Chapter 7 Bankruptcy Archives - Page 23 of 28

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Household Credit Card Debt Still on the Rise

Posted on August 5, 2016by Admin

Financial experts believe the average household credit card debt will reach the “tipping point” of financial sustainability by the end of 2016. During the first quarter of 2016, Americans paid down approximately $26.8 billion in credit card debt; however, this is the lowest amount paid down in one quarter since 2008. By the end of 2015, credit card debt had reached $917.7 billion, up $71 billion from 2014. Analysts predict that national credit card debt will exceed $1 trillion dollars by the end of 2016.

A study conducted by CardHub found that the average American household’s credit card balance was more than $7,500. The amount is approximately $831 less than what the study considers the “tipping point” of financial sustainability.

Another study conducted by Dun & Bradstreet found that on average, people spend 12 to 18 percent more when they use a credit card, rather than cash.

The number of cards the average American uses is also on the rise. In 2015, data from Experian revealed that the average number of cards borrowers had was 2.24 cards per person, up from 2.18 cards per person in 2014.

One of the factors financial experts attribute to the rise in credit card debt is the lack of emergency funds. Many Americans are using credit cards for unexpected expenses without reducing their expenses, rather than using credit cards as a substitute for cash.

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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

Tips to Quickly Pay Off Credit Card Debt

Posted on July 26, 2016by Admin

In 2015, the average American had approximately $15,762 in consumer credit card debt and the United States as a whole had more than $733 billion. Credit card debt was the fourth largest type of debt in the country, following student loans, auto loans and mortgages. However, most consumers retain this debt for many years and end up racking up thousands of dollars in interest. This typically occurs because consumers prioritize other payments such as mortgage payments, student loan payments, hospital bills and car payments, and therefore only make the minimum credit card payments each month.

Below are some tips to help you quickly pay off $10,000 in credit card debt.

• Find out your total balance. The first thing you need to do is find out your total amount of debt, totaling all of your consumer credit cards.

• Stop the interest. The next thing you need to do is look for a card that is offering a long lasting “0% intro APR balance transfer” promotion. Next, transfer your balance to this card. If you have more than one card with a balance, try to consolidate all of your credit card balances to the same card offering 0% interest. In many cases, interest accounts for as much as 75% of your monthly payment! According to NerdWallet, the average household pays $6,658 in interest per year in various debts.

• Power through the balance. After you have transferred your balance, it is important to take advantage of the interest-free period of your new card. Continue to make the same payments you made before and your balance will start shrinking much faster.

Related Resources:

https://www.lendingtree.com/info/powerful-2-step-method-pay-off-credit-cards?esourceid=6164156&cchannel=bd&csource=cnn-money&siteid=CC-pay-off-10k-hp

https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Why Chapter 7 Bankruptcy should be Your First Option and Not Your Last Resort

Posted on July 25, 2016by Admin

Many Americans turn to debt relief assistance options when they are struggling with medical, credit card or other types of unsecured debt. However, according to the Huffington Post, nearly half of all programs aimed at helping you with your debt problems, fail to achieve the results they promise. These programs include credit counseling services, debt settlement programs, etc. Even those who have success with such programs usually end up with extremely high, consolidated payments for many years and accrue thousands of dollars in interest.

Filing for bankruptcy can you save time and money when you are in financial distress. Here is an example that shows the money and time debtors can save if they choose to file for bankruptcy, rather than seek debt relief assistance. Imagine that you currently have $22,000 in unsecured debts, such as credit cards. You have recently lost your job and can no longer afford each of the individual payments; therefore you choose to consolidate your credit cards into one monthly payment with the help of a credit-counseling agency. Your monthly payment is now $418 per month for the next five years. Once you pay off your debt at the end of the five years, you have paid roughly $25,000 including interest. However, if you put the same payment of $418 per month into an IRA for five years with an average return of 9.74%, you would not only have saved yourself $3,000 in interest but you would also have approximately $32,000 saved for retirement.

Filling for Chapter 7 bankruptcy can eliminate years of extremely high monthly payments and ongoing stress. The process of filing bankruptcy can take as little as 90 days and the total cost is typically between $1,500 and $1,800.

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Bankruptcy Law, Debt Relief, Florida Bar, Timothy Kingcade Posts

The Bankruptcy Means Test: What is it? Why is it Important?

Posted on July 20, 2016by Admin

The bankruptcy means test determines whether or not you are eligible to file for debt forgiveness through Chapter 7 bankruptcy. The test uses factors such as: income, expenses and family size to determine who can afford to repay their debts through reorganization and who cannot. Most who take the means test, pass it and are considered clear to file Chapter 7 bankruptcy. However, those who are ineligible for Chapter 7 have the option to file Chapter 13, which will restructure and reorganize debts.

How the Test Works

There are two steps involved in determining whether or not you have enough disposable income to pay off your debts. An experienced bankruptcy attorney will assist you in filling out and filing your paperwork with the bankruptcy court. Most debtors who file for Chapter 7 bankruptcy are struggling with consumer debt such as credit card or medical debt.

