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

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

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

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

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

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

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

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, Timothy Kingcade Posts

What to Do if Your Medical Bill Gets Sent to Collections

Medical debt is an issue that plagues many Americans. It only takes one major medical crisis to set a person back hundreds, even thousands of dollars. According to the Kaiser Family Foundation, one in every three Americans report having difficulty paying their medical bills. As a result, a number of these individuals end up having their medical bills go into collections.

If you are one of the millions of Americans struggling with medical debt, remember you are not alone, and you do have options.

Negotiating a Settlement with Service Provider or Debt Collector.

If the debt has not been officially sent to a third-party debt collector but is being collected by the original service provider, the consumer can often work directly with that company to negotiate either a payment plan or settlement of the debt owed. The same could be said for if the debt has been sent to a third-party debt collector, although the entity contacted to negotiate on the debt will be different. This settlement can be done through three different possible methods including:

  • Reduced lump sum payment;
  • Percentage of debt payment;
  • Payment plans.

A lump sum payment is a common method used so long as the person has enough money to pay a large amount. The debt collector often would rather have some level of payment rather than nothing at all, so they will often take a lump sum payment to close the account, although the amount owed may be slightly less than what is paid. Many times, this method is preferred because the creditor or debt collector would rather receive a large lump sum of money immediately instead of keeping the negative account on the books or having the consumer file for bankruptcy where the debt would be discharged.

While very similar to a lump sum payment, some creditors will accept a specific percentage to pay off the debt, such as 25 to 30 percent, while forgiving the remainder owed. However, this type of settlement depends heavily on the balance. If someone owes a small balance, the percentage the creditor will accept may be much higher than the percentage of a large balance. Additionally, if the person is suffering from a financial hardship, the creditor may be more willing to work with that person on a percentage payment. Also, if there is a strong threat of bankruptcy, the creditor may accept a lower payment rather than get nothing through a bankruptcy discharge.

Many medical providers will work with the account holder on payment plans if they are not able to pay the bill off in full right away. However, these agreements need to be worked out timely and not after missing several payments, causing the account to go into default. Both parties must agree on an amount and the terms of the payment plan.

Get any Agreement in Writing.

Whatever settlement is worked out between the creditor/collector and consumer, it is important that this agreement be documented in writing. Without a firm commitment on the amount agreed upon, the consumer will have nothing to hold the collector to in the event they dispute the arrangement. It also gives the consumer something legally enforceable in the event the agreement falls through.

Payments Made but Still Sent to Collections.

The unfortunate fact is even if the consumer is making payments on the debt, the unpaid balance can still be sent to collections. Ultimately, it is a business decision that is made by the medical provider (i.e. – doctor’s office, hospital or dentist). How they handle the account depends on many factors, including how large the balance is, how much is being paid monthly, and how long it will take to finally pay off the amount owed. For example, if the individual owes $15,000 and is only making $10 per month payments, the provider may ultimately find that this is not going to work and could send the claim to collections, even though the $10 monthly payments are being made. This action can be much harder to accomplish if the parties have a written payment agreement, which is why it is extremely important that the payment arrangement be in writing.

Refusal of a Payment Plan.

It is always possible that a medical provider will refuse a payment plan. They are not legally obligated to work with the customer on a payment arrangement. For the most part, medical providers will work out payment arrangements out of goodwill, but if the person asking for the payment plan has failed several times before, they are not legally obligated to work out an agreement. The same goes for a collection agency. However, collectors do often work on commission, and because of this, they will often accept a payment plan that will pay off the obligation quickly, closing the account, and getting them paid.

How Medical Debt is 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 McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.inquirer.com/health/consumer/challenge-medical-bill-debt-collection-tips-20190610.html

https://www.growingfamilybenefits.com/negotiate-medical-bills-settle/

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

What You Can Do if a Creditor Is Harassing You

The business of debt collection can be intense and stressful for the person on the receiving end of the call. Debt collectors can be relentless and will stop at nothing to reach the person owing the debt. However, consumers do have rights, and it is important that they be aware of what those rights are in the event they are on the receiving end of creditor harassment.

Fair Debt Collection Practices Act

Consumers are protected from abusive and unfair debt collection practices through the Fair Debt Collection Practices Act (FDCPA). The FDCPA provides rules that third-party debt collectors must follow when they contact consumers to collect upon the debt.

The following acts are specifically prohibited under the FDCPA:

  • Repetitive phone calls from the debt collector with the intent to annoy, harass or abuse the person answering the phone;
  • Using profane or obscene language when communicating to collect the debt;
  • Threatening physical violence against the person answering the phone;
  • Using deception or misleading collection practices, including lying about how much is owed and that the person calling is an attorney when he or she is not; and
  • Making any threats to do something that either the debt collector has no intention of doing or does not have the legal right to do.

The consumer has the right to send a letter to the debt collector informing them that they must cease and desist communication with the consumer due to their violations of the FDCPA.

Depending on how extensive the abusive tactics and harassment are, the consumer can sue the debt collector under the FDCPA. This lawsuit can include damages, as well as the consumer’s attorney’s fees for having to file the case. Damages can be even more extensive if the debt collector ignores the consumer’s written cease and desist letter and continues the abusive tactics.

