Bankruptcy Law Archives - Page 96 of 128

Bankruptcy Law, Credit, Timothy Kingcade Posts

New FICO Model Could Boost Credit Scores for Millions

Posted on August 19, 2014by Admin

FICO, the company responsible for the most widely used credit score in the U.S. announced this month that its newest scoring model will differ drastically from past versions. Known as FICO 9, the new model will take effect in fall 2014. FICO 9 will differ from FICO 8 in two major ways:

1.) It will differential between medical and non-medical bills that have been turned over to collections. Medical bills will no longer carry as much weight in consumers’ credit scores. Currently, FICO 8 makes no distinction between unpaid medical and non-medical bills.

2.) It will disregard accounts in collections that consumers have already paid. Currently, FICO 8 makes no distinction between paid and unpaid accounts in collections.

Treating medical debt differently comes as a welcome change to consumers. In a May 2014 report, the Consumer Financial Protection Bureau (CFPB) said millions of Americans’ credit scores are being “overly penalized” by medical debts in collections.

So how do you know if your credit score will improve because of the new model? Basically, if your credit score is low as a result of unpaid medical bills or bills that went into collections that you later paid, you are likely to get a significant boost from FICO 9 when it takes effect.

Remember, you have the power to boost your credit score by following these “money smart” moves:
• Pay your bills on time.
• Keep your balance on credit cards below 30% of your total credit limit at ALL times.
• Using credit as early in your adult life as possible.
• Keeping a good mix of credit accounts on your credit report.
• Applying only for credit that you actually need.

If you are in a 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, 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, Foreclosures, Timothy Kingcade Posts

Foreclosures hit Pre-Crisis Low

Posted on August 14, 2014by Admin

The number of home loans that entered foreclosure in the second quarter this year hit its lowest level since early 2006, just before the housing crisis, according to data released by the Mortgage Bankers Association. Housing experts attribute the low rate to an improving job market and higher home prices, another sign that the mortgage crisis is behind us- for now. At the mortgage crisis’ worst point, in the third quarter of 2009, servicers started foreclosures on 1.42% of home loans. Last quarter, they began foreclosures on only 0.4% of loans, the lowest rate since the second quarter of 2006.

Delinquency rates- those that have at least one late payment but are not yet in the process of foreclosure- decreased to 6.04% after adjusting for seasonality, reaching its lowest level since the end of 2007. However, banks still have a number of already foreclosed-upon homes to work through particularly those in “judicial states,” where foreclosures must be processed through the court and tend to take longer.

Florida, New York and New Jersey accounted for more than 40% of all loans in foreclosure in the second quarter. These three states will have a significant impact on national figures moving forward.

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.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Grieving parents hit with $200,000 in student loans

Posted on August 12, 2014by Admin

Losing their 27-year old daughter, Lisa, to liver failure was devastating enough, but then the student loan bills started coming. Steve Mason and his wife Darnell immediately took in their daughter’s three children- ages 4, 7 and 9 following her death. The family had co-signed on $100,000 in private student loans that his daughter took out for nursing school. Unable to keep up with the payments and mounting expenses, the $100,000 debt ballooned to $200,000 as a result of late fees and interest rates as high as 12%.

Steve called the lenders to explain he could not afford the $2,000 a month payments, but unfortunately private lenders are not bound by any federal requirements to help borrowers or co-signers. Loan forgiveness is up to the discretion of the individual lender. Navient Corp., which manages several of the loans said they reduced the balance owed to $27,000 from nearly $35,000 and lowered the interest rate to 0% on three of four loans. The family was less fortunate with American Education Services, which handled the bulk of Lisa’s student loans. The lender refused to provide the family with any relief.

Dreams for retirement have been shattered for the Masons. The family has considered filing bankruptcy, but student loans are the only type of debt that generally cannot be discharged through bankruptcy. Legislation aiming to help families in similar situations, including recent bills that would allow student loan debt to be discharged in bankruptcy, have been introduced over the years but have yet to pass in Congress.

“People with other debt from splurging — they can discharge that,” Mason said. “Student loans should really be the one type of debt they do discharge because it’s done to further an education and career. But somehow getting [my daughter] an education has encumbered me for the rest of my life.”

