Debt Relief

Bankruptcy Law, Debt Relief

How to Protect Your Home in Bankruptcy

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When facing the possibility of filing for bankruptcy, whether it be Chapter 7 or Chapter 13, the thought of losing your home can be frightening. In fact, losing one’s home can be one of the biggest concerns holding someone back from filing for bankruptcy. The lawyers at Kingcade Garcia McMaken work hard to protect people from losing their assets in a bankruptcy case, including the filer’s home.

Automatic Stay

One of the first protections filers receive when proceeding with any type of bankruptcy case is the automatic stay. The automatic stay keeps creditors from continuing any collections actions, and it immediately goes into effect after the bankruptcy petition is filed.

Credit Card Debt, Debt Relief

How to Protect Your Wages from Credit Card Companies

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A credit card company can garnish a person’s wages following a successful judgment, which is why it is important to not ignore collection attempts. While it can be hard to fight wage garnishment after it is entered, consumers do have options to protect themselves in the event this does occur.

Settling the Debt

One of the best ways to avoid a wage garnishment is to work directly with the credit card company or debt collector. Many times, the company may be willing to work with the consumer rather than go through the effort and spend the legal fees to take them to court.

They may require the consumer provide some type of proof that his or her financial situation is solid enough to handle the settlement amount. If the debt is large, they may require some type of security to ensure payment will occur.

Bankruptcy Law, Debt Relief

The Biggest Violations Made by Debt Collectors

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Debt collectors can be persistent to the point of becoming threatening or intimidating. However, this does not mean consumers are without rights. The Fair Debt Collection Practices Act (FDCPA) protects consumers from unfair debt collection practices by third-party debt collectors. The law provides when debt collectors can contact individuals, what information they can provide to third parties, and other protections.

In 2018, the Federal Trade Commission received a total of 84,500 complaints regarding debt collectors. The following violations are the most common offenses made by debt collectors.

  1. Failure to Provide Written Verification of the Debt.

Any person who is contacted regarding a debt has the right to get written verification of the amount owed. Under the FDCPA, the debt collector must send written verification of the debt within five days after making initial contact. In that communication, the debt collector needs to provide the amount owed, the name of the original creditor, and information regarding how the individual can dispute the debt. However, many debt collectors fail to follow through on this requirement. Alternatively, many consumers are not aware they have the right to request this information.

Credit Card Debt, Debt Relief

When Can a Credit Card Company Garnish Your Wages?

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When someone is facing a credit card collection action, the last thing that person wants is to have his or her wages garnished by the credit card company. However, credit card companies do have the right to garnish a cardholder’s wages, just like any other creditor.

Before credit card debt can be collected, it must be considered delinquent.  At the time a person gets a credit card, he or she enters into an agreement to make monthly payments. If these payments are not made on time, that contract is considered broken and the debt delinquent. Once this happens, the credit card company is within its right to collect on the debt. Normally, missing a credit card payment results in a significant interest rate hike, but if the debt goes unpaid for too long, the credit card company can file a legal action to collection on the debt.

This step is where garnishment comes into play. Credit card companies cannot garnish the cardholder’s wages without first filing a legal complaint to collect on the debt and serving the complaint on the cardholder. The accountholder has a chance to respond to the complaint and file an answer within a set period of time. If he or she does not respond, the credit card company can obtain a default judgment against the cardholder, speeding up the process. However, if the cardholder does respond, the credit card company must prove that the debt is owed at a hearing before a judge.

Bankruptcy Law, Debt Relief

How to Defend Yourself Against a Debt Collection Lawsuit

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When someone is facing a debt collection action, it can seem like a hopeless situation. It is a situation, however, that many Americans face. According to the Consumer Financial Protection Bureau (CFPB), more than 70 million Americans have interacted with a debt collector.

Of these 70 million, 25 percent of them report feeling threatened during their communications with debt collectors, who often use aggressive methods to obtain payment. If the collection gets to the point where legal proceedings are filed, certain steps can be taken to protect your rights.

  1. File a Response

The biggest mistake that consumers make is to ignore the paperwork when they receive it. A consumer who is facing a debt collection proceeding will receive a summons and complaint, informing him or her that a legal action to collect upon the debt has been filed. This paperwork will provide information regarding how long the individual has to file a response to the legal action. If a response is not filed, however, the debt collector or creditor can get a default judgment against the individual, resulting in a garnishment of the consumer’s wages. If that happens, the court can add the collection agency’s legal fees, court costs and interest to the balance.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

Student Loan Borrowers Diagnosed with Cancer Still Waiting for Promised Relief

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In September 2018, President Donald Trump signed a bill into law, allowing student loan borrowers who have been diagnosed with cancer to delay their federal student loan payments. This new law was created to allow these individuals to focus on their treatment and not their student loan obligations through the course of their medical treatment and six months afterward. However, just nine months after the law took effect, borrowers who have requested this deferment are still waiting for approval.

The delay seems to be due to the U.S. Department of Education not yet providing student loan providers that administer its federal student loan programs an official application through which qualifying borrowers can apply. While the law may be in effect, service providers have no way to implement it.

