Bankruptcy Archives - Page 9 of 34

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Puerto Rico Files for Largest U.S. Municipal Bankruptcy

Posted on May 11, 2017by Admin

Last week Puerto Rico filed for municipal bankruptcy with a total of $123 billion in debt and pension obligations. It is the largest municipal bankruptcy filing in U.S. history, far exceeding Detroit’s $18 billion bankruptcy filing in 2013.

Governor Ricardo Rossello said, “Given the deficit that we inherited, it is my responsibility to guarantee the best interests of the Puerto Rican people.”

The court proceedings could potentially make the island solvent again for the first time in decades. However, many of the prominent Wall Street firms who own Puerto Rico’s bonds are not too happy about the bankruptcy filing because they fear they won’t get paid back the money they are owed.

Puerto Rico has been in an economic recession for more than a decade and the unemployment rate is 11.5 percent. The island’s financial crisis is so bad that Congress installed a Fiscal Oversight Board last year to call the financial shots. However, the board stopped negotiations with creditors last week and filed for bankruptcy.

While on the campaign trail, Donald Trump said he would not “bail out” Puerto Rico. He repeated that again in a recent tweet. His budget director also said that the White House pushed hard to ensure no federal dollars would go toward paying the island’s debts in the latest Congressional budget deal.

If you are in financial crisis and considering filing for bankruptcy, 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, 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://money.cnn.com/2017/05/03/news/economy/puerto-rico-wants-to-file-for-bankruptcy/

https://www.nytimes.com/2017/05/03/business/dealbook/puerto-rico-debt.html?_r=1

Bankruptcy Law, Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

Dance Moms Reality Star Abby Lee Sentenced to One Year in Prison

Posted on May 10, 2017by Admin

This week Abby Miller, former “Dance Moms” star was sentenced to a year and a day in prison. The reality TV star was charged with hiding $775,000 worth of income and bringing $120,000 worth of Australian currency into the U.S. without reporting it.

U.S. District Judge Joy Flowers Conti also fined Miller $40,000 on top of the $120,000 in currency she is forfeiting as a part of the guilty pleas she entered last year. She was also ordered to spend two years on probation after her prison sentence.

In late 2010, Miller filed for bankruptcy after defaulting on a $245,000 Florida condominium mortgage and a $96,000 mortgage on her Abby Lee Dance Company studio in Penn Hills, outside of Pittsburgh.

U.S. Bankruptcy Judge Thomas Agresti nearly approved a plan to let her repay her creditors at lower interest rates and longer terms before he saw her on TV one night. Miller had declared in court that she was only making $8,899 per month.

It is a crime to deceive a bankruptcy judge regarding one’s income and assets because that information is used to determine how much and how soon creditors will receive in the court-ordered repayment plan.

She later paid out $288,000 in TV income she did not initially report in 2012, then the federal investigators found that she had hidden nearly $550,000 more from personal appearances, dance sessions and merchandise sales.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

400 Percent Increase in Scams this Tax Season

Posted on April 17, 2017by Admin

According to the IRS, there has been a 400 percent increase in tax scams during this year’s filing season, compared to last year. The IRS has issued warnings about the growing threat of scams as the end of tax season nears. Scammers use tax season to trick taxpayers into disclosing confidential information so they can access bank accounts, make fraudulent purchases, apply for loans and steal tax refunds.

The most common way scammers steal W-2s is through phishing emails. Hackers create a fake email address, posing as a CEO or CFO of a company and send a request to an employee in payroll asking for a PDF of all employees’ W-2s.

According to the Department of Justice, stolen identity tax refund fraud has affected hundreds of thousands of taxpayers and has cost the United States Treasury billions of dollars.

Other common scams claim there is an urgent situation requiring taxpayers’ immediate attention, such as an issue with processing refunds, additional forms or an audit warning.

The best way to protect yourself from tax scams is to know the signs:

Emails that appear to be from the IRS with suspicious links and attachments
Text messages that instruct you to call a toll-free number
Phone calls with pre-recorded messages that ask for confidential information

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Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

The New Shape of U.S. Household Debt

Posted on April 14, 2017by Admin

Household debt in America has been reshaped in ways that could potentially affect how financial experts are able to help manage a consumer’s liabilities. The overall debt of U.S. households is $100 billion smaller than it was in 2008. According to the Federal Reserve Bank of New York, it also looks a lot different now than it did then.

Mortgage debt remains the largest debt burden. However, its share of household debt has declined along with that of credit card debt, while the share of student loan debt and auto loan debt has grown.

By the end of 2016, mortgage debt accounted for 71 percent of household debt, down from almost 79 percent in 2008. Student debt had more than doubled since 2008 and more than tripled since 2003 to 10.4 percent.

