Bankruptcy Law

The Consumer Financial Protection Bureau (CFPB) issued a report in December, asking for stronger protections for military families. Earlier this year, NBC News reported that military families are “especially vulnerable.”

Predatory lending practices affect a large number of Americans, and currently in the U.S. house there’s an important debate about just how far these protections will go. According to The Huffington Post, Congress passed legislation in 2006 that set a 36 percent cap on interest rates for auto title loans, tax refund loans, and payday loans for military families.

In response, Lenders aptly adjusted the loan terms to avoid these limits. These terms applied to payday loans that were for 91 days or less, and the amount of $2,000 or less. For payday loans exceeding 92 days or $2,001, credit companies were still able to avoid the new rules. Larger banks skirted around the issue by creatively issuing “deposit advance products,” which operated very much like payday loans, but annual interest rates of 300%. In 2012, Congress passed another law to close these loopholes. As of September 2014, these new rules have been finalized.

Unfortunately, the problem was not completely solved because a provision was added to the military spending bill to delay the adding of any new protections for another year. Josh Earnest, White House Press Secretary termed the proposal as “shameful” and Iraq War veteran, Rep. Tammy Duckworth (D-Ill.), has led the opposition against the Republican measure.

According to the Military Times, the delay was successfully stopped by Democrats. A narrow vote among House lawmakers removed the contentious language delaying the new rules, a great relief to advocates who viewed the clause as an attempt to take away military family financial protections.

Members of the House Armed Services Committee voted 32 to 30 to strip provisions from the legislation that would have setback Defense Department plans for expanding the 2006 Military Lending Act.

Those opposing of the clause accused supporters of providing predatory lenders with more chances to oppress troops. They also feel these rules are long overdue. Banks will be displeased but Democrats, consumer advocates, and other military advocacy groups see the vote as positive news.

“Service members who are drowning in debt are a burden to the military. They are costly to manage because they need special attention. Beyond that, thousands of service men and women have already been barred from duty abroad because the debt they carried made them security risks. In other words, blocking better debt protections is a terrible idea,” said journalist and author, Brent Staples.

For now, the current crisis has been averted.

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 website at www.miamibankruptcy.com.

Source: http://www.msnbc.com/rachel-maddow-show/house-targets-predatory-lending-protections-us-troops

A federal judge’s ruling this week will finally allow homeowners who were denied mortgage assistance from Wells Fargo to soon get the help they needed years ago. The bank’s denial of modifications to homeowners was considered a breach of the 2010 Mortgage Settlement, involving adjustable-payment mortgages.

According to Reuters, the dispute over the 2010 deal has been long-running and this breach was only the most recent development, regarding the “pick-a-payment” loans Wells Fargo inherited when they acquired Wachovia. Initially, borrowers had the choice of paying a lesser amount than the interest due on their mortgage, but payment escalation caused mortgages to grow. This contributed to the foreclosure crisis of the late 2000s.

For homeowners who had taken out the pick-a-payment loans, Wells Fargo did not grant loan modifications. Plaintiffs in the case argued that Wells Fargo had not complied with the 2010 agreement. Reuters also reported lawyers contended that thousands of borrowers were denied mortgage assistance because Wells Fargo failed to use proper methods to determine if homeowners were at imminent risk of default, effectively qualifying them for assistance.

The judge found Wells Fargo’s breach to have been done using “evolving and perhaps ill-defined standards” when deciding assistance needs. The judge’s ruling ordered Wells Fargo to find a way to correct the violations and also make preparations to allow some homeowners the chance to reapply for assistance. In two weeks time, both Wells Fargo and the plaintiffs are required to provide the court with proposals for correcting the breach.

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 website at www.miamibankruptcy.com.

Source: http://consumerist.com/2015/04/17/wells-fargo-breached-2010-mortgage-settlement-must-work-to-provide-homeowner-assistance/

Researchers have found that congressional changes to the U.S. bankruptcy law has kept financially struggling people out of bankruptcy court, but not from going bankrupt. Because of a new study,  written by economists Jaromir Nosal of Columbia University and Stefania Albanesi of the New York Fed, the Federal Reserve Bank of New York has shed some light on why some individuals are simply too poor to file for bankruptcy.

In 2005, lawmakers made changes to the law and the cost for filing for bankruptcy became more expensive. According to the study, The Bankruptcy Abuse Prevention and Consumer Protection Act from 2005 may have eliminated the chance to start over for many who needed it.

The report clearly reveals that a “sizable group of individuals exists that does not file for bankruptcy, but seems unable to pay off their debts.” Researchers said, “These individuals are concentrated at the bottom of the income distribution, and therefore they are the ones who would be expected to benefit most from the relief offered by personal bankruptcy.” Individuals with financial troubles are less likely to have much access to new lines of credit and they also tend to have lower credit scores than those who file for bankruptcy, the study showed.

