Debt Relief Archives - Page 34 of 86 - Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

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

Exceptions to Paying Tax on Forgiven Debt

Posted on December 28, 2017by Admin

If you recently had debt forgiven or negotiated down last year, you likely breathed a sigh of relief. However, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount as income on your tax return, depending on the circumstances. Before you write a check to the IRS, see if you qualify for one of these exceptions to paying tax on forgiven debt.

Debts discharged in bankruptcy. If you filed for bankruptcy protection, you do not have to pay tax on the canceled debt.
Mortgage debt forgiven due to foreclosure. Originally set to expire after the 2012 tax year, the Mortgage Forgiveness Debt Relief Act protects you from having to pay tax on debt forgiven when you lose your home in foreclosure. The deadline has been extended several times, most recently in December 2015 to include the calendar years 20017 through 2016. And in early 2017, a bill to grant another exemption was introduced to Congress.
Debts canceled when you were insolvent. This is the most common exception, because debt is generally only cancelled when debtors are “insolvent” (i.e. – completely broke). This exclusion only applies up to the amount by which you are insolvent.
Student loans forgiven after you have worked for a period of time. If your student loans contain a loan forgiveness provision based on service in your profession, do not include the canceled debt as income. In addition, certain federal student loans that were discharged by the U.S. Education Department’s “Defense to Repayment” or “Closed School” discharge process are exempt. These apply to students at Corinthian Colleges and American Career Institutes Inc.
Forgiven interest that would have been deductible. For example, interest on a business debt. You are not required to pay tax on the portion of the debt due to interest, if you could have deducted the interest if you had paid it. However, if it was interest on a personal credit card- you must pay taxes on all the forgiven debt, including the interest.
Cancellation of debt as a gift. If the cancellation of debt is a gift, it is not income. Generally, the IRS will believe you if you say the debt payoff was a gift between parties such as family members or friends.
Business and farm exceptions. You may not have to pay tax on canceled debt if it was in connection with your farm or if the debts were tied to business real estate and were forgiven when you owed more money than the property was worth.

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 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.creditcards.com/credit-card-news/six-exceptions-paying-tax-forgiven-debt-1282.php

https://www.irs.gov/newsroom/home-foreclosure-and-debt-cancellation

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

What You Can Expect at the Bankruptcy Meeting of Creditors

Posted on December 27, 2017by Admin

The meeting of creditors, also known as the 341 hearing, is a meeting with the bankruptcy trustee and creditors who choose to attend the hearing. The trustee is the individual responsible for administering your bankruptcy estate and ensure that you did not leave any assets or property off your bankruptcy papers and your reported income is accurate.

Before the meeting of creditors, it is important that you carefully review your bankruptcy petition with your attorney to ensure every entry is accurate.

Here is what you will need to bring to the meeting of creditors (341 hearing):

Your bankruptcy papers;
Proof of income;
Recent bank statements and investment account information;
Your photo id;
Your social security card;
If documentation was required for any expenses under the Means Test, bring those as well;
Additional documentation the trustee requests in the Notice of Meeting of Creditors or required by the local courts.

The meeting of creditors is held in a meeting room, not a courtroom. The trustee will be there, not the bankruptcy judge and creditors may attend, although in many bankruptcy cases creditors do not show up. The trustee will swear you in and ask you some of the following questions. You will be required to answer the questions under oath.

How did you come up with the value for big ticket items, like your house or car?
Do you anticipate receiving any tax refunds?
Have you transferred any property within the last year?
Does anyone else hold property that belongs to you?
Do you anticipate receiving an inheritance or life insurance payout in the future?
Will you be receiving any property as a result of a divorce in the next year?
Do you have any legal claim for money from a business or another entity?
Do you have any possible claim against someone because of a recent accident?
Have you made any recent large payments to relatives or creditors?
Does anyone owe you money?

