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Bankruptcy Filings, Bankruptcy Trends, Consumer Bankruptcy, Consumer Debt, Timothy Kingcade Posts

Consumer Bankruptcy Inquiries Reach Highest Level Since the Pandemic

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People inquiring about filing for bankruptcy have reached its highest level since 2020.  Insurmountable debt, years of steep inflation, costly mortgages, and a weakened housing market remain the driving factors.

Legal Service provider, LegalShield, reported bankruptcy legal inquiries jumped in Q1 following three quarters of “high consumer stress.” The index is based on a survey of more than 25 million legal requests.

Prolonged financial stress combined with price pressures driven by tariff uncertainty will likely contribute to a surge in bankruptcy filings this summer.

These bankruptcy warning signs come amid a third straight quarter of elevated consumer stress measured by LegalShield’s Consumer Stress Legal Index (CSLI), pointing to a heightened financial strain that has become a “new normal” for American households.

Tariffs are driving up costs on everything from food and clothing to electronics and cars. The increased costs are typically passed on to consumers.

The share of households more than 90 days late on credit cards and car loans hit a 14-year high at the end of 2024, according to The Federal Reserve Bank of New York, and delinquencies are still climbing. Credit card balances also hit a record high of $1.21 trillion.

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If you have questions on this topic or are in a 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.

Bankruptcy Trends, Consumer News, Timothy Kingcade Posts

Fears of a Recession Grow as Trump’s Tariff Policy Takes Effect

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Several economic indicators point to a recession, including declining stock prices and a weakening consumer outlook. Consumer inquiries about bankruptcy surged during the first quarter of 2025 to the highest level since early 2020, reports LegalShield, which predicts “a potential wave” of bankruptcy filings this summer.

What do economists rely on to predict a recession? There are 10 indicators, some of which have been weakening before President Trump announced his tariff policy.

Shifting Stock Prices. In the aftermath of Trump proposing higher tariffs on April 2, the S&P 500 has dropped sharply, down 6% just in the two-plus weeks since then. Lower stock prices reflect declining consumer and business confidence.

Uptick in Foreclosures & Real Estate Trends. Certain real estate segments have shown weakness, with office buildings among the most stressed. A new sentiment survey among real estate investors, compiled by RCN Capital and CJ Patrick Co., dropped to its lowest level since it was started two years ago. The survey takes quarterly readings of optimism or pessimism among investors in residential properties.

Employment Uncertainty. The unemployment rate stood at 4.2% in March. While those numbers are not bad, jobless rates are not a leading indicator for predicting the direction of the economy.  However, if the economy does take a dive, unemployment rates will start climbing.

Credit and Interest Rate Movements. With inflation expectations rising, due to higher tariffs, the Federal Reserve is likely to face a tough choice between trying to boost economic activity while trying to keep inflation at bay.

Consumer Outlook and Expectations. Consumers are feeling uneasy about the economy, and that is showing up in the data. Even before Trump’s tariff announcements, consumer expectations were the component that weighed down the leading indicators index. Since then, things have worsened. A more current indicator of consumer sentiment tracked by the University of Michigan showed substantial drops in confidence as of early April, as people prepare for what they think will be rising unemployment and inflation.

Hours Worked in Manufacturing. One key goal of Trump’s tariff policy is to boost jobs in U.S. manufacturing. However, while manufacturing employment may rise, it will take time, years even, for improvements to be reflected.

New Business Orders. This includes consumer goods, and orders for non-defense capital goods. The group also compiles a separate index that tracks new orders. As of the most recent report published in March, one of these components showed weakness, another was flat, and the third, slightly positive. The Trump Administration has changed its tariff policy several times in recent weeks, creating the type of uncertainty that businesses fear.

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If you have questions on this topic or are in a 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.

Timothy Kingcade Posts

As Home Rental Prices Soar, Rent-Control Measures Return

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With rent prices surging across the country, legislators are looking for ways to curb the surge and help tenants stay in their homes. State lawmakers have come up with different options for rent control legislation to help with the effort, including putting a limit on how much landlords can increase their rent.

For the most part, rental prices have been on the rise since the start of the COVID-19 pandemic. According to real-estate broker, Redfin Corp., rental prices are up on average by 18 percent over the past two years. Most of these proposals restrict how much a landlord can raise rent by no more than two to ten percent in an effort to hold off any continued increase.

Kingcade Garcia McMaken, Timothy Kingcade Posts

Kristina Gonzalez Named Partner at Kingcade Garcia McMaken, P.A.

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The Miami-based bankruptcy and foreclosure defense law firm of Kingcade Garcia McMaken is pleased to announce the promotion of Kristina Gonzalez to the position of Partner with the firm.

