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Protecting Military Service Members from Predatory Loans Issue of National Security

Posted on February 20, 2015by Admin

Laws such as the Military Lending Act are intended to reduce service members’ likelihood of ending up in debt to predatory creditors by capping interest rates on loans at 36%; prohibiting “roll over” loans where the borrower pays off an existing debt with another loan (usually with less favorable terms); eliminating forced arbitration with creditors; banning creditors from requiring that they carve out an automatic amount of money from their paycheck to pay back your loan; and forbidding prepayment penalties for borrowers who pay back some or all of the loan early.

These rules, which protect our military are not just about doing something nice for our soldiers, it is an issue of national security. While it is unfortunate for any consumer to end up with revolving debt, there are particular concerns when the borrower is a service member. Someone looking for unauthorized access to military information or assets may be able to leverage that debt in their favor. This is why service members with significant debt on their credit reports may end up having their security clearance lowered or taken away. Some debt collectors are using this as leverage when trying to get service members to pay up, threatening to reveal their financial situation in a way that will negatively impact their position in the military.

According to the Consumer Financial Protection Bureau, some debt collectors have even threatened to tell the soldier’s superiors about the debt and when their status comes up for review. Such contact is illegal as outlined in the Fair Debt Collection Practices Act. Even if a soldier’s security clearance is damaged by debt, they can appeal their case to an Administrative Judge of the Defense Office of Hearings and Appeals, where they will be given a chance to explain how they ended up in debt and what they are doing to address the problem. This can include the soldier showing that they are currently living within their means; that they are making a good faith effort to resolve the unpaid debts; disputing debts that are not theirs, etc.

Click here to read more on this story.
http://consumerist.com/2015/01/09/protecting-military-servicemembers-from-predatory-loans-is-a-national-security-issue/

If you 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, 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, Timothy Kingcade Posts

Many States have cracked down on Predatory Payday Loans- But how are Lenders Still Evading the Law?

Posted on February 19, 2015by Admin

Several states have passed legislation, which regulate or completely outlaw payday loans. These types of predatory loans often charge triple-digit interest rates and tend to be a last resort for the poor and extremely desperate consumer. The business of lending to the low-income is a lucrative one and lenders continue to find loopholes.

Below are just five ways lenders have dodged current legislation:

1.) Disguising themselves as “other kinds” of lenders. Many payday lenders have become licensed as mortgage lenders, which operate under different rules and allow them to continue what they are doing.

2.) Altering the definition of “payday lending.” In 2006, Congress passed the Military Lending Act, which in part forbids lenders from charging active military households more than 36 percent interest on short-term loans. That provision has been something of a failure, according to the Consumer Financial Protection Bureau. The problem lies in the definition of a short-term loan. For example, the law regulates payday loans of 91 days or shorter; to evade this law, many lenders are offering loans just slightly longer than 91 days.

3.) Issuing simultaneous loans. Payday lenders are splitting up big loans into small, concurrent loan. For example, in Mississippi, two-week loans cannot exceed $250. Instead, lenders are giving four $100 loans at the same time. Whereas it is illegal to make a $400 loan due in only two weeks, the four $100 loans is perfectly legal.

4.) Referring to themselves as loan middlemen. Many payday lenders have registered themselves as “credit repair organizations.” These groups operate as middlemen, connecting customers to law-abiding loans from third-party lenders. So how do they make their money? By tacking their own fees on top of each transaction.

5.) Using Indian tribes to evade the law. Some payday lenders are partnering with Indian tribes to exempt themselves from local lending laws. These lenders tend to operate online, which allow them to offer their services nationwide- including states where payday lending has been banned.

Click here to read more on this story.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Consumers Still Struggling with Medical Debt

Posted on February 18, 2015by Admin

The Federal Health Care Law was intended to keep an unexpected illness or injury from bankrupting Americans. When calling for the law’s passage, President Obama proudly declared, “people shouldn’t go broke because they get sick.” Even though the Affordable Health Care Act has authorized states to expand eligibility for Medicaid and created online insurance markets for those without employer coverage to qualify for federal subsidies- it hasn’t solved the problem.

