Debt Collection, Debt Relief

Predatory Debt Collectors Barred from PPP Loans Under New Bill

New legislation introduced this week will effectively bar all predatory debt collectors from receiving money from funds received under the federal government’s Paycheck Protection Program (PPP).  

The measure has been introduced by Representatives Suzanne Bonamici (D-Ore.) and Marie Newman (D-Ill.). In announcing the proposed legislation, the lawmakers pointed to an analysis conducted by the Washington Post in January 2021. The Post reported several incidents where debt collection companies had harassed consumers for payment on debts after they had received their own financial assistance from federal PPP loans. It was their hope that this legislation will curb these practices and will effectively block predatory debt collection firms from receiving PPP money themselves.  

Since it’s inception, the $670 billion Paycheck Protection Program (PPP) has provided forgivable loans for amounts up to $10 million for qualifying small businesses. The purpose behind them was to keep struggling small businesses afloat during the COVID-19 pandemic. 

While thousands of businesses have struggled to survive during this time, many debt collection firms have reportedly thrived. Many of them were able to successfully receive aid through the initial set of PPP loans issued, leaving many consumer advocates to question whether debt collection firms should be allowed to receive these funds.    

According to the Washington Post study, over 1,700 debt collection agencies received PPP funds, totaling over $520 million in funds received. Even after receiving this money, many of them continued to pursue collection of debts through harassment or other abusive methods.

Click here to read more.  

If you have 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 McMaken 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 McMaken website at www.miamibankruptcy.com.   

Debt Relief

Credit Counseling vs. Bankruptcy- Which one is right for you?

When it comes to dealing with debt, you have options.  Debt relief can ease the burden of overwhelming debt, but it’s not right for everyone. Given a person’s financial and personal circumstances, certain considerations should be kept in mind when making the determination between credit counseling and bankruptcy.

If the consumer has a steady income and can pay back his or her debt within a few months to a year, credit counseling may be the wise choice for him or her. However, if the person has an overwhelming amount of debt in comparison to his or her income, filing for Chapter 7 or Chapter 13 bankruptcy may be the better option.  

Credit Card Debt, Debt Relief

The Best Way to Conquer Credit Card Debt

Many consumers find themselves still struggling with large amounts of credit card debt. Much of this credit card debt is carried over from previous years. Certain steps can be taken to tackle credit card debt and either pay it off in full or reduce the amount owed to a more reasonable number.   

The first step is to push the pause button on spending and inventory the situation. The consumer’s debt cannot be conquered until the spending stops. It is important to review what has been purchased the past few months, determining how much has been spent and what is owed. It also helps to write down what the interest rate is for each card, noting the balance owed and the minimum monthly payment. Taking this first step will allow the consumer to be able to put together a budget and a plan to pay off the debt over time.  

Once the consumer has a chance to review his or her debt situation, the next step is to select a strategy to pay down the debt. Two of the most common methods include the snowball method and the avalanche method.  

With the snowball method, the consumer arranges his or her credit card balances from smallest to largest balances. The consumer focuses his or her attention on the card with the smallest balance first, paying down as much as possible on that card while continuing to make the minimum monthly payments on the other cards. Once the first card is paid in full, the consumer focuses on the card with the next smallest balance until all cards are paid off in full. The snowball method requires a great deal of patience and discipline, but it can be an effective way to pay down debt. However, this method does involve paying more in interest over time since credit cards with higher balances tend to have higher interest rates. 

The avalanche method works similarly to the snowball method, but the consumer focuses on the credit card with the highest interest rate first. This method allows the consumer to get out of debt quicker than the snowball method since it focuses on the larger balances with the higher interest rates first, but it can be hard to stay motivated with this method since seeing the results of the consumer’s efforts can be harder to immediately see. 

Another method to pay down credit card debt involves consolidating the debt through a personal loan or balance transfer.  Many credit card companies offer balance transfers, allowing the consumer to transfer multiple credit card balances to one card with a zero or low introductory interest rates. It is important that the consumer pay the balance down before that promotional period expires, however. Otherwise, the interest rate can skyrocket at the end of the promotional period, leaving the consumer in a worse position than before. A personal loan can also be used to pay off all the consumer’s credit card balances. This method allows the consumer to focus his or her attention on one, fixed monthly payment over time in lieu of multiple credit card payments.      

Please click here to read more.  

If you have 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 McMaken 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 McMaken website at www.miamibankruptcy.com.   

Debt Relief, student loan debt, Student Loans

White House Considering Executive Action to Cancel Portion of Nation’s Federal Student Loan Debt

The Biden administration is considering issuing an executive order that would effectively cancel some portion of the $1.6 trillion in federal student loan debt held by 43 million Americans. This statement comes as no surprise as student loan forgiveness and student loan reform were consistently topics of discussion during the 2020 Presidential campaign.  

The statement came last Thursday from White House press secretary Jen Psaki. She indicated the administration was looking into whether President Biden had the executive authority to cancel a portion of the nation’s outstanding student loan debt. However, they also indicated that they would welcome any legislation brought forth by Congress to do the same.  

