Bankruptcy Law Archives - Page 20 of 128

A Record 7 Million Americans Are 90 Days Past Due on Their Car Loans

Posted on February 14, 2019by Admin

The struggle to keep current on monthly bills is a real one felt by many Americans. It can be hard to meet all your obligations, from utility bills to car loans. It is estimated that seven million Americans are at least 90 days past due on their car loan payments, according to the Federal Reserve Bank of New York.

What does this mean for the economy? Many economists believe it is an indication that, despite the strong economy and low unemployment rate, many Americans are still struggling to make ends meet. In fact, when the rate of car loan delinquencies is high, this means that Americans in the lower-income classes are significantly struggling financially.

The problem is a car is extremely important to someone who is having a hard time paying bills. That person needs it to get to and from work, and not having a form of transportation can cause that person to lose his or her job, thus continuing the cycle. Losing your car, leading you to lose your job will result in losing other important items, such as a place to live.

The Federal Reserve figures showed that the majority of people who were behind on their car loan bills had lower credit scores and were under the age of 30. What this indicates is that younger consumers are struggling to pay for their car loans on top of other expenses. One of these expenses that older Americans do not have that these younger consumers have are student loans. Perhaps these young consumers are not able to pay both their student loan expenses as well as their car payments?

Reports show that 17.5 million vehicles were sold in 2016 in the U.S. Car sales are not suffering by any means, and for the most part, those consumers purchasing cars have enough credit to be approved for decent loans and are able to repay their loans. However, the category of borrowers who are considered “subprime,” meaning they have credit scores under 620 seem to default more frequently.

One thing financial experts warn American consumers about is to be cautious as to where they get their financing. For the most part, banks and credit unions have smaller default rates as compared to companies that claim to be “auto finance” companies. One way to ensure that you are getting a good loan is to not get your auto financing from the dealership, unless it comes from a bank directly. Get the financing first and then go to the dealership with the financing documents in hand.

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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.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Medical Debt a Factor in Two-Thirds of Bankruptcy Filings

Posted on February 13, 2019by Admin

Coming to the decision to file for bankruptcy is an extremely difficult and personal one to make, but for many Americans, they have no other choice but to file. Why are so many of them at the point where bankruptcy is their only viable option? According to a recent study published in the American Journal of Public Health, medical debt is the leading cause behind many of these bankruptcy filings.

The study was conducted by two medical professionals, two attorneys and a sociologist from the Consumer Bankruptcy Project. The data reported showed that two-thirds of filers cited medical debt as the reason for their filing. They surveyed 910 Americans who filed for bankruptcy between the years 2013 and 2016. Of those surveyed, 58.5 percent reported that medical expenses either “very much” or “somewhat” contributed to their bankruptcy case. Additionally, 44.3 percent of those surveyed cited a serious illness that resulted in work loss as a contributing factor. Two-thirds of those surveyed said that medical reasons were one of the factors that led to them filing for bankruptcy.

It is estimated that approximately 530,000 medical bankruptcies are filed annually. Even after the passage of the Affordable Care Act (ACA), medical bankruptcies are still a common occurrence. High medical costs can lead to the person falling into financial difficulties, but so can losing time at work or even losing a job because of an illness or injury.

The study concluded that, even with the ACA, those who are considered “chronically poor,” tended to be the group that was most affected by the ACA coverage expansion. This group tends to also not have access to credit or assets to utilize to handle unexpected medical expenses. Many of these filers are already strapped financially and unable to make ends meet. Of those surveyed, 45 percent of them said they filed for bankruptcy due to foreclosure or the inability to pay their mortgages; 44.4 percent stated they were living beyond their means; and 24.4 percent of them were struggling after a divorce or separation.

According to Dr. David U. Himmelstein, distinguished professor at Hunter College and the founder of Physicians for a National Health Program, the lack of sufficient healthcare coverage is a leading cause these filings. Lack of savings is also a contributing factor. All it takes is for one major, unexpected medical crisis for a person to fall into a desperate financial situation where he or she cannot pay medical bills, and struggle to afford basic living expenses.

