Tag: Bankruptcy

Student Loans, Timothy Kingcade Posts

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

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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.

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, Credit, Timothy Kingcade Posts

How Long Do Debt Collections Affect Your Credit Report?

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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.

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.

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

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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.

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.

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

IRS Found to Have Willfully Violated Bankruptcy Discharge, Ordered to Pay $175,000 in Damages

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The Internal Revenue Service (IRS) has been found to have violated a bankruptcy discharge according to a recent decision by the First Circuit Court of Appeals. Despite the IRS’s argument that it acted under a good faith belief that it had the right to continue to collect debts that were otherwise discharged in a bankruptcy.

The matter was decided in the case of Internal Revenue Service v. Murphy, 65 Bankr.Ct.Dec. 195 (2018). In this case, Murphy had received a bankruptcy discharge in 2006. However, despite this discharge, the IRS still attempted to collect on the debt on the belief that his tax obligations were not discharged under 11 U.S.C. § 523(a)(1)(C). This code section allows an exception to discharge for any tax if the “debtor made a fraudulent return or willfully attempted to in any manner to evade or defeat such tax.”

Murphy fought back under Section 7433(e) of the Internal Revenue Code, which allows the individual filing bankruptcy to petition the bankruptcy court to recover damages against the U.S. when the IRS has willfully violated the automatic stay or the final bankruptcy discharge.

In its defense, the IRS argued that that Murphy filed a fraudulent tax return to evade or defeat a tax, they had a right to try to collect on the debt from that debtor.

The lower court found that the IRS failed to file an objection prior to the bankruptcy discharge, both before or appropriately after the order was entered. The IRS continued trying to collect on the debt. It got so severe as the IRS levying insurance companies that did prior business with Murphy. In response, Murphy pursued a proceeding in bankruptcy court to get an official declaration from the court that the taxes were discharged in the original order.

Even though the IRS insisted that they were pursuing the debt in good faith because of tax evasion by Murphy, they never actually submitted evidence of evasion. The bankruptcy court granted a judgment for Murphy in 2010, declaring that his debts were, in fact, discharged. Even after this order, the IRS did not appeal this ruling. Instead, they continued to try to collect on the debt.

Murphy later filed another complaint against the IRS in 2011stating that by the levies the IRS issued in 2009, they were violating the discharge under Section 7433(e). The IRS fought back by saying they were not willfully violating the discharge, insisting that they were acting under the good faith exception. The bankruptcy court found in favor of Murphy, ruling that a willful violation includes the person acting “with knowledge of the discharge,” intending to take an action to collect on a debt the entity or person knows was discharged. The IRS did appeal this decision to Federal district court, who vacated the bankruptcy court decision but agreed with the definition of willful violation.

Eventually, after the case was remanded, the IRS settled the matter out of court in 2017. In the settlement, the IRS agreed to pay Murphy $175,000 in damages, only if it lost an appeal on the question of whether Section 523(a)(1)(C) provides a good faith exception to willful violation under Section 7433(e).

The IRS lost on its bet that the appeal would go in its favor. Instead, the First Circuit ruled that a creditor has willfully violated an automatic stay if it knew of the automatic stay or discharge and took an intentional action that violated the stay or discharge. The court ruled that a good faith belief in a right to property did not matter when determining whether the creditor’s action was willful. The court considered bankruptcy discharge to be equivalent to a violation of the automatic stay.

Looking back at the procedural history, the appeals court did note that the IRS could have but did not file an objection to discharge during the original bankruptcy proceedings. Further, they could have filed an adversary proceeding prior to collection to get an official statement from the court that the debts were not discharged. None of this was done in this case. This is not to say the IRS must appear in every bankruptcy case to have the taxpayer’s debts excepted from discharge. It may wait until the discharge is issued as a defense to collection efforts, but the IRS must prove some evidence and factual basis for their objection.

Click here to read more.

If you or a loved one 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.

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What Bankruptcy Does to Your Credit Score

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A common concern people have when filing for bankruptcy is the effect it will leave on their credit score and their ability to access credit, again. While bankruptcy does affect your credit score, it is sometimes the last resort to rebuild your credit and your financial future. In fact, it is oftentimes easier to reestablish your credit after filing for bankruptcy, because you are essentially given a “clean slate.”

It helps to sort through the myths and facts before making that final decision, and if you do choose to file for bankruptcy, this does not mean all hope is loss. There are proven ways to rebuild your credit score after bankruptcy, and our clients are proof!

My credit score said on all three reports 775, I couldn’t believe that I had such a great score before 10 years. Tim for me was the best move I have made for my situation. I have no regrets, I am glad the past is the past. – Bill T.

Hi Tim- I just wanted to send a quick note and thank you and your team for handling my bankruptcy case.  It is only a month or two after discharge, and my credit scores are already in the upper 600’s. – C.S.