Tactics to Keep in Mind

Keep in mind that these debt collectors are highly skilled at antagonizing the person on the other end of the phone. Do not fall prey to their tactics of intimidation and fear. They usually record these conversations in hopes that they can get the person to say something that will incriminate them or tie them to the debt. Whatever you do, stay calm but firm, and keep the communication brief.

It helps to keep records of these conversations and contacts in the event the consumer does wish to file an FDCPA claim. The more letters, text messages, emails and phone calls that are made and recorded, the stronger the consumer’s case will be. When talking with a collector, be sure to get that person’s name, the name of the company for whom he or she works, and a call back number.

One recommendation that could also help the consumer’s case is to ask for written verification of the debt. Never assume that the collector is providing accurate information. Once this information is requested, the collector has five days from the initial contact to provide this verification including the following information:

  • The amount of the debt;
  • The name of the original creditor;
  • Information showing that the person has 30 days to dispute the validity of the debt.

If any inaccurate information is provided by the debt collector, this could be used as further proof that they are exercising unethical debt collection practices under the FDCPA.

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.thebalance.com/how-to-stop-debt-collector-harassment-4107936

https://www.consumerfinance.gov/ask-cfpb/what-is-harassment-by-a-debt-collector-en-336/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How to Improve Your Credit After Bankruptcy

The decision to file for bankruptcy is a tough one to make, but it is often the first step in gaining control of your financial future. A common concern people have when filing for bankruptcy is the effect it will leave on their credit score and their ability to access credit, again. While bankruptcy does affect your credit score, it is sometimes the last resort to rebuild your credit and your life.

In fact, it is oftentimes easier to reestablish your credit after filing for bankruptcy, because you are essentially given a “fresh start.”  Here are some quick tips to help rebuild your credit after filing for bankruptcy.

  1. Pay Your Bills on Time. Take full advantage of your financial fresh start. Make consistent and timely payments on all of your bills and any remaining debts moving forward, like your mortgage and car payment. These consistent payments over time will help improve your credit score and re-establish your credit.
  2. Monitor your Credit Report. Make sure and check your reports every few months for errors. Confirm that any negative marks (i.e. – your discharged debts) have been removed.
  3. Use a Secured Credit Card. With a secured credit card, you deposit with the lender an amount equal or nearly equal to the maximum credit line on the card. Unlike with a debit card, your payment history for a secured card is reported to the credit reporting agencies.
  4. Budget. Create a realistic budget for yourself. Review your finances several times per week to ensure you are sticking to your budget.
  5. Set up Auto-pay. Set up automatic payments for your cable, Internet and phone bills, so you do not miss your payment due date. Again, watch your finances closely so that you know when money will be coming out of your account.

There are proven ways to rebuild your credit score after bankruptcy, and our clients are proof!

My credit score said on all three reports 775, I couldn’t believe that I had such a great score before 10 years. Tim for me was the best move I have made for my situation. I have no regrets; I am glad the past is the past. – Bill T.

Hi Tim- I just wanted to send a quick note and thank you and your team for handling my bankruptcy case.  It is only a month or two after discharge, and my credit scores are already in the upper 600’s. – C.S.

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.

Source:

https://www.thebalance.com/how-to-improve-your-credit-score-after-bankruptcy-316108

 

Foreclosures, Timothy Kingcade Posts

5 Steps to Slow Down the Foreclosure Process in Florida

Receiving a notice of delinquency in the mail does not automatically mean that you are going to lose your home. Florida has what is called a judicial foreclosure process, which means that every homeowner is entitled to a hearing before the court to determine whether or not the bank is entitled to foreclose.  The most important thing to remember is that the homeowner has rights. There are things you can do to slow down the foreclosure process and even keep your home, while getting your financial life back on track.

  1. Educate yourself. Read over everything you have received from the lender, including the mortgage itself. Many notices will contain information on foreclosure prevention options. It is only after you have not paid your mortgage for a period of 90 days that foreclosure proceedings will start.  Remember, Florida is a judicial foreclosure state, meaning the lender must file a lawsuit against you before moving forward with the proceedings.
  2. Contact your lender. The lender will likely be willing to work with you as the foreclosure process can be lengthy and costly in Florida. There are different options they may extend to you, which include: refinancing, a repayment plan, forbearance or a loan modification.
  3. Contact a HUD approved housing counselor. There are federally funded agencies in each state that work with a variety of lenders to secure affordable repayment options for struggling homeowners. But with this option, beware that there are many non-legitimate companies looking to scam borrowers.  Research these options carefully and use caution. Make sure you are working with a free, federally approved agency.
  4. Consider doing a short sale. If you do not see yourself being able to repay your mortgage with a loan modification or repayment plan, a short sale may be a good option.
  5. Consider filing for bankruptcy. Filing for bankruptcy will not only eliminate your unsecured debt, but as soon as you file for bankruptcy an “automatic stay” goes into effect, which stops all collection attempts and halts the foreclosure process.

Click HERE to read more on this story.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.