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, pension, 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.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

40 Percent of Palm Beach and Broward County Residents Are Struggling to Meet Basic Needs

Posted on February 12, 2019by Admin

A number of residents in the Palm Beach and Broward counties are struggling to make ends meet, according to a recent report published by The United Way. It is estimated that around 40 percent of residents living in some of the area’s oldest neighborhoods are barely able to meet their most basic expenses.

This report comes from a study produced by the United Way called the ALICE report. ALICE stands for “Asset Limited, Income Constrained, Employed.” It is a formula that takes federal, state and local income and expenses data and adds the percentage of households that are said to below the federal poverty guidelines. The result of this formula is the ALICE category, which includes households of working families who produce income but still do not have enough money coming in to meet their basic needs or save for the future. The ALICE rate is the number of families who fall into this category.

The ALICE report showed that six states, including Florida, New Jersey, California, Michigan, Connecticut and Indiana, struggle the most. In these states, up to half of the households surveyed are struggling so much that they have to make difficult decisions such as whether they pay their utility bills or buy groceries for the week.

Florida reports an ALICE rate of 45 percent. Specifically, in Palm Beach County, the ALICE rate is 41 percent while it is 47 percent in Broward County. It is reported that of the 64,229 households in Palm Beach county, 12 percent of them are below the poverty guidelines while 29 percent of them are employed but still not able to meet their most basic needs. In Broward county, of the 90,321 households reported, 14 percent of them are in poverty with 33 percent working but struggling to meet daily expenses.

What is considered to be poverty? It depends on the area of the country and the specific living expenses in each area. For example, in Palm Beach, a family of four needs to bring in $52,379 in income annually. In this area, the study reports that an average family of four spends $1,138 on housing costs, $1,146 on child care expenses, $655 in transportation costs, and $531 on food and groceries. These expenses are similar for the same sized family in Broward county, requiring them to earn an annual income of $52,712 to meet their basic daily living expenses.

However, the problem is most families in these areas do not bring in much more than this income. In many communities within both of these counties, households struggle even more. One area includes South Bay, which has an ALICE rate of 70 percent. Belle Glade has an ALICE rate of 68 percent and Rivera Beach comes in with a rate of 55 percent.

Even more concerning were the reports that in half of Broward county’s 32 communities, residents were not able to pay for necessary living expenses. Of all of these communities, the one that struggles the most is the Pembroke Park area, which reported at a 72 percent ALICE rate. Following Pembroke Park were Deerfield Beach, Lauderdale Lakes, Lauderhill, North Lauderdale and Pompano Beach.

The older neighborhoods with smaller homes and older appliances in the homes tend to be the areas that struggle the most. Many of these individuals are just on the edge of what the poverty guidelines dictate, which means they are just above the level of where they would be able to receive government assistance for expenses, which makes their situation that much more difficult.

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Two New Ways to Raise Your Credit Score

Posted on February 11, 2019by Admin

Credit scores play a major role in your ability to do many different things in life, ranging from getting a mortgage or car loan to being approved for renting an apartment. A good credit score can also secure a lower interest rate when you do receive financing for a large purchase. It pays to have a good credit score and rebuilding a damaged credit score can take time.

There are two new ways to boost your credit score. These new programs include the UltraFICO from Fair Issac, the creator of the FICO Score, and Experian Boost. These two new programs can potentially help you increase your score, especially if you have a limited credit history or have a lower credit score.

UltraFICO

The first of these scores, the UltraFICO was launched in January 2019 and is planned on being available to most lenders in the U.S. by mid-2019. The program is part of a joint venture with FICO, Experian and Finicity. UltraFICO allows FICO to look at a consumer’s bank and financial accounts to show lenders that you do have savings and the money available to make loan or credit payments if approved for financing.

