Tag: American Bankruptcy Institute

Bankruptcy Law, Consumer Bankruptcy

Should You Hire a Bankruptcy Attorney?

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Bankruptcy can be a stressful and complicated process, but it doesn’t have to be something you do on your own. While consumers can pursue a bankruptcy case on their own, or file bankruptcy pro se, without the assistance of an attorney, it is not always wise to do so. In fact, the benefits of hiring an attorney far outweigh the negatives in the long run.

According to the American Bankruptcy Institute, less than 50 percent of filers who pursued a Chapter 7 bankruptcy case without the assistance of an attorney had their debts discharged. Alternatively, 94 percent of filers represented by an attorney had their debts discharged.

Small Business Bankruptcy

The Future of Small Business Bankruptcy

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The COVID-19 pandemic hit the nation’s economy hard, forcing many businessowners to make some tough decisions regarding their business’s future. Government stimulus efforts, as well as lower interest rates, kept many businesses afloat, which brought Chapter 11 bankruptcy filings to an all-time low.

At the same time, Subchapter V of the 2019 Small Business Reorganization Act (SRBA), opened the doors and made filing for Chapter 11 bankruptcy simpler and more streamlined for attorneys and business owners. The CARES Act temporarily also tripled the debt limit for eligible small businesses to file for bankruptcy. However, now that those measures are coming to an end, Congress has been asked to pass legislation to extend the measures, keeping the elevated limit of $7.5 million. These measures failed last week, and the limit expires as of Sunday.

Student Loans

ABI Releases Key Recommendations on Discharging Student Loan Debt in Bankruptcy

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Student loan debt can be particularly challenging to discharge in bankruptcy.  The current undue hardship standard can be difficult for most borrowers to meet.  However, that doesn’t mean student loan debt is any less burdensome than other types of debt that are discharged in bankruptcy.  Borrowers can spend years struggling to make payments on student loans, only to see thousands of dollars in interest and fees added to the total if they default on a payment or have to go into forbearance.  Most borrowers do not see bankruptcy as being a viable option to discharge their student loan debt.

However, this may soon change thanks to the recommendations made by the American Bankruptcy Institute (ABI). How student loan debt is handled in bankruptcy is just one of issues being reviewed by ABI and discussed in the final report made by the Commission on Consumer Bankruptcy.

The ABI Commission on Consumer Bankruptcy was created in 2016 with the mission of researching and recommending improvements to the country’s current bankruptcy system. The changes include amendments to the Bankruptcy Code, as well as administrative rules, recommendations on interpreting the current bankruptcy law, and modifications to the Federal Rules of Bankruptcy Procedure.

When the Commission began its work, they asked for input on what bankruptcy issues should be reviewed. Student loan debt was one of the issues that received the most recommendations. With consumers holding an estimated $1.5 trillion in student debt, the fact that this issue is an area of focus by the ABI Commission on Consumer Bankruptcy is not surprising. It is also estimated that over 40 million American consumers currently carry some amount of student loan debt.

Bankruptcy is intended to serve as a fresh start for consumers struggling financially, but the tests currently used by bankruptcy courts to determine whether the filer’s student loan debt should be partially or completely discharged makes this fresh start an impossibility for many.

The Commission recommended that the current bankruptcy law be re-written so that student loan borrowers who are no longer able to continue paying on their debts and default on their student loans be allowed to receive this fresh start.

Currently, the law requires that the borrower prove an undue hardship before being able to discharge the debt. However, what qualifies as a hardship is not defined legally. Courts have used various tests to determine what qualifies as a hardship, but no uniform test exists. The Commission recommended that a student loan debt be allowed to be discharged unless certain factors exist including: 1) the debt was made, insured or guaranteed by a government agency; 2) the debt was incurred for the borrower’s own education, and 3) the student loan first became payable less than seven years before the bankruptcy petition was filed.

The recommendations made by the Commission would have the effect of eliminating the protection private student lenders have previously enjoyed. Additionally, it would make it possible for individuals who took loans out on behalf of someone else to get out of the debt, including parents who co-signed loans for their children. These recommendations are being submitted to Congress, and it is hoped that lawmakers will take this report and use it to propel change to the current bankruptcy system.

