims to two scam artists, posing as attorneys promising mortgage relief, but instead pocketed the upfront fees they charged. Joseph Anton Hilton and Adam Todd Forman plead guilty to federal charges in connection with the scheme.

Authorities say the pair operated phony law firms based in Coral Springs, Boca Raton and West Palm Beach, FL. The pair posed as lawyers and even manipulated real attorneys into working on their behalf. They tricked homeowners into paying legal fees in lieu of making mortgage payments. Hilton and Forman targeted homeowners across Florida and in other states, including New Jersey and Ohio, according to authorities.

The Florida victims were from cities including Sunrise, North Palm Beach, Cooper City, Miami, Fort Lauderdale, Hollywood, Miramar and Delray Beach.

The Attorney General’s office said the fake law firms had more than 300 clients who could have potentially been harmed.

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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 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, Credit, Debt Relief, Foreclosures

Struggling with Bad Credit? Here are some ways you can still qualify for a Mortgage

Posted on November 8, 2017by Admin

Having a poor credit score, does not necessarily mean a home is out of reach. There are organizations and resources available to help homeowners get assistance with a down payment and find lenders willing to work with them.

Here are few options that are worth looking into:

FHA Loans. These type loans, insured by the Federal Housing Administration (FHA) have flexible lending requirements and if you have a credit score of at least 580, you may qualify for a FHA loan requiring a down payment of no more than 3.5%. Have a credit score between 500 and 579? You can still get approved, but you will have to provide a down payment of at least 10 percent.

VA Loans. VA loans are reserved for eligible veterans and do not require a down payment or mortgage insurance. There is not a set minimum credit score for VA loans. Lenders who offer these loans will have their own credit requirements.

Good Neighbor Next Door Program. The Good Neighbor Next Door program is offered by the Department of Housing and Urban Development (HUD) and is reserved for teachers, law enforcement officers, firefighters and emergency medical technicians. This affordable housing program offers two big incentives: Eligible borrowers can qualify for 50 percent off the list price of the home if they commit to using the property as their sole residence for 36 months; and homes can be bought with as little as $100 down.

Filed bankruptcy or foreclosure? If you have filed for bankruptcy or foreclosure, you can still own a home again and qualify for a mortgage. Some borrowers may even qualify for an exemption. For example, if the bankruptcy or foreclosure was due to a job loss or health problem, the lender may ask for an “extenuating circumstances letter.” This is an explanation of the events that led up to the bankruptcy or foreclosure, events that were beyond your immediate control.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Bankruptcy Filings Hit 10-Year Low

Posted on November 7, 2017by Admin

Bankruptcy filings have taken another plunge, marking a 10-year low for any 12-month period, according to the latest numbers from the Administrative Office of the U.S. Courts (AOUSC).

Annual filings totaled 790,830 through September, compared with 805,580 in the previous year. This was the lowest number of bankruptcy filings for any 12-month period since June 2007, according to the AOUSC. However, the statistics show that Chapter 12 filings totaled 508, an increase from 458 in 2016.

The 2005 amendments to the Bankruptcy Code made Chapter 7, 11 and 13 bankruptcies more complex and expensive, but did not do the same for Chapter 12. The national wave of bankruptcy filings that began in 2008 reached a peak in September 2010 when nearly 1.6 million bankruptcies were filed, according to the AOUSC.

Breakdown of Filings by Chapter for the 12-month period ending Sept. 30, 2017 are as follows:

Chapter 7 filings totaled 486,542, down from 498,367 in 2016.
Chapter 11 filings totaled 7,052, down from 7,450 in 2016.
Chapter 12 filings totaled 508, an increase from 458 in 2016.
Chapter 13 filings totaled 296,599, down from 299,150 in 2016.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Tips for Seniors to Avoid Medical Debt

Posted on November 6, 2017by Admin

Open enrollment began November 1, 2017 for health insurance plans through the Affordable Care Act. On October 15, open enrollment began for Medicare recipients. For many seniors, Medicare enrollment is a complex process that does not always cover all medical bills and expenses. As a result, some seniors are left with thousands of dollars in medical debt. Here are some ways seniors can stay one step ahead and avoid medical debt:

Set savings aside to cover unexpected medical expenses. A recent analysis found couples may need as much as $350,000 for medical bills post retirement. Factor this amount in when saving for retirement.