Related Resources:

http://www.alllaw.com/articles/nolo/bankruptcy/what-expect-meeting-creditors-341-hearing.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Beware of these Holiday Debt Traps

Posted on December 22, 2017by Admin

The holidays are officially here and if you have some last minute shopping to do this weekend, make sure and avoid these common holiday debt traps. Last year shoppers took on an average of $1,003 worth of debt, up from $986 in 2015. The merriment and excitement of holiday shopping can be replaced with anxiety and fear of debt in the New Year.

Keeping up with the Joneses. The pressure to purchase the latest and greatest holiday gifts ranging from expensive electronics to brand new cars all contribute to holiday debt. From the tree, to elaborate light displays and decorations, if not limited to a budget can all leave you with debt in the New Year.

Hot holiday toy crazes. On average, parents plan to spend $495 per child, according holiday shopping data from Rubicon Project. When the ‘must-have’ toy items start to run out, prices increase. Plan accordingly, and budget throughout the year for holiday spending.

Store credit cards. Avoid store credit cards at all costs. The 10% off the day of purchase can have big consequences if a single payment is missed on one of these cards, such as 29.99 percent APR.

Holiday parties. Hosting hordes of holiday visitors and entertaining guests can cost hundreds of dollars, not only adding to your grocery bill, but your utilities in the month of December.

Indulgent spending. The problem is that many consumers do not plan for holiday spending. Sometimes, they mentally plan to go into debt. We advise planning ahead for the next season, start checking items off the list in February or in the summer months when fewer people are buying and prices are lower.

Related Resources:

http://www.wbir.com/article/money/magnify-money/watch-out-for-these-holiday-debt-traps/507-493900752

Bankruptcy Law, Credit, Debt Relief

Steps to Take if a Creditor Has Seized Your Bank Account

Posted on December 21, 2017by Admin

If you owe a debt to a creditor or a collection agency, they can legally seize your bank account and take back what is owed. However, agencies are supposed to notify debtors about the lawsuit beforehand. Unfortunately, creditors can take everything in your bank account and leave you with nothing if it is the same amount or less than what is owed.

Although your options are limited, here are three of your best options at this point.

File Bankruptcy. If a creditor seizes your account and you immediately file for bankruptcy, you may be able to recover some or all of the money that was in your account. In some states, you can “exempt” those funds that were seized from your bank and the creditor would be forced to return it.
Contest the Lawsuit. You may be successful in contesting the lawsuit if you were not properly served.
Stop using your Account. If the first two options fail, it may be in your best interest to avoid keeping funds in your bank account. Creditors may continue to seize your funds until the balance is paid in full.

Click here to read more on this story.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorneywho 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.

Bankruptcy Law, Credit, Debt Relief

Things Not To Do Before Filing Bankruptcy

Posted on December 20, 2017by Admin

If you are considering filing for bankruptcy, the list of actions to avoid is just as important as the list of things to do before filing. If you do not avoid these simple decisions, it may prevent you from getting debt relief.

Do not transfer assets out of your name. Doing so raises huge red flags in bankruptcy court, particularly if the transferal of assets occurs right before bankruptcy filing. In some cases, hasty asset transfers may be illegal.
Do not use a credit card for large cash advances. Many filers choose to max out their credit cards before filing for bankruptcy because they fear losing credit later or they assume the debt will be discharged. However, if someone has no intention of paying money back, it is considered fraud.
Do not pay off a preferred creditor. Oftentimes, bankruptcy filers try to pay off debts with friends and family members before filing. However, bankruptcy court may make them give the money back so other creditors can get their share.
Do not make large purchases. It may seem like a good time to make large, expensive purchases since your debts are about to be discharged, however; the bankruptcy court may consider these purchases fraudulent.

Click here to read more on this story.

Credit, Debt Relief

3 Tips for Dealing with Credit Card Debt with Rising Rates

Posted on December 19, 2017by Admin

The Federal Reserve announced earlier this year that it would begin withdrawing some of the trillions of dollars it has invested since the Recession began in 2008. Although the decision is a sign that the bank is confident in the continuation of economic growth, it also means that interest rates will continue to hike. At the recent policy meeting, central bank members decided to push the target range to 1.25 percent to 1.5 percent, raising the benchmark interest rate a quarter point. This means consumers’ credit card debt is becoming more and more expensive.