Professor Lois R. Lupica from the University of Maine’s law school conducted an earlier study and found that the cost of a Chapter 7 filing grew from $600 to $2,500. According to the numbers from the study, more paperwork, mandatory credit counseling classes and attorney fees made up most of the cost. The average rose from $663 to $986.

In an interview with The Wall Street Journal on Tuesday, Prof. Lupica agreed that the study reveals that the increase in cost has stopped people from filing. Approximately 601,000 people and couples filed Chapter 7 in 2014, far less than the 1.1 million filings recorded in 2010 from the recession-era peak, according to the U.S. Administrative Office of the U.S. Courts.

Consumer advocates who opposed financial industry lobbyists, voiced that the bankruptcy process was being abused by people who filed for Chapter 7 protection to cancel their debt, when they were able to still repay a portion of the debt over time. After an 8 year battle to reform the U.S. consumer bankruptcy laws, former President George W. Bush signed the law on April 20, 2005.

The New York Fed study stated that they are the first to focus on the individuals “who no longer file for bankruptcy post-reform.” Researchers used Consumer Credit Panel/Equifax Data from 1999 to 2013 to study and track anonymous individuals, in order to draw their conclusions. Unlike the Consumer Bankruptcy Project which houses volumes of data on people who did file for bankruptcy, this study includes those who did not file, which the academic community may find to be particularly useful.

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.

Source: http://blogs.wsj.com/economics/2015/04/14/too-poor-to-file-for-bankruptcy/

The amount of money owed to financial institutions is considered household debt. This can include various forms of consumer debt such as student loans, auto loans and credit card debt, as well as mortgage loans. According to the latest household debt report, released by Federal Reserve Bank of New York, balances from mortgages have increased in the fourth quarter of 2014.

The Federal Reserve Bank of New York’s report clearly shows the growing trend in borrowing and indebtedness. Also according to the report, outstanding household debt increased by $117 billion, from the third quarter of 2014. This one percent increase has placed total household indebtedness at a staggering $11.83 trillion as of Dec. 31, 2014.

Compared to the fourth quarter of 2013, total debt has gone up $326 billion. The Federal Reserve Bank of New York’s report has been based on data collected from New York Fed’s Consumer Credit Panel, with a nationally representative sample drawn from anonymized Equifax credit data.  Mortgage debt appeared to have the highest increase by $39 billion, while student loans followed closely behind with an increase by $31 billion.

Additionally, we saw an increase in auto loan debt by $21 billion and credit card debt by $20 billion. Outstanding student loan debt reached $1.16 trillion. Overall, delinquency rates for 2014’s fourth quarter remained unchanged at 4.3 percent. However, auto loans and student loan rates grew worse.

Donghoon Lee, research officer at the Federal Reserve Bank of New York stated, “Although we’ve seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student loan balances and delinquencies is concerning. Student loan delinquencies and repayment problems appear to be reducing borrowers’ ability to form their own households.”

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.

Source: http://www.acainternational.org/creditors-household-debt-continues-upward-climb-35086.aspx

Bankruptcy officials in South Florida discovered a couple was hiding assets from the courts while filing for Chapter 7 bankruptcy protection. When bankruptcy trustees paid a surprise visit to the couple’s home, they discovered a Presidential Rolex watch suddenly disappeared from the wife’s wrist. The discovery led to investigators uncovering $120,000 worth of hidden assets in the form of jewelry and artwork, all of which the couple claimed to have pawned.

The judge decided to reject the couple’s request to discharge their debts totaling $2.9 million as a result of the lies and concealing assets. Seven years after their failed attempt at filing for bankruptcy protection, the couple was charged with one count of bankruptcy fraud and sentenced to one year and one day in federal prison.

The couple still owes all of the original debts plus an additional $27,295 in restitution owed for the trustee’s services. The couple’s behavior caused them to lose their homes and their personal belongings, including family heirlooms, jewelry and clothing, much of which was auctioned off at “fire sale prices.”

This case comes as a warning to anyone considering hiding assets when filing for bankruptcy.  This can include: lying about owning assets, transferring assets into someone else’s name or creating fake liens or mortgages to make assets look as if they have no value. When you file for bankruptcy, you must disclose everything you own and all your debts, in exchange for having your debts “discharged.”  If you do not fully disclose your assets, you will not be granted a discharge.  However, this is just one of the consequences you will face.  You will also be subject to criminal penalties and will not be able to discharge those debts in subsequent bankruptcies.

Click here to read more on this story.

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 recent statistic from the National Bureau of Economic Research (NBER) revealed that 15.7 percent of NFL players have filed for bankruptcy 12 years after retirement.  For many of us it’s hard to believe how professional athletes, who earn so much money, could end up bankrupt.