Click here to read more on this story.

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. There are ways to file for bankruptcy with student loan 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 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 Resource:

https://consumercommission.abi.org/

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Beware of Credit Card Skimming Scams at Gas Stations

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Consumer protection officials are warning consumers about a new form of high-tech theft that can affect all credit and debt card users. Scammers are using devices known as ‘skimmers’ at gas pumps to steal account information from debit and credit cards that are swiped. These devices are also commonly found at ATMs.

According to Mississippi state Attorney General, Jim Hood, the devices are difficult to detect and come in two forms: internal or external. The external devices fit over the actual card readers at the pumps. The internal devices are typically communication cables connected to a device that records data from the cards.

“These devices may go undetected for weeks, all the while gathering sensitive account information from unsuspecting consumers,” Hood said. “Consumers need to call their financial institutions immediately if they see any unauthorized activity on their accounts, and watch closely for signs of tampering when using gas pumps or ATMs.”

Authorities offer the following tips to avoid becoming a victim of card skimming:

  • Pick pumps close to the entrance of the gas station or convenience store. Skimmers usually target pumps that are not near the entrance.
  • Pay with cash.
  • If you’re using a debit card, choose the option to process the payment as credit so scammers do not have access to your PIN.
  • Lightly wiggle the card reader on the pump. External skimmers might feel loose and come off.
  • Ask gas stations and convenience stores what type of anti-skimming measures they have adopted.

According to the Florida Department of Agriculture and Consumer Services, more than 250 skimmers were confiscated from gas pumps between July 2015 and July 2016. Approximately 100 consumers’ card numbers were stolen from each device and $1,000 stolen from each consumer.

Click here to read more on this story.

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, Debt Relief, Timothy Kingcade Posts

The South has the highest rates of personal bankruptcy filings in the country

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Personal bankruptcy filings fell to levels not seen since before the Great Recession of 2007, according the American Bankruptcy Institute.  However, this is not the case for some parts of the country.  Recent federal data from U.S. courts reveals the median bankruptcy rate among the 587 counties examined was 224 filings per 100,000 residents. Among the 50 states and Washington, D.C., the median bankruptcy rate was 226 filings per 100,000 residents.

Six of the 10 states and eight of the 10 counties with the highest personal bankruptcy filings were in the South. Many of the areas had lower to median annual incomes. Eight of the 10 states with the highest rates of bankruptcy filings had annual household incomes lower than the 2014 U.S. median of $53,657.

Another downside, states with the highest bankruptcy rates offer the least amount of protections for consumers. For example, Alabama and Kentucky, allow debt collectors to seize nearly everything a debtor owns, according to the National Consumer Law Center.

These are the states with the highest rates of personal bankruptcy filings:

Tennessee, 553 bankruptcy filings per 100,000 residents

Alabama, 529 bankruptcy filings per 100,000 residents

Georgia, 483 bankruptcy filings per 100,000 residents

Illinois, 432 bankruptcy filings per 100,000 residents

Utah, 392 bankruptcy filings per 100,000 residents

Indiana, 387 bankruptcy filings per 100,000 residents

Mississippi, 361 bankruptcy filings per 100,000 residents

Kentucky, 345 bankruptcy filings per 100,000 residents

Arkansas, 344 bankruptcy filings per 100,000 residents

Ohio, 322 bankruptcy filings per 100,000 residents

While seeking relief through bankruptcy may not have been your first choice, it may be your best financial strategy, when compared to the alternatives of wage garnishment, lawsuits and endless collection calls. In addition, depending on the type of bankruptcy filing, there is no more overwhelming debt. The majority of personal bankruptcy filings are for Chapter 7, which erases most unsecured debts, such as your credit card debt and medical bills.

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.

Related Resources:

http://www.csmonitor.com/Business/Saving-Money/2016/0816/The-South-has-the-highest-bankruptcy-rates-in-the-country