Credit Archives - Page 16 of 82

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Top Debt Mistakes to Avoid

Posted on August 18, 2017by Admin

From credit cards to car loans, there are many ways to get in over your head with debt. Here are some common debt mistakes to avoid.

Credit card debt. Avoid this at all costs- if you can. Most of these cards come with high interest rates, so any remaining debt at the end of the month increases daily. Make sure you are only using credit cards on items you can (and will) pay off each month.
Amassing bad debt. Borrowing money should be something you do as an investment in your future. Student loan debt and a mortgage loan are examples. In contrast, “bad debt” is money you borrow for purchases that decrease in value.
Paying late. Constant late payments or missing payments can cost you penalties and lower your credit score. If you struggle to remember your payments, take advantage of automatic payments.
Paying only the minimum. Making minimum payments on your credit card is tempting, but it will ultimately cost you more money due to the loan debt interest rate.
Not budgeting. The only way to get out of debt is to stop living beyond your means, and the only way to stop living beyond your means is to stick to a strict budget.
Ignoring your lender. Lenders want their money, and they want you to be able to pay it- even if that means settling for less. Do not ignore their calls. If you cannot afford to pay, tell them. Never promise to pay or give your bank account information if you cannot afford to pay. Chances are, a simple conversation will lead to a solution, whether that is a lower interest rate or a simple payment plan.

Click here to read more on this story.

If you have any questions on this topic or 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, Credit, Debt Relief

Record High Credit Card Debt Exceeds Previous Numbers Set Prior to the 2008 Recession

Posted on August 16, 2017by Admin

U.S. credit card debt is just over $1 trillion, exceeding the previous high set in April 2008 right before the Great Recession. The average amount of credit card debt per household is $9,600. That equals about 17% of the average U.S. household income. Since the average interest rate on a credit card is 16%, and about 24% for those with “less than perfect” credit, that debt grows between $1,600 and $2,300 each year.

A recent survey found millennials’ knowledge on credit card use troubling. A few millennials (6%) actually believe that missing a credit card payment would “improve” their credit rating. 17% said missing a card payment would have no effect on their score. Some 36% have maxed out credit cards and 48% carry card balances over to the next month, paying high interest rates and other monthly fees.

Click here to read more on this story.

Credit, Debt Relief, Timothy Kingcade Posts

Wells Fargo Latest Lawsuit Involves Customer Car Loans

Posted on August 14, 2017by Admin

After settling one class action lawsuit involving the exploitation of customers by opening bogus credit card and savings accounts to meet sales goals, Wells Fargo faces another lawsuit involving its auto lending business and unnecessary auto insurance policies.

A borrower who financed an automobile in February 2016 through Wells Fargo filed a lawsuit in U.S. District Court in San Francisco on Sunday, July 30, claiming he was charged for insurance he did not need and is seeking class-action status to represent all U.S. borrowers in the same situation.

After more customer complaints, an internal investigation revealed that some 490,000 customers were charged for auto insurance they did not need and an additional 60,000 customers in states with specific disclosure requirements may not have been told about the insurance by the third-party vendor that issued it.

The loan contracts required customers to maintain auto insurance and allowed Wells Fargo to purchase it for them if the customer did not have insurance with another company. Some 20,000 customers may have defaulted on loans and had their cars repossessed because of the additional charges, the bank said.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How do you know if it’s the IRS Contacting You?

Posted on August 11, 2017by Admin

When the IRS contacts you, their first form of communication is through the U.S. Postal Service. The IRS will NEVER initiate contact though email, social media or text messages.

Here are some additional ways the IRS will contact tax payers. It is important to be aware of these so you do not fall victim to an IRS-related scam.

An IRS agent or tax compliance officer may call you after mailing a notice to confirm an appointment or discuss an item for a scheduled audit;
Private debt collectors can call taxpayers for the collection of certain outstanding inactive tax liabilities- but only after the taxpayer and their representative has received written notice;
Private debt collectors for the IRS must respect taxpayers’ rights and abide by the consumer protection provisions of the Fair Debt Collection Practices Act (FDCPA).

All payments should be made to the U.S. Treasury. Taxpayers should never use a prepaid debit card or wire transfer to make a payment. Specific guidelines to make tax payments can be found at irs.gov/payments.

IRS employees will NEVER:

Be hostile or insulting;
Demand payment without giving taxpayers the opportunity to question or appeal the amount;
Require a specific payment method (i.e. – a prepaid debit card);
Threaten lawsuits, arrest or deportation for not paying;
Request credit or debit card numbers over the phone.

A special page on IRS.gov, “How to know it’s really the IRS calling or knocking on your door,” helps taxpayers determine if a person claiming to be from the IRS is legitimate or a scammer.

Related Resources:

http://www.examiner-enterprise.com/business/20170806/how-do-you-know-when-irs-is-contacting-you

Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

New Underwriting Rules Make it Easier to Obtain a Mortgage with Student Loan Debt

Posted on August 9, 2017by Admin

If you are struggling with student loan debt the prospect of ever qualifying for a mortgage may seem out of reach. However, last week changes made to underwriting rules by Fannie Mae could make easier for borrowers with student loan debt to obtain a mortgage.

