Bankruptcy Law

You may be surprised to hear who the Bipartisan Student Loan Certainty Act of 2013, officially signed on August 9, by President Obama is actually benefitting. According to a recent story in U.S. News & World Report, the Congressional Budget Office projects the new law will increase government profits on student loans through 2023 by $715 million! The new law offers a moderate amount of help to current students at the expense of future ones and simply does not address the fundamental problem in the student loan system- the enormous profit the federal government is making at the expense of students.

The amount added to subsidized and unsubsidized direct loans for undergraduates is 2.05 percentage points. Unsubsidized direct loans for graduate and professional students have 3.6 percentage points added to the 10-year Treasury note rate and 4.6 percentage points are added to PLUS loans for graduate and professional students. By itself- when interest rates are low- this is not too bad.

Unfortunately, the new law combines this market rate with different – and much higher – interest rate caps. Undergraduates can now pay a maximum interest rate of 8.25 percent – compared with the previous maximums of 6.8 and 3.4 percent for unsubsidized and subsidized direct loans. When interest rates go up, which they likely will in the near future, students will pay much higher rates.

Click here to read more on the new student loan act and who it is actually benefiting.

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.

According to a recent report by Reuters, Detroit’s two public pension funds will file an objection on Monday to the city’s bankruptcy filing on Michigan constitutional grounds. The challenge expected from the pension funds is the first to emerge from among several parties likely to object to the city of Detroit’s claim that it is bankrupt.

For Detroit’s Chapter 9 bankruptcy to proceed, U.S. Bankruptcy Judge Steven Rhodes, who is overseeing the case, must first find the city has proved it is insolvent and negotiated in good faith with its creditors, or that there were too many creditors to make negotiation possible.

In a court filing earlier this month, Detroit released a list of creditors, including current, former and retired workers that filled 3,504 pages. If Detroit is ultimately deemed eligible for municipal bankruptcy, it would be the biggest case in U.S. history.

The city’s two pension boards will claim that Michigan Governor Rick Snyder violated the state’s Constitution when he allowed Detroit’s state-appointed emergency manager,Kevyn Orr, to make the bankruptcy filing. The pension boards will also claim Detroit violated state constitutional language that prohibits the impairment of vested retirement benefits for public workers.

Click here to read more on the latest drama surrounding Detroit’s bankruptcy filing.

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.

A good credit score can help you get approved for a mortgage or a car loan. It also allows you to qualify for the best loan interest rates possible. A ‘good credit score’ is considered to be a 720 or higher. But it’s all too easy to let your credit score slip. Below are seven mistakes that can negatively affect your credit score:

1.) Failing to understand how your credit score is calculated. The three credit reporting bureaus- Equifax, Experian and TransUnion rely on the following five factors: payment history, amount you owe, length of credit, types of credit and new credit inquiries you make.
2.) Pay late. Lenders look for patterns of missed or late payments. Even being one day late on a payment can lower your credit score.
3.) ‘Max out’ your credit card. Lenders consider it a bad sign if your debt-to-credit ratio is too high. You should shoot for a ratio under 30 percent.
4.) Canceling credit cards. This is not always a good thing. Canceling a credit card can raise your debt-to-credit ratio because the available credit you have shrinks when you close the account.
5.) Failing to strike a balance between paper and plastic. Using a credit card properly can convey responsibility when it comes to money management. Deciding to pay cash for most purchases can actually hurt your credit score.
6.) Applying for a credit you do not need. The more credit inquiries you make, the riskier you seem to creditors. Apply only for credit you truly need.
7.) Give up on improving your credit score. If you have a low credit score and are not making efforts to improve it, chances are your score will continue to go down. There are two things that will eventually help improve your credit score: making regular, on-time payments and the passage of time.

Click here to read more on the seven mistakes that can hurt your credit score.

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.

Detroit officials are hopeful that the bankruptcy battle ahead of them will be rewarded with a more efficient and prosperous city. But the fact is, when it comes to U.S. municipal bankruptcy filings there have been few happy endings.

Just 61 local governments have gone through Chapter 9 bankruptcy since 1954 – and while the process is devoted to restructuring debt and provides temporary cash flow relief, it does not help a city enhance its revenue or economic outlook. Furthermore, cities typically lose access to capital markets in the wake of a bankruptcy.

Detroit has a very high level of debt and the bankruptcy will correct some of it; however, experts warn that an economic turnaround is unlikely. Take for example Vallejo, California, with about 116,000 people. It spent more than three years in bankruptcy from 2008 to 2011, weighed down by labor contracts and retirement benefits. The city was allowed to terminate its collective bargaining agreements, but it never renegotiated some $128 million of unfunded pension liabilities.
Both Vallejo and Stockton have seen further increases in crime after seeking protection from creditors. Stockton, with nearly 300,000 people, was granted permission to enter Chapter 9 protection in April and will file a debt-adjustment plan later this year.

The brightest post-bankruptcy story is California’s Orange County. But its 1994 bankruptcy – the largest in history at the time – stemmed from $1.7 billion in bad derivative bets.

