Credit Archives - Page 28 of 82

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Creditor Protections for IRA’s & Beneficiaries

Posted on December 13, 2016by Admin

Whether you have a Traditional or Roth Individual Retirement Account (IRA), the tax benefits allow your savings to grow and compound more quickly than in a taxable account. Another benefit is creditor protection in the event of a bankruptcy. But what about when you pass away, are your beneficiaries protected?

The Supreme Court has helped clear up this issue in recent years. Just like protection offered to pensions, 401(k)s and Social Security, IRAs are protected from creditors in bankruptcy proceedings. This means that if you declare bankruptcy, your IRA assets are usually safeguarded and cannot be seized.

Another benefit to IRAs is the simplicity in selecting a beneficiary (or beneficiaries) who will receive the money once you pass. However, beneficiaries are not always afforded the same creditor protection as the original account owner, and this is something to consider when determining who your IRA beneficiary should be.

The U.S. Supreme Court has ruled that an inherited IRA for a non-spouse beneficiary no longer is protected from creditor’s claims when the beneficiary files for bankruptcy. The rationale is that once the owner dies and the non-spouse beneficiary takes ownership of the account, the assets are no longer considered retirement funds, and can thus be seized in bankruptcy.

The reason this only applies to non-spouse beneficiaries is because a spouse is able to roll over inherited IRA assets into their own account. When this type of transfer occurs, the assets are once again protected. However, a non-spouse cannot combine inherited IRA assets with their own retirement assets.

Many parents list their children as beneficiaries of their IRA accounts, but this can present a problem if the children have financial issues or file for bankruptcy. One of the best ways to get around this is to establish a trust, such as a conduit trust, and list the trust as beneficiary of the IRA instead of the child. As the assets are not legally owned by the beneficiary, but instead owned by the trust, the assets are protected from creditors in many cases. However, keep in mind once the income is paid out to the beneficiary (i.e. – leaves the trust), that income is no longer protected.

If you have any 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, 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, Timothy Kingcade Posts

Wells Fargo, Ocwen and other Creditors Sued for Violating Chapter 7 Discharge

Posted on December 12, 2016by Admin

Secured creditors Wells Fargo, Ocwen, RAS Boriskin and Duane Morris must pay a debtor who filed Chapter 7 bankruptcy $7,000 in emotional distress damages and $39,142 in punitive damages for willfully violating the discharge order.

Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York concluded that the creditors harassed the debtors for years by filing an illegal foreclosure action against the debtors’ property and sending numerous collection letters after their debt had been discharged in bankruptcy.

The debtors received more than 100 calls and notices for collection of the discharged debt in the past five years. This case is particularly noteworthy for the large amount of punitive damages and the emotional distress damages the debtors received, who represented themselves pro se.

The debtors in the case filed for Chapter 7 bankruptcy and their nonexempt assets were liquidated by a trustee and the proceeds were distributed to their creditors. They received a discharge of all of their debts in 2009.

The debtors alerted the secured creditors to their violations by contacting them after the discharge, but the creditors insisted they were doing nothing wrong. Instead of taking steps to correct the problems, the creditors and their attorneys wrote threatening letters to the debtors. The court found evidence that the creditors and their attorneys received notice of the debtors’ bankruptcy and discharge on at least 15 different occasions, but failed to stop contacting them.

Click here to read more on this story.

If you 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, 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 Debt Forgiveness Signed into Law in New Jersey

Posted on December 7, 2016by Admin

Governor Chris Christie signed a bill into law this week that will eliminate student loan debt in the event of death and total disability, and allow for deferment of payments and interest accumulation for those who are temporarily disabled.

The change comes after an investigation into the case of a mother who was forced to continue paying her son’s student loans after his senseless murder. It brought to light New Jersey’s punitive lending practices. The bill’s sponsors in the lower house called its success a victory for students and parental co-signers who could have been left with insurmountable debt after a tragedy.

