Month: July 2019

Foreclosures

Seniors Targeted Through Reverse Mortgages Now Face Foreclosure

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An alarming trend is emerging when it comes to foreclosures among the senior population. A number of them have been the victims of reverse mortgage schemes resulting in their homes being foreclosed on.  Consumers 62 years of age and older face a unique set of financial difficulties- one of their main concerns is servicing issues with reverse mortgages, according to the Monthly Complaint Report released by the Consumer Financial Protection Bureau (CFPB).

Reverse mortgages allow the homeowner to borrow against the value of their home, receiving money through a lump sum, a fixed monthly credit or line of credit. However, a reverse mortgage does not require the individual to make any loan payments. Instead, the entire balance becomes due when the borrower either dies, moves away permanently or sells the home.

The problem with reverse mortgages is they can be quite expensive and complex if you need to get out of one. Additionally, many lenders put themselves out there as reputable reverse mortgage service providers while offering what are essentially scams to homeowners.

For the most part, the reverse mortgages that elderly homeowners are struggling with come from more than a decade ago when the recession first hit. All it takes is for the homeowner to miss one simple deadline or to fall behind on homeowner’s insurance payments or taxes before the lender moves into foreclose on the home.

Elderly homeowners who are at or below the poverty line and are living in urban areas, have been hit the hardest. USA Today recently published a story regarding reverse mortgages and the effects they have had on the aging population. Their study showed a notable disparity and a trend that subprime lenders tend to target certain areas where the loans are almost always doomed to fail, including fixed incomes and lower income areas.

Miami is one of the cities that has been hit the hardest. Not only does the Miami metropolitan area have pockets of neighborhoods where the population falls below the poverty guideline, it is also an area where many seniors come to retire.

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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.

 

Related Resource: https://www.investopedia.com/mortgage/reverse-mortgage/

 

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

Student Loan Borrowers Diagnosed with Cancer Still Waiting for Promised Relief

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In September 2018, President Donald Trump signed a bill into law, allowing student loan borrowers who have been diagnosed with cancer to delay their federal student loan payments. This new law was created to allow these individuals to focus on their treatment and not their student loan obligations through the course of their medical treatment and six months afterward. However, just nine months after the law took effect, borrowers who have requested this deferment are still waiting for approval.

The delay seems to be due to the U.S. Department of Education not yet providing student loan providers that administer its federal student loan programs an official application through which qualifying borrowers can apply. While the law may be in effect, service providers have no way to implement it.

The Department of Education insists that they are taking steps towards resolving this problem and creating an application for the cancer deferment. However, many borrowers are questioning why this was not done previously. As of January 2019, the Department of Education asked that the Office of Management and Budget conduct an emergency review and approval of the cancer deferment form created.

The Department of Education is also requiring a 60-day comment period on the proposed form, which is delaying the process even further. With cancer patients, time is of the essence. Many consumer advocates question why the comment period was not shorted to 30 or even 15-days.

Student loan servicers are offering temporary forbearances for borrowers who are seeking the cancer deferment. However, forbearance does not stop interest from accruing on the debt while payments are paused. Deferment, on the other hand, puts payments on hold while pausing interest from accruing, as well.

Click here to read more on this story.

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.

Bankruptcy Law, Credit, Debt Relief

How a Bankruptcy Affects Co-Signers

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To obtain financing or approval for a loan, many consumers will resort to asking a loved one or family member to co-sign the loan for them. If the individual is not able to continue paying on the loan and defaults, the lender will be able to seek payment on the debt from the co-signer. However, what happens when the borrower who took out the loan files for bankruptcy? Does the co-signer receive relief from the obligation, as well?

What is a Co-signer?

A co-signer or guarantor is a person who takes on a financial obligation along with a borrower who often either has poor credit or limited credit. Deciding to sign a loan as a cosigner is more than just being a reference, a co-signer or guarantor is responsible for paying back the debt if the borrower is unable to do so.

A lender may see the borrower as a lending risk and will require him or her to find someone with a more solid financial history to co-sign the obligation. A co-signer may be needed for a personal loan, a student loan, an application to rent an apartment or other space, or a lease on a car, equipment or furniture. The responsibilities that accompany co-signing a loan are more than being a second signature on a lending application. By co-signing, that person is essentially taking on full responsibility for the loan in the event the original borrower defaults.