The effects of bankruptcy on a person’s credit score depends on the score the filer had before filing for bankruptcy. If you have a higher credit score, the effect the bankruptcy will have will be more noticeable. However, if you have a lower credit score to begin with, the change may not be as much after filing for bankruptcy.

According to data from FICO, for individuals who had credit scores of 780 or more, the average amount of decrease is around 240, with a resulting credit score of 540. If the filer had a fair credit score of around 680, the decrease is on average 150 points, resulting in a score of 530. Both scores end up at roughly the same point, but the drop that the filer sees in getting to that score is noticeably different.

The good news is the American credit scoring system allows consumers to rebuild their credit score quite quickly after filing for bankruptcy. Even with a credit score at 550, you can still get back to a respectable score within one to two years through demonstrating good financial habits.

These habits include monitoring your credit report on a regular basis, ensuring that any accounts that are at a zero balance. Many financial experts recommend using a secured credit card to use for purchases to rebuild credit. After some time has passed and you have successfully used the secured card for a period, you may be able to slowly take on new credit, although it is never recommended that you have more than one account opened within a six-month period.

Rebuilding your credit is important for many reasons, the main one being it will allow you to be able to borrow in the future. Many filers worry that they will never be in the financial situation to purchase a home or qualify for another loan- these are all bankruptcy myths. Stick to a budget and a sound financial plan following bankruptcy, and you will be back on your feet before you know it.

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.

 

Bankruptcy Law, Debt Relief

Bouncing Back from Bankruptcy Can Happen Sooner than you Think

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There are many misconceptions surrounding the amount of time it takes to rebuild credit after bankruptcy.  But a new study reveals that individuals who file for bankruptcy can improve their credit score sooner than they think.

According to a recent study by LendingTree, more than 40 percent of consumers end up having a credit score of 640 one year after filing for bankruptcy. Approximately 65 percent of filers see the same score, at least, three years after the bankruptcy case is over.

What the study showed was that it is possible to bounce back from a bankruptcy, and relatively quickly. With proper planning and financial insight, it is possible for a bankruptcy filer to get back on his or her feet financially.

It helps to first evaluate how you got to the situation where bankruptcy was needed. Were you spending beyond your means and relying too heavily on credit? Perhaps a medical crisis brought on the debt or an unfortunate event like the loss of a job or a divorce caused the hardship.

The next step is to work on rebuilding your credit. One of the best ways to get credit back to where it once was is to pay all bills on time every month. Missing a payment is such an easy way to hurt your credit score. Put together a budget, see what your monthly expenses are, and stick to that budget. Make sure you have enough income every month to meet your monthly obligations, and set up automatic payments, if needed, to be sure no bills are missed.

In addition, the use of a secured credit card can also help rebuild credit. While these cards do have higher fees and lower spending limits, they can be excellent ways to build up credit and show that you can continue making payments on a card on a regular and consistent basis.

Once you use a secured credit card for a period of time, try to find a card with a lower interest rate. However, the key is to not overspend with this card. Use the card for only necessary expenses and make sure that the balance is paid off in full on a monthly basis.

Experts also recommend that you set up an emergency fund or savings account in the event you run into a financial crisis again in the future. Try putting away a small amount of money regularly on a monthly basis, if not setting up an automatic transfer into savings if possible. By having this emergency fund there, you are protecting yourself from having to rely on credit again in the event a major crisis occurs.

Following these tips and recommendations can help you rebuild your credit after bankruptcy. It may seem like the impossible dream, but with hard work and determination, it is possible.

See what some of our clients have to say about their credit score after filing for bankruptcy…

My credit score said on all three reports 775, I couldn’t believe that I had such a great score before 10 years. Tim for me was the best move I have made for my situation. I have no regrets, I am glad the past is the past. – Bill T.

Hi Tim- I just wanted to send a quick note and thank you and your team for handling my bankruptcy case.  It is only a month or two after discharge, and my credit scores are already in the upper 600’s.  I’ve sent a screenshot if you would like to use this to show prospective clients. – C.S.

Click here to read more on this story.

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.

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Which Business Debts Are Discharged in a Chapter 7 Bankruptcy?

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If you are struggling to pay off business debts, filing for bankruptcy can help.  A bankruptcy is not just a way to liquidate a business, it can serve as a way for you to keep your doors open while you reorganize and regroup.  Business owners can file for Chapter 7, Chapter 11 or Chapter 13 bankruptcy.  You may have questions about what types of business debts can be discharged in an individual Chapter 7 bankruptcy case. It depends ultimately on the type of business as well as the debt.

