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Detroit officials are hopeful that the bankruptcy battle ahead of them will be rewarded with a more efficient and prosperous city. But the fact is, when it comes to U.S. municipal bankruptcy filings there have been few happy endings.

Just 61 local governments have gone through Chapter 9 bankruptcy since 1954 – and while the process is devoted to restructuring debt and provides temporary cash flow relief, it does not help a city enhance its revenue or economic outlook. Furthermore, cities typically lose access to capital markets in the wake of a bankruptcy.

Detroit has a very high level of debt and the bankruptcy will correct some of it; however, experts warn that an economic turnaround is unlikely. Take for example Vallejo, California, with about 116,000 people. It spent more than three years in bankruptcy from 2008 to 2011, weighed down by labor contracts and retirement benefits. The city was allowed to terminate its collective bargaining agreements, but it never renegotiated some $128 million of unfunded pension liabilities.
Both Vallejo and Stockton have seen further increases in crime after seeking protection from creditors. Stockton, with nearly 300,000 people, was granted permission to enter Chapter 9 protection in April and will file a debt-adjustment plan later this year.

The brightest post-bankruptcy story is California’s Orange County. But its 1994 bankruptcy – the largest in history at the time – stemmed from $1.7 billion in bad derivative bets.

Orange County, home to Disneyland and with median household income of more than $75,000, nearly three times Detroit’s, has suffered few lingering effects from its 18 months in Chapter 9.

The impacts of a bankruptcy on a community are often hard to predict, but oftentimes there can be a lot of anxiety in the city’s workforce and there can be a loss of confidence among its residents.

Click here to read more on past city bankruptcy stories.

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.

Bankruptcies can happen to any-sized business at any time. For a small business owner facing the prospect of bankruptcy, knowing your options and contacting a reputable bankruptcy attorney can help make the process pain-free and financial recovery possible.

Chapter 7 bankruptcy is an ideal option for sole proprietorships and small businesses. With a Chapter 7 bankruptcy a trustee will be named to sell all of the assets of the business, including its client list, and all proceeds will go toward paying any outstanding debts. Any unpaid debts after the liquidation sale are forgiven and the business no longer exists.

A reorganization or Chapter 11 bankruptcy is typically used by larger companies that do not want to give up their business, but want time to reorganize it. These types of bankruptcies are typically more expensive than a Chapter 7 and entrepreneurs should be warned that this usually entails their business being operated under increased scrutiny from a court-appointed trustee for a period of time.

A repayment or Chapter 13 bankruptcy, often used by personal consumers, is a type of bankruptcy where the business owner is required to file a repayment plan with the bankruptcy court disclosing how he or she will pay back all debts.

Click here to learn more about the various bankruptcy options available to businesses of all sizes.

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.

The House of Representatives passed a bill last week reducing borrowing costs for millions of students. The legislation links student loan interest rates to the financial markets, offering lower rates for most students now but higher ones for students in the future if the economy improves. The bill, which is now headed to the White House for President Obama’s signature, will lower interest rates for subsidized Stafford loans in the short term. These rates doubled to 6.8% on July 1 because Congress could not come to terms on a deal before the deadline.

Under the bill, undergraduates will be able to borrow at 3.9% for this school year, graduate students at 5.4% and parents at 6.4%. The rates would be locked in for that year’s loan. Rates would rise as the economy picks up and it becomes more expensive for the government to borrow money. The bill establishes a formula for student loan rates based on the interest rate on 10-year Treasury notes, so the rates will fluctuate with the market. Under current law, Congress sets interest rates on subsidized student loans. A deal in the Senate set a cap on interest rates. Interest rates would not top 8.25% for undergraduates. Graduate students would not pay rates higher than 9.5%, and parents’ rates would top out at 10.5%.

Click here to read more on the bill which reduces borrowing costs for students.

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.

According to Moody’s Investor’s Service, Detroit’s filing for bankruptcy protection could change the approach to pensions and other long-term liabilities for other struggling local governments in the U.S. Some of these distressed local governments that are essentially ‘below investment grade’ could find bankruptcy more appealing if Detroit can use its Chapter 9 case to eliminate pension benefits and general obligation debt.

However, on the contrary costly litigation could deter other cash-strapped cities from filing for bankruptcy protection. If Detroit is burdened for years with expensive court proceedings which fail to restructure its liabilities, other distressed cities will be unlikely to follow its approach.

Moody’s reports that there could be a “modest increase” in the number of those towns that choose to use tactics similar to Detroit’s if the Michigan city cuts accrued pension benefits and general obligation debt.

Click here to read more on the far reaching effects of Detroit’s bankruptcy proceedings.

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 U.S. bankruptcy judge upset public employee unions and pension funds this week protesting against Detroit’s bankruptcy petition by suspending all legal charges made in Michigan state courts. Steven Rhodes, a U.S. bankruptcy court judge, halted lawsuits filed by retirees, city workers and pension funds opposed to Detroit’s bankruptcy filing. He did the same with suits filed against Detroit’s emergency manager, Michigan’s governor and treasurer to make sure that all battles concerned with the Chapter 9 bankruptcy petition are done only through his courtroom.

Detroit Emergency Manager Spokesman, Bill Nowling said, “This action gives us one venue to settle our disputes and bring it into one court where it should be.”

Click here to read more on the city of Detroit’s historic bankruptcy filing.

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.

An Oregon woman was recently awarded $18.6 million in what people are referring to as a “major consumer victory” against credit reporting giant, Equifax. She contacted Equifax eight times between 2009 and 2011 to get errors removed from her credit report. The incorrect information included a false name and social security number and debts that did not belong to her. She learned about the errors in 2009 when she was turned down for a bank loan she was attempting to get to help her disabled brother.