The new rule impacts borrowers with federal student loan debt who are currently enrolled in income-driven repayment plans. An income-driven repayment plan sets your monthly student loan payment at an amount that is affordable based on your income and family size. Your monthly payments could be capped at 10% of your income. If your discretionary income is low enough, your monthly payment could be as low as $0.

In order to qualify for the mortgage, a borrower must meet certain debt-to-income (DTI) requirements.

A statement from Fannie Mae says that reduced payment can be used, even when the payment is $0. According to Fannie Mae, “if the lender obtains documentation to evidence the actual monthly payment is $0, the lender may qualify the borrower with the $0 payment as long as the $0 payment is associated with an income-driven repayment plan.”

These new changes will allow more borrowers to qualify for a home, but there are exceptions. These rules do not apply to all mortgages, and are specific to “agency-backed” mortgages that represent more than half of the mortgage market. The changes do not apply to borrowers with private student loans. As a general rule, student loan borrowers should max out federal loans before considering private loans.

Click here to read more on this story.

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 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, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Mistakes to Avoid in your 20’s

Posted on August 8, 2017by Admin

Student loan debt can feel like a dark cloud hanging over your future- particularly if you just graduated college and may not have landed your “dream job,” yet. Here are some mistakes to avoid early on when paying back your student loan debt.

You wait until the end of the grace period to begin making payments. Upon graduation, your lender will likely give you a grace period of six months to start paying back your debt. Nice of them, right? Wrong. On the contrary this is a trap. Most student loan debt begins accruing interest immediately upon graduation.
You ignore the auto pay option. Automatic payments will deduct the amount directly from your checking account, ensuring you do not incur late fees or penalties. Most loan providers will also give you a 0.25 percentage discount if you do this.
You fail to plan. It is important to strategize- particularly if you have multiple student loans with different lenders and different interest rates. The way you pay these off can make a big difference in how much interest you will pay in the long run.
You do not consolidate your federal loans and refinance private loans. If monthly payments are too much for you, look into whether you qualify for an income-based repayment plan. Consider consolidating federal loans into a federal direct consolidation loan and refinancing your private loans.
You do not make your student loan debt a priority. Financial experts advise to first prioritize your company’s 401(k) match program. Second, work to establish an emergency fund that will cover your living expenses for at least three months. Repaying your student loan debt should be at the top of this list.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief

Pompano Beach “Debt Relief” Companies Scammed Victims out of $70 Million

Posted on August 7, 2017by Admin

A debt relief scheme headquarted in Pompano Beach has scammed nearly 15,000 people across the country, according the Florida Attorney General’s Office and the Federal Trade Commission (FTC).

A civil complaint filed in federal court in Fort Lauderdale alleged that telemarketers at several of the companies managed from the Pompano Beach office building offered to pay off personal debts for customers, settle or obtain dismissals for these obligations and loan consolidation- all while improving their credit scores.

The defendants in the case were Jeremy Lee Marcus, who was described by the receiver as the CEO and an owner of the group of companies in the debt relief operation; Craig Davis Smith, the COO and also an owner; and Yisbet Segrea, an executive who ran the office in Panama, plus dozens of corporate defendants. These included 321Loans Inc., Financial Freedom National Inc., Helping America Group, Marine Career Institute Sea Frontiers Inc., Instahelp America Inc. and Breeze Financial Solutions.

Customers were convinced to pay a few hundred to more than a thousand dollars per month to the “so-called” debt-relief companies and their operators who orchestrated the scheme.

After numerous customer complaints, it was discovered that in most cases no payments were ever made towards the customers' debts. Customers ended up becoming victims. As a result of the scam they incurred even more debt. Some customers were sued by their old creditors or were forced into bankruptcy.

The scheme used Internet advertising and websites, direct mail and unsolicited phone calls to market itself. The company bought presumably legitimate debt-relief firms and used their clients’ names as well as personal and financial information.

Here is how the scam worked:

Companies in the scam used ads on their website and sent out personal letters to the victims’ home addresses. These companies would go so far as to falsely identify themselves as nonprofits, offering low-interest loans so a consumer could combine all debts and make one payment at a lower interest rate;
Consumers would have to agree to have their bank accounts debited immediately for their first loan “repayment” or for a processing fee. Then monthly “repayments” were automatically taken from their accounts, ranging from $200 to over $1,000;
Few or no payments were ever made to creditors;
When consumers were told by original creditors that none of their bills had been paid, dismissed or settled, the scammers strung them along with false explanations, such as more time was needed to validate the consumers’ debts or to confirm payoff amounts. Clients who called to complain were given excuses and treated poorly. The only contact number available was disconnected.

Click here to read more on the scam.