While a bankruptcy discharge may relieve the borrower, who is defaulting on the obligation, from responsibility or liability on the debt, the discharge does not always lift this burden from the co-signer on the debt. It often depends on the type of bankruptcy being filed as to what type of protections co-signers have regarding their debts.

Chapter 7 Bankruptcy

At the time of filing for Chapter 7 bankruptcy, the filer will receive protection from collection on his or her debts through the automatic stay. However, protection from the automatic stay does not also extend to any co-signers on debts. This lack of protection leaves the creditors completely free to pursue collection on the debt from the co-signers on the loan.  If the borrower wishes to maintain a good relationship with the co-signer, it may be wise for him or her to take certain steps to protect the co-signer. The person may choose to reaffirm the debt, especially if it involves a secured debt, such as a home loan, car loan or other secured credit account. By reaffirming the debt, the borrower is giving up the benefit of bankruptcy discharge on that specific debt. Many creditors will accept payment plans or partial payment on the debts in lieu of receiving nothing. If they discover the co-signer has substantial assets, they may be less likely to accept anything other than full payment, however, so this may not be a possibility.

Chapter 13 Bankruptcy

While a Chapter 7 bankruptcy case does not offer much protection for co-signers, a Chapter 13 bankruptcy case offers a little more. A Chapter 13 bankruptcy involves a three-to-five-year long repayment plan, which gives the borrower more time to pay off the co-signed debt. When a Chapter 13 case is filed, the automatic stay issued will protect both the borrower and co-signer from collection on any consumer debts, which is called the Chapter 13 co-debtor stay. The stay will be in effect unless the court lifts it upon request of a creditor or dismissal of the case. The co-debtor stay may also be lifted if the bankruptcy court converts the Chapter 13 case to a Chapter 7 bankruptcy case. Otherwise, a co-signer will receive considerably more protection under a Chapter 13 bankruptcy.

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.

Related Resource:

https://www.nolo.com/legal-encyclopedia/cosigner-liable-debt-file-bankruptcy.html

 

 

student loan debt

5 Tips to Keep in Mind Before Taking out a Direct PLUS Loan

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Many parents will do anything possible to help their children get a higher education, and that desire to help often takes the form of financial aid. It is estimated that at least 3.4 million individuals have taken out a Direct PLUS Loan to help pay for their child’s college education.  Before considering these loans, it is important to be aware of the risks that come with this form of financial assistance.

Direct PLUS Loans allow parents of eligible college students to take out loans for their children’s education through a federal government program. The U.S. Department of Education is the lender, which is why many borrowers believe that these loans offer a safe and secure option to pay for their child’s education.

  1. Loan Eligibility, Amount Available and Fees. Not all parents are eligible to take out Direct PLUS Loans. First, they must be taken out on behalf of biological and adopted children, although some situations allow for stepparents of dependent students to take out these loans. Parents can take out enough money needed to have their child attend college; minus any amount of financial aid the student receives. Since the tuition and expenses vary from college to college, no maximum amount is set on how much a parent can take out through the PLUS program.Interest rates on PLUS loans are set by the federal government and are currently at 7.6 percent. Since these loans are unsubsidized, this means that interest on the loan begins accruing immediately. Payments on the loans can be deferred by the borrower until his or her child finishes college, but the balance will grow since the interest continues to accrue. If no deferment is requested, the parent will need to start paying right away. Borrowers also will have to pay a loan fee along with interest charges, which varies depending on the year. The fee comes out proportionately from each loan disbursement, but it does not increase the total amount of the loan.
  2. Limits on Repayment Programs. Parents have a handful of repayment options available for PLUS loan programs. The standard repayment plan involves equal payments made over the course of ten years. Borrowers can also request a graduated repayment plan, which allows the borrower to start off with lower payments, building up every two years over a ten-year period. Borrowers can also pay under an extended plan, which spreads the payments out over 25 years instead of 10. The monthly payments are lower, but the borrower ends up paying much more in interest in the long run. However, parent borrowers are limited on the types of repayment plans they may have in addition to these plans, while student borrowers have more options available to them.
  3. Repayment Responsibility May Not Be Transferred. Many parent borrowers take out PLUS loans on the assumption that they can eventually transfer the debt to their child upon graduation. However, this option is not available for a PLUS loan. Responsibility for repayment stays with the parent who is the legal borrower. This fact is important for the parent to realize if loan payments present a problem later as the parent approaches retirement age.
  4.  Impact on Credit Score. Any time a borrower takes out a loan, it should be expected that his or her credit score will take a hit, and that includes PLUS loans. If a parent takes out a PLUS loan, he or she should expect the loan, its balance, and payment history on the loan will appear on the parent’s credit score. So long as the borrower makes payments on time, this fact should not cause too much of a problem. However, if the parent is not able to keep up and misses a payment, the damage to the borrower’s credit score could be significant.
  5. Consequences of Defaulting on the Loan. It is extremely important that the parent borrower be able to handle the payments associated with the PLUS loan. Defaulting on a PLUS loan comes with serious financial consequences and can put the borrower at risk of wage garnishment, as well as offsets on his or her tax refunds or Social Security disbursements.

