Bankruptcy Law Archives - Page 105 of 128

U.S. Consumer Debt on the Rise- Highest Since Early 2008

Posted on November 18, 2013by Admin

According to data from the Federal Reserve Bank of New York, U.S. household debt increased in the latest quarter by the most it had in more than five years and student loans in delinquency hit a record high. Total consumer debt rose to $11.28 trillion, which marked the biggest quarterly jump since 2008. The increase in the third quarter suggests that the cycle may be nearing its end.
There is has been an increase of household debt essentially across all spectrums. Americans have recently put more on credit cards, borrowed more money to buy houses and cars and took out more student loan debt.

The continued rise in student debt continues to be a cause for concern. Outstanding balances increased $33 billion to $1.03 trillion in the third quarter. A record 11.8 percent of loans were behind by 90 days or more, the New York Fed said, up from 10.9 percent in the second quarter. Student loan debt can unfortunately not be discharged under current bankruptcy law. Economists worry that in the coming years delinquencies could lock people out of economic participation.

Foreclosures which continue to decline, hit their lowest levels since the end of 2005.

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If you 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, Credit, Timothy Kingcade Posts

Company’s Fourth Bankruptcy Filling Sets Unprecedented Record

Posted on November 13, 2013by Admin

The charter air transport company, Global Aviation Holdings, Inc. filed a record fourth Chapter 11 bankruptcy. The company is the largest provider of commercial charter airline services to the U.S. military and has attributed the bankruptcy filing to the recent government cutbacks.

Global Aviation had previously filed for bankruptcy in 2004 and 2006 in the Southern District of Indiana and last year in the Eastern District of New York.

Repeat filings by companies like Global Aviation are not uncommon. In fact, about one-third of larger companies that file for Chapter 11 find themselves back in bankruptcy court within four years. But it’s pretty rare to end up there a third time, a fourth time is unprecedented.

Global Aviation’s previous bankruptcies were particularly hard on general unsecured creditors, such as suppliers. The best they did was in the company’s 2006 bankruptcy, when court records indicate they were expected to get as much as 2.4 percent of what they were owed.

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Bankruptcy Law, Credit, Timothy Kingcade Posts

Private Student Loans Just as Dangerous as Using a Credit Card to Pay for College

Posted on November 12, 2013by Admin

A recent analysis done by the Consumer Financial Protection Bureau’s Student Loan Ombudsman report concluded that private student loans are a “risky and high-cost” method to pay for a college education, “no better than paying for college on a credit card.” These private student loans total approximately $165 billion and account for 15 percent of the nation’s total outstanding student loan debt.

Private student loan repayment was the subject of nearly 65 percent of more than 4,300 complaints received by the Consumer Financial Protection Bureau from October 1, 2012 through September 30, 2013. Repayment concerns included fees, billing, deferment, forbearance, fraud and credit reporting.

What’s most concerning is how borrowers incurred these private student loan debts. “In 2008, a majority of private student loan borrowers took out less in federal student loans than they could have. Of these borrowers, a full quarter took out no federal student aid whatsoever … In large part, private student borrowers fell prey to a range of unsavory marketing tactics… Some lenders deliberately misled borrowers into believing that their private student loans were superior to federal loans.”

The CFPB’s Student Loan Ombudsman is a statutory office created within the Bureau to assist consumers in resolving their issues with private student loan lenders. Through this effort, the CFPB has assisted hundreds of borrowers obtain relief from their lenders. The median monetary recovery is $700; the maximum amount of relief granted thus far is $75,000.

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If you are having trouble making your student loan payments or you have recently defaulted on your federal or private student loans, contact an experienced Miami bankruptcy attorney. Although student loans are often not dischargeable in bankruptcy court, an attorney can help you eliminate other debts and obligations so you can take control of your finances and better handle your student loan debt. 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. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Advantage Rent A Car to File for Bankruptcy

Posted on November 8, 2013by Admin

Advantage Rent A Car will file for bankruptcy after Hertz terminated lease agreements that provided the company with its cars. Shares of Hertz fell as much as 17 percent after Advantage’s owners said the book value of the cars passed to them at the time of the sale was too high. Hertz terminated lease agreements on 24,000 Advantage vehicles last Saturday, saying Advantage’s owners had failed to make some payments.

Franchise Services of North America (FSNA), which also owns the U-Save and Canada’s Rent-a-Wreck brands, said it would file for Chapter 11 bankruptcy protection for Advantage as early as Tuesday. Advantage operates in 33 states, including airport locations serving 60 of the top 70 airports across the United States.