In 2013, medical debt was the largest cause of personal bankruptcy — 1.7 million people lived in households experiencing bankruptcy because of health costs. The health care law brought regulations that limited for the first time the cost-sharing in plans. For example, an individual plan sold on an exchange cannot include out-of-pocket costs greater than $6,600. In practice, the average deductible (which must be paid before insurance kicks in), varies based on how expensive a plan is. This regulation still only applies to “in-network” doctors and specialists, which can be a short list. Many vulnerable consumers are incurring medical debt by visiting unapproved doctors or hospitals.

Deductibles keep growing. Last year, work-sponsored insurance plans had an average deductible of about $1,200. In 2009, the average deductible was $826. And this year, the silver plans sold through the federal marketplace require people to pay on average more than $2,500 or approximately $3,500 before their insurance benefits kick in. Bronze plans, known for having cheaper monthly premiums have average deductibles of about $5,300.

Even with the Affordable Health Care Plan in place, efforts to regulate how providers can collect on patient debt remain limited. For instance, hospitals and doctors can still obtain judgments, garnish paychecks and go after people’s assets, including their homes.

Click here to read more on this story.
http://www.usatoday.com/story/news/2015/02/01/consumers-still-struggling-with-medical-debt/22587749/

Bankruptcy Law, Credit, Timothy Kingcade Posts

BBB’s Top 10 Scams of 2014

Posted on February 17, 2015by Admin

The Better Business Bureau hears from thousands of consumers and business owners each year, reporting a variety of scams and frauds. Below are the Top 10 scams they consider to be most ‘pervasive’ last year:

10. Sweepstakes Scam: The scammers alert you that you have won a contest, a prize or the Publishers Clearing House Sweepstakes! All you have to do is pay some taxes and fees before you collect. This is not a new scam, but continues to be a common one.
9. Click Bait Scam: This scam can take many forms, but the most notorious one this year was when Malaysian Airline Flight 370 went missing, prompting online users to “click here for video.” Enticing stories like this, celebrity images and other fake news can get you to unintentionally download malware.
8. Robocall Scam: “Rachel from Cardholder Services” claims to be able to lower your credit card interest rates, taking personal information (i.e. – your card number) and charging fees to your card.
7. Government Grant Scam: You get a call saying you have been awarded a government grant for thousands of dollars. All you have to do is pay a couple hundred dollars in fees by wire transfer or a prepaid debit card.
6. Emergency Scam: Often referred to as the “grandparent scam,” because it preys on the elderly, the victim receives a call or email claiming to be a grandchild who has been severely injured, robbed or stabbed while overseas and they need money immediately via wire transfer.
5. Medical Alert Scam: This scam also preys on the elderly. The victim receives a call or visit from a company claiming a concerned family member ordered you a medical device in case of emergency. They take down the victim’s credit card or banking account information, but they receive nothing in the mail.
4. Copycat Website Scam: You receive an email, text message or social media post for an excellent deal on a popular product. You click through to what appears to be a popular retailer’s website, but when you order the product, nothing arrives. Now the company has your payment information and personal information.
3. “Are you calling yourself” Scam: The latest phone scam trick puts your phone number in the caller ID, getting you to pick up the phone out of curiosity or return the call.
2. Tech Support Scam: You receive a call or pop-up on your computer screen claiming to be a Microsoft representative from Norton or Apply, regarding a problem on your computer. The scammer says if you give them access to your hard drive, they can fix the problem. Instead, they install malware and have full access to your computer allowing them to steal your personal information.
1. Arrest Scam: You receive a phone call from someone claiming to be a police officer or government official, who says they are coming to arrest you for unpaid taxes or missing out on jury duty. The victim can avoid this by sending money via a prepaid debit card or wire transfer. Being threatened with arrest is scary and most people ultimately pay out of fear.

