Bankruptcy Archives - Page 4 of 34

Be on the Look-Out for These Student Loan Scams

Posted on October 7, 2019by Admin

More than 40 million borrowers are carrying an estimated $1.5 trillion in student loan debt. With that many individuals carrying student loan debt, it should come as no surprise that many scams are out there, hoping to take advantage of borrowers who are desperate to get out of debt quickly. Borrowers need to be aware of these debt relief scams in particular, which are now facing investigation by the Federal Trade Commission (FTC).

Student Loan Debt Elimination Scams

Many companies are out there offering the promise of eliminating student loan debt for borrowers who are desperate for a way out. However, if someone is offering a deal that sounds too good to be true, that is usually because it is, in fact, too good to be true. Many companies will promise to wipe away a person’s loans when they have no actual ability to do so. The fact of the matter is no one can promise student loan forgiveness or cancellation. Student loan borrowers can only ever receive forgiveness if they meet very specific conditions, and the fastest any borrower can receive loan forgiveness is five years. Even these forgiveness programs can be very difficult in terms of qualifications.

If the borrower has federal student loans, it should be noted that no student loan debt relief company can negotiate directly with the federal government to obtain lower rates on those loans. If a company promises the ability to negotiate a lower payment, this can normally only be done via an income-drive repayment plan, but most of these can be applied for directly by the borrower, not a third-party entity.

Bankruptcy Law

What are the Credit Counseling Requirements in Bankruptcy?

Posted on September 25, 2019by Admin

Whenever a person files for Chapter 7 or Chapter 13 bankruptcy, he or she must submit proof that a credit counseling course from a nonprofit credit counseling agency was successfully completed. The purpose of this course is to help the filer determine whether he or she can pay his or her debt outside of bankruptcy and provide proper financial guidance to prevent an additional bankruptcy filing in the future.

What Is Required?

According to the Federal Trade Commission (FTC), all bankruptcy filers must take an approved credit counseling course prior to filing. The U.S. Department of Justice’s U.S. Trustee Program keeps a list of approved programs if filers are not sure where to go. Proof of completing a program must be submitted before the bankruptcy case can proceed further. In fact, this proof must be submitted within 180 days prior to filing for bankruptcy. The filer will normally walk away from the credit counseling program with a repayment plan, if a plan is realistic, although nothing in the FTC rules requires the filer to follow that specific plan.

Bankruptcy Law

Understanding the Bankruptcy Process: How to File & the Qualifications

Posted on July 16, 2019by Admin

Filing for bankruptcy can be an emotional and sometimes stressful process. However, enlisting the help of an experienced bankruptcy attorney can make the process painless and worry-free. Many clients have little understanding about what is involved when they file for bankruptcy. Bankruptcy is a legal proceeding where a judge and bankruptcy trustee review the financial situation of individuals or businesses who are not able to pay their financial obligations and discharge qualifying debts that they are no longer able to pay.

The Purpose of Bankruptcy

Bankruptcy is meant to give an individual a fresh financial start, allowing that person to wipe the slate clean. It also serves as a way to give the filer some sense of relief through the protection of the automatic stay, which means creditors are prohibited from continuing collection actions against the filer. This allows the person time to regroup, protect valuable assets and work with the bankruptcy trustee to handle their debts.

Bankruptcy Law, Debt Relief

How to Defend Yourself Against a Debt Collection Lawsuit

Posted on July 15, 2019by Admin

When someone is facing a debt collection action, it can seem like a hopeless situation. It is a situation, however, that many Americans face. According to the Consumer Financial Protection Bureau (CFPB), more than 70 million Americans have interacted with a debt collector.

Of these 70 million, 25 percent of them report feeling threatened during their communications with debt collectors, who often use aggressive methods to obtain payment. If the collection gets to the point where legal proceedings are filed, certain steps can be taken to protect your rights.

File a Response

The biggest mistake that consumers make is to ignore the paperwork when they receive it. A consumer who is facing a debt collection proceeding will receive a summons and complaint, informing him or her that a legal action to collect upon the debt has been filed. This paperwork will provide information regarding how long the individual has to file a response to the legal action. If a response is not filed, however, the debt collector or creditor can get a default judgment against the individual, resulting in a garnishment of the consumer’s wages. If that happens, the court can add the collection agency’s legal fees, court costs and interest to the balance.

Bankruptcy Law, Debt Relief, student loan debt, Student Loans

Student Loan Borrowers Diagnosed with Cancer Still Waiting for Promised Relief

Posted on July 5, 2019by Admin

In September 2018, President Donald Trump signed a bill into law, allowing student loan borrowers who have been diagnosed with cancer to delay their federal student loan payments. This new law was created to allow these individuals to focus on their treatment and not their student loan obligations through the course of their medical treatment and six months afterward. However, just nine months after the law took effect, borrowers who have requested this deferment are still waiting for approval.