Debt Relief, student loan debt

Freeze on Student Loan Payments Extended Through September 2021

The U.S. Department of Education has placed a pause on student loan payments through September 2021. This is among the 17 executive actions President Biden has signed since taking office. This Order, along with the extension on eviction and foreclosure moratoriums, are an effort to relieve the economic impact caused by the coronavirus pandemic. Prior to the Order, payments were scheduled to resume at the end of January.

Student loan debt continues to be a national crisis, as debt tops more than $1.6 trillion. What was once a looming financial crisis, has now been exacerbated by job losses and pay cuts caused by the pandemic. Approximately 1 in every 5 student loan borrowers are in default, according to the U.S. Department of Education. Many are struggling to pay for basic necessities and provide for their families. With the extension of the forbearance agreement, borrowers will not be forced to decide between paying their student loans and putting food on the table.

COVID-19, Debt Relief, Foreclosures

Biden Extends Ban on Evictions and Foreclosures through March

Shortly after being sworn in as the nation’s 46th president, Joe Biden signed several executive orders. One of these signed orders included extending the ban on evictions and foreclosures for individuals affected by the COVID-19 crisis.

This new order extends the Centers for Disease Control and Prevention’s (CDC) moratorium that was set to expire on January 31, 2021. The CDC’s order first went into effect in September 2020. This new executive order extends the ban for at least an additional two months past the expiration date.

Credit Card Debt, Debt Relief

Best Ways to Pay Off a Large Credit Card Bill

Many Americans ended the year 2020 with large credit card balances, and now with the new year in full swing, they may be looking for ways to chip away at that debt. Carrying a high balance on credit cards not only makes life harder, but it can present a major threat to that person’s financial stability. Several different options are available to consumers seeking to reduce or pay off their large credit card balances. What works for one consumer may not work for another. Ultimately, it depends on the person’s credit history and current financial situation as to what will work for him or her.  

Personal Loans 

One popular method to pay down a credit card has been by taking out a personal loan to pay off the balance. This method is also known as debt consolidation, and it can be a successful way for consumers to pay down several large balances at once. By taking out a personal loan, he or she can use this money to pay off all these outstanding balances, leaving just the loan balance to pay a monthly basis. It effectively transfers credit card debt to a one, singular debt with a lower interest rate. Not only does this make repaying the amount easier, but it can also often save a lot of money in interest that would otherwise build up over time on multiple credit card balances.  

Debt Relief, student loan debt, Student Loans

Student Loan Changes on the Horizon in 2021

Changes are on the horizon for student loans in 2021. Student loan reform has been an issue discussed for years, if not decades, but several events that occurred in 2020 have pushed the issue to the forefront. The presidential election, the coronavirus (COVID-19) outbreak, and the current economic climate have all pushed lawmakers to realize that student loan reform is a very real issue, and one that requires immediate action. The following possible changes could be coming in the new year.  

Student Loan Cancellation 

A number of recent legislative proposals have brought up the idea of student loan forgiveness. One proposal was included in the Heroes Act stimulus package proposed by House Democrats. In the legislation, lawmakers proposed to cancel up to $10,000 in student loan debt for borrowers who could demonstrate that they were struggling financially. Unfortunately, even though the legislation moved forward to the Senate, this portion of the original bill was removed. Senators Elizabeth Warren (D-MA) and Chuck Schumer (D-MA) have proposed legislation that would cancel $50,000 in student loan debt for borrowers who earn less than $125,000 in annual income. Lawmakers have pushed on President Elect Joe Biden to make a statement as to whether he supports or does not support student loan cancellation. Biden has stated that he would not likely pursue an executive order to cancel student loans, but rather, he encouraged Congress to consider immediate cancellation of $10,000 of student loans across the board. However, the fate of this proposal hinges on whether Republicans will retain control over the Senate. If they do, it is unlikely that student loan cancellation will move forward. 

Coronavirus, COVID-19, Debt Relief

Floridians Hope to Receive Relief from Second Round of Stimulus Payments

As coronavirus (COVID-19) continues to affect the economy, many have been wondering when another relief package would be passed by Congress. After the CARES Act was passed in March 2020, providing the first source of stimulus payments, consumers have been anticipating a second source of stimulus payments to help during their continuing financial struggles. Fortunately, at the end of December 2020, a second stimulus relief package was passed by Congress and signed by the President, providing them with a sense of reprieve.

As compared the $2 trillion CARES Act passed last March, this second package totals $900 billion. Additionally, while the previous package provided $1,200 per taxpayer, this new bill provides $600 per individual making less than $75,000 annually. The new legislation provides $600 per child, while the previous legislation provided $100 less per child.  

Debt Relief, Financial Advice, Kingcade Garcia McMaken

Make a Resolution to Eliminate Your Debt in the New Year

Some of the most common New Year’s resolutions involve improving one’s physical health through diet and exercise, cutting out bad habits, and losing weight.  Other popular New Year’s resolutions involve improving one’s financial health, getting finances in order, and eliminating debt.

The unexpected turn of events caused by the pandemic have been far-reaching. Job loss, medical expenses, the inability to pay bills, rent, and credit card debt are at the forefront of concerns for many South Florida residents.

For those dealing with concerns about their financial situation and are worried about foreclosure and repossession, there are options available including bankruptcy. When you gain control over your debt, you gain control over your life.