The Masons are not alone. Similar financial nightmares are facing families throughout the country. For now, the only option parents have is to negotiate a payment plan with the lender or try to prove undue financial hardship to the courts in order to get the debts discharged in bankruptcy.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you 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

Five Store Credit Cards to Avoid

Posted on August 8, 2014by Admin

According to a survey of 61 major retail credit cards by CreditCards.com, retail credit cards are becoming debt traps for consumers. Many of these cards have an average APR of 23.23%, compared with 15.03% for other credit cards. This means a consumer who spends $1,000 on a retail card, and made only the minimum payments, would spend more than six years repaying that balance and end up paying a total of $1,840 for the $1,000 item. That is equivalent to an 84% markup!

Retail credit cards sometimes have benefits that may be worth it to consumers who frequently shop at the store and pay the balance off in full every month. Many of these cards come with perks like store discounts, special sales and rewards for cardholders. But miss one payment one month and you run into trouble on most of these credit cards.

Below are the retail credit cards to steer clear of, according to the CreditCards.com survey:

1. Zales has up to a 28.99% APR.
2. Office Depot Personal Credit Card has a 27.99% APR.
3. Staples Personal Account has a 27.99% APR.
4. My Best Buy has up to 25.24% and 27.99% APR, depending on your credit score.
5. My Best Buy Preferred has a 25.24% and 27.99% APR, depending on your credit score.

Bottom line: Retail credit cards are a bad idea for anyone who does not pay their balance off in full every month, because the interest rates are so exorbitant.

Bankruptcy Law, Foreclosures, Timothy Kingcade Posts

Once Popular TV Star Facing Foreclosure

Posted on August 4, 2014by Admin

“The O.C.” star Mischa Barton is facing foreclosure on her Beverly Hills mansion. According to TMZ, Barton has been handed a default notice informing her that she has missed more than $100,000 in payments. She purchased the eight-bedroom, 11-bathroom mansion for $6.4 million in 2005, when “The O.C.” was at its height of popularity and took out a loan for $4.2 million. The show went off the air in 2007 and Barton has been trying to sell the property since 2010 for a reported $8.9 million. Her prior attempts to rent the home at a price of $35,000 a month were unsuccessful.

Bankruptcy Law, Credit, Foreclosures, Timothy Kingcade Posts

When should you consider bankruptcy?

Posted on July 29, 2014by Admin

Many consumers struggling to pay off credit card debt or medical bills wonder when the right time is to file for bankruptcy- or if bankruptcy is even the best option for them. It makes little sense to continue struggling against a mound of debt you are not even making a dent in with monthly payments– or maybe you are no longer able to afford those payments. A good rule thumb is, if it would take you five years or more to repay what you owe, you should consider filing for bankruptcy. Why five years? Because that is how long you would be required to make payments under a Chapter 13 repayment plan.

However, most consumers qualify for Chapter 7 bankruptcy, which is typically faster (takes approximately three to four months, as opposed to five years) and erases all of your credit card debt and medical bills. If lower interest rates would help you pay off the debt within five years, consider scheduling an appointment with a credit counselor associated with the National Foundation for Credit Counseling (www.nfcc.org). These nonprofits can set you up with debt management plans that may offer you lower rates on your credit card debt.

Many people feel an obligation to pay what they owe, even if in reality they will never be able to pay off the debt. Bankruptcy laws allow individuals to gain a fresh start, so they can take care of themselves and their families. If you are behind on your mortgage payments, filing for Chapter 7 bankruptcy can allow you to stay in your home and catch up on your payments or negotiate with your lender. This is all thanks to the automatic stay which immediately goes into effect and prohibits your mortgage lender from foreclosing on your home.

Bankruptcy Law, Foreclosures, Timothy Kingcade Posts

Former Bank of America Mortgage Employee Facing Prison Time for Taking Bribes

Posted on July 24, 2014by Admin

A former Bank of America mortgage employee has been sentenced to 30 months in prison for pocketing $1.2 million in payoffs to approve the sale of distressed properties for far less than their actual value.

Kevin Lauricella, 29, who has been cooperating with investigators, pled guilty to accepting bribes and falsifying bank records. He was sentenced by U.S. District Judge Otis D. Wright II in Los Angeles this week and was ordered to repay Bank of America $5.7 million in losses and to forfeit a Thousand Oaks home acquired through payouts from the criminal scheme.

Lauricella worked for a Bank of America division that handled delinquent home loans in 2010 and early 2011. During this time, lenders were overwhelmed by defaults on underwater mortgages, creating opportunities for insiders to exploit flaws in bank systems.