FICO anticipates that this program will benefit approximately seven out of ten consumers whose financial accounts can show a history of good savings and financial behavior. Even consumers who do not have a FICO score currently could still be eligible to receive an UltraFICO score.

This score could be more beneficial to someone who has a rather large bank balance but a limited credit history. So long as the consumer can show he or she can save money responsibly, the fact that he or she has not applied for credit much in the past will not hurt them with the UltraFICO score.

One point to keep in mind is UltraFICO is only available for loans or credit cards that are applied for with a lender who uses Experian. If the lender uses Equifax or TransUnion, the borrower will not be able to take advantage of this opportunity. Before applying for the loan or credit, as the company which credit bureau they use to review new applicants. If the company says they do not use Experian, it may be advisable to use another institution if you believe the UltraFICO score will help you.

Experian Boost

Another program is set to be released in the early months of 2019, known as Experian Boost. The Experian Boost program is different from UltraFICO in that it allows lenders to review the borrower’s financial history through their bank accounts, specifically related to utility bill payments. The key is not to see that a consumer has a sizeable savings but rather a demonstrated, good history of paying his or her utility payments in a timely manner over a set span of time. Also, unlike the UltraFICO score, the data found through this review is added automatically and directly to your Experian credit report. The borrower must opt in to allow his or her utility information to be visible in the Experian credit report, and if the results are positive, they will be posted immediately to the borrower’s Experian score. Borrowers are allowed to sign up for early access to the program.

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The Top Ways to Avoid a Financial Crisis, according to a Bankruptcy Judge

Posted on February 7, 2019by Admin

No one wants to think about what he or she would do if faced with a major financial crisis. However, what if the unthinkable happens, and you find yourself facing a financial situation you never thought you would encounter? Some bankruptcies are precipitated by events that are beyond a person’s control – for example, a major health crisis, a job loss or divorce. But a number of causes are entirely within a person’s power to stop. After 12 years serving as a bankruptcy judge, the Hon. Margaret Cangilos-Ruiz, the chief judge for New York’s Northern District Bankruptcy Court says she has seen it all. In a recent interview with MarketWatch, she shared her insight on how people can avoid bankruptcy and setting foot in her courtroom.

Monitor Your Credit Cards

It can be very easy to rely on credit cards to make all of your daily purchases. However, when that bill comes in the mail, and you see just how much these small purchases add up to, the outstanding balance can be more than you predicted. It can also be tempting to only pay the minimum balance listed on the statement, promising yourself that you will be catch up on the payments eventually. A good rule of thumb is to never carry a credit card balance from month to month. If at all possible, it is best to pay the balance in full, but if this cannot happen, put together a plan to pay off the balance completely over time.

Not only should you not carry a large balance for too long on your credit cards, it also helps to pay them on time. As soon as you miss one or two payments, your card’s interest rates will skyrocket, making it even more difficult to pay down the balance. As soon as you receive the bill, make sure you do not put it aside and forget to pay it. You will be saving yourself hundreds of dollars in fees and penalties for the long run.

Monitor Your Credit Score / Report

It also helps to keep an eye on your credit score. A good credit score will make it easier for you to take out a loan in the future for big purchases, such as a home or a car. Also, you never know when you will hit a rough patch down the road and will need to take out a loan to help finance medical bills or pay off an unexpected expense. By periodically checking your credit report, you can keep track of your score and also make sure that no incorrect accounts or mistakes are on your credit report. It is best to discover these issues ahead of time and fix them before they become a bigger problem.