Her attorney argued these mistakes have cost his client “her reputation, was a breach of privacy and lost her opportunity to seek credit.” In many cases, credit report errors can even cost people employment opportunities.

While consumers are entitled to one free credit report from the Big Three (i.e. – Experian, TransUnion and Equifax) every year, these three are also required to provide copies to consumers after they are denied credit. Equifax failed to do so in this case.

The jury awarded her $18.4 million in punitive damages and $180,000 in compensatory damages. Studies indicate that up to 21% of all credit reports contain some errors.

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.

According to a recent study published by the National Association of Consumer Bankruptcy Attorneys (NACBA), four out of five U.S. bankruptcy attorneys reported a major jump in student loan borrowers seeking debt relief. The same experts that were among the first to warn of the mortgage crisis are now warning of a ‘student loan debt bomb.’ Student loan debt is now topping U.S. credit card debt with few options available for distressed borrowers. Even parents who co-signed loans for their children are not exempt from this trend. They are facing the loss of nest eggs, retirement homes and other assets as a result of insurmountable student loan debt.

Below are the findings from the NACBA nationwide survey of 860 bankruptcy attorneys:

• More than four out of five bankruptcy attorneys (81 percent) say that potential clients with student loan debt have increased “significantly” or “somewhat” in the last three-four years.

• 39 percent of bankruptcy attorneys have seen potential student loan client cases increase from 25 to 50 percent in the last three-four years. 23 percent of bankruptcy attorneys have seen such cases jump by 50 percent to more than 100 percent.

• 95 percent of bankruptcy attorneys report that few student loan debtors are seen as having any chance of obtaining a discharge as a result of undue hardship.

• College seniors who graduated with student loans in 2010 owed an average of $25,250, up five percent from the previous year.

• Borrowing has significantly increased for those in the 35-49 age group, with school debt increasing by 47 percent.

• Loans to parents for the college education of children have jumped 75 percent since the 2005-2006 academic years. Parents have an average of $34,000 in student loans and that figure rises to about $50,000 over a standard 10-year loan repayment period.

• An estimated 17 percent of parents whose children graduated in 2010 took out loans, up from 5.6 percent in 1992-1993.

• Of the Class of 2005 borrowers who began repayments the year they graduated, one analysis found 25 percent became delinquent at some point and 15 percent defaulted. The Chronicle of Education puts the default rate on government loans at 20 percent.

Click here to read more on the study reporting a major jump in student loan borrowers seeking debt relief.

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 has been a part of our country’s history and constitution for years. Originally, bankruptcy was only available to businesses, credit was not readily available to the working class. By the end of World War II, the face of bankruptcy changed as credit became available to U.S. citizens. In 2005, the bankruptcy laws were tightened, but they can still provide relief for debt- including your tax debt.

Here are some simple rules to remember:

• If you are currently under audit, bankruptcy will not stop the audit. It will stop collection action while the bankruptcy is pending and if there is no Relief of Stay motion from the IRS.

• Not all tax debt can be discharged in bankruptcy. Items considered ‘priority debt’ cannot be discharged. This can include child support, student loans and drunk driving charges. These types of debt must be completely repaid in Chapter 13 reorganization.

For taxes to be dischargeable in bankruptcy, they must be personal income taxes which are at least three years old. Also, the tax must be assessed for at least 240 days. But if you have not filed your tax returns, it does not matter how old the liability is, those taxes will not be dischargeable in bankruptcy. Every situation is different, so it’s best to involve an attorney when dealing with tax debt and bankruptcy.

Click here to read more on how filing for bankruptcy can impact your tax debt.

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.

Roy Kronk and Zenaida Gonzalez filed complaints in federal court this week arguing their lawsuits should survive Anthony’s bankruptcy, because she was ‘willful and malicious’ in damaging their reputations. Texas EquuSearch, the search and recovery group that looked for her daughter Caylee in 2008 are also in objection to the discharge of her debts.

In her complaint filed Monday, Gonzalez’s attorneys write that Anthony “intended to subject [Gonzalez] to heightened police and media scrutiny in connection with Caylee’s disappearance to reduce the authorities’ suspicion that [Anthony] was involved in her daughter’s disappearance.”

Kronk, who alleges that Anthony’s criminal defense lawyers made statements implicating him in Caylee’s death, used similar language in his complaint. The complaints ask U.S. Bankruptcy Judge K. Rodney May to rule the Gonzalez and Kronk claims exempt from Anthony’s Chapter 7 bankruptcy. Casey currently has more than $790,000 in debt.

Click here to read more on Casey Anthony’s defamation lawsuits likely to survive bankruptcy.

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.

With Federal student loan interest rates doubling to 6.8% and private loans averaging between 8% and 12%, some graduates are contemplating paying off their student loan debt with credit cards. This can look like a good option with the amount of credit cards offering rewards points, low to no interest rates for a year, etc. And unlike student loan debt, credit card debt can be discharged in bankruptcy court. Sounds tempting, right? Well, let me tell you why this is a bad idea.

• Shifting student loan debt to a credit card can be costly. These transfers are accompanied by fees and higher interest rates. Once the promotional interest rates expire, the average credit card interest rate can run you close to 15% every month.

• If you pay off your student loans with credit cards, the credit card debt would be non-dischargeable in bankruptcy. It would be considered fraud if you pay off your student loan debt with credit cards with the intention to file for bankruptcy.

Remember, there are other alternatives to paying down your student loan debt. If you have federal student loans, explore an income-based repayment plan or graduated repayment plan before resorting to using credit cards to pay off your student loans.

Click here to read more on the various alternatives to pay off your student loan debt.

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.