Step One

The first step in the bankruptcy means test will compare your household income with the average income in your state. In Florida, the median income for a household with one earner is $43,136. The median income for a household with two earners is $53,654. The means test is based on your financial situation over the past six months; therefore you will need to gather all of your documentation about your income during this time period. Keep in mind the court will consider any recent changes in your income such as: losing your job or starting a new job. If your median income over the past six months falls below your state’s average, you automatically qualify to file for Chapter 7 bankruptcy.

Step Two

If you are not automatically qualified to file for Chapter 7 bankruptcy based on your household income, you will need to move on to step two in the bankruptcy means test. As a part of this step, you must gather all of your documentation that lists your “allowable expenses” over the past six months. These expenses can include any of the following: rent, groceries, clothing and medical costs. What is left over is considered disposable income. In this portion of the means test, it is important to be thorough and not leave out any “allowable expenses.” It is also crucial to know your local “allowable expense” standards in addition to national standards. Make sure you consult with your attorney to fully understand what are considered allowable expenses in Florida.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Former Duke Basketball Star Faces Bankruptcy

Posted on July 4, 2016by Admin

Christian Laettner, Duke University basketball legend is facing bankruptcy. Several creditors filed an involuntary Chapter 7 petition against him alleging he owes $14 million. The nature of Laettner’s debts was not described in the petition. However, according to The Wall Street Journal Mr. Laettner and his business partner in several real estate deals faced civil lawsuits seeking repayment of loans valued at about $30 million, including to sports celebrities like former Chicago Bull, Scottie Pippen. The two played on the 1992 Olympic men’s basketball team together.

Laettner, who made the famous game-winning shot against Kentucky in the 1992 NCAA Tournament East Region finals, has 21 days to respond to the involuntary petition.

Laennter’s attorney said the involuntary bankruptcy is related to the West Village real estate development in Durham, N.C., a downtown project that crumbled during the economic recession. The involuntary petition stems from two creditors who are fighting to recover money from the project and that Mr. Laettner plans to negotiate a deal that will lead the chapter 7 filing to be dismissed, he said.

Laettner led the Duke University Blue Devils to two NCAA championship titles in the early 1990s. He also played in the NBA for more than a dozen seasons.

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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.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

OJ Simpson’s defense attorney F. Lee Bailey, Files for Bankruptcy

Posted on July 1, 2016by Admin

F. Lee Bailey, part of O.J. Simpson’s “Dream Team” of defense attorneys, has filed for bankruptcy in an attempt to discharge an IRS debt of more than $5 million. IRS debts are typically non-dischargeable in bankruptcy, but the 83-year-old Bailey said they can be discharged if the debtor abides by certain conditions, such as filing and paying taxes on time since the original taxes and penalties were assessed.

The debt stems from a dispute of Bailey’s reported income from 1993 to 2001, according to The Portland Press Herald.

Bailey was disbarred in Florida in 2001 over mishandling client assets, and Massachusetts issued a reciprocal disbarment in 2003. Bailey’s attempt to gain admission to the Maine bar failed in 2014, when the Maine Supreme Judicial Court reversed a judge’s ruling that would have allowed him to practice law in Maine.

Bailey served as one of Simpson’s attorneys during the 1995 high-profile murder trial, which ended in the former NFL star’s acquittal in the 1994 murders of his ex-wife, Nicole Brown Simpson and Ronald Goldman.

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

Co-signing a loan puts more than your name on the line

Posted on June 29, 2016by Admin

Co-signing is an all too common practice, and gives you the opportunity to help another person. However, this responsibility comes with great risk, and little reward.

For example, you might co-sign for a car you never drive, a house you never live in or even a student loan for someone else’s college education. When you co-sign a loan, you essentially agree to repay the loan yourself.

A survey from CreditCards.com reveals the dangers of co-signing and why you SHOULD NOT do it.

28 percent of co-signers saw a drop in their credit scores because the primary borrower paid late or not at all.
38 percent of co-signers had to pay some or all of the loan payments because the primary person did not pay.
If your income is not high, you are more likely to be pulled into a co-signing nightmare. The survey found that 58 percent of co-signers who make less than $30,000 a year had to pay some or all of a credit card bill or loan they co-signed.
Most co-signing requests were for auto loans, followed by personal loans, student debt and then credit cards. About half of the people who co-signed were parents.

Here are some additional dangers of co-signing a loan.

You are not considered a backup borrower. You are equally responsible for the first payment to the last.
If the loan or credit card is not paid, the lender can start collection actions on you right away. Do not believe that lenders first go after the primary borrower and then the co-signer. Most likely, lenders will target “the person with the better potential to pay.”
If collection actions are pursued, you could end up paying late fees and even have your wages garnished.
Late payments and collection actions are reported on your credit report.
This may limit your ability to borrow because, as a co-signer, you are on the hook for the debt.
Even if the person you are co-signing for is responsible with money, you cannot predict what the future holds for his or her finances. What if the person becomes unemployed or unable to work?