The Better Business Bureau has identified ways consumers can avoid becoming victims to these scams:
• Do not let anyone pressure you into making fast decisions.
• Research the organization. A quick Google search or visiting www.bbb.org, will bring up any complaints made against the company.
• Never provide your personal information (i.e. – address, date-of-birth, social security number, banking information, ID etc.) to people you do not know.
• Never click on links from unsolicited emails or text messages.
• If you are unsure about a call or email that claims to be from your bank, utility company, etc., call the number on your bill or the back of your credit card to verify.
• Never send money by wire transfer or prepaid debit card to someone you do not know or have never met in person.
• Never send money for an emergency situation unless you have been able to verify the emergency.

Click here to read more on this story.
http://www.bbb.org/council/news-events/news-releases/2015/01/bbb-top-ten-scams-of-2014/

Bankruptcy Law, Credit, Timothy Kingcade Posts

‘70s Pop Icon, David Cassidy Files for Personal Bankruptcy in South Florida

Posted on February 16, 2015by Admin

David Cassidy filed for Chapter 11 bankruptcy protection last week in Fort Lauderdale, where he owns a waterfront home. The 64-year-old former teen idol with hits like “I Think I Love You” and “I Woke up in Love This Morning,” reported debts including a $292,598 mortgage, $39,102 on credit cards and considerable attorney and accountant fees. Cassidy listed assets and debts in the estimated range of $1 million to $10 million.

The clerk’s office concluded that Cassidy’s petition was incomplete for missing 16 documents, including forms listing real property, creditors holding secured claims, executory contracts, unexpired leases and current income. All are due by February 25th.

The filing said Cassidy owes money to more than 10 lawyers and accountants in South Florida. Hallandale Beach attorney, Brian Rodier who represented Cassidy from 2006 to 2011 claims Cassidy racked up $134,221 in legal bills, which he never paid. According to the bankruptcy filing Cassidy owes American Express $21,952 and the Villas at Polo Towers in Las Vegas $1,420 in maintenance fees, where he frequently performs.

The former star and teen heartthrob of the 1970s TV show, “The Partridge Family,” has struggled the past several years. He faced four drunken-driving charges, court-ordered rehabilitation and his wife, Sue Shifrin, filed for divorce last year. Cassidy has been a defendant in 12 civil cases in Broward Circuit Court, with several still pending. One of them involved a foreclosure on a Fort Lauderdale penthouse.

Click here to read more on this story.
http://www.dailybusinessreview.com/id=1202717845853/70s-Pop-Star-David-Cassidy-Isnt-Singing-I-Think-I-Love-You-Now-Files-Personal-Bankruptcy?mcode=1202615581416&slreturn=20150115134105

Foreclosures, Timothy Kingcade Posts

Number of reverse mortgage complaints show consumers confused by loan terms

Posted on February 13, 2015by Admin

The Consumer Financial Bureau released a report highlighting the most common consumer complaints about reverse mortgages. A reverse mortgage allows a borrower, 62 years or older, to access the equity they have built up in their homes and defer payment of the loan until they pass away, sell or move out. The report details the approximately 1,200 reverse mortgage complaints the CFPB received between December 2011 and December 2014.

The most frequent complaint involved older consumers and their families demonstrating confusion about the terms and requirements of reverse mortgage loans. Many complaints showed a disconnect between consumer expectations and the way a reverse mortgage actually works.

For example, many consumers are frustrated when they are unable to refinance their loans because there is insufficient remaining equity in their homes. The CFPB reports these complaints suggest that some homeowners may not understand that the loan proceeds as well as the accrued interest on the loan overtime will substantially decrease the amount of available equity. Another complaint was over struggles with foreclosure due to issues with property taxes and homeowners’ insurance. Even though reverse mortgages require no monthly payments, borrowers are still responsible for property taxes and homeowners’ insurance. The CFPB reports the most frequent complaint involved consumers trying to add additional borrowers to the loan in order to extend the term of the loan.

