The fear of losing everything is a very real concern for those contemplating bankruptcy. However, this is one of the most common bankruptcy myths, and can keep individuals who are drowning in debt from obtaining a fresh financial start.
To make the bankruptcy process a little easier to understand, we have dispelled the top three fears people have when filing for bankruptcy.
The Biden Administration canceled an additional $55.6 million in student loans for 1,800 students who were found to be victims of fraud. This additional amount brings the total amount of student loan debt cancelled by the Biden administration to $1.5 trillion.
Since entering office, President Biden has made it his mission to stand up for the thousands of students who were taken advantage of by for-profit colleges. This most recent effort was focused on students who attended Westwood College, Marinello Schools of Beauty, and the Court Reporting Institute. Previously, the administration had approved loan forgiveness for students who attended ITT Technical Institute, the American Career Institute and Corinthian College. This is the first time the Department of Education has approved loan forgiveness for students attending for-profit schools not including these three.
Dealing with debt collectors can be stressful. Their job is to get the consumer to pay on a debt at any means necessary, which can often mean through coercion, harassment, and fear. Many debt collectors have been known to use aggressive or illegal tactics to collect on a debt, leaving many consumers to feel like they have no choice but to make payment to get them to go away. However, federal law offers certain protections when it comes to debt collectors. It is important that consumers understand what these protections are so that they are aware of what rights they do have when dealing with debt collectors.
According to the Consumer Financial Protection Bureau (CFPB), nearly one in every four people have a debt in collections. Illegal debt collection practice is a common complaint made to the CFPB.
Debt can seem like an insurmountable burden, impossible to escape once a consumer has gotten too far in. Different options are available for dealing with credit card debt, student loan debt, and other consumer debts.
Many times, consumers find themselves overwhelmed with several different types of debt in differing amounts.
Managing Shareholder, Timothy S. Kingcade of the Miami-based bankruptcy and foreclosure defense law firm of Kingcade Garcia McMaken has been selected for inclusion in Florida Super Lawyers 2021, in the practice area of consumer bankruptcy. This is the eighth consecutive year Kingcade has been selected to the Florida Super Lawyers list (2014-2021). The prestigious honor is awarded to only five percent of lawyers in the state.
After receiving one of the highest point totals, Kingcade was also selected to be on the Florida Super Lawyers Blue Ribbon Panel. Only those in each practice area with the highest point totals are asked to be part of the panel to evaluate the candidacy of fellow lawyers to enter the prestigious Super Lawyer rankings.
Consumer debts have what is called a statute of limitations. This is the amount of time the creditor can use the court to force a consumer to pay a debt. After the statute of limitations has expired on a debt, it is no longer legally enforceable. Occasionally, however, a consumer may be contacted regarding an old debt by a collector who hopes the consumer will ‘restart the statute of limitations.’
Zombie debt is debt that the consumer thinks is “dead,” meaning it is past the statute of limitations that the debt collector is now trying to bring back to life. While the debt collector cannot take the consumer to court to collect on the debt, there are no laws saying they cannot continue to contact the consumer to collect what is owed. Many times, debt collection agencies will purchase expired debt to turn a profit. Since the cost to buy expired debt is exceptionally low, even if they collect on a handful of accounts, they are still earning a profit.
Debt collectors will attempt to contact a consumer through any means necessary to collect on a debt. As more consumers communicate with each other via social media, debt collectors are utilizing these platforms as another means to contact consumers.
A federal agency issued a new rule that would allow debt collectors to contact people by email, text message, and social media platforms, including Twitter, Facebook, and Instagram.
The new rule limits how many times the collection agency can contact the consumer via telephone. Collectors will be limited to seven debt-collection phone calls weekly, but they are allowed to send an unlimited number of text messages, email messages, and social media private posts.
The U.S. Department of Education announced Wednesday that 18,000 former ITT Technical Institute students who were found to be defrauded by the shuttered for-profit university will have their federal student loans cancelled in full. This move is a step in the right direction. The for-profit school closed permanently in 2016, leaving tens of thousands of students with massive student loan debt, and no degree.
More than 30,000 former students petitioned the Department of Education to cancel their debt under the “borrower defense to repayment law.” However, even after being defrauded by ITT Tech, their claims were denied by officials under the Trump administration.
Paying down a credit card balance can be difficult, especially if the card carries a high interest rate. According to CreditCards.com, the average credit card interest rate in the U.S. is 16.15 percent (16.15%), and for many consumers, their interest rate is significantly higher, which can make paying off large balances very difficult. The good news is credit card interest rates can be negotiated, so long as the consumer knows how to do it.
It helps to do some preparation before contacting the credit card company. The consumer should first be aware of what his or her credit score is before making contact. The credit card company will closely examine the consumer’s credit score, as well as his or her payment history. Every consumer is entitled to a free annual credit report, which should be closely reviewed before calling the credit card company. Be aware of all missed payments or late payments in case these are brought up in conversation.
Before filing for bankruptcy, many people fear losing their property during the process. Federal bankruptcy laws, as well as Florida bankruptcy laws, allow for certain property to be protected under what are known as bankruptcy exemptions. However, not all property is protected, and it is important for filers to be aware of the difference between exempt and non-exempt property in a bankruptcy case.
When filing for Chapter 7 bankruptcy, the filer should expect for a significant portion of his or her property to be turned over to the court as part of the “bankruptcy estate.” The bankruptcy trustee will sell this non-exempt property to pay off the debtor’s creditors before a bankruptcy discharge is granted.