As one consumer wrote, “I have told more than one relative that while I can guarantee their willingness to pay, I cannot guarantee their health or employment.”

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Bankruptcy Law, Credit, Debt Relief

Bankruptcy Counseling: What it is and What to Expect

Posted on June 6, 2016by Admin

Deciding to file for bankruptcy is not an easy decision, but it may be your best option if you do not see yourself paying off your debt in five years. The federal government requires two sessions of credit counseling: pre-filing counseling to start the process and pre-discharge counseling before your debts are forgiven. These sessions will help you understand how bankruptcy works and how to avoid financial devastation in the future.

The counseling sessions do not take long to complete. Here is what you can expect.

Pre-filing counseling

Pre-filing bankruptcy counseling is the first step in the bankruptcy process. If you do not go through pre-filing counseling before submitting your case to the court, it will be thrown out.

In addition to being an educational course to help you understand the advantages and disadvantages of going through bankruptcy, pre-filing counseling presents alternatives such as debt management to help you determine if bankruptcy is the best way to resolve your debt. Upon completion of the pre-filing session, you will receive a certificate of completion valid for 180 days. You will need that certificate if you decide to file for bankruptcy.

Pre-discharge counseling

Pre-discharge counseling is the final step before the court finalizes your bankruptcy and discharges your debts. This counseling offers valuable financial education to help you manage your finances in the future. It focuses on your income, expenses and strategies to help you save money.

This class covers much of the same ground as the pre-filing session but with a focus on increasing your financial literacy. You will cover topics such as understanding your credit score, living on a budget and avoiding future financial risk. You will receive a certificate upon completion that you will need to present before the court before your debts can be discharged.

Before going into either session, gather documents that outline your income, expenses and debt to expedite the process. Expect each session to take between 90 minutes and two hours.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Can an employer check my credit?

Posted on June 1, 2016by Admin

While credit checks are not the norm in the job application process, the practice is common for jobs where candidates will be privy to sensitive information or making financial decisions.

States and local jurisdictions are increasingly regulating the use of credit reports in hiring. Eleven states limit employers’ use of credit reports, and other states are considering similar legislation.

When an employer checks your credit they are reviewing your credit report, not your score. What are they looking for? In most cases they want to see evidence that you are honest and responsible- this is not always the best indicator of either.

It is important to remember that the employer needs to ask your permission and receive written consent, before running a credit check. If your poor credit disqualifies you, the employer is required to let you know and give you a chance to respond.

Regardless of where you stand, it is a good idea to take a look at your credit report before you start a job search. Check for inaccuracies and take steps to correct them. Remember, there are three different credit bureaus—Equifax, Experian and TransUnion. You can access your FREE credit report at AnnualCreditReport.com.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

When Bankruptcy is the Best Option

Posted on May 25, 2016by Admin

Filing for bankruptcy is not the end of the world. In fact, it can help improve your overall situation and relieve the financial stress you are facing. Bankruptcy stops collection calls, lawsuits and wage garnishment. It wipes out most, sometimes all of your debt and can improve your credit score.

Many credit bureaus and scoring experts will disagree, not seeing the whole picture. For most people after struggling with insurmountable debt for sometime, their credit score has already greatly been affected by the time they file for bankruptcy.

Once they file for bankruptcy, their credit score typically increases. If the debt is erased, which is also known as a “discharge,” scores can increase even more- typically within a year. Accessing data from the Equifax credit bureau, researchers at the Federal Reserve Bank of Philadelphia found that filers’ credit scores plunged in the 18 months before filing for bankruptcy and rose steadily after that. The average credit score for someone who filed Chapter 7, the most common type of bankruptcy, in 2010 was 538.2 on Equifax’s 280 to 850 range. (Scores in the low 600’s and below are generally considered poor.) By the time the filers’ cases were discharged, usually within six months, their average score was 620.3.

Credit scores are not the only factor to consider when making the decision to file for bankruptcy. People who file for bankruptcy benefit from the “automatic stay,” which stops all collection activity, including lawsuits, wage garnishment and collection calls. A Chapter 7 bankruptcy wipes out a number of debts, including: credit card debt, medical bills, personal loans, civil judgments (excluding fraud), past-due rent and utility bills, business debts and older tax debts.

Most of us feel we have an ethical obligation to repay our debts, if we are able to. But oftentimes, people find themselves in over their head before realizing they need to consider bankruptcy as an option. Some continue to pay down debt they may never be able to pay off, prolonging the damage to their credit score and diverting money that could be put into retirement savings.

Bankruptcy is likely your best option if your consumer debt (any of the debts listed above) total more than half your income, or if it would take five or more years to pay off that debt, with extreme fiscal measures.

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