To ensure that potential reverse mortgage borrowers and their families are prepared for the unexpected, the CFPB has the following advice for borrowers:

Verify who is on the loan: If two borrowers took out a reverse mortgage, they should verify with the reverse mortgage company’s loan records to ensure accuracy.
Plan ahead for the non-borrowing spouse: For those who took out a HECM reverse mortgage in the name of only one spouse before Aug. 4, 2014, they should contact their loan servicer to find out if the non-borrowing spouse can qualify for a payment deferral. If the answer is no, they should make an immediate plan in the event the borrowing spouse passes away first. If the reverse mortgage was taken out after Aug. 4, 2014, new changes to the HECM program allow the non-borrowing spouse to remain in the home, if certain conditions are met.
Plan ahead for other family members. Consumers should make sure that any children or family members living in the home know what to expect when the reverse mortgage comes due. When a borrower dies, heirs can sell the home, repay the loan balance or pay 95 percent of the property’s assessed value. If those members want to keep the home, the borrower should contact their reverse mortgage company to have them explain all of their options in greater detail.

Click here to read more on this story.

http://consumerist.com/2015/02/09/reverse-mortgage-complaints-show-consumers-confused-by-loan-terms/

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.

Bankruptcy Law, Credit, Timothy Kingcade Posts

The Dirty Dozen Tax Scams for 2015

Posted on February 12, 2015by Admin

Aggressive phone calls top the IRS’s list of “Dirty Dozen Tax Scams of 2015.” The government has issued a warning to taxpayers- the early weeks of the filing season are when these phone scams are rampant.

Below is the complete “Dirty Dozen” list of tax scams to watch out for this year:

1.) Phone scams. Aggressive and threatening phone calls by criminals posing as IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent months as these scam artists threaten arrest, deportation and license revocation.

2.) Phishing. Beware of fake emails or websites looking to steal your personal information. The IRS will never send you an email about a bill or refund. Even clicking on certain strange links and websites can allow scammers access to your personal information and passwords.

3.) Identity theft. Taxpayers need to be aware of the potential for identity theft, particularly around tax time and take every precaution to avoid becoming a victim.

4.) Return preparer fraud. Taxpayers need to be aware of criminals posing as tax professionals. These individuals set up shop each filing season to perpetrate refund fraud, identity theft and other scams.

5.) Offshore tax avoidance. It is a bad bet to hide money and income offshore. Taxpayers need to come forward voluntarily to get their taxes and filing requirements in order with the IRS’s Offshore Voluntary Disclosure Program.

6.) Inflated refund claims. Taxpayers need to be on the lookout for anyone who promises inflated refunds. Taxpayers should avoid anyone who asks them to sign a blank return, promises a large refund before looking at their records, or charges fees based on a percentage of the refund. These scams usually target their victims through flyers, word of mouth, advertisements, community groups and even churches.

7.) Fake charities. Taxpayers should be aware of fake charitable organizations anxious for donations. Oftentimes these charities have a similar or familiar sounding name to nationally recognized organizations.

8.) Hiding income with fake documents. Hiding taxable income by filing false Form 1099s or other fake documents is a scam that taxpayers should always avoid and guard against. In the end, the taxpayer is legally responsible for what is on his or her return, regardless of who prepares the paperwork and does the filing.

9.) Abusive tax shelters. Taxpayers should steer clear of using abusive tax structures to avoid paying taxes. The IRS is committed to putting a stop to these complex tax avoidance schemes and the people behind them. When in doubt, seek a professional’s opinion.

10.) Falsifying income to claim credits. Taxpayers should avoid inventing income to fraudulently claim tax credits. Taxpayers are sometimes talked into this by scam artists. A taxpayer’s best bet is to file the most accurate return possible.

11.) Excessive claims for fuel tax credits. The fuel tax credit is not available to most taxpayers and is generally limited to “off-highway” businessuse, including use in farming. However, the IRS routinely finds taxpayers who erroneously claimed the credit to inflate their refunds.

12.) Frivolous Tax Arguments. The penalty for filing a frivolous tax return is $5,000. Promoters of these schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe.