The Department of Education insists that they are taking steps towards resolving this problem and creating an application for the cancer deferment. However, many borrowers are questioning why this was not done previously. As of January 2019, the Department of Education asked that the Office of Management and Budget conduct an emergency review and approval of the cancer deferment form created.

The Department of Education is also requiring a 60-day comment period on the proposed form, which is delaying the process even further. With cancer patients, time is of the essence. Many consumer advocates question why the comment period was not shorted to 30 or even 15-days.

Student loan servicers are offering temporary forbearances for borrowers who are seeking the cancer deferment. However, forbearance does not stop interest from accruing on the debt while payments are paused. Deferment, on the other hand, puts payments on hold while pausing interest from accruing, as well.

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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. There are ways to file for bankruptcy with student loan 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 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.

Bankruptcy Law, Credit, Debt Relief

How a Bankruptcy Affects Co-Signers

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To obtain financing or approval for a loan, many consumers will resort to asking a loved one or family member to co-sign the loan for them. If the individual is not able to continue paying on the loan and defaults, the lender will be able to seek payment on the debt from the co-signer. However, what happens when the borrower who took out the loan files for bankruptcy? Does the co-signer receive relief from the obligation, as well?

What is a Co-signer?

A co-signer or guarantor is a person who takes on a financial obligation along with a borrower who often either has poor credit or limited credit. Deciding to sign a loan as a cosigner is more than just being a reference, a co-signer or guarantor is responsible for paying back the debt if the borrower is unable to do so.

A lender may see the borrower as a lending risk and will require him or her to find someone with a more solid financial history to co-sign the obligation. A co-signer may be needed for a personal loan, a student loan, an application to rent an apartment or other space, or a lease on a car, equipment or furniture. The responsibilities that accompany co-signing a loan are more than being a second signature on a lending application. By co-signing, that person is essentially taking on full responsibility for the loan in the event the original borrower defaults.

While a bankruptcy discharge may relieve the borrower, who is defaulting on the obligation, from responsibility or liability on the debt, the discharge does not always lift this burden from the co-signer on the debt. It often depends on the type of bankruptcy being filed as to what type of protections co-signers have regarding their debts.

Chapter 7 Bankruptcy

At the time of filing for Chapter 7 bankruptcy, the filer will receive protection from collection on his or her debts through the automatic stay. However, protection from the automatic stay does not also extend to any co-signers on debts. This lack of protection leaves the creditors completely free to pursue collection on the debt from the co-signers on the loan.  If the borrower wishes to maintain a good relationship with the co-signer, it may be wise for him or her to take certain steps to protect the co-signer. The person may choose to reaffirm the debt, especially if it involves a secured debt, such as a home loan, car loan or other secured credit account. By reaffirming the debt, the borrower is giving up the benefit of bankruptcy discharge on that specific debt. Many creditors will accept payment plans or partial payment on the debts in lieu of receiving nothing. If they discover the co-signer has substantial assets, they may be less likely to accept anything other than full payment, however, so this may not be a possibility.

Chapter 13 Bankruptcy

While a Chapter 7 bankruptcy case does not offer much protection for co-signers, a Chapter 13 bankruptcy case offers a little more. A Chapter 13 bankruptcy involves a three-to-five-year long repayment plan, which gives the borrower more time to pay off the co-signed debt. When a Chapter 13 case is filed, the automatic stay issued will protect both the borrower and co-signer from collection on any consumer debts, which is called the Chapter 13 co-debtor stay. The stay will be in effect unless the court lifts it upon request of a creditor or dismissal of the case. The co-debtor stay may also be lifted if the bankruptcy court converts the Chapter 13 case to a Chapter 7 bankruptcy case. Otherwise, a co-signer will receive considerably more protection under a Chapter 13 bankruptcy.

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.

Related Resource:

https://www.nolo.com/legal-encyclopedia/cosigner-liable-debt-file-bankruptcy.html

 

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Medical Expenses Lead to More Than 60 Percent of Personal Bankruptcy Filings

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Many different factors play into why a person decides to file for bankruptcy. For many consumers, the cost of healthcare and staggering medical bills play a major part in why they file bankruptcy.

According to a recent report published by the American Journal of Public Health, 66.5 percent of all bankruptcies are related to medical debt, whether it be the cost of medical care or the time away from work required due to the injury or illness. The study reviewed court filings for a random sample of 910 Americans who filed for bankruptcy between the years 2013 and 2016. They found that 530,000 families file for bankruptcy annually due to either a medical issue or medical bills.

Medical bills often come at a completely unexpected time, which is a big reason why they play such a major role in personal bankruptcy. The cost of medical care is high enough as it is, and it only takes one major medical crisis to set someone back thousands of dollars. When a person is already living on a limited income to pay for basic living expenses, these unexpected medical bills can put him or her in a serious bind. If a major medical crisis also leads to the loss of a job or if the person is under-insured, the results can be even more devastating.  Even if someone does have savings, one trip to the hospital could quickly deplete that account.

Medical expenses were not the only reason people filed for personal bankruptcy. The study also reported that 45 percent surveyed cited not being able to afford their mortgages as their reason for filing. Other factors also included student loan debt, a major life event, such as a divorce or job loss. Many consumers reported a combination of two or more of these factors as a leading cause of why they filed for bankruptcy.

