Chapter 7 Bankruptcy Archives - Page 23 of 27

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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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, 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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Bankruptcy Law, Credit, Foreclosures, Timothy Kingcade Posts

Don’t think you can buy a home after bankruptcy? Actually, you can.

Posted on May 24, 2016by Admin

There are a number of myths associated with bankruptcy; the inability to purchase a home is one of them. Bankruptcy is certainly not the end of homeownership. In fact, all major mortgage programs available today- conventional, USDA, VA and FHA home loans-have established guidelines that allow post-bankruptcy buyers to qualify for a mortgage.

Each loan type has its own waiting period requirement after bankruptcy. Waiting periods for the four major types of loans are as follows:

FHA loans: 2 years
VA home loans: 2 years
Conventional mortgages: 4 years
USDA home loans: 3 years

While these are the “standard” guidelines, you may qualify for a conventional or FHA loan even sooner. Both of these loans have exceptions for “extenuating circumstances” or one-time events that caused income loss and were outside of the homeowner’s control.

In this case, an applicant can be approved for a conventional loan just two years after bankruptcy, and an FHA applicant can receive approval after one year in the “Back to Work Program.”

Below are some quick and easy ways to re-establish your credit after bankruptcy.

Re-establishing your credit involves opening credit accounts and paying them on-time for at least 12 months. These credit accounts must be kept open and active.
Begin with a credit card. Use it for gas and groceries and pay it down every month. Keep a small balance on it so the credit bureaus can see that it is active, but keep the balance below 30% of your available balance.
The credit bureaus value a diverse credit profile, more than just credit card accounts. Personal loans, student loans and car loans are other types of credit. Credit bureaus want to see that you can manage your credit responsibly.
Lenders may look for non-traditional credit. For example, 12 months of cell phone bill, gym membership, car insurance, cable bill, etc.

With proper planning, you can re-establish your credit to the level at which you can qualify for a home loan.

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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, Timothy Kingcade Posts

FBI Arrests 8 in Miami accused of hiding assets before filing bankruptcy

Posted on May 18, 2016by Admin

Eight people were arrested this week and charged with concealing more than $3 million in assets from federal bankruptcy court in Miami. The five cases allege that eight individuals hid or illegally transferred assets out of their name before filing for Chapter 7 bankruptcy.

The neighbors of one of the couples could not believe a small army of FBI agents arrived at their Miami high rise condo building early Tuesday morning, and escorted them out in handcuffs.

One of the accused couples liquidated a certificate of deposit worth approximately $141,829 in 2010, then filed a joint petition for Chapter 7 bankruptcy in 2011, according to the allegations in the indictment. Another one of the indictments allege a Pinecrest man transferred and concealed a Jeep Wrangler, a 34-foot boat, The Isabella, approximately $41,200 in cash and his interest and roles in companies he owned. The fraudulent transfer of these assets was valued at more than $160,000.

A Boca Raton woman is accused of liquidating approximately $102,445 from her IRA account and transferring the money into a family member’s account. A Miami couple is accused of concealing assets they held in a divorce settlement. Among the assets concealed: Properties in North Carolina, valued at $336,300; $36,000 in cash to purchase a Jaguar valued at approximately $80,000; and $100,257 in cash from the sale of a condo in the Bahamas.

This should come as a warning to anyone who plans to hide assets from the bankruptcy court. Bankruptcy trustees are experts at finding undisclosed cash, property, vehicles, boats, jewelry, antiques, and collectibles. If you are caught trying to hide assets, the consequences are big. Your discharge will be denied, and you will be unable to discharge the debts you listed in a subsequent bankruptcy filing. In addition, the potential penalty for bankruptcy crimes includes fines and imprisonment of up to five years.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Lawsuit Alleges Orlando law firm violated rules on bankruptcy fees

Posted on April 29, 2016by Admin

The KEL law firm is facing a lawsuit alleging it routinely allowed clients to pay bankruptcy legal fees using credit cards, a violation of bankruptcy law. Credit card purchases are considered new debts and new debts are prohibited in the days before filing for bankruptcy and during the bankruptcy process. That is because bankruptcy courts often erase a filer’s credit card debt, which means the nation’s banking system would be on the hook for KEL’s legal fees.