Below are three tips to help you reduce or eliminate your credit card interest before the Fed increases the rate again.

Try a balance transfer from one credit card company to another. Typically, credit card companies will offer you competitive rates if you inquire about transferring a credit card balance. Companies often allow you to pay a low introductory rate for a specified number of months. Before completing a transfer, ask if there is a transfer fee, and make sure the transfer makes sense.
Opt for a personal loan. In recent years, many consumers are taking out personal loans as an alternative to credit cards. Although the payments are typically higher, the loans have fixed terms of five years or less and force you to get out of debt much quicker. Another selling point of personal loans is that they have fixed interest rates, which means if the Federal Reserve raises interest rates, personal loan rates will not be affected.
If all else fails, another alternative is calling your credit card company and simply asking for a lower rate. Your credit card company may not reduce your rate a significant amount, but every little bit helps in the long run.

Related Resources:

https://www.forbes.com/sites/nickclements/2017/12/04/3-strategies-to-deal-with-credit-card-debt-in-a-rising-rate-environment/2/#3e811eed1b19

https://www.cnbc.com/2017/12/13/fed-hikes-rates-by-a-quarter-point.html

https://www.nytimes.com/2017/09/20/business/economy/fed-bond-buying.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

4 Tech Tools to Help you Get Out and Stay Out of Debt

Posted on December 15, 2017by Admin

According to the Federal Reserve Bank of New York, household debt has reached almost $13 trillion as of September 30, 2017. If you are hoping to get a handle on your debt in 2018, here are a few tech tools to help you reach your goal.

Make a Payoff Plan: Unbury.Me

Unbury.Me is a free online tool that allows users to create an account, list all of their debt and map out a payment plan to suit their needs. The app allows users to either use the “avalanche” method, attacking the highest interest rate debt first, then moving to the second highest and so on or the “snowball” method, which focuses on the lowest balance first.

Attack Debt Subconsciously: Qoins

Qoins rounds each of your purchases to the nearest dollar, then applying that cash to your student loan or credit card debt. Nearly $1 million in spare change has been saved since the app launched in January 2017. To sign up, you log in and link your financial account to begin saving.

Meet Payoff Goals Via Savings Goals: Digit

A great strategy for paying off debt is being able to do so without having to think about it. Digit is an app that analyzes your spending habits to gauge the right amount of money to auto-save for your goals. It only transfers an amount it thinks you won’t notice and the cash is moved from your checking account to an in-app savings account. You can also set a goal amount for a certain debt and once you have saved that amount, it will notify and congratulate you.

Avoid Future Debt by Rethinking Credit: Debitize

If your goal is to pay off credit card debt, it is a good idea to put your plastic in a drawer and lock away the key until you have reached your goal. If you have paid off your credit card debt or you are hoping to avoid accruing more debt, Debitize is an app that will help you avoid more credit card debt. The app enables users to think of credit more concretely by automatically withdrawing the funds to cover any purchase you make immediately – then paying off the balance on your behalf within a day or two. Users end up with a credit card balance of zero each month.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Federal Trade Commission Bans Three Scammers from Posing as Debt Collectors

Posted on December 14, 2017by Admin

A settlement has been reached with three defendants who allegedly posed as lawyers and falsely threatened to sue consumers, even have them arrested for failing to pay on debts they did not owe. The settlement resolves an FTC complaint filed in July 2017, alleging that the defendants told consumers they were attorneys or calling from a law firm and that a lawsuit had been filed or would soon be filed against them for an unpaid debt. We originally wrote a blog on the topic, entitled: FTC Shuts Down Debt Collector for Allegedly Threatening Lawsuits.

The FTC alleged the defendants Hardco Holding Group LLC, S&H Financial Group Inc. and Daryl M. Hall (DBA- Alliance Law Group) threatened consumers with prison time and claimed police would show up at their home and arrest them if the debt was not paid. The threats and harassment on the so called, “phantom debt” are all a violation of the Fair Debt Collection Practices Act (FDCPA).