The types of debts that can be discharged in a Chapter 7 bankruptcy case include:

  • Unsecured debts, such as credit card bills or medical bills;
  • Some legal judgments;
  • Unsecured debts owned by a sole proprietor;
  • Obligations included under a lease or contract that were entered into by a sole proprietor, including commercial and residential property leases or equipment rental leases; and
  • Personal loans or promissory notes.

This list of debts includes only unsecured debts, meaning these debts are not connected to collateral or a piece of property. Secured debts are handled under different rules and require other considerations and depend on other factors, including whether a deficiency between what the property is worth and the amount that is owed on the property exists.

If your business is a sole proprietorship, you and your business are treated equally, which means that any unsecured debt that was obtained under the sole proprietorship can be discharged through a Chapter 7 bankruptcy case. If the business owes on a secured debt, this secured debt will be treated just as it would be treated in an individual bankruptcy filing.

If the business is a partnership, it is considered a separate legal entity. If the partnership files for bankruptcy, no discharge exists for the business debt. Normally the bankruptcy trustee will close and liquidate the business, selling the business or its assets to pay off the creditors. In a general partnership, all partners are personally liable for any business debt under the partnership. If the partnership fails and the bankruptcy court must liquidate the debts of the business, if there is still money owed on the debts due to the assets not being enough to satisfy the debts, the bankruptcy trustee can go personally after the partners to satisfy any outstanding obligation. It is usually advisable for the individual partners to file for Chapter 7 bankruptcy in their own names and discharge both the personal and business debts.

If the business is a corporation, it can file for Chapter 7 but will not receive a bankruptcy discharge of the business debts. Just like a partnership, the bankruptcy trustee will close the business and liquidate it under a Chapter 7 case, using that money to pay off the outstanding obligations. However, since shareholders are normally involved in a corporation, other complications do arise when it comes to closing a corporation and paying off business debts.

Lastly, if the business is a limited liability company (LLC), the same rules apply. The LLC can be liquidated through a business bankruptcy, but the debts must be either paid through the assets of the business or the debts can be discharged through a personal bankruptcy case.

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

Related Resources: https://www.nolo.com/legal-encyclopedia/business-debts-discharged-chapter-7-bankruptcy-32415.html

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How Often Can A Person File for Bankruptcy?

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Many clients want to know if a previous bankruptcy filing is going to prevent them from filing again in the future.  A number of factors go into when and whether it can be done, but the two biggest factors are what type of bankruptcy was filed previously and how long ago the case was filed.

A Ban Does Not Exist on Subsequent Filings

The good news for bankruptcy filers is there are no limits on the number of times a person can file for bankruptcy. However, the bankruptcy courts do not want to see individuals misuse the system with multiple filings made in bad faith. It is for this reason that the law does impose certain statutory requirements and prerequisites that filers must meet to be able to file again. If an individual has filed for bankruptcy previously, it is important that he or she contact an experienced bankruptcy attorney to discuss the options available, as well as the requirements for filing again.

Previous Chapter 7 Bankruptcy Filing

If the previous bankruptcy filing was a Chapter 7 case, the individual must wait at least eight years from the date of the previous bankruptcy filing before filing a second time, if that person wants to file another Chapter 7 case. However, if the person filed a Chapter 7 bankruptcy case for the first filing but now wants to go forward with a Chapter 13 reorganization case, the time is shorter, and that person must only wait four years from the date of the first bankruptcy filing date.

Previous Chapter 13 Bankruptcy Filing

If the previous bankruptcy filing was Chapter 13, certain time limits do apply. If the previous case resulted in a bankruptcy discharge, the filer must wait at least six years from the date the first Chapter 13 case was filed before he or she can file for and get another discharge in a later Chapter 7 case. However, exceptions do exist to this rule. If the filer paid back all of his or her unsecured debts or at least 70 percent of the unsecured debts were paid, and the plan was to pay them back in good faith, the six-year rule does not apply. If the later case is a Chapter 13 bankruptcy again, the filer cannot get a later Chapter 13 bankruptcy unless the case has been filed at least two years after the date the first case was filed.

Case Dismissed with Prejudice  

However, other exceptions exist to the rules listed above. The filer can be prohibited from filing a later bankruptcy case if the bankruptcy court dismissed the previous bankruptcy case with prejudice, meaning the person who had filed the case failed to comply with court orders, filed multiple cases with the purpose of deceiving creditors or the case was not filed in good faith.

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

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Souring Bankruptcy Rates Signal a Calm Before the Storm for the Elderly

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Bankruptcy statistics are showing an alarming trend among senior citizens as more of them are filing for bankruptcy than ever before. In fact, according to the study, these numbers have jumped significantly in the last 25 years.

The numbers come from the Consumer Bankruptcy Project as published by the Social Science Research Network. These figures show that the rate of individuals over the age of 65 who have filed for bankruptcy has grown 204 percent from 1991 to 2016. Further, the percentage that senior citizens who filed compared to all other U.S. bankruptcy filers went up five times over this 25-year period.