Auto loan debt had a 9.2 percent share at the end of 2016, which is approximately one-third larger than it was in 2008. All three types of debt had larger shares of households’ income than credit card debt.

All of this means that housing debt fell $1 billion from its peak in 2008 of $9 trillion, while student loan debt rose $700 billion and auto debt rose $350 billion.

Financial experts attribute the change in household debt to a change in the demographics of U.S. debt. Households that are headed by those 60 years old and older now account for just over 22 percent of outstanding U.S. debt, which is up from 16 percent in 2008.

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Bankruptcy Law, Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

U.S. Bankruptcy Judge Fines Bank of America $45 Million

Posted on April 13, 2017by Admin

Judge Christopher Klein of the U.S. Bankruptcy Court in Sacramento issued a $45 million fine against Bank of America Corp., calling the treatment of a California couple who fought to save their home “brazen” and “heartless.” According to Judge Klein, the bank’s mortgage modification process and mistaken foreclosure on Erik and Renee Sundquist’s home left them in a “state of battle-fatigued demoralization.”

“It is apparent that the engine of Bank of America’s problem in this case is one of corporate culture… not rogue employees betraying an upstanding employer,” Judge Klein said. He added that he hopes the fine is large enough that it will not be “laughed off in the boardroom as petty cash or ‘chump change’.” Most of the money from the fine will go to law schools and consumer advocacy organizations.

The Sundquists’ financial troubles started in 2008 after their construction business closed down due to the economic downturn. The couple later bought a cheaper home outside of Sacramento and borrowed approximately $590,000 from a lender that was later taken over by Bank of America. After which, the bank promised them that they could request lower monthly payments. However, in 2009 when the couple stopped making payments, Bank of America officials said they would not consider a loan modification. Over the next few years, the couple requested loan modifications approximately 20 times. Each time their requests were “routinely either lost or declared insufficient, or incomplete or stale or in need of resubmission or denied without comprehensible explanation,” the ruling said.

In 2010 the couple filed for bankruptcy which halts foreclosure sales. However, the bank still improperly took over the home and gave them a three-day eviction notice. A few weeks after the couple moved out, Ms. Sundquist was hospitalized with stress-related heart attack symptoms.

Bank of America later reversed the sale but never formally notified the couple of the change. According to the ruling, they moved back in several months later.

Click here to read more on this story.

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, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loans ‘Designed to Fail’: States Say Navient Preyed on Students

Posted on April 12, 2017by Admin

Navient, a student loan lender that split off from Sallie Mae in 2014, retained nearly all of the company’s loan portfolio. In recent months, Navient has come under fire for aggressive and sloppy loan collection practices, leading the government to file multiple lawsuits against the student loan giant in January.

However, those accusations have overshadowed broader claims made against the lender. Two separate states, Illinois and Washington, have filed lawsuits against Sallie Mae claiming that it engaged in predatory lending, extending billions of dollars in private loans to students.

“These loans were designed to fail,” said Shannon Smith, chief of the consumer protection division at the Washington State attorney general’s office.

New details emerged last month in the lawsuits against Navient that shed light on how Sallie Mae used private subprime loans, some of which it expected to default at rates as high as 92 percent, as a tool to build its business relationships with colleges and universities across the company.

The risky loans were detrimental for students, however; they were beneficial for Sallie Mae. The private loans were a “baited hook” as Sallie Mae described it. The lender used the private loans to reel in more federally guaranteed loans, according to the lawsuit.

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. 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, 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, Student Loans, Timothy Kingcade Posts

The IRS Has Hired a Debt Collector That is Being Sued by The Government

Posted on April 7, 2017by Admin

The IRS has hired for-profit debt collectors to collect on long-overdue taxes that the government lacks the resources to work on. Four debt collectors were selected for the new contracts, including one whose parent company is currently being sued by the U.S. government over its student loan debt collection practices.

Pioneer Credit Recovery is a subsidiary of Navient, a student loan debt collector. The Consumer Financial Protection Bureau filed a lawsuit against both companies in January claiming that the companies “systematically misled consumers.” A few months prior, Pioneer was selected as one of the IRS debt collection contacts in September, alongside ConServe, Performant and CBE Group.

Pioneer’s parent company Navient, formerly known as Sallie Mae, holds a federal government contract to service approximately $300 billion in student loans owed by 12 million borrowers.