Practice Responsible Spending Habits

Paying off your credit card and creating a budget is one thing, but these cannot be possible without controlling your spending. One of the biggest ways to do this is to limit how much you spend on “non-necessary” items and differentiating between something you want and something you need. If there is a large item that you want, save up for that item and only purchase it when you have enough money to pay for that item. Keep an eye on the small purchases you make on a daily basis, as those do add up. Many consumers find success in allowing themselves to use a certain amount of cash every month on non-necessary expenses. Once the cash is gone, they are not able to purchase anything more of their “wanted” items. Resist the urge to rely on credit cards to pay for a cup of coffee or a new shirt after you go through your cash allowance for the month.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Medical Debt Still the Leading Cause of Bankruptcy for Many Floridians

Posted on February 5, 2019by Admin

Medical debt is a major issue that burdens many Floridians. In fact, it is one of the top reasons that Americans in general struggle with debt they can never quite seem to conquer. For many of these individuals, bankruptcy is the only way out. However, the process of getting to that decision can be stressful.

As healthcare costs rise, many people are struggling to pay for their regular medical expenses incurred every year. Add one major medical crisis on top of those regular bills, and the expenses can get out of control quickly. With the repeal of Obamacare and the fact that individuals are no longer required to carry health insurance, the number of individuals filing for bankruptcy due to medical debt is expected to increase.

According to the Kaiser Family Foundation, it is estimated that 25 percent of all U.S. adults struggle to keep up with their medical bills. If your medical costs are getting out of hand and you find that you are not able to keep up with payments, what are your options? You should never simply ignore the bills and calls from collectors, hoping they will go away.

One option is to work with the medical provider on a possible payment plan to pay the debt off over time. Many providers are more than willing to work with someone so long as the individual contacts the company sooner rather than later. As soon as the account goes into default and a collection case is filed, it may be too little too late to work with them.

The problem is many of these individuals are not able to even communicate with the provider quickly because of their medical conditions which led to the debt to begin with. Many of them are already struggling in terms of health, which can make keeping up with financial matters extremely difficult.

If someone has an otherwise stellar credit score but suddenly falls ill and faces thousands of dollars in medical bills, it can be a major hit to the ego to decide that the situation calls for filing for bankruptcy. However, it often is the best decision to make. If the debt will likely be discharged in a bankruptcy case, it can be fruitless for someone to struggle paying the bills and delay the inevitable filing. While bankruptcy can put a mark on your credit, it can easily be fixed through positive financial habits and proper budgeting. The fear of what filing will do to your credit report should not keep you in a stressful financial situation, especially if you are already overwhelmed with a medical situation. A bankruptcy attorney can evaluate your situation and advise you on the best way to proceed, whether it be working directly with the medical provider or filing for bankruptcy.

How is Medical Debt Handled in Bankruptcy?

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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.

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Miami Bankruptcy Attorney Timothy S. Kingcade Receives the Prestigious AVVO Clients’ Choice Award 2019

Posted on February 4, 2019by Admin

Managing Shareholder, Timothy S. Kingcade of the Miami-based bankruptcy law firm of Kingcade Garcia McMaken has received the 2019 AVVO Clients’ Choice Award. In order to obtain this honor, an attorney must have received five or more exceptional client reviews for the same year.

One of attorney Kingcade’s clients had this to say on AVVO: “Going to Kingcade Garcia McMaken and enlisting the bankruptcy services of Mr. Timothy Kingcade was the best thing that happened to us. They are very professional and helped us to go thru all the process. Our 3 credit scores after 6 months are unbelievable over 700!!! Thank you, Mr. Kingcade and everyone who helped us in your office.”

Click here to read all of Miami Bankruptcy Attorney Timothy Kingcade’s client reviews on AVVO. Timothy has also earned a “Superb” 10.0 AVVO rating in the area of bankruptcy law, the highest rating an attorney can receive. The rating is calculated using a mathematical model, which takes into consideration the years an attorney has practiced law, their professional achievements, discipline history and industry recognitions. The rating is completely objective and unbiased. Attorneys cannot pay or petition the site to have their rating changed, which makes AVVO one of the most respected lawyer rating services in the country and an invaluable legal resource for consumers.