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.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Medical Expenses Lead to More Than 60 Percent of Personal Bankruptcy Filings

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Many different factors play into why a person decides to file for bankruptcy. For many consumers, the cost of healthcare and staggering medical bills play a major part in why they file bankruptcy.

According to a recent report published by the American Journal of Public Health, 66.5 percent of all bankruptcies are related to medical debt, whether it be the cost of medical care or the time away from work required due to the injury or illness. The study reviewed court filings for a random sample of 910 Americans who filed for bankruptcy between the years 2013 and 2016. They found that 530,000 families file for bankruptcy annually due to either a medical issue or medical bills.

Medical bills often come at a completely unexpected time, which is a big reason why they play such a major role in personal bankruptcy. The cost of medical care is high enough as it is, and it only takes one major medical crisis to set someone back thousands of dollars. When a person is already living on a limited income to pay for basic living expenses, these unexpected medical bills can put him or her in a serious bind. If a major medical crisis also leads to the loss of a job or if the person is under-insured, the results can be even more devastating.  Even if someone does have savings, one trip to the hospital could quickly deplete that account.

Medical expenses were not the only reason people filed for personal bankruptcy. The study also reported that 45 percent surveyed cited not being able to afford their mortgages as their reason for filing. Other factors also included student loan debt, a major life event, such as a divorce or job loss. Many consumers reported a combination of two or more of these factors as a leading cause of why they filed for bankruptcy.

Other factors that played a role in personal bankruptcy filings had to do with the location of the filer. The report showed that someone who lives in a larger, metropolitan area is more likely to fall behind on their basic living expenses when compared to someone else who lives in a more rural part of the country. Additionally, medical debt statistically is more common in certain areas of the country when compared to others.

The filer’s age and stage of life also plays a role the reason behind filing for bankruptcy. The number of bankruptcy filings for individuals between the ages of 18 and 54 declined between 1991 and 2016. However, bankruptcy filings have gone up for individuals over the age of 55. In fact, the number of individuals over the age of 65 who filed for bankruptcy have tripled since 1991. Many filers in this age group attributed the cost of healthcare as to why they filed for bankruptcy.

The good news is if medical debt does make up a large part of the total debt the filer is carrying, this category of debt is considered unsecured and can be discharged in a Chapter 7 or Chapter 13 bankruptcy case. Unsecured debt is debt that is not otherwise tied to an asset, including credit card and medical debt. Rather than struggle with paying medical bills for too long, a consumer who finds himself or herself in a troubling financial situation due to a medical crisis should consult with a bankruptcy attorney to see if bankruptcy is a good option for him or her.

How is Medical Debt Handled in Bankruptcy?

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing.  Making the decision to file for bankruptcy is never an easy one.  It can be difficult to get past some of the myths associated with filing for bankruptcy. Sometimes by waiting, an individual facing a lot of debt can find himself or herself in an even worse situation. Filing for bankruptcy can help protect valuable assets, including your home, car, IRA and social security.  It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.

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 website at www.miamibankruptcy.com.

Source: https://www.businessinsider.com/causes-personal-bankruptcy-medical-bills-mortgages-student-loan-debt-2019-6