The delay seems to be due to the U.S. Department of Education not yet providing student loan providers that administer its federal student loan programs an official application through which qualifying borrowers can apply. While the law may be in effect, service providers have no way to implement it.

The Department of Education insists that they are taking steps towards resolving this problem and creating an application for the cancer deferment. However, many borrowers are questioning why this was not done previously. As of January 2019, the Department of Education asked that the Office of Management and Budget conduct an emergency review and approval of the cancer deferment form created.

The Department of Education is also requiring a 60-day comment period on the proposed form, which is delaying the process even further. With cancer patients, time is of the essence. Many consumer advocates question why the comment period was not shorted to 30 or even 15-days.

Student loan servicers are offering temporary forbearances for borrowers who are seeking the cancer deferment. However, forbearance does not stop interest from accruing on the debt while payments are paused. Deferment, on the other hand, puts payments on hold while pausing interest from accruing, as well.

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.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Top 10 Tips for Negotiating with Creditors

Posted on May 21, 2019by Admin

At Kingcade Garcia McMaken, our No. 1 piece of advice to those struggling with debt is to be honest with creditors. If you are unable to make a payment, do not make a promise to pay and never provide a creditor with your debit card or bank account information.

In our latest blog, we have some tips for negotiating with creditors.

Keep Your Story Straight and Stick to the Facts

One important fact to keep in mind is that the person on the other end of the phone line is not your friend. Many individuals will try to get them to understand the personal details of how they got into their situation. It is important to tell the creditor or debt collector that you are going through a financial hardship and are working to get back on track. Keep to the facts and be honest with creditors. If you are unable to pay, tell them that.

Take Notes of Your Conversation

Whenever you speak with a creditor or debt collector, take notes of what is discussed. Be sure to write down the name of the person on the other end of the line, the time of day and date when the discussion occurred, write down what was discussed, and any statements made from the collector. This information may be needed later if the creditor or debt collector disputes the conversation.

Ask Questions

Never take what a debt collector or creditor says as the gospel truth, believing everything that is said. Many times, creditors or collectors will say just about anything to get someone scared enough to pay on the debt. Under the Fair Debt Collection Practices Act (FDCPA), you have rights as a consumer.

Do Not Argue

While asking questions can be a good thing, it is important to remain calm when talking to the creditor or collector. Losing your temper is never productive. Collectors are skilled at pushing a person’s buttons to get them to react, but it is important that you not let them push you too far. If you get to the point where you feel like you will lose your cool, the best thing to do is tell the collector you will be ending the call, hang up and return to the conversation later.

Save All Written Communications

It is likely that creditors or debt collectors will communicate via U.S. mail, in addition to telephone communication. It is imperative that all correspondence be opened and not ignored. Keep track of any mail received from the creditors and save it in a file for later use.

Be Aware of Your Budget

Before making any plan with a creditor or collector, make sure that a budget is prepared, outlining just how much money could go towards paying that specific debt. The last thing a person wants to do is agree to a payment plan or a set amount only to find out later that the amount that was agreed-upon is not actually realistic. Do this before opening any lines of negotiation with creditors.

Try to Negotiate Directly with the Creditors

If it is at all possible, try to work out a payment agreement with the creditor first before the matter is turned over to collections. After that point, you will be forced to deal directly with the debt collector and not the original creditor. Once the account is sent to collections, your credit score will take a significant hit, and that drop in your credit score can be even worse the longer the account stays in collections.

Get Any Agreement in Writing

When negotiating on the debt, whenever an agreement is reached, it is important that the agreement be memorialized in writing. This rule applies to a payment plan or an agreed debt settlement. Before any money changes hands, get the agreement in writing first. Otherwise, if the collector changes the terms of what was originally discussed, it ends up being a matter of your word against theirs.

Seek Assistance If Necessary

Negotiating with collectors or creditors is not easy by any means. Many times, it helps to call in the professionals to do the negotiations for you. Credit counseling agencies can help you work out an agreement with your creditors or with collectors, but it is important that you do your research first before choosing a credit counselor. Additionally, if a collector is being particularly persistent, it can help to seek the assistance of a bankruptcy attorney in fielding these calls and working out agreements on the amount owed.

Determine if the Debt Should Be Paid

If the person is struggling to pay on multiple unsecured debts, including credit cards, personal loans and medical debt, bankruptcy may be the best option for that person in the end. It never pays to leave the debt unpaid for too long. Once the debt goes into collection and even further into a judgment, that person’s wages can be garnished to pay the debt. Having a debt go into collections can adversely affect a person’s credit score. If the end result will be that the person files for bankruptcy, it may be advisable to talk with a bankruptcy attorney before entering into any payment plan and discussing which option would be best in the long run for that person.