The report entitled, “Bankruptcy Rates Among NFL Players with Short-Lived Income Spikes,” focused on the traditional model of “consumption smoothing.” An athlete’s income peaks almost immediately after school while they are still very young, the exact opposite of most Americans.  They retire young and in the vast majority of cases, never earn at the same levels.  Because of this model, it is difficult for them to save.  They are often taken advantage of financially and ill-equipped to manage the amounts of money they are earning at the time.

The data finds that bankruptcy filings begin “very soon after retirement” (but just 1.9% of retirees have filed after two years) and “continue at a substantial rate through at least the first 12 years of retirement.”   Surprisingly, the bankruptcy rates were not affected by a player’s career length.  Meaning: playing for longer did not make it any less likely a player would go bankrupt.

The report includes data on all players drafted to the NFL from 1996 to 2003.

Click here to read more on retired NFL players going bankrupt.

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 filings for the end of March 2015 were down 12 percent from the previous year, according to the Administrative Office of the U.S. Courts. Total bankruptcy filings as of March 31, 2015 from the past twelve months totaled 911,086 compared to the previous 12-month period, which totaled 1,038,280.

Of the 911,086 filings between March 2014 and March 2015, 884,956 were non-business bankruptcy filings. More than 300,000 of those were Chapter 13 proceedings, 26,130 were Chapter 7 proceedings, 7,053 were Chapter 11 and only 354 were Chapter 12.

Click here to read more on the decrease in bankruptcy filings.

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.

If you are experiencing extreme financial hardship, filing for bankruptcy can be one of the best decisions you make. Below are seven signs you should move forward with filing for bankruptcy.

1. Putting everyday necessities on credit cards. If you are racking up credit cards with everyday necessities, like groceries and gas, it may be time to move forward with your bankruptcy filing. Oftentimes we see clients spending nearly their entire paycheck on debt repayment. This becomes a vicious cycle. You continue to accrue interest and finance charges on these cards, and eventually you will owe more than you can ever afford to pay off.
2. Paying credit cards with credit cards. Another sign bankruptcy protection might be the answer for you is if you are making one credit card payment with another credit card. If you are regularly taking out cash advances to pay another cash advance loan, you are only postponing your debt repayment, not lessening it.
3. Interest rates rising. If your lenders are increasing your interest rates due to missed payments, you may want to consider filing for bankruptcy. If you start missing payments, lenders, particularly credit card companies will raise your interest rate by as much as 30%! If your interest rate is that high, you are only paying interest each month and not the balance.
4. Working multiple jobs. If you are working two or three jobs and still struggling financially, bankruptcy may be your best option. Oftentimes, an extra income is enough to reduce your debt. If you are still lagging behind on your bills while working multiple jobs, you may need to consider more drastic options.
5. Being sued / facing wage garnishment. If your lenders are pursuing a court order to garnish your wages, you should consider filing for bankruptcy protection. If the lenders are successful, they will make an arrangement with your bank or your employer to take money directly from your paycheck. If this happens, it can lead to more financial problems.
6. Debt affecting your work and personal life. If your financial stress is affecting your work and personal life, you may want to consider filing for bankruptcy. Your financial problems will become much worse if your performance suffers and you are fired. Filing for bankruptcy will give you a fresh start with your finances and eliminate the financial stress and pressure you have been under.
7. Dipping into retirement accounts. If you are considering taking money from your retirement account to pay your current debt, bankruptcy is a better option. Keep in mind, most retirement accounts are protected in bankruptcy, therefore you should avoid pulling out any money before you file.

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.

Related Resources:

http://www.moneycrashers.com/when-reasons-why-file-bankruptcy/

New York Attorney General Eric Schneiderman has reached an agreement with the three major credit bureaus that will help eliminate stress for consumers burdened by medical debt. The new policy will wait 180 days before adding delinquent medical bills to consumers’ credit reports. This means consumers will have a grace period to navigate through the tangled web of payments and reimbursements. Consumers often endure months of stress, going back and forth with insurance companies and doctors, to determine how much they actually owe.

The Consumer Protection Financial Bureau published a report in December 2014 that revealed many consumers who were behind on paying medical bills showed no other signs of financial distress. The report also revealed that 22% of those consumers have only medical bills showing up as unpaid on their credit reports.

According to the CPFB many of those consumers were unaware of their outstanding medical bills.  In some cases, this outstanding debt has been a barrier for consumers applying for a mortgage or even getting a new job.

Although positive changes are being made to assist those with medical debt, consumers still face many problems involving substantial medical debt, including:

1. Determining exactly what they owe and to whom they owe it to. Consumers can often accrue multiple bills from a single hospital visit;
2. The size of medical bills in comparison to their income and other expenses;
3. Medical debt is often unforeseen and therefore many consumers have little savings to deal with the financial impact of such debt.

Click here to read more on this story.

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