Attorney Timothy S. Kingcade is dedicated to helping people from all walks of life take advantage of their rights under bankruptcy protection to restart, rebuild and recover. Timothy is a certified public accountant (CPA), which allows him to better understand tax-motivated bankruptcy cases against the IRS. Timothy’s vast experience and expertise in the area of bankruptcy law allow him to know what bankruptcy trustees in the Southern District of Florida are looking for, preventing his clients from some of the pitfalls that can lead to the dismissal of a bankruptcy claim.

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Miami-based Kingcade Garcia McMaken, P.A. was established by managing partner and bankruptcy attorney, Timothy S. Kingcade in 1996. The firm represents clients throughout the State of Florida in Chapter 7 bankruptcy and foreclosure defense cases. The firm is committed to providing personalized service to each and every client, clearly explaining the options according to the unique circumstances of his or her life. The office environment and the service provided are centered on a culture of superior client care for the financially disenfranchised. All partners and associates at Kingcade Garcia McMaken P.A. specialize in consumer bankruptcy and foreclosure and have dedicated their practices to this area of the law. Additionally, all attorneys and staff members at the firm are bilingual speaking Spanish.

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Understanding the Risks Associated with Debt Settlement

Posted on February 1, 2019by Admin

Carrying large amounts of debt can be debilitating. It can affect every aspect of a person’s life, to the point where you would do just about anything to find a way out. So, if someone approaches you with an offer to reduce or eliminate your debt for less than the full amount you owe, it can seem too good to be true, right? The problem is, with debt settlement, it usually is. It is important to understand the risks associated with debt settlement.

The Process Is Not Quick.

One thing many debtors do not fully realize is the process of debt settlement is not actually quick. In fact, it can take anywhere from months to years to be completed. The first step is to accumulate enough money to offer a settlement to creditors. You first must enroll in a settlement program with a debt settlement company. The company opens a type of savings account to gather funds that you pay them monthly to use towards settlement offers. The debt settlement company will normally instruct you to pay them instead of your creditors. After you have reached the threshold determined by the company to begin making payments for creditors, the debt settlement company will negotiate with your creditors and collectors, if accounts have gone into collections, on a settlement. The company will use the money in your “savings” account to make these payments. This process can take anywhere from 12 to 48 months, depending on how much you owe and the monthly payments you are able to make.

Your Credit Score Will Take a Hit.

One major problem a with debt settlement program is the hit it will make to your credit score. For one, if your debt is successfully settled, your account status will read as “settled in full” instead of “paid in full,” which is less favorable on a credit report. Additionally, if a debt is settled, this mark will stay on your credit report for seven years from the date of final discharge or settlement of the debt. However, even more significant than this issue is what happens when you suddenly stop paying your debts. You take the risk that your creditors will put your accounts into past-due status or even turn them over to collections if you do not pay on them for more than 30 days. You assume that these debts will eventually be settled and cleared, but the damage that is done to your credit report in that time period can be quite significant.

Settlement Fees Are High.

Debt settlement companies do not perform this work out of the goodness of their hearts. After all, they are ‘for profit’ businesses, so they are performing this service with the intent of making money. Most of these companies charge a settlement fee that is either based on a percentage of the total debt settled or a flat fee taken at the end. According to a Federal Trade Commission (FTC) rule enacted in 2010, no debt settlement company can require a fee be charged upfront before settling or reducing a person’s credit card or other unsecured debt. They must be taken at the end. The fees can be high, however, so that can be a negative aspect to proceeding with debt settlement.

Do Creditors Have a Motivation to Settle?

Another problem with debt settlement is the fact that creditors have little motivation to settle the debt. They are under no obligation to work with the debt settlement company, and the debt settlement company cannot guarantee that their negotiations will be successful. In fact, if a company tells you that they guarantee they will be able to reduce or settle your debts, this statement should raise a red flag that the company may not be legitimate.