Orange County, home to Disneyland and with median household income of more than $75,000, nearly three times Detroit’s, has suffered few lingering effects from its 18 months in Chapter 9.

The impacts of a bankruptcy on a community are often hard to predict, but oftentimes there can be a lot of anxiety in the city’s workforce and there can be a loss of confidence among its residents.

Click here to read more on past city bankruptcy stories.

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.

Bankruptcies can happen to any-sized business at any time. For a small business owner facing the prospect of bankruptcy, knowing your options and contacting a reputable bankruptcy attorney can help make the process pain-free and financial recovery possible.

Chapter 7 bankruptcy is an ideal option for sole proprietorships and small businesses. With a Chapter 7 bankruptcy a trustee will be named to sell all of the assets of the business, including its client list, and all proceeds will go toward paying any outstanding debts. Any unpaid debts after the liquidation sale are forgiven and the business no longer exists.

A reorganization or Chapter 11 bankruptcy is typically used by larger companies that do not want to give up their business, but want time to reorganize it. These types of bankruptcies are typically more expensive than a Chapter 7 and entrepreneurs should be warned that this usually entails their business being operated under increased scrutiny from a court-appointed trustee for a period of time.

A repayment or Chapter 13 bankruptcy, often used by personal consumers, is a type of bankruptcy where the business owner is required to file a repayment plan with the bankruptcy court disclosing how he or she will pay back all debts.

Click here to learn more about the various bankruptcy options available to businesses of all sizes.

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.

The House of Representatives passed a bill last week reducing borrowing costs for millions of students. The legislation links student loan interest rates to the financial markets, offering lower rates for most students now but higher ones for students in the future if the economy improves. The bill, which is now headed to the White House for President Obama’s signature, will lower interest rates for subsidized Stafford loans in the short term. These rates doubled to 6.8% on July 1 because Congress could not come to terms on a deal before the deadline.

Under the bill, undergraduates will be able to borrow at 3.9% for this school year, graduate students at 5.4% and parents at 6.4%. The rates would be locked in for that year’s loan. Rates would rise as the economy picks up and it becomes more expensive for the government to borrow money. The bill establishes a formula for student loan rates based on the interest rate on 10-year Treasury notes, so the rates will fluctuate with the market. Under current law, Congress sets interest rates on subsidized student loans. A deal in the Senate set a cap on interest rates. Interest rates would not top 8.25% for undergraduates. Graduate students would not pay rates higher than 9.5%, and parents’ rates would top out at 10.5%.

Click here to read more on the bill which reduces borrowing costs for students.

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.

According to Moody’s Investor’s Service, Detroit’s filing for bankruptcy protection could change the approach to pensions and other long-term liabilities for other struggling local governments in the U.S. Some of these distressed local governments that are essentially ‘below investment grade’ could find bankruptcy more appealing if Detroit can use its Chapter 9 case to eliminate pension benefits and general obligation debt.

However, on the contrary costly litigation could deter other cash-strapped cities from filing for bankruptcy protection. If Detroit is burdened for years with expensive court proceedings which fail to restructure its liabilities, other distressed cities will be unlikely to follow its approach.

Moody’s reports that there could be a “modest increase” in the number of those towns that choose to use tactics similar to Detroit’s if the Michigan city cuts accrued pension benefits and general obligation debt.

Click here to read more on the far reaching effects of Detroit’s bankruptcy proceedings.

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.

A U.S. bankruptcy judge upset public employee unions and pension funds this week protesting against Detroit’s bankruptcy petition by suspending all legal charges made in Michigan state courts. Steven Rhodes, a U.S. bankruptcy court judge, halted lawsuits filed by retirees, city workers and pension funds opposed to Detroit’s bankruptcy filing. He did the same with suits filed against Detroit’s emergency manager, Michigan’s governor and treasurer to make sure that all battles concerned with the Chapter 9 bankruptcy petition are done only through his courtroom.

Detroit Emergency Manager Spokesman, Bill Nowling said, “This action gives us one venue to settle our disputes and bring it into one court where it should be.”

Click here to read more on the city of Detroit’s historic bankruptcy filing.

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.

An Oregon woman was recently awarded $18.6 million in what people are referring to as a “major consumer victory” against credit reporting giant, Equifax. She contacted Equifax eight times between 2009 and 2011 to get errors removed from her credit report. The incorrect information included a false name and social security number and debts that did not belong to her. She learned about the errors in 2009 when she was turned down for a bank loan she was attempting to get to help her disabled brother.

Her attorney argued these mistakes have cost his client “her reputation, was a breach of privacy and lost her opportunity to seek credit.” In many cases, credit report errors can even cost people employment opportunities.

While consumers are entitled to one free credit report from the Big Three (i.e. – Experian, TransUnion and Equifax) every year, these three are also required to provide copies to consumers after they are denied credit. Equifax failed to do so in this case.

The jury awarded her $18.4 million in punitive damages and $180,000 in compensatory damages. Studies indicate that up to 21% of all credit reports contain some errors.

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.