Click here to read more on this story.
http://www.nbcphiladelphia.com/news/local/The-Internal-Revenue-Service-List-of-Dirty-Dozen-Tax-Scams-291445471.html

Foreclosures, Timothy Kingcade Posts

U.S. Service Members Receive $123 Million in Foreclosure Relief

Posted on February 11, 2015by Admin

U.S. armed service members will receive $123.4 million as a first round of payments, in conjunction with the $25 billion nationwide mortgage settlement reached in February 2012. The U.S. Justice Department announced that 666 service members and their co-borrowers will receive $88 million from JPMorgan Chase & Co, Wells Fargo & Co, Citigroup Inc and Ally Financial Inc, under a federal law that protects service members from foreclosures.

Lenders have been accused of violating the Servicemembers Civil Relief Act that prohibits non-judicial foreclosures against service members who are on or have recently left active duty, and took out their mortgages before their service started. The foreclosures at issue took place between January 1, 2006 and April 4, 2012.

Acting Associate Attorney General Stuart Delery had this to say, “Service members should never have to worry about losing their home to an illegal foreclosure while they are serving our country.”

Click here to read more on this story.
http://www.reuters.com/article/2015/02/09/us-foreclosures-military-idUSKBN0LD2KQ20150209

Foreclosures, Timothy Kingcade Posts

HARP: The Government Refinance Program the Banks Don’t want you to know about

Posted on February 10, 2015by Admin

Despite being launched in 2009, less than 0.5% of people have taken advantage of the Home Affordable Refinance Program (HARP). Few people know about it and even less know how to use it. HARP is designed to help homeowners obtain a more affordable, stable mortgage. It provides a bailout to help millions of homeowners save a significant amount of money by lowering their mortgage payments. Those who have taken advantage of the program have reduced their mortgage payments by as much as $3,000 a year.

The program expires in 2015, but there’s still time to get signed up. If you qualify and refinance through HARP, you may be able to take advantage of a number of significant benefits, including:

• Eliminating up to 15 years of mortgage payments and interest;

• Changing to a lower monthly payment;

• Refinancing at historically low rates.

Banks do not want you to benefit from the program, because it allows homeowners to switch lenders, taking millions out of their pockets and putting it back into the pockets of everyday people. If you feel like your mortgage interest rate is too high with your current lender, it probably is. HARP can help you switch to a new lender, one prepared to offer you today’s low rates, and you could save big. HARP is a government program and is totally free, so you have nothing to lose.

Click here to see if you qualify.

Credit, Foreclosures, Timothy Kingcade Posts

Mortgage Advice from Dave Ramsey: Is a 30-year mortgage a bad option?

Posted on February 9, 2015by Admin

According to financial guru, Dave Ramsey, you are better off with a 15-year mortgage. His reasoning… “The 30-year mortgage robs your future. It enables borrowers to buy more house than they can afford by spreading the payments out over a longer term. In addition, those homeowners paid tens- even hundreds of thousands of dollars more in interest.”

Dave recommends getting a 15-year mortgage with “at least a 10% down payment and monthly payments that are no more than 25% of your take-home pay. This is a great way to ensure you build wealth quickly and avoid paying a mortgage into your retirement. Paying off your mortgage completely will free up income later for other investments and allow you to live more comfortably as you age.

If you have already committed to a 30-year mortgage loan, there’s still time for you to save and be mortgage free by retirement. Some homeowners have been able to switch to a 15-year mortgage with extremely low interest rates. However, if you cannot afford the 15-year repayment plan comfortably, do not risk it.

Instead, look into the Home Affordable Refinance Plan (HARP), a government-backed program that offers low mortgage rates and was designed to reduce mortgage payments and put money back in your pocket. If you owe less than $650,000 on your mortgage, the chances of qualifying for this program can be high. Homeowners who have refinanced have saved an average of $250 per month.

Click here to read more on this story.

http://www.bills.com/dave-ramseys-advice-on-mortgage/?utm_source=taboola&utm_adgroup=agg_desktoptablet&utm_term=coinhead_30flatout_agg&utm_medium=businessweek

Related Resources:

http://www.bills.com/dave-ramseys-advice-on-mortgage/?utm_source=taboola&utm_adgroup=agg_desktoptablet&utm_term=coinhead_30flatout_agg&utm_medium=businessweek