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Bankruptcy Law, Credit, Timothy Kingcade Posts

Rapper DMX’s Latest Bankruptcy Drama

Posted on November 6, 2013by Admin

Rapper DMX, whose real name is Earl Simmons, filed for bankruptcy in July, but according to the Justice Department there have been some problems. DMX’s attorney is urging the Manhattan bankruptcy court to let the rapper exercise his right to reorganize under Chapter 11.

However, watchdog, U.S. Trustee Tracy Hope Davis, has asked the court to convert the rapper’s Chapter 11 restructuring into Chapter 7 liquidation or throw out the case entirely. This is following the rapper’s failure to appear at a meeting with his creditors and inconsistent information regarding his financial standing.

In court papers filed last week, DMX’s bankruptcy lawyer said his client “is committed to fulfilling his obligations as a debtor in possession and successfully reorganizing under Chapter 11.” This includes attending a rescheduled meeting with his creditors and turning over financial information related to the noted discrepancies. One in particular, involves a filing listing of $0 worth of clothing among his assets, while another says he spends $1,000 a month on clothing.

The rapper filed for Chapter 11 bankruptcy protection just days after his arrest on suspicion of drunk driving; listing less than $50,000 in assets and $1 million to $10 million in debt- $1.2 million being in child support obligations.

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Bankruptcy Law, Credit, Timothy Kingcade Posts

Big Bank Pays a Big Price for Creditor Harassment

Posted on November 5, 2013by Admin

Bank of America has been ordered to pay $10,000 per month for every time it continues to harass a couple to pay off a loan that was discharged in bankruptcy. Judge Robert Drain of the U.S. Bankruptcy Court in New York says, “He means to send a message by the ruling.”

Chapter 7 bankruptcy relieved Edwin and Michelle Ramos of the obligation to pay off their home loan while preserving the bank’s right to foreclose on its collateral. However, the calls and letters kept coming to the Ramoses; even after their attorney pointed out that their personal liability had been discharged in bankruptcy. According to court records, the bank ignored this fact and failed to respond to Judge Drain until 10 days after he signed an order imposing sanctions on the lender.

Following the penalty, Bank of America agreed to stop the calls and letters except for informational notices that inform the Ramoses of what they have to do keep their home.

This is not the first time Bank of America has been reprimanded for these type practices. In March, U.S. Bankruptcy Court Judge Karen Jennemann in Orlando, Fla., fined the bank $220,000 for repeated violations of court orders involving a loan-modification arrangement.

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Bankruptcy Law, Credit, Timothy Kingcade Posts

Student Loan Borrowers Face Payment Processing Pitfalls

Posted on November 1, 2013by Admin

A new report from the Consumer Financial Protection Bureau (CFPB) reveals that the companies hired by lenders to collect payment for private student loans are not always acting in the borrowers’ best interest. In fact, sometimes their actions increase the total cost of higher education. The most common complaint deals with the problem encountered when borrowers try to pay off their loans early or pay them off in a certain order.

Oftentimes, it makes the most sense to pay off the student loan with the highest interest rate first, but the CFPB report found that loan servicers do not always do that. Instead, they frequently divide the payment or over-payment and apply it to all of the person’s outstanding loans. According to the report, these “payment processing pitfalls” can lead to increased costs, extended periods of repayment and harm the borrower’s credit profile.

The CFPB also found problems for borrowers who had multiple loans with the same servicer and were unable to make their monthly payment in full. They were oftentimes told by the loan servicer to pay as much as they could. But instead of putting all of the money toward the highest-rate loans, the loan servicer applied it evenly to all of the loans. This practice maximizes late fees and can intensify the negative impact of a single late payment to the borrower’s credit profile.

Another problem encountered by borrowers was when their loans were transferred to another service provider. These complaints included lost paperwork, processing errors that resulted in late fees and an interruption in billing statements. More than 3,800 complaints about private student loans were received between October 1, 2013 and September 30, 2013. 49 percent of these complaints were with Sallie Mae.

Bankruptcy Law, Credit, Timothy Kingcade Posts, Uncategorized

Student Loan Default in the U.S. and Steps the Govt. is taking to address the Problem

Posted on October 31, 2013by Admin

With student loan debt approaching $1.2 trillion it has become a threat to our children’s futures. Senator Elizabeth Warren, D-Mass., a leading consumer activist and advocate for student loan reform in Congress recently co-sponsored a bill, “Keep Student Loans Affordable Act of 2013.” The new bill would have rolled back interest rates and frozen them for a year at 3.4 percent. During that year, Warren and her colleagues planned to reform the student loan system to eliminate profits, provide better consumer protection and address “the college affordability problem,” which, she says, forces families into debt in the first place.