The primary sponsor of the bill, State Assemblyman Vince Mazzeo, made the following statement:

“Imagine you’re a family who always pays their bills, has good credit and then you lose a child and in the midst of your grief, you’re saddled with tens, if not hundreds, of thousands of dollars in their remaining student loan debt,” Mazzeo wrote. “That’s just something we can’t allow to happen on our watch.”

Fellow sponsor Andrew Zwicker also praised the change.

“To expect a student’s family or other survivors to pay their college loan debt in the event of their death is cruel and unacceptable. We can do better than that,” Zwicker wrote.

New Jersey’s Higher Education Student Assistance Authority (HESAA) will now be obligated to forgive those debts. In cases of permanent or temporary disability, borrowers will have to provide a written statement from their physician attesting to their condition.

Unlike other states, New Jersey does not allow for payments to be adjusted by income and charges higher interest rates than similar federal programs. The state can also garnish a borrower’s wages for non-payment and revoke professional licenses without court approval.

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, Timothy Kingcade Posts

Delinquencies on the Rise for Subprime Auto Loans

Posted on December 6, 2016by Admin

Subprime auto loans are back in a big way, and according to recent data have climbed to the highest level in a decade, with large increases in loans to borrowers with credit scores below 660. The number of subprime auto loans becoming delinquent has climbed to the highest level since 2010 in the third quarter and is following a pattern similar to the months leading up to the 2007-2009 recession, according to data from the Federal Reserve Bank of New York.

New auto loans to borrowers with credit scores below 660 have nearly tripled since the end of 2009. In 2016, approximately $50 billion of new auto loans per quarter have gone to those borrowers thus far. About $30 billion each quarter has gone to borrowers with credit scores below 620.

The increasing delinquency of subprime auto loans is concerning because it comes as the overall economy is on the mend and the employment rate is improving. The credit quality of other types of loans has improved.

Delinquency rates declined in the quarter for mortgages, student loans and credit cards. The number of individuals with a new foreclosure notation on their credit reports hit the lowest level in 18 years of data.

The increase in auto loans, particularly the subprime sector, has raised alarms among some regulators in Washington. The rate at which auto loans for borrowers with credit scores below 620 has climbed for 10 consecutive quarters, especially on loans made to those with the lowest or subprime credit scores.

Lenders know that subprime borrowers are more likely to default and become delinquent on their loans and charge them higher interest rates. The mistake during the financial crisis was that while the lenders expected higher defaults among subprime loans, they failed to anticipate just how high it would rise.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

For-Profit College Debt Strikers Plead with Obama to Discharge their Loans before Trump’s Inauguration

Posted on December 5, 2016by Admin

More than 1,000 students (calling themselves the Debt Collective) from for-profit schools are protesting, claiming their colleges used manipulative financial tactics while providing them with a subpar education.

They released a statement and video on Monday, pleading with President Obama to discharge their student loans before President-elect Trump’s inauguration. The Debt Collective claims that the Obama Administration has yet to provide the relief it promised. One former Corinthian student said she had $32,000 of student loan debt and was unemployed, despite having applied to about 300 jobs in the criminal justice field. She said she had either received no response or had been told she did not qualify.

The Department of Education refunds federal loans to students enrolled in the last 120 days before a college closes in what is called a closed school discharge. ITT Tech closed its doors in September. But students who left the school before that 120-day time frame or who graduated but still feel they were defrauded by their college must instead file a “borrower’s defense to repayment” claim.

The Obama Administration had planned to resolve back-logged relief claims from Corinthian and ITT Tech students by the spring of 2017, but will likely now be under additional pressure to speed resolution of the claims.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Xerox Ordered to Pay $2.4 Million to Settle Illegal Debt Collection Charges

Posted on November 30, 2016by Admin

Many of us know Xerox as the company that handles office supplies, printers and similar products. However, back in 2009 the company acquired ACS and has been operating as a lender of student loans through Xerox Education Services (XES).

The division has come under much scrutiny in the past year for allegedly violating debt collection laws and overcharging borrowers. Now the company has decided to settle the charges by paying a $2.4 million settlement.

