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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What is “good debt” and how to make it work for you?

Posted on December 14, 2015by Admin

The word “debt” predominately carries a negative connotation. However, some debts are good for you as all financing is not created equal. So what is good debt? Good debt is “any debt that offers a return on investment.” For example, a mortgage is often considered good debt. Other examples of good debt include: federal student loans (which offer greater protections for borrowers and come with the potential return of a higher salary and improved job prospects), and low interest lines of credit taken in order to invest in stocks or retirement funds.

Bad debt is any credit that you are taking out and using without a clear-cut plan of paying it back. Think of using a high-interest credit card to fund a shopping trip or taking out a payday loan to cover extra holiday spending.

Most credit score models reward consumers for having a diverse portfolio of accounts and revolving debt, like credit cards, depending on how much of the credit you are going to use and pay off each month. Making on-time payments and keeping your balances low on these cards is important when it comes to keeping a healthy credit score.

So how can consumers avoid taking on bad debt? First, remember that you do not have to take every credit card that comes your way. Ask yourself if you will be able to pay off the debt. If you do not have a plan to pay off the debt, it is probably a bad debt.

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If you are in financial crisis and considering filing for bankruptcy, 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, 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.

Foreclosures, Timothy Kingcade Posts

$5.4 Million Awarded to Houston Couple in Foreclosure Fraud Case

Posted on December 11, 2015by Admin

Sometimes David does beat Goliath. It’s a story we have heard thousands of times since the housing crisis. Homeowners fighting the big banks to try and save their homes from foreclosure. Many times arguing that the lender or servicer has no legal authority to foreclose on their home.

One Houston couple recently took on one of the nation’s largest banks- and won! David and Mary Ellen Wolf received a foreclosure notice in 2011 from Wells Fargo. There’s just one problem- The Wolf’s had never done business with Wells Fargo or their mortgage servicer, Carrington Mortgage Services.

After discussing the situation with their neighbor, who is also a lawyer, they determined that neither Wells Fargo nor Carrington had the legal right to foreclose on them. The issue of mortgage notes being transferred between lien holders and servicers after the mortgage was originated is not a foreign concept, but the Wolf’s argued that Wells Fargo violated Texas law.

According to the Houston Chronicle: Wells Fargo retroactively attached the Wolfs’ mortgage to a securitized trust that was closed and sold to investors three years earlier, the bank violated a Texas law that prohibits fraudulent real estate filings. The jury agreed, although State District Judge Mike Engelhart has not formally entered the verdict, and the bank and mortgage company have not said whether they’ll appeal.

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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 website at www.miamibankruptcy.com.

Foreclosures, Timothy Kingcade Posts

Foreclosure Filings Fall in South Florida

Posted on December 10, 2015by Admin

South Florida had a sharp decrease in foreclosure filings in November, losing its spot on the “Top 10 states with the highest number of foreclosures,” according to RealtyTrac’s foreclosure report. There was one foreclosure filing per 645 homes in South Florida, ranking 12^th among metro areas. The region once had the highest foreclosure rate in the nation. However, with property values rising, homeowners who were previously underwater have been able to refinance or sell their homes.

Banks are continuing to work through the backlog of foreclosures. The recent numbers mean the share of active foreclosures tied to the housing bubble burst are shrinking, with 59 percent of all loans in foreclosure originated between 2004 and 2008. It continues to decrease from 61 percent earlier this year and 75 percent two years ago, according to Daren Blomquist, VP of RealtyTrac.

There were 3,824 South Florida foreclosure filings in November, down 38.9 percent from the same month a year ago. This total includes new lawsuits, judgments and repossessions. Repossessions accounted for the largest amount at 1,845, as most of the foreclosures are in their final stages.

Atlantic City, New Jersey led the nation in foreclosure filings with one foreclosure every 307 homes.

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Foreclosures, Timothy Kingcade Posts

South Florida Still in Need of Mortgage Debt Forgiveness

Posted on December 9, 2015by Admin

South Florida was hit harder by the 2008 mortgage, housing, banking and economic crises than any other region in the U.S. and continues to lag behind the nation as a whole in the housing market recovery. We continue to hear stories of families who are struggling to piece their financial lives back together after this seven year ordeal. To make matters worse, without the re-authorization of the Mortgage Debt Relief Act, a number of South Florida homeowners will continue to be unjustly burdened.

The Mortgage Forgiveness Debt Relief Act eliminates the income tax on forgiven mortgage debt, eliminating a particularly punitive burden resulting from plummeting home values. In the aftermath of the housing crisis, many homeowners found that their homes were underwater- worth far less than their outstanding mortgage balance.