The bill unfortunately failed, but Warren is continuing to press for the following changes:

– Eliminating government profits from the student loan program.

– Reducing the burden of student debt on existing borrowers by letting them refinance their loans during this period of historically low interest rates.

– Restoring basic consumer protections, such as bankruptcy relief. Under current law, student loans cannot be dismissed when someone files for bankruptcy protection.

President Obama gave his support to Warren’s key issue saying that, “government shouldn’t see student loans as a way to make money; it should be a way to help students.” The urgency from Warren and other advocates is that students and their parents are increasingly turning to loans to pay for higher education, as college costs have become out of reach for most families.

Nationally, about 11 million students take out college loans each year. One reason loan numbers are spiking is that college costs have soared since 1982-83, by 257 percent at four-year state colleges and universities and by 166 percent at four-year private colleges and universities, according to the College Board. At the same time, state support of public colleges and universities has slipped. State funding for public universities dropped by 23 percent between 2007 and 2012, Warren said.

Defaulting on student loans can have a lasting impact on your financial future. The Federal Student Aid website lists the following consequences of defaulting on your student loans: The outstanding amount of the loan-both principal and interest- becomes due immediately; the borrower loses eligibility for any additional student aid or forgiveness program; you are reported to credit bureaus; the overall debt will increase as interest keeps building, which can include late fees, collection fees and court fees. The following consequences can also result: Wages may be garnished; tax refunds may be withheld; pay can be withheld and the lender may even file a lawsuit against you.

The debt that students are taking out to finance their lives and futures is crushing! Student loans are the toughest because they start so early, when students are trying to launch their careers and gain their financial footing. This is also the time young people are the most vulnerable and have the fewest resources available to them.

Bankruptcy Law, Timothy Kingcade Posts

More Repeat Bankruptcy Filers in 2012

Posted on October 28, 2013by Admin

1.1 million Americans filed for bankruptcy this past year, and for many it was not their first time. These filers had a median monthly income of $2,743 and most filed under Chapter 7. An annual report by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) released the following data:

o Approximately 69 percent of consumer bankruptcy petitions filed in 2012 were filed under chapter 7, down from 70 percent in 2011.

o In 30 percent of the chapter 13 cases filed during 2012, debtors reported that they had filed for bankruptcy protection during the previous eight years, 2 percent more than in 2011.

o Consumer debtors seeking bankruptcy protection reported holding total assets in the aggregate amount of $140 billion. Total assets reported fell 18 percent over the comparable 2011 numbers. Aggregated liabilities totaled $218 billion, falling 22 percent over comparable data for 2011.

o Median average monthly income reported by all debtors was $2,743, one percent lower than in 2011. Filers in the Northern District of California had the highest median average monthly income at $3,673.

o Median average monthly expenses for individuals that filed were $2,769. Filers in the U.S. Virgin Islands had the highest median average expenses with $4,715.

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http://news.uscourts.gov/2012-report-shows-more-repeat-bankruptcy-filers

Bankruptcy Law, Credit

BAPCPA Renews Bankruptcy Option for Thousands

Posted on October 25, 2013by Admin

The eight year anniversary date of the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) has restored the opportunity for thousands to file for Chapter 7 bankruptcy. Prompted by fear and uncertainty, hundreds of thousands of Americans impulsively filed for Chapter 7 bankruptcy before BAPCPA went into effect on October 17, 2005.

Many consumers filed for bankruptcy too early for his or her particular situation, accruing debt following their filing date and ending up even deeper in the hole financially. Because BAPCPA restricted an individual’s right to file Chapter 7 bankruptcy to once every eight years, these consumers lost homes and assets because preventative financial tools were not available to them.

Those consumers are now able to get a fresh start, as the eight years has now passed! Here are some points to consider before filing for Chapter 7 bankruptcy:

• Know that the following debts are non-dischargeable in bankruptcy court: Student loans, child support, spousal support and income tax debt.

• If you are considering filing a Chapter 7 bankruptcy, do not attempt to hide money or assets. This can include transferring money to a family member or opening a hidden bank account to hide funds. These actions can greatly affect the outcome of your case and can land you in jail.

• You will not be able to file for Chapter 7 bankruptcy again for another eight years.

At Kingcade & Garcia, P.A. we have been helping people from all walks of life build a better tomorrow! Our attorneys help thousands of people each year take advantage of their rights under bankruptcy protection. We offer FREE consultations and affordable rates. The day you hire our firm, we stop the creditor harassment and put you on the path to financial freedom. You can find useful consumer information by visiting www.miamibankruptcy.com.

Related Resources: http://www.digitaljournal.com/pr/1530118