You can also negotiate with creditors on your own. You do not need to rely on the assistance of a third-party company to negotiate a lower payment on your debts or a lump sum reduction in what is owed. You will save yourself the fees that come along with working with a debt settlement company and can just as easily accomplish what you are trying to accomplish when retaining a debt settlement agency.

Debt Settlement or Bankruptcy?

Many times, debt settlement is simply avoiding the inevitable. You can spend years working with a debt settlement company to pay down a debt that would otherwise be liquidated in a bankruptcy case. If you are struggling to pay mostly unsecured debt, which includes personal loans, credit cards, and medical debt, this debt is what is normally discharged in a Chapter 7 or Chapter 13 bankruptcy case. With a bankruptcy filing, you get the benefit of an automatic stay, which essentially puts all collection matters on hold until the bankruptcy case is completed. If you choose to proceed with debt settlement first, you do not get this protection, and many of your accounts that would otherwise be liquidated in bankruptcy will go into collections or even be brought to a judgment, resulting in a wage garnishment against you. The result is you will take a significant hit to your credit score and pay monthly payments to a debt settlement company to negotiate on a debt that you would otherwise be able to discharge in a bankruptcy case. It may be more practical to proceed with the bankruptcy instead of other options, especially if the majority of your debt is unsecured. An experienced bankruptcy attorney can review your situation and discuss possible options that are available for handling the debt and eliminating it.

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What Happens When You Stop Paying Your Credit Cards?

Posted on January 31, 2019by Admin

Missing credit card payments can come with some serious financial consequences. How a credit card delinquency is handled depends on how long the bill has gone unpaid. A credit card payment is considered “late” if it has been unpaid for at least 30 days after the due-date. However, credit reports list delinquencies in different ranges as to how late the payment may be, and includes the following categories:

30 to 59 days late;
60 to 89 days late;
90 to 119 days late;
120 to 149 days late;
150 to 179 days late;
Over 180 days late.

Your credit report will not show a missed credit card payment so long as it has been made no later than 29 days past the due date. After 30 days has passed, the credit card company will likely charge a late fee and potentially increase the interest rate on the card. This fee and interest rate hike will be reflected in the next month’s bill.

However, if a genuine mistake was made or a valid reason exists for why the payment was missed, you should contact your credit card company immediately to see if they will waive the fee as a courtesy. If you have been a good customer up until this point and have a good payment record, most credit card companies will understand and be willing to work with you.

Whether they waive the fee is one issue, but the credit card company will likely report the fact that you missed the payment to the three major credit reporting agencies, Equifax, Experian and TransUnion. Your credit score will likely drop once this report has been made. If you have an otherwise stellar credit score, you can see the hit more noticeably as opposed to someone who has a lower credit score. This single missed payment can remain on your report for up to seven years, but if you are able to continue making your payments on time after this mistake, your score will rebound, and creditors will see that you are not a future risk.

If you are 60 days late in making your payment, the financial consequences will be more severe. You will incur late fees and a likely a higher interest rate, even more than the one you received when 30 days late. The credit card company may also bump the interest rate to a penalty APR, which can be expensive and can get as high as 29.99 percent. It is likely that this penalty APR will stay with you for up to six months before the card holder decides to lower the interest rate. The higher the interest rate, the longer it will take for you to pay down your credit card debt completely. You may find that the high interest rate is all you are paying with monthly payments and that you are not making any dent in the principal.

Payments that are 60 days late can hurt your credit, but just like with payments that are 30 days late, you can eventually bounce back from this slip so long as you demonstrate smart financial behavior.

However, as soon as your payments are past 90 days late, the credit card company will likely turn the account over to a collection agency. Many will wait until the payments are more than 180 days past-due before turning the account over to a collection agency and will simply try to collect on the debt themselves first. As soon as you are past 90 days, you will either be notified that the card company has sent the account to an in-house collection department of outside collection agency. After 90 days, not only will fees and penalties increase, but the cardholder may also lower your card’s credit spending limit.