The most recent foreclosure statistics reveal that Florida’s foreclosure activity remains the nation’s second highest. Five Florida cities were among the 10 highest foreclosure rates for metro areas in the U.S. in the third quarter, including Jacksonville (No. 2), Deltona-Daytona Beach-Ormond Beach (No. 3) Tampa (No. 4), Miami (No. 5), Lakeland (No. 7) and Ocala (No. 8).

Without the re-authorization of the Mortgage Forgiveness Debt Relief Act, any forgiven principal reduction is currently taxable in 2015. This means struggling homeowners, who have already faced job loss and sought loan modifications, will be left owing thousands of dollars in taxes this year on top of the loss of their home and its equity.

Banks and investment firms in the mortgage industry have received numerous breaks throughout the recovery. South Florida homeowners, who have been hit particularly hard by the crisis, have earned the right to this temporary tax break. We urge the Florida congressional delegation to pass the Mortgage Forgiveness Debt Relief Act.

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Bankruptcy Law, Credit, Debt Relief

RushCard Disruption Reveals Flaws in Prepaid Debit Cards

Posted on December 8, 2015by Admin

Thousands of account holders of one of the most popular prepaid debt cards, the RushCard, found themselves unable to access their funds for the better part of two weeks. Essentially, they could not purchase groceries, pay rent or purchase gas using their cards because of a so-called “technology transition,” the company said. Hip-hop mogul, Russell Simmons who is the founder of the card simply said he was “praying” for those affected, in a since-deleted tweet.

It’s a sad reality that the poorer you are the more you pay for banking in America- but it can also be dangerous to live outside the mainstream banking system as this type of problem is not limited to RushCard. The Pew Charitable Trusts reported in June that about 23 million Americans use prepaid cards such as RushCard regularly, up about 50% between 2012 and 2014, with many treating them like bank accounts and having their pay checks directly deposited to the card.

It’s not the first time that a prepaid debit card backed by a celebrity and marketed directly at the financially most vulnerable segment disappointed consumers. Last year, Suze Orman and Bancorp Bank shut down their approved card project. Part of the card’s marketing pitch was that this might be a way for Americans with poor credit to rebuild their damaged FICO scores. However, the minimum annual cost to use Orman’s product for a typical “unbanked” consumer came closer to $81 in fees.

For many individuals, using these type cards seem like a rational choice, as a number of banks are beginning to charge fees for smaller accounts. The banking industry has stopped serving those who are “too poor to bank”, pushing them into the arms of non-bank service providers to provide the most basic services: to cash pay checks, pay bills or transfer money. But in reality, consumers are forking over approximately 10% of their income for these services when they use these type cards.

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Bankruptcy Law, Student Loans, Timothy Kingcade Posts

More Student Loan Debt Forgiven for Corinthian College Students

Posted on December 7, 2015by Admin

The government is erasing student loan debt for more than 7,000 former students of the now-defunct Corinthian Colleges- totaling over $100 million. According to a recent report, the Education Department has approved a second wave of loan forgiveness for students who attended this college and took out loans. This one is for students who filed “borrower’s defense” claims with the government, alleging they were lied to or mislead. At one time, Corinthian was one of the largest chains of for-profit colleges, but filed for bankruptcy protection in May 2015 after allegations of fraud surfaced.

The department’s undersecretary, Ted Mitchell said, “We will continue to provide forgiveness to every student who has been similarly mistreated.”

In a progress report released by the department, Joseph Smith, who is overseeing the debt relief, said his team has approved relief for 1,300 former Heald College students, totaling nearly $28 million in loans that now will not have to be repaid to the government.

Heald, which had campuses in California, Hawaii and Oregon, was one of three schools under the Corinthian umbrella. The other two were Everest (with 10 Florida campuses) and WyoTech.

Another 5,800 former students from Heald, Everest and WyoTech who filed “closed-school” claims with the government will see their debt discharged, totaling $75 million. It is expected that tens of millions of dollars of additional relief will be granted in the coming months under the closed-school claims.

Education officials have predicted that if all Corinthian students who borrowed government money (dating back to 2010) would seek relief, the total cost would be $3.2 billion in student loan debt relief.

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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. 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, 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.

Bankruptcy Law, Credit, Student Loans, Timothy Kingcade Posts

Student Debt in America: Extend with a Smile, Collect with a Fist

Posted on December 4, 2015by Admin

The student loan debt crisis is nothing new, but the interest accruing on these loans represents a new threat. Of the 43.3 million borrowers with outstanding federal student loans, 1.8 percent, or 779,000 people, owes $150,000 or more. And 346,000 owe more than $200,000. A Missouri high school teacher and mother of four owes the federal government a staggering $410,000! She took out loans for her undergraduate education, but also for law school, which she was unable to complete after becoming ill with a life-threatening autoimmune disease that required a lengthy hospitalization. Today, the interest has accumulated to twice the original principal. The monthly loan payments of $2,750 will stretch for 30 years.