“We are delighted to have Kristina become a Partner with the firm. Kristina is an exceptional bankruptcy lawyer and is the perfect fit to support our firm’s growth and positioning as the leading consumer bankruptcy law firm in Miami,” said Timothy S. Kingcade, the firm’s Managing Partner.

Ms. Gonzalez focuses her practice on Chapter 7 and Chapter 13 bankruptcies, foreclosure defense, and debt settlement. Kristina represents debtors throughout the bankruptcy process – initiating petitions, guiding debtors through meetings, depositions, and litigation with the trustee and advocating for debtors before the bankruptcy court.

Bankruptcy Law, Credit, Credit Card Debt, Timothy Kingcade Posts

Top Reason Americans Are Carrying an Average Credit Card Balance of Over $6,200

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Credit card debt is a burden for many consumers. Most have a complicated relationship with their credit cards. On one hand, disciplined and modest use of a credit card to make certain purchases can help establish a good credit score. On the other hand, if the balance on a credit card is not paid in full each month, and on time, the balance can quickly spiral out of control.

According a recent study by CompareCards, American consumers are carrying an all-time high of $1.1 trillion in credit card and other types of revolving debt. This figure is up nearly 20 percent from where it was just ten years ago.

Credit Card Debt, Debt Relief, student loan debt, Timothy Kingcade Posts

The Effects Student Loan Debt and Credit Card Debt have on U.S. Economic Growth

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The fact that many Americans are struggling to pay their student loans and credit card debt is not just effecting the individuals carrying the debt. It is taking a toll on the economy, as well. In fact, these two growing categories of debt are reportedly weighing down U.S. economic growth.

Credit card balances are at an all-time high at $868 billion in the second quarter, which is up from $848 billion reported in the previous three months, according to the Federal Reserve Bank of New York. Consumer debt is also climbing, hitting an all-time high of $13.86 trillion in the second financial quarter. When compared with the previous high of $12.68 trillion just before the 2008 recession, financial experts have expressed concern as to what this could mean for the country’s financial well-being.

Debt Relief, student loan debt, Student Loans, Timothy Kingcade Posts

Student Loan Debt Relief Scams to Watch Out For

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Student loan debt is an issue for many Americans, and for a great number of them, the situation has become a desperate one. This fact could be why so many borrowers are falling prey to student loan debt relief scams.

It is estimated that the national total student loan debt is well over $1.5 trillion. The average student loan borrower in 2018 is carrying just shy of $30,000 in loan debt, according to Student Loan Hero. This figure only represents what the average undergraduate student owes. For a graduate or professional degree, the borrower may end up with student loan debt well into six figures. With this much debt, borrowers can be paying on their loans for decades, which is why many of them jump at the opportunity, when presented, to get some sort of relief on their debt.  The problem is these “relief opportunities” end up being more trouble than they are worth.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How Debt Collectors Trick Consumers into Reviving Old Debts

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Creditors can be extremely creative when attempting to collect on a debt. Many of them rely on the fact that most consumers do not truly understand the laws surrounding debt collection. The average consumer may not know creditors only have so long to collect on a debt under the state’s statute of limitations. After that time has passed, the creditor or debt collector is barred from taking legal action to collect on the debt.  But that does not mean they can’t stop trying to collect on it.

The problem is many debt collectors will still attempt to get payment on the debt, even after it is past the legal statute of limitations. This practice is often referred to as “zombie debt collection.” Their hope is that the consumer will pay on the bill, even just a partial amount, reviving the debt, and then giving the debt collector the legal right to sue to collect on the remaining debt.

It is important that consumers be aware of what the statute of limitations is for their given state. In Florida, debt collectors may not collect on a debt that is more than five years past due for written contracts, such as personal loans. For other debts, including those with revolving accounts, such as credit cards, the statute of limitations is four years.

student loan debt, Timothy Kingcade Posts

Teachers Sue U.S. Over Student Loans that Were Not Forgiven

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The American Federation of Teachers has filed a lawsuit against the U.S. Department of Education on behalf of educators who argue that they have been wrongfully denied loan forgiveness under the federal public service loan forgiveness program.

The Public Service Loan Forgiveness program was created more than a decade ago to encourage young graduates to seek employment in a government job or in public service industries. While the pay in these types of jobs tends to be lower, the promise of having their federal student loans forgiven at the end of a ten-year period was created to entice them to apply for these positions.

Under the program, borrowers who work in certain public service professions, including law enforcement, nursing, and teaching, and who make payments consistently for ten years, can have their federal loans forgiven. It is estimated that more than one million borrowers have filed official paperwork to participate in the program. However, many of these borrowers are finding out that they suddenly do not qualify for forgiveness for one reason or another, including not carrying the correct type of loan.

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