According to the settlement order, the defendants are banned from ever participating in debt collection activities, buying or selling consumer or commercial debt, and trading in consumer information related to a debt. They are also prohibited from making misrepresentations about any product or service, profiting from consumers’ personal information obtained from any debt collection activities, and failing to dispose of consumers’ information properly. The order imposes a $702,059 judgment that will be partially suspended upon the surrender of certain assets.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Reasons to File Bankruptcy before Divorce

Posted on December 13, 2017by Admin

Financial stress caused by the way couples view and spend money can ultimately lead to divorce. If you are facing both of these issues, does it make sense to file for bankruptcy or divorce, first? The bottom line: Divorce will most likely not make the financial pressure go away, oftentimes it compounds it.

Here are some reasons why you should file bankruptcy before divorce.

You will save money filing jointly. If you are still married, you can file your bankruptcy case together. This will allow you to pay one court filing fee, one set of documents and scheduling, one meeting of the creditors and one attorney fee.

Filing for bankruptcy together will free you of any liability on joint debt. If you file for bankruptcy before divorce you will be off the hook for paying joint debt acquired during the marriage. However, if you file for divorce first and receive a divorce settlement, you may still be responsible for some (or all) of the joint debt. Essentially, you may have to cover your spouse’s liability.

Filing jointly doubles the exemption amounts. When you file for bankruptcy, you are allowed to keep some property in order to regain a fresh start. These exemption amounts are usually limited or capped. However, if you file a bankruptcy case with your spouse, in most states you and your spouse will each be able to claim a full set of exemptions.

It saves you time. If one spouse files for bankruptcy in the middle of the divorce case, the bankruptcy judge may take jurisdiction of any property settlements, which can cause delays. Filing a joint bankruptcy will eliminate most (if not all) unsecured debt, such as credit cards, medical bills and personal loans for both spouses, allowing the divorce to go much smoother when negotiating debt and property division.

It reduces stress. Eliminating debt and reducing financial pressures can in turn reduce stress in the marriage. If the marriage ultimately cannot be saved, it can help the divorce proceed more amicably.

Keep in mind, if your spouse files for bankruptcy before or during the divorce case and you do not, you may ultimately be responsible for all of the marital debt. This is because your spouse used the bankruptcy case to eliminate his or her liability on your joint debts.

Related Resources:

https://www.thebalance.com/six-reasons-to-file-bankruptcy-before-the-divorce-316343

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Reasons to Delay Your Bankruptcy Filing

Posted on December 12, 2017by Admin

Bankruptcy can be used as an effective tool to take back control of your financial future and get out from under insurmountable debt. However, sometimes it is best to delay filing your bankruptcy case. Here are some reasons you should do so.

You recently took on additional debt. If you took on additional debt right before filing, there is a chance that debt will not be discharged in your bankruptcy case. If you took on the debt knowing you could not repay it or intended to file for bankruptcy, the debt could be considered fraudulent. Certain debts can be exempt from a bankruptcy discharge. These include:

Cash advances of at least $925 taken out within 70 days before filing bankruptcy;
Charges of $650 or more to any one creditor for luxury items made within 90 days before filing bankruptcy.

You recently sold, gave away or transferred property. If you sold or gave away property two years before filing for bankruptcy, the trustee will scrutinize the transaction. They do this to prevent the person who is filing for bankruptcy from putting the property in the hands of someone else. These might be gifts or they may be transferred intentionally to get them out of the bankruptcy case (i.e. – fraudulent transfers).

You expect your income to decrease or your expenses to increase soon. To qualify for Chapter 7 bankruptcy, your financial circumstances are applied to the Means Test. This test compares your income and expenses against national and local norms to determine if you have the means to pay at least a portion of the debt. The higher your income the more likely you are to have difficulty qualifying for the Means Test. Sometimes depending on your financial circumstances and the timing, it might make sense to wait until the figures used to calculate the Means Test are most favorable. It is important to work with a professional who has the skill and experience to evaluate all aspects of your financial situation and to build a strategy for your bankruptcy case that meets your specific needs.

Related Resources:

https://www.thebalance.com/four-reasons-to-delay-filing-your-bankruptcy-case-316336