Other factors that played a role in personal bankruptcy filings had to do with the location of the filer. The report showed that someone who lives in a larger, metropolitan area is more likely to fall behind on their basic living expenses when compared to someone else who lives in a more rural part of the country. Additionally, medical debt statistically is more common in certain areas of the country when compared to others.

The filer’s age and stage of life also plays a role the reason behind filing for bankruptcy. The number of bankruptcy filings for individuals between the ages of 18 and 54 declined between 1991 and 2016. However, bankruptcy filings have gone up for individuals over the age of 55. In fact, the number of individuals over the age of 65 who filed for bankruptcy have tripled since 1991. Many filers in this age group attributed the cost of healthcare as to why they filed for bankruptcy.

The good news is if medical debt does make up a large part of the total debt the filer is carrying, this category of debt is considered unsecured and can be discharged in a Chapter 7 or Chapter 13 bankruptcy case. Unsecured debt is debt that is not otherwise tied to an asset, including credit card and medical debt. Rather than struggle with paying medical bills for too long, a consumer who finds himself or herself in a troubling financial situation due to a medical crisis should consult with a bankruptcy attorney to see if bankruptcy is a good option for him or her.

How is Medical Debt Handled in Bankruptcy?

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing.  Making the decision to file for bankruptcy is never an easy one.  It can be difficult to get past some of the myths associated with filing for bankruptcy. Sometimes by waiting, an individual facing a lot of debt can find himself or herself in an even worse situation. Filing for bankruptcy can help protect valuable assets, including your home, car, IRA and social security.  It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.

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 McMaken, 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.

Source: https://www.businessinsider.com/causes-personal-bankruptcy-medical-bills-mortgages-student-loan-debt-2019-6

 

Bankruptcy Law, Debt Relief

U.S. Supreme Court Issues Ruling Setting Sanctions for Bankruptcy Debt Collections

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The U.S. Supreme Court issued a ruling this week that would hold creditors in contempt and face serious civil penalties if they attempt to collect on a debt that was canceled in a bankruptcy case. The ruling came out Monday, following an appeal from the U.S. Ninth Circuit Court. The Justices unanimously ruled that a court may hold a creditor in civil contempt if it is found that the creditor’s collection of the old, discharged debt is “objectively unreasonable.”

The fact that this ruling came as a unanimous decision is a win for consumers and provides a set standard for cases in the future. This case was an appeal from a circuit court ruling that found that creditors should be given some amount of leniency, even when it is unreasonable for them to believe that the bankruptcy discharge order is not applicable to the debt they are trying to collect.

The legal standard adopted by the Supreme Court was originally advocated by the U.S. Department of Justice. Justice Stephen Breyer penned the unanimous decision where he wrote that “a court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct.”

Since the Supreme Court sets the standard all lower courts must follow, this rule now provides a test judges can use when facing cases involving debt collectors who are continuing to collect on a debt after it has been discharged in bankruptcy. Therefore, all courts will need to review future claims under the question of whether there exists a “fair ground of doubt’ as to whether the creditor’s conduct might be considered lawful under the bankruptcy discharge order.

Up until this time, courts, including the Ninth Circuit, followed the good-faith standard, which allowed for these types of collections if the creditor was said to be collecting on the debt in “good faith.” The standard was extremely subjective and creditor friendly.

Justice Breyer clearly stated that this standard is meant to be an objective one and not a subjective standard. Courts are to review the facts of the case as to whether the violation was done on an objectively unreasonable understanding of the bankruptcy court’s discharge order.

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.

Related Resources:

https://www.courthousenews.com/supremes-set-sanctions-rule-for-bankruptcy-collections/

 

 

Debt Relief, student loan debt, Student Loans, Uncategorized

$5.3 Million in Student Loan Debt Canceled as Part of the ITT Tech National Lawsuit Settlement

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Hundreds of Pennsylvania students who attended the now-bankrupt ITT Technical Institute will receive $5.3 million in student loan debt relief as part of a national settlement. Pennsylvania Attorney General Josh Shaprio said 570 former ITT students will have their student loan debt canceled as part of a multi-state settlement.

“With the private student loan program that ITT and CUSO established, ITT Tech was able to take advantage of thousands of hardworking students who were simply trying to complete their education,” Shapiro said in a statement.

The national settlement provides $168 million for more than 18,000 students harmed by abusive lending practices. ITT Tech targeted “low income” students who could not afford to pay tuition out of pocket and relied on federal loans to pay for school, according the settlement. A coalition of 44 states reached a settlement with Student CU Connect CUSO LLC, which was managing the loans for ITT.

ITT Tech had more than 136 campuses in 38 states when it shut down in September 2016. This $600 million settlement cancels all the student loan debt owed to the school.

The agreement specifically deals with student borrowers who attended ITT Tech between the years 2006 and 2016. The settlement also returns $3 million to students who made payments on their loan to the school after the school’s parent company, ITT Educational declared bankruptcy in 2016.

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. There are ways to file for bankruptcy with student loan 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 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.