The initial investigation began in December of 2015. After analyzing the company’s loan servicing practices, officials found that XES had failed to properly process applications for federal loan relief associated with the Income-Based Repayment Plan under the Higher Education Act. This forced student loan borrowers to pay more than they needed on their debt. They were also hit with more late fees when they could not afford to make their payments.

The company was charged with violating debt collection regulations by making frequent and repeated phone calls to borrowers and not investigating credit reporting disputes. This led to false information being reported to credit agencies.

Under the settlement, XES will pay $2.4 million, which will be be used as restitution for borrowers who tried to apply for relief but were not able to enroll. The company has also agreed to credit late fee overcharges, reform service members’ accounts, stop its illegal debt collection practices, and establish a “Borrower Advocacy Group” that will help loan recipients apply for income-based repayment plans.

Click here to read more on this story.

Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

Mortgage Rates Surge after Donald Trump’s Election Win

Posted on November 25, 2016by Admin

Mortgage giant Freddie Mac said that the average rate on a 30-year fixed rate loan rose to 4.03 percent, which is the highest rate since July 2015. It is up from 3.94 percent the previous week. Rates on 15-year home loans also rose to 3.25 percent, up from 3.14 percent last week, which is the highest rate since January.

Long-term mortgage rates have been increasing each week since Donald Trump was elected as President on November 8^th. Experts believe that investors are fearful of the president-elect’s plan to cut taxes and spend massively on roads, bridges, airports and other infrastructure could provoke inflation. As a result, investors demand higher long-term rates and pay lower prices for bonds.

The anticipation of economic stimulus has also caused a surge in stock prices. On Wednesday, the Dow Jones industrial average closed above 19,000 for the first time.

However, rising mortgage rates pose a threat to the housing market and the economy. In the past, lower mortgage rates have fueled the real estate market by causing an increase in home sales. According to the National Association of Realtors, existing home sales rose two percent in October to a seasonally adjusted annual rate of 5.6 million, which was the highest rate since February 2007.

Real estate experts believe that mortgage rates will continue to rise until there is more understanding of where the economy and housing policies are headed during Trump’s presidency.

Click here to read more on this story.

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, Debt Relief, Timothy Kingcade Posts

8 Mistakes to Avoid on Black Friday

Posted on November 23, 2016by Admin

Millions of Americans wait all year for Black Friday to come around. According to the International Council of Shopping Centers, seven out of ten people stock up on holiday gifts during Thanksgiving weekend. With the right planning and research, you can save a ton of money this holiday season.

Here are some mistakes to avoid during the busiest shopping day of the year.

Failing to make a list. Start by making a list of the items you wish to buy. Then research the places with the best prices for these items. If you are unsure of the items you need, determine who you are shopping for and then do some research online.
Paying full price for add-ons. One of the most common mistakes Black Friday shoppers make is paying full price for add-ons when shopping for electronics. These include batteries, cables and chargers. It is important to keep in mind that you do not need to get add-ons the same day or at the same place. Strategize where you can buy each commodity for electronics at the best price. Saving these items for Cyber Monday is a good choice!
Buying toys. The sales on toys typically extend into the first two weeks of December. According to DealNews.com toys are generally cheaper in the first two weeks of December.
Choosing the wrong time to go. Many of the stores who participate in Black Friday deals have started their sales on Thanksgiving in recent years. According to retale.com, 54 percent of shoppers said they would prefer to stay home on Thanksgiving. This gives shoppers a chance to beat the Black Friday crowds.
Opening store credit cards. It is tempting to open a store credit card to save an additional 10 to 15 percent off your purchase. However, going into debt over the holidays is not worth the savings.
Not using a price-comparison app. If you are planning on shopping on Black Friday, using apps like RedLaser, ShopSavvy and BuyVia will help you find the best prices.
Falling for “fear of missing out.” Oftentimes shoppers fall for the belief that sales are short-lived or that items are in limited supply. This is not necessarily true. Retailers have been preparing for this day weeks in advance and have ample supplies of what they expect to be top sellers. Keep in mind that many of the door-buster deals that are in limited supply are cheap quality, as well as cheaply priced.
Forgetting about Cyber Monday. If you do not find what you need on Black Friday, don’t forget about the Cyber Monday deals. Shopping online makes it easier to compare prices and stock up your cart with items you might not have been able to find in stores.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Bankruptcy History Suggests Intent to Hinder and Delay Creditors

Posted on November 22, 2016by Admin

The Tenth Circuit Court recently heard the Rupp v. Pearson case where the debtor’s historical use of bankruptcy filings suggested improper purpose to hinder and delay creditors.