Understand Medicare options and costs. Remember to sign up for Medicare at the right time. Most people are eligible to enroll in Medicare beginning three months before their 65th birthday. Enrollment continues until three months after they turn 65. You can choose standard Medicare or a Medicare Advantage plan. The second option offers lower out-of-pocket costs, but a higher monthly premium, for coverage through an HMO or PPO.

Gather all personal information and keep it organized. Have this information readily available so a loved one or caregiver can help manage your healthcare if you are hospitalized or unable to do so. This should include a daily list of medications, medical providers, your medical history and medical and legal documents such as advance medical directive and a will. Here is a checklist to help manage your personal medical information.

Review medical bills carefully. A recent study found that 49 percent of Medicare medical bills contain errors or unnecessary charges. When you receive a bill for a procedure, hospitalization or nursing care, take time to review it for accuracy. If you received only a total due, request an itemized list of services provided.

Avoid putting medical expenses on a credit card. More than half of adults over the age of 50 put medical bills on their credit cards, according to a recent survey by AARP. Request an affordable payment plan from your medical provider.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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, 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 McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief

Scientologist with “Super Power” Can’t Discharge Tax Debt, says Bankruptcy Judge

Posted on November 3, 2017by Admin

Super powers could not save well-known Scientologist, Matt Feshbach and his wife Kathy from $3.8 million dollars in tax debt owed. Florida federal bankruptcy Judge Catherine Peek McEwen had this to say in her ruling:

“The Feshbachs made poor spending decisions, continually leading a life of excess in the face of serious, known financial obstacles. At all times, their primary concern should have been reducing their substantial tax debt. But as their immoderate spending choices show, they were far more focused on living in the lap of luxury. They would have been wise to heed the proverb which cautions that enough is better than too much. As it is, however, the Feshbachs misjudgment ultimately cost them complete relief. Having concluded that the Feshbachs willfully attempted to evade their tax debt within the meaning of 11 U.S.C. § 523(a)(1)(C), the Court rules that such debt is nondischargeable. Accordingly, the Court will enter a separate final judgment in favor of the United States in this proceeding.”

The couple, who is considered Scientology royalty, had accumulated $13 million in revenue since getting into trouble with their taxes, but refused to make good on their $3.8 million tax debt. As legal documents prove, the couple did not attempt to slow down their spending as the case was going through court:

“$722,000 was spent on personal travel (including $233,000 for a rental home in Aspen), a half-million on clothing, another $370,000 on groceries, (plus another $78,000 eating out) and $147,000 plus on entertainment…$360,000 on their children, including a private education for their son. But more important than their children was the private chef, who cost more than $610,000 over eight years.”

What is most shocking is that during the same time the Feshbach’s knew they were being investigated by government agencies and as they were trying to low-ball and delay payment to the IRS, they continued spending at an excessive rate, assuming the court would discharge their IRS debt anyway.

A couple of examples that were found in IRS documents that were part of the bankruptcy court file include: In 2011, IRS investigators found the couple’s claim to being “penniless” was “hardly credible” when they discovered that the couple was spending thousands of dollars a month to send their 14-year-old son to Scientology’s pricey “Delphi Academy” private school in Oregon. One of the largest credit card charges they found in that period was nearly $10,000 for “Scientology publications.”

Matt Feshbach was the first Scientologist in the world to go through “Super Power” processing because in the 1990s he had made a $1 million donation to the Super Power project, which eventually resulted in the “Flag Building” being opened in November 2013.

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