The crimes involved short sales. Lauricella collected bribes from so-called “flippers” who bought homes with the intent of quickly reselling them, Katzenstein admitted. He then issued approvals for short sales that were beyond his authority to approve, with sales prices far below the fair market value.

Lauricella made false entries in Bank of America’s computer system to make it appear that higher-ups had approved the short sales, Katzenstein said. When he pleaded guilty, Lauricella admitted approving fraudulent short sales for at least nine properties.

Related Resources:

http://www.latimes.com/la-fi-mortgage-bribe-sentencing-20140721-story.html

Bankruptcy Law, Timothy Kingcade Posts

Consumer Warning: Beware of Companies Offering Student Loan Debt Relief

Posted on July 15, 2014by Admin

With student loan debt exceeding $1 trillion, a record number of graduates facing a tough job market are struggling to afford their monthly payments. For the debt settlement industry, these consumers are an irresistible target and represent of gold mine of potential new customers. Federal and state regulators have spotted new instances of abuse as these companies are shifting away from their traditional targets- credit cards and mortgage debt- and focusing in on student loans.

Illinois is expected to become the first state to bring legal action against debt settlement companies in connection with their student loan practices, contending in two separate lawsuits that Broadsword Student Advantage and First American Tax Defense tricked vulnerable borrowers into paying for help that never arrived.

In the lawsuit, the Illinois attorney general contends that these two companies lured unsuspecting borrowers into paying hundreds of dollars upfront, misled customers about those fees and in some instances pretended to be affiliated with federal relief programs. Even more egregious, the companies sometimes charged customers for debt relief assistance they could have received free from the Education Department.

The abundance of these student loan debt relief companies reflects a growing crisis- students taking on more debt than they can ever afford to repay. Of the $1.2 trillion dollars in outstanding student loan debt in the United States, an estimated seven million Americans have already defaulted on a total of $100 billion, with tens of thousands more borrowers defaulting each month, according to the Consumer Financial Protection Bureau.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Beware of Filing Bankruptcy Pro Se

Posted on July 10, 2014by Admin

The Internet has given average consumers the ability to Google everything from how to change a flat tire to how to replace a kitchen sink. However, there are certain tasks that should be left to the professionals. Filing for bankruptcy is one of them.

Bankruptcy laws significantly changed in 2005, making it more difficult to file. There are also crucial steps in the bankruptcy process, including appearing before a bankruptcy trustee and a meeting of creditors. These two steps can be intimidating for individuals not familiar with the process. Not to mention the complex legal forms involved with filing bankruptcy. A single mistake or oversight on one of these forms can cause you to lose your property and assets or your case to be dismissed.

Consulting with an experienced bankruptcy attorney will help you fully understand your legal options and avoid these pitfalls. The court in the 1973 case of The Florida Bar v. American Legal & Business Forms, Inc. ruled that non-attorneys selling package forms or “kits” for performing legal services as the unauthorized practice of law if any instructions or advice on their preparation is included.

The recent case, In re Falck reveals how some predatory individuals have taken advantage of consumers who are struggling to manage their debt and stay in their homes. The defendants solicited debtors through the mail pitching their mortgage foreclosure defense scheme. They charged debtors monthly payments, along with illegal and excessive fees, and then later claimed the debtor never paid. These individuals were not licensed attorneys in Florida or in any other state and did not file the proper disclosures. The court noted there were hundreds of debtors victimized by this mortgage foreclosure protection scheme.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Credit Repair Company GUILTY of Deceiving Consumers and Lying to Credit Bureaus

Posted on July 8, 2014by Admin

RMCN Credit Services, Inc., one of the nation’s largest credit repair companies, has been ordered to pay $2.35 million in civil penalties after it violated federal law by deceiving consumers and lying to credit bureaus. The company reportedly would charge consumers up-front fees- as much as $2,000 before rendering services. The court order bars the defendants, Doug and Julie Parker, the owners of the company, from similar conduct in the future. The company is also required to submit reports to the Federal Trade Commission (FTC) for a decade to ensure that it is incompliance with the terms of the order.

According to the FTC, the company “continued to send deceptive dispute letters to credit bureaus even after the company received detailed billing histories or signed contracts from creditors proving the credit reports were accurate. RMCN also falsely told consumers that federal law allowed it to dispute accurate credit report information and credit bureaus must either prove it or remove it.”