With her forbearance options exhausted, the loan servicer has threatened to “come after her,” garnishing her wages and eventually her social security. This woman’s story reveals the deep contradictions in the federal government’s approach to student loans. People have always struggled with debt and access to capital is what fuels the modern economy. Borrowing for college is often seen as a good idea because it represents an investment in a person’s future potential. However, borrowing is risky and people often do a poor job- particularly young people- of properly weighing the interests of their present and future selves.

The private enterprise system is built to limit over-borrowing by sharing risk between lenders and borrowers. Lenders examine credit and income histories and ask for collateral that can be repossessed in case of default. Because most loans can be discharged in bankruptcy, lenders share on the cost of default. But federal student loans do not work that way. “No Cash? No Credit? No Problem!” is essentially the Department of Education’s policy on student loans.

The number of active borrowers enrolled in college has declined roughly nine million today from about 12 million in 2010, according to the Federal Reserve Bank of New York. But the total amount of outstanding student loan debt continues to increase, because many borrowers are struggling to pay back their older loans.

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

Student Loan Debt- Not just a burden to the student

Posted on December 3, 2015by Admin

Ninety-four percent of parents of college students are increasingly feeling the burden of student loan debt, according to a 2014 survey by Citizens Financial Group. More than half of those parents are worried that the cost of college will impact their ability to retire. Parents who cosign on their child’s student loan debt assume equal responsibility for repaying the loan. That means any late payments not only hurt the child’s credit, but the parents as well.

The problem is wide-reaching, but the middle class seems to have been hit the hardest. In many instances, the debt is held by private lenders because federal loans have been maxed out. Those taking out the loans oftentimes do not qualify for need-based aid since their parents make “too much” money.

Parents who are shouldering the burden of student loan debt are encouraged to look for ways to improve their cash flow by reducing monthly expenses like cable bills, refinancing mortgages to lower interest rates and shopping around for the best insurance coverage.

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

Debt Collectors can now Robcall to Collect Student Loans

Posted on December 2, 2015by Admin

If you are currently in default on your student loans, you may begin receiving continuous calls from collectors to pay up. A budget agreement, which is awaiting President Obama’s signature, contains a provision that allows the government to collect federal debts using automated calling systems to mobile phones.

Not surprisingly, Navient (formerly Sallie Mae) and Nelnet, two companies that service federal loans, have been strongly advocating for this. They both argue that debtors who receive robocalls are more likely to repay their debts. Currently, loan servicers are allowed to robocall people only after they have consented to being auto-dialed and who have verified their cell phone numbers. (Only about a third of customers fall into both of those two categories.)

In an interestingly twist, the bill puts the Federal Communications Commission (FCC) in charge of implementing the robocalls- an organization that has been fighting against automated calls to cell phones recently. Just last week, the FCC started publishing reports on consumer complaints about cell phone robocalls to give software developers tools to build apps that will block them.

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

What happens to your debts when you die?

Posted on December 1, 2015by Admin

Your debts become the responsibility of your estate. When you pass away, any debts you leave behind could take from the assets you had hoped to leave your loved ones. In some cases, family members can even be responsible for your debts. This is the reason many people purchase life insurance- not only to leave their loved ones something when they pass, but also to take care of any outstanding debt and final expenses.

Mortgages and home-equity loans

If the property has a mortgage, the lender does have some protection, at least up to the value of the property. However, federal law states that lenders cannot force the joint owner to pay off the mortgage immediately after the co-owner dies. This also applies to any relative who inherits the home and lives in it. This means the family member or co-owner can simply take over the monthly mortgage payments. If there is an outstanding home-equity loan, a lender can force the person who inherits the home to repay the loan immediately, which could result in the home being sold.

Auto loans

If the vehicle is not paid in full, the lender has the right to repossess the car. But typically, whoever inherits the car can just take over the payments. It is unlikely the lender will take action.

Credit cards

When the estate runs out of assets, the credit card companies are out of luck. This is due to the fact that credit card debt is not secured by assets the way mortgages and car loans are. Any joint account holder would be responsible for the bill, but people who are simply authorized users of the card would not be.

Student loans

Lenders do not have any recourse if the estate does not have assets to repay other unsecured obligations, like student loans. Even if your relatives are not responsible for your debts, collection companies can still legally call to discuss the debts to find someone who is authorized to pay them, according to the FTC. It is important to know, debt collectors cannot mislead family members into thinking they are responsible for the debts.

Caveats

These are the circumstances in which spouses or other people would be responsible for your debts. These include:

They co-signed on a loan;
Are joint account holders;
Are spouses in community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

What is protected?

Creditors typically cannot go after your retirement accounts or life insurance proceeds. However, if the life insurance beneficiaries you named are no longer living, your death benefit may go into your estate and then be subject to creditors. That is one reason why it is important to make sure your policy names the proper beneficiaries.

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