Mrs. Pearson had filed nine, mostly unsuccessful, bankruptcies since 1993. In 1997, she filed two unsuccessful chapter 13 cases before filing a chapter 7 petition and receiving a discharge. She later filed two more unsuccessful chapter 13 cases and had one pending chapter 13 case. She then filed another chapter 7 case seeking another discharge of her debts. The second chapter 7 case was filed two weeks after the dismissal of her chapter 13, and immediately upon the passage of the eight-year period.

The bankruptcy court inferred that Ms. Pearson was a “system-gamer.” This means that she routinely filed chapter 13 cases simply to stall collection efforts and with no actual intention of complying with the terms of her own plans. She then filed for chapter 7 relief as soon as the law allowed.

During one of Ms. Pearson’s filings, she agreed to contribute her expected tax return to the extent it exceeded $2,000. However, she kept the entire $4,829 refund and spent it on non-exempt personal items. This resulted in the bankruptcy court dismissing one of her chapter 13 cases. When she filed a chapter 7 case two weeks later, the trustee filed an adversary complaint seeking to have Ms. Pearson’s discharge denied due to her misappropriation of the tax refund with intent to defraud creditors, in violation of section 727(a)(2)(A). “In our view, the (trustee’s) complaint states a plausible claim that Ms. Pearson’s failure to turn over to the Chapter 13 bankruptcy estate the required portion of the tax refund was part of a scheme to hinder and delay creditors.”

However, the Tenth Circuit Court rejected the reasoning of the lower courts in finding that the complaint failed to state a claim for relief due to an absence of “fraud markers” and the fact that the complaint failed to negate the possibility of innocent uses of the tax refund. Rather, the circuit court noted that cases under 727(a)(2)(A) are fact-specific and not subject to rigid formulas.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How Trump’s Presidency Will Affect Consumers

Posted on November 21, 2016by Admin

The battle for consumer rights against powerful corporate and special interests has always been an uphill battle, but the road ahead just got considerably more difficult with this month’s election results. President-Elect Donald Trump released a statement on his website saying that he plans to “dismantle” the Dodd-Frank Act, which would be detrimental for consumers’ protection rights.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Obama in 2010 in order to protect consumers from irresponsible lenders who used hidden fees and fine print to take advantage of them. The purpose of the Dodd-Frank Act is to prevent the excessive risk-taking that led to the Great Recession and the housing bubble burst in the mid-2000’s.

One of the greatest threats consumers’ face during Trump’s presidency is the fate of the Consumer Financial Protection Bureau (CFPB). The CFPB was one of the most significant outcomes of the Dodd-Frank Act. The Bureau is a consumer watchdog that protects American families from unfair and abusive financial practices. It sets clear rules and ensures that the highest financial standards are met. The CFPB monitors the actions of mortgage lenders, banks, credit unions and other financial companies.

Unfortunately for consumers, the future of the CFPB during Trump’s administration is unclear. While he spoke out against the Dodd-Frank Act, saying that it “has made it impossible for banks to function,” he has not mentioned his plans for the Consumer Financial Protection Bureau. However, the Republican Party has called for repeal of the Dodd-Frank Act and abolishment of the CFPB. Opponents of consumer protections clearly feel empowered to push the agenda of predatory lenders, abusive debt collectors and others who target struggling individuals and low-income families.

Related Resources:

https://consumerist.com/2016/11/09/from-healthcare-to-financial-protection-how-will-the-trump-white-house-affect-consumers/

https://www.greatagain.gov/policy/financial-services.html

https://www.whitehouse.gov/economy/middle-class/dodd-frank-wall-street-reform