The following website (www.321loansreceivership.com) has been set up to inform victims and the public about developments in the receivership process.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Debt Questions you may be Afraid to Ask

Posted on August 4, 2017by Admin

Talking about debt can bring up all sorts of emotions, leaving some to worry in silence about their own debt or a family member’s finances. Here some answers to some of the most common questions about debt.

Can I inherit my spouse’s or family member’s debt after they die? This depends on the debt. The assets left behind after a death typically go towards paying off that individual’s debt. After that runs out, the creditor typically suffers the loss. Co-signers when it comes to student loans, mortgage debts and joint credit cards will likely be on the hook for any remaining balance. Know the dangers co-signing a loan and make sure and carry enough life insurance to cover all of your debts.

Is there a limit to the amount of debt I can take on? The answer is no, but it depends largely on the type of debt. Lenders sometimes offer you more credit than you can pay back. Think of a loan you would take out to start a new business or taking out a mortgage to purchase a new home. Even if you qualify for the loan, be realistic about what you can afford to repay.

Can I be arrested for outstanding debt? The answer is no. The Fair Debt Collection Practices Act (FDCPA) bars debt collectors from harassing and threatening you with arrest or jail. However, they can sue you for payment. Know your rights when dealing with debt collectors and consult with an experienced bankruptcy attorney before receiving a court summons or being sued by a creditor.

If I file for bankruptcy, will ALL of my debt be erased? Alimony and child support obligations cannot be erased in bankruptcy. Student loans, certain tax debts and judgments against you can be difficult to get discharged as well.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Rebuilding Your Credit After Bankruptcy

Posted on August 3, 2017by Admin

Chapter 7 bankruptcy allows you to get a fresh start financially and erase past debts, but a legitimate concern consumers have is the effects it will have on their credit score and their ability to take out credit again.

One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit score and your financial future. To the contrary, after filing for bankruptcy you can begin restoring your credit right away.

Here are some steps you can take to begin rebuilding your credit after filing for bankruptcy:

Create a budget. This will help you stay on top of your finances and is something you should have gone over in the “pre-discharge” credit counseling.

Build an emergency fund. Research shows that having as little as $250 saved up for an unexpected expense can protect families from having to resort to pay day loans and credit cards.

Plan your post-bankruptcy credit strategy. Assess your situation by first checking your credit score. Dispute any inaccurate information on your credit report and have this corrected immediately. Remember, a Chapter 7 filing will wipe out your debts, but it does not wipe your credit reports clean. Make sure and double check all three reports.

Here are some ways to access to new credit while rebuilding your score.

Secured loans are typically offered by credit unions or community banks. One type of secured loan involves borrowing against money you already have on deposit. The other type can be made without upfront cash. Instead, this money is loaned to you and is placed in a savings account and released to you only after you have made the necessary payments. In return, the financial institution agrees to send a report to the credit bureaus.

A secured credit card is backed by the deposit you make and the credit limit is typically the amount you have on deposit. This can help repair your credit while you wait to become eligible for an unsecured card.

A co-signed credit card can improve your score, but it is definitely a big ask. Essentially, this individual (the co-signer) is risking his or her own credit history for you and will be on the hook if the full amount is not paid on the card.

If asking to co-sign is too much, an authorized user status will work. Basically, you are an authorized user on that person’s credit card. Just make sure the credit card will report the payment activity by authorized users to the credit bureaus, otherwise it will have no effect on your score.

A lighter debt burden automatically makes you more desirable to lenders, so be vigilant about paying on time. Keep your credit card balances relatively low compared to the card’s limit. For example, less than 30% is typically advised while using just 10% of the available credit is even better.

Still not convinced? A testimonial from one of our clients in regards to their credit score after filing for bankruptcy.

My credit score said on all three reports 775, I couldn’t believe that I had such a great score before 10 years. Tim for me was the best move I have made for my situation. I have no regrets, I am glad the past is the past. – Bill T.

Related Resources:

https://www.nerdwallet.com/blog/finance/rebuild-credit-after-bankruptcy/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Changes to Healthcare could lead to More Bankruptcies

Posted on August 1, 2017by Admin

Thanks to the Affordable Care Act, personal bankruptcy filings dropped about 50 percent, from 1,536,799 in 2010 to 770,846 in 2016. Studies have shown medical debt as the leading cause of personal bankruptcy filings. As legislators and the executive branch renew their efforts to repeal and replace the Affordable Care Act, there is concern about what that will do to coverage and premiums.

A study conducted by the American Medical Association in 2007 found that 67% of those who filed for bankruptcy cited medical debt as a major factor. For middle class homeowners, the issue of medical coverage was even more influential, with half of all foreclosures caused in part by medical debt. The uncertainty about the fate of healthcare coverage for many Americans may cause the number of bankruptcies and foreclosures to increase in the coming years.

The current healthcare bill that is being debated may result in 22 million to 32 million Americans losing a portion of their current healthcare benefits.

Click here to read more on this story.

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, 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:

https://www.consumerreports.org/personal-bankruptcy/how-the-aca-drove-down-personal-bankruptcy/