If the account is more than 120, 150 or even 180 days late, this means you have missed at least four payments. You will see many of the same consequences that come along with being 90 days past-due, but the consequences are understandably harsher. Debt collections calls will increase significantly. If, at this point, the account was not previously sent to collections, the debt will likely be sold to a third-party collection agency. This step of selling the debt to a third-party collector is known as a “charge-off,” which basically means the credit card company has written the debt off as a financial loss on their books. It does not mean the debt is forgiven or gone, but it means a new company that has the right to collect on the debt owns the account. If your debt has been charged-off, this will reflect very negatively on your credit report.

You can work with the debt collectors on settling the account, potentially paying for a less than full balance, or you may consider consulting with a bankruptcy attorney. It is important that you act quickly, however, in the event the debt collector files a collection action and obtains a judgment against you on the debt and a wage garnishment. So long as the debt is within the Florida statute of limitations for collections, which is five years, the debt collector is within its rights to file a legal action against you to pursue collection on the debt. However, if a bankruptcy case is filed before a judgment is issued, the automatic stay will put an immediate halt to the collection matter to allow for the bankruptcy process to occur. Since credit cards are unsecured debts, bankruptcy is often the best option for an individual struggling with insurmountable credit card debt.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt. We offer additional tips for eliminating credit card debt on our blog.

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

Do you have enough debt to file for bankruptcy?

Posted on January 30, 2019by Admin

One of the common misconceptions surrounding bankruptcy has to do with how much debt you must have to qualify for bankruptcy. Bankruptcy laws do not have a set minimum debt requirement for someone to be able to file for bankruptcy. Ultimately, it depends largely on the person’s financial circumstances, including the type of debt he or she has, as well as the person’s ability to pay back the debt, along with other factors.

When it comes to debt levels, how much debt you have is only one consideration made when determining whether you should proceed with a bankruptcy filing. Unlike a Chapter 7 bankruptcy case, a Chapter 13 bankruptcy does have a maximum debt amount for debtors considering this form of bankruptcy. Currently, you cannot hold more than $1,184,200 in secured debt or $394,725 in unsecured debt when filing a Chapter 13 bankruptcy case. These numbers do fluctuate depending on inflation and can change from year-to-year.

Filers are limited in how many times they can receive a bankruptcy discharge within a set amount of time. For example, if you filed for Chapter 7 bankruptcy and received a discharge, you must wait eight years before being able to file for Chapter 7 again. Therefore, if you do not have a significant amount of debt, you may want to consider whether you will anticipate needing to file in the future. Is it worth it to file for bankruptcy now on a smaller amount of debt and be barred from filing again, if needed? A bankruptcy attorney can talk through these options with you to help you make the best choice.

Bankruptcy looks at the different types of debts you carry and whether these debts can be discharged. Certain debts are considered non-dischargeable, including priority tax debts, student loans in most cases, child support, spousal support, and any obligations arising from a personal injury case caused by wrong actions, which can include drunk driving. For instance, if most of your debt is in student loans, a bankruptcy may not be your best option, while a person who carries mostly credit card and medical debt will find bankruptcy beneficial.

If you are filing for Chapter 7 bankruptcy in Florida, you can use Florida bankruptcy exemptions to protect your property. In addition, residents are provided unlimited exemptions for homestead, annuities, and the cash surrender value of a life insurance policy. Florida has one of the most generous homestead exemptions in the country.

Even if you do not have a large amount of debt, if you are being sued or the matter is being referred to collections, it may be best to file for bankruptcy now instead of later. As soon as you file for bankruptcy, an automatic stay will be issued, putting a stop to all collection actions. If you wait too long, and a judgment is issued on the debt, resulting in wage garnishment, it may be too little too late. It is for this reason that it is important you meet with an experienced bankruptcy attorney to talk about your financial situation and whether bankruptcy is right for you.