The suit, which seeks class-action status, contends that KEL “uses standardized procedures when attempting to collect attorney’s fees by charging credit cards prior filing Chapter 7 bankruptcy.” It seeks the return of all bankruptcy fees paid by credit card—the amount of which is cited at $1,700 in the suit—and $1 million in punitive damages.

The lawsuit states an Orlando resident paid his bankruptcy fees to KEL using a Discover credit card and a BJ’s credit card. During the course of the filing, the debtor decided to switch to a new law firm, which noticed the prior fee payment on the credit cards to KEL. Jacksonville law firm Mickler & Mickler filed the proposed class action on behalf of the debtor.

Related Resources:

http://www.abajournal.com/news/article/ex_client_sues_law_firm_says_it_allowed_bankruptcy_fees_to_be_paid_by_credi

http://www.orlandosentinel.com/business/brinkmann-on-business/os-kel-firm-bankruptcy-fees-lawsuit-alleges-20160420-story.html

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How quickly can you refinance your Mortgage after Bankruptcy?

Posted on April 28, 2016by Admin

The rules have changed over the years regarding how quickly you can refinance a mortgage after bankruptcy. If you are underwater on your mortgage, meaning your mortgage is more than the current value of your home, your only refinance option will be through the Home Affordable Refinance Program (HARP). The earliest you can take out a new mortgage guaranteed by Fannie Mae or Freddie Mac following a bankruptcy is two years.

Freddie Mac’s guidelines say, the “waiting period” for reestablishment of credit after a Chapter 13 bankruptcy is 48 months from the dismissal date, but this period is only in effect if the bankruptcy was “caused by financial mismanagement.”

If the bankruptcy was due to illness, income loss, etc. and not due to overspending, the period will be 24 months from the discharge date. Fannie Mae has similar rules in effect of two years from the discharge date or four years from the dismissal date.

If you are unable to meet Fannie or Freddie’s guidelines, you may be eligible for an FHA-backed refinance. You will need to document “one year of the pay-out period under the bankruptcy has elapsed, that your payment performance has been satisfactory and all required payments have been made on time, and you have received written permission from the bankruptcy court to enter into the transaction.”

This one-year waiting period is thanks to the “Back to Work Program.” Here’s how you qualify:

You meet all the typical FHA loan requirements;
You can properly document the issues that led to your financial hardship;
In the last year you have re-established your credit;
You have completed HUD-approved housing counseling.

What about refinancing while you are still in bankruptcy? For starters, the bankruptcy court will need to grant you permission to take on new debt. To be able to proceed, you will need to file a motion with the court. Although described differently in each court district, you are essentially filing a “motion to incur debt” or “motion to refinance secured debt.”

Start by working with the attorney who handled your bankruptcy filing, they will be familiar with your case and know the motion paperwork needed in your district.

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

Judge’s Ruling on Law School Grad’s Debt Could Trigger ‘Seismic’ Shift in Loan Practices

Posted on April 18, 2016by Admin

A judge’s recent ruling to discharge a portion of a law school grad’s student loan debt could have major implications for those struggling with insurmountable student loan debt. The law student applied for the loan while she was studying for the bar exam as a student at Pace University Law School in 2009. She received a “bar loan” of $15,000 from Citibank, according to the bankruptcy court documents, and she made payments on the loan until June 2012. But in November 2014, after having failed the bar exam, she filed for Chapter 7 bankruptcy.

She wanted the $15,000 loan to be discharged arguing that it was not an “educational benefit” under the U.S. bankruptcy code. Citibank disagreed, arguing that the loan was an “educational benefit” in the fact that the eligibility for the bar loan was dependent on her being a law student.

But Judge Carla Craig of U.S. Bankruptcy Court in Brooklyn wrote in her decision, “However, this argument could be advanced by the myriad private lenders who provide funds to borrowers who are taking educational or training courses. The fact that [Citibank’s] underwriting standards required [Campbell] to be a law student does not turn an arm’s length consumer credit transaction into a ‘benefit’ within the meaning of [the bankruptcy code],” Craig wrote in her opinion.

Although there have been cases involving student loans where judges have ruled the opposite of Judge Craig, this recent decision may have an effect on future cases. This opinion is a confirmation that these loans should be dischargeable in bankruptcy.

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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