It is reported that the rising cost of healthcare, reduced income and decline in pensions are to blame for the increase. All three of these factors have led to the perfect storm, leaving more financially broken retirees than ever before.

Most of these individuals worked their whole lives, thinking Social Security, their pensions and Medicare would carry them through retirement. However, following the 2008 recession, companies began to freeze or completely eliminate pensions. Many also lost their jobs during this time or were forced to retire early and are now delaying collecting Social Security, just barely getting by. All it takes is for one major crisis, whether it be a medical diagnosis or job loss, for their finances to quickly fall apart.

Medical costs seem to be the biggest trigger for financial issues, according to the study. For one, Medicare does not cover all medical expenses that may be needed, including the costs of long-term care, dental treatments or hearing aids. Medicare requires co-pays most of the time, as well as deductibles, and even meeting these costs can be difficult for many. If someone needs major surgery, those costs can be astronomical, even just meeting the deductible.

According to figures from the Kaiser Family foundation, out-of-pocket health expenses for individuals on Medicare took over 40 percent of the average reported Social Security income during 2013. It is anticipated that costs are going to increase to 50 percent of what the average Social Security income is by the year 2030.

The financial institution, Fidelity, reported earlier this year that the average retiree couple, age 65, will need approximately $280,000 alone to cover health care and other medical costs throughout retirement. That figure does not even begin to cover the cost of living. This number is up 75 percent from what Fidelity recommended in 2002, when the company recommended that a retired couple at the age of 65 save up $160,000 for healthcare costs.

One major concern brought up from these statistics is the fact that even though older individuals are struggling, society as a whole does not seem to be all that concerned with their struggles. When the average person is in this type of financial situation, bankruptcy offers him or her a fresh start.

Individuals in this generation can sometimes view bankruptcy as a way of giving up or have trouble asking for help. It is important, however, that if family and friends see their older loved ones struggling financially, that they reach out to them and encourage them to seek help as soon as possible. For many seniors, bankruptcy can provide the relief they so desperately need and help them enter retirement with a fresh financial start.

Click here to read more on this story.

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.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Attorney Timothy S. Kingcade Obtains Successful Win for Bankruptcy Client

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Second Motion to Dismiss Granted & Hearing Cancelled due to lack of evidence to support the claims

Bankruptcy Attorney Timothy S. Kingcade, founding partner of Miami-based Kingcade Garcia McMaken successfully obtained an Order for his client in a Chapter 7 case, granting a Second Motion to Dismiss and cancelling a hearing scheduled for July 25, 2018.

“We are extremely pleased with the victory obtained for our client today. The allegations stated in the Complaint lacked sufficient evidence to support the claims. It was simply assumed that actions taken by Torres and PSI petroleum, LLC assigned liability to our client, without providing sufficient and specific allegations. The law was on our side in this case,” Kingcade said.

On March 5, 2018, the Plaintiffs in the case: Milan Gohil and GMC Law Firm, PLLC filed an adversary proceeding seeking a judgement against the Defendant. The complaint alleged three counts: (1.) False Pretenses, Fraud & Nondischargeability; (2.) False Financial Statements & Non-Dischargeability, and (3.) GMC Law Firm Claim for Attorney’s Fees. The Order Granting the First Motion to Dismiss included a provision that allowed the Plaintiffs to file an amended complaint, and on May 6, 2018 the Plaintiffs filed an Amended Complaint to Determine Dischargeability of Debt.  On May 18, 2018, Defendants filed the Second Motion to Dismiss stating the plaintiffs did not plead their claims for relief as required by law.

A court “weighing a motion to dismiss asks ‘not weather a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.’” (quoting Scheurer v. Rhodes). Federal Rule of Bankruptcy Procedure 7012, adopting Federal Rule of Civil Procedure 12, authorizes the court to dismiss a complaint that fails to state a claim upon which relief may be granted.

The Order directs the Second Motion to Dismiss be granted, all pending motions are denied as moot and the hearing on July 25, 2018 be cancelled.

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Miami-based Kingcade Garcia McMaken was established by managing partner and bankruptcy attorney, Timothy S. Kingcade in 1996. The firm represents clients throughout the State of Florida in Chapter 7 bankruptcy and foreclosure defense cases. The firm is committed to providing personalized service to each and every client, clearly explaining the options according to the unique circumstances of his or her life. The office environment and the service provided are centered on a culture of superior client care for the financially disenfranchised. All partners and associates at Kingcade Garcia McMaken specialize in consumer bankruptcy and foreclosure and have dedicated their practices to this area of the law. Additionally, all attorneys and staff members at the firm are bilingual speaking Spanish.

For more information visit, https://www.miamibankruptcy.com/.