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.credit.com/debt/ten-tips-for-negotiating-with-creditors/

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Protecting Bank Accounts During Bankruptcy with Pre-Bankruptcy Planning

Posted on April 18, 2019by Admin

One of the most important assets someone going through a bankruptcy case wants to protect, aside from retirement accounts or their home, are their bank accounts. After all, no one wants to lose all the cash they have available to pay for daily expenses. How money in a bank account can be protected depends heavily, however, on the type of bankruptcy exemptions used and what planning was done pre-bankruptcy to protect that money.

One of the benefits of filing for bankruptcy involves the automatic stay, a measure that goes into effect as soon as the bankruptcy case is filed. This automatic stay puts a halt to any collection proceedings or efforts, giving the filer reprieve from the continuous calls and communications from creditors seeking to receive payment on their debts.

Are the Funds Exempt?

In any bankruptcy case, certain property is protected from being liquidated and used to pay off qualifying debts. This practice is done through bankruptcy exemptions. In a Chapter 7 bankruptcy case, the bankruptcy trustee cannot take this exempt property to pay off debts. While the bank account itself is not necessarily exempt, the money in that account could be protected if it qualifies under one of Florida’s bankruptcy exemptions. After all, Florida has quite generous bankruptcy exemptions, when compared to other states.

If you own a home, you will likely find Florida’s bankruptcy exemptions quite favorable. You can exempt all the equity in a residential property that meets Florida’s guidelines. In addition, Florida has unlimited exemptions for annuities and the cash surrender value of a life insurance policy.

Money in the account that is from wages from the head of family is exempt up to $750 per week or the greater of 75 percent or 30 times the federal minimum wage. Under Florida Statute §222.11, this money includes paid or unpaid wages during the last six months. Additionally, any money that is income for a person other than the head of family is also protected up to 75 percent or 30 times the federal minimum wage, whichever is the greatest of the two. Additionally, if you are a federal government employee, pension payments that are needed for support and were received for up to three months before the bankruptcy filing are exempt.

Pre-Bankruptcy Planning

If any funds are not otherwise covered by a bankruptcy exemption, they could be protected through pre-bankruptcy planning. However, this planning must be done with caution and properly so a bankruptcy attorney should be consulted before any actions are taken. Bankruptcy laws allow you to take property that would not be exempt and convert it into exempt property, so long as you are acting in “good faith.” The key here is to act in good faith. Bankruptcy filers who conceal or hide their assets in hopes of fooling the bankruptcy court, will result in the case being thrown out due to bankruptcy fraud. It is for this reason that you should proceed with caution when doing any pre-bankruptcy planning.

One possible method of converting nonexempt cash into an exempt asset before filing is to pay your mortgage down, especially considering Florida’s generous homestead exemption. You may also make an annual contribution to your retirement account or other retirement funds with any nonexempt cash to ensure that it goes to an asset that is protected. Money can also be used to pay down debts that would not be discharged in bankruptcy, including child support, spousal support, taxes, and student loan debt. Ensure your balance is low by using your funds to pay necessary bills before you file.

If you use any money that would be nonexempt to buy assets that would be considered luxury items or unnecessary or extravagant expenses, you could face civil and criminal penalties for your actions. The bankruptcy court will look carefully at whether you misrepresented your asset values, whether the investment or property purchased was worth less than the money you used to purchase it, whether the assets were given to a family member or friend with whom you have a close relationship, and whether your lifestyle radically changed as a result of the purchase.

When filing for bankruptcy, you will be required to disclose all asset transfers made outside of the ordinary course of business within 90 days before filing the petition. Any transfers made to a friend or relative within one year of filing must also be disclosed.

Please click here to read more.

Source:

https://www.nolo.com/legal-encyclopedia/florida-bankruptcy-exemptions-property-assets-bankruptcy.html

Student Loans, Timothy Kingcade Posts

Student Loan Debt and College Costs Set to Increase with Trump’s New Budget Proposal

Posted on April 3, 2019by Admin

President Trump’s proposed budget could have some serious consequences for individuals carrying student loan debt. In fact, student loan debt seems to be a major part of the President’s proposed fiscal year 2020 federal budget, which was sent to Congress on Monday.

The proposed fiscal year 2020 budget includes various cuts and changes to federal student loan programs. In addition, the budget includes a 10 percent total decrease in Department of Education Funding. The total cuts end up being $62 billion, which is $7.1 billion less than what the DOE had allotted in funds for the 2019 fiscal year.

Many financial experts worry what these changes could mean for student loan costs, as well as college expenses. Not only would the budget proposal raise costs for attending college, it could also result in a significant increase when it comes to student loan debt.

An estimated $1.5 trillion in student loan debt is owed nationwide. However, it is estimated that this new budget could force borrowers to pay an additional $207 billion more on their student loan debt on top of this already astronomical amount.