The IRS was mandated by Congress to hire debt collectors, in language that was inserted into a $205 billion highway funding bill in late 2015. Experts on consumer protection say the new contracts create more potential for bad behavior in debt collection.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

An Increasing Number of Americans Have Stopped Paying Their Car Loans

Posted on April 6, 2017by Admin

Wall Street is starting to worry about the auto loan market as millions of Americans are falling behind on their car loans. The increased interest in the auto loan market seems to be based on commentary from Ally Financial, weak guidance from Ford and what Evercore ISI called “a splurge in incentive spending.” Here’s what you need to know:

The delinquency rate for subprime auto loans is at the highest level in at least seven years.
Banks are pulling back and newer players with loose lending standards are stepping in.
Used vehicle prices are dropping sharply, as the market is flooded with off-lease vehicles.
The percentage of trade-ins with negative equity is at an all-time high.
Asset-backed securities based on auto loans are showing signs of stress.
A growing proportion of the auto loan ABS market is now made up of “deep subprime” deals.

The 60+ day delinquency rate for subprime is the highest it has been in seven years. A key driver of the increasing delinquency rate is a spike in the proportion of “deep subprime” deals, or those with an average FICO score of less than 500. In other words, the subprime delinquency rate is creeping up while the subprime market is ballooning in size.

The Liberty Street Economics post, written by Andrew Haughwout, Donghoon Lee, Joelle Scally and Wilbert Van Der Klauuw said, “The data suggest some notable deterioration in the performance of subprime auto loans. This translates into a large number of households with roughly six million individuals at least ninety days late on their auto loan payments.”

Related Resources:

http://www.businessinsider.com/wall-street-is-worried-about-car-loans-2017-3/#fitch-deteriorating-credit-performance-will-be-more-acute-in-the-subprime-segment-1

https://www.aol.com/article/finance/2016/11/30/6-million-americans-have-stopped-paying-their-car-loans-and-it/21617633/

Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

What the Navient Lawsuit Means for Your Student Loans

Posted on April 5, 2017by Admin

Navient, a company that derived from Sallie Mae, has more than 12 million customers and services more than $300 billion of government and private student loans. In January, a lawsuit was filed against the student loan lender where the Consumer Financial Protection Bureau (CFPB) alleged that Navient “systematically and illegally failed borrowers at every stage of payment,” in many ways such as:

Creating obstacles to repayment by providing bad information
Processing payments incorrectly
Failing to act when borrowers complained
Illegally cheating many struggling borrowers out of their rights to lower payments, which caused them to overpay for their student loans
Deceiving private student loan borrowers about requirements to release their co-signer from the loan
Harming the credit of disabled borrowers, including severely injured veterans

According to the CFPB, Navient also improperly directed borrowers into forbearance when these borrowers otherwise might have qualified for income-based repayment plans. The lender also failed to keep borrowers in income-based repayment plans informed of deadlines to maintain their eligibility under such plans.

Navient later denied all allegations and claimed the lawsuit was politically motivated. The company filed a motion to dismiss the lawsuit on March 24^th, claiming there have been no violations of actual servicing rules.

Does your student loan servicer owe you a fiduciary duty?

According to Navient, it is not a fiduciary financial advisor. The student loan lender claims that courts “routinely hold that servicers and lenders do not owe borrowers any specific fiduciary duties based upon their servicer/borrower relationship.”

This means that if you need guidance in choosing a repayment plan, Navient maintains that the lender is not responsible for counseling borrowers on alternative repayment plans. Navient further notes that the U.S. Department of Education does not pay Navient enough to provide sufficient customer service that the CFPB would like Navient to provide.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

When a Tax Refund Means Bankruptcy

Posted on April 4, 2017by Admin

A review of the past four years shows that Chapter 7 bankruptcy filings, the most common form for individuals, have spiked during tax season or just after tax season. This suggests that taxpayers are using their refunds to file for bankruptcy and wipe out their debt, rather than funding a vacation or splurging on a big purchase.

Filings in March were 26 to 34 percent higher than the monthly average from 2013 to 2016, according to NerdWallet. Additionally, April’s bankruptcy filings were also 15 to 25 percent higher than other months.

Filing for Chapter 7 bankruptcy costs the average consumer approximately $1,500 to discharge their debts. Attorney fees typically cost $1,200 and other court fees total approximately $335. Due to a 2005 law change that made bankruptcy filing more complicated, fees have increased in recent years.

According to the IRS, the average tax refund in 2016 was $2,860, which is enough to cover the average bankruptcy costs.

When Bankruptcy Makes Sense

You should consider Chapter 7 bankruptcy if the following applies to you.

Your problem debt is greater than 50 percent of your annual income. This usually means medical bills, credit card debt or high-interest loans.
You see no way of paying off your debt within five years.
Debt is interfering with other parts of your life, such as hampering your ability to buy a car or save for retirement.

Click here to read more on this story.