One part of the proposed budget eliminates the subsidized student loan program. Students who are enrolled in school could discover that they are accruing interest on their loans even though they are still enrolled in school. Currently, if a student is enrolled in school, they do not accrue interest on their loans, which means these students could be in for a rude awakening if the proposals go through. Adding interest while students are attending college could increase the cost of attending college or even graduate school for these students.

President Trump’s budget proposal also eliminates the public service loan forgiveness program, which has been law since the President George W. Bush era. Many graduates utilize this program as a means of eliminating their student loan debt by entering the public sector and taking jobs as prosecutors, public defenders, legal aid attorneys, police officers, firefighters and civil servants. Taking a lower paying job with the end goal of eliminating tens of thousands in student loan debt pales in comparison to the alternative of being stuck with student loan debt for decades. However, this option may no longer be available for these borrowers if the budget is approved.

The proposed budget does call for quicker loan forgiveness with respect to undergraduate student loans. The budget proposal includes the possibility of student loan debt being forgiven after 15 years instead of the current 20-year term.

Click HERE to read more.

Bankruptcy Law, Credit, Timothy Kingcade Posts

How Long Do Debt Collections Affect Your Credit Report?

Posted on March 14, 2019by Admin

When you are being pursued by debt collectors, the incessant phone calls can make you feel anxious and stressed. The number one piece of advice we give when dealing with creditors is to be honest with them. Never make a promise to pay if you are unable to do so and do not avoid creditors or collection attempts.

A collections action is essentially any type of collection on a debt. Whenever a creditor submits an account to collections, a notification is submitted to the credit reporting agencies. This notification will almost always result in the consumer’s credit score dropping. The more collections that show up on the person’s credit report, the bigger the drop will be. Any type of collections will show up on a credit report, including credit cards, medical bills, loans and mortgages.

Once a collections action is reported, it will stay on a person’s credit report for seven years. The same time period applies for missed or late payments. To put these figures in comparison, a Chapter 7 bankruptcy case will stay on a person’s credit report for ten years and Chapter 13 bankruptcy for seven years.

Credit reports treat debts all in the same manner, so if the collection is for a secured debt, such as a home or car, it will be treated the same way as credit card debt. However, medical debt is treated somewhat differently than other unsecured debt. New rules regarding medical debt have made it more difficult for it to impact your credit score as quickly. The new rule builds additional time between patients and insurance companies to resolve such matters. Up until this point, there was no grace period and medical debt could appear on your credit report as soon as it was reported as an unpaid debt. The three credit reporting agencies now have to wait 180 days before putting an unpaid medical bill onto your credit report.

Click here to read more on this story.

Related Resource:

https://www.myfico.com/credit-education/faq/negative-reasons/how-long-negative-information-remain-on-credit-report

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Generation X Carries Most Debt Out of All Generations

Posted on January 14, 2019by Admin

Debt presents a problem for many Americans today, but one generation clearly stands out among the rest in terms of holding the most consumer debt. In fact, according to a recent study published by LightStream Survey conducted by the Harris Poll, nearly 80 percent of all members in the Generation X, ranging from ages 36 to 51, have some level of debt. The report showed that eight in ten members in this age category carry debt.

Coming in just below this were members of the Millennial generation, consumers between the ages of 20 and 35. Approximately 75 percent of all members in this age group carried debt. The next group was the Baby Boomer generation, which includes individuals between the ages of 52 and 70, with 69 percent of them carrying some type of debt.

While all three of these generations carry debt, it is the mindset of those in the Gen X category that presents the most cause for concern. Those surveyed in Gen X reported that they felt it was impossible to pay off a significant debt once it was incurred. Additionally, 25 percent of those in this demographic reported that they were not confident in how they were handling their finances. However, in the survey data, these individuals did state that they would be willing to give up hobbies or extracurricular activities to get rid of their debt payments, which does show some promise.

On average, individuals in Generation X carry $30,334 in “non-mortgage debt.” In comparison, Baby Boomers hold $27,513 and Millennials hold $22,784 in non-mortgage debt.

Getting out of debt can also be problematic for individuals in this generation, as well. Those who are younger may be able to use their savings or cash in their investments to reduce their debt, but it may be too difficult for Gen X members to dip into their retirement savings to pay off debt.

If you are struggling with insurmountable debt, dipping into retirement savings is never advisable. These are protected in bankruptcy along with the following bankruptcy exemptions in Florida. Many individuals are already struggling to pay for obligations, including helping aging parents as well as adult children. While they are not quite at the age of retirement, they are approaching that point, making it too close for comfort to use retirement savings.

Continuing to struggle with debt is a slower, less effective way to pay it off. Many different debt relief options exist, including debt consolidation, debt settlement or negotiation and bankruptcy – but it is important that as a consumer you research your options carefully.

Click here to read more.