Tag: Chapter 7 Bankruptcy

Bankruptcy Law, Debt Relief

How Small Business Owners Can Protect Assets in Bankruptcy

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Many business owners worry about what will happen to their companies and their business assets when facing bankruptcy or a lawsuit. It is important for any business owner that he or she creates an asset protection plan for these exact types of situations.

The first step is to develop a debt management plan for the business. Having debt is not always a bad thing. The key is to manage the debt in an intelligent manner to stay out of trouble.  Business loans will usually involve offering business assets as collateral, which means that if the business owner ends up defaulting on the loan, the lender can seize the collateral to pay the debt. Some lenders will require borrowers to sign a personal guarantee if the collateral is not enough to cover the debt.

student loan debt

Six-Figure Parent Loans and the True Cost of Parent PLUS Loans

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Parents will often do anything they need to when it comes to their children, and for many parents, that means taking on student loans for them, on top of the ones they already have left over from their own college education. These loans are normally taken on in the form of Parent PLUS Loans, and can often end up being a struggle for the parent to pay off in the end.

The Parent PLUS program was introduced in the 1980s as a means of financial support for middle- and upper-income families to help pay for their children’s college expenses. Most of the time, parents in these income classes did not qualify for other financial assistance, but the Parent PLUS program allowed them to obtain financing while keeping their liquid assets. However, since that time, the program has also become more popular among lower-income families who may not be able to pay down the loans once they are taken so easily.

Debt Relief, student loan debt

Seniors Carrying as Much Student Loan Debt as Borrowers in Their 30s

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The student loan debt crisis is at an all-time high, but it appears that when it comes to the age of the borrower, this type of debt does not discriminate. According to Experian, a review of student loan balances across different age categories showed that borrowers who were in their 30s and borrowers who were in their 60s carried around the same amount of student loan debt.

According to Experian, the average 30-year-old borrower owes $36,406 in student loan debt while the average 60-year-old borrower owes $35,637.

Bankruptcy Law

What are the Credit Counseling Requirements in Bankruptcy?

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

What Is Required?

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

Debt Relief, student loan debt, Student Loans

FTC Takes Legal Action Against Corrupt Student Loan Debt Relief Companies

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The case comes as a warning to student loan borrowers struggling with their debt and company’s looking to profit from it. The Federal Trade Commission is cracking down on two student loan debt relief operations and the financing company that assisted them. The complaint is alleging the companies charged illegal upfront fees, led consumers to believe the fees would go towards reducing their loan balances, and falsely promised to permanently lower and even eliminate their balances.

The FTC has also charged the companies with locking its customers into high-interest loans and paying their fees without making required disclosures. This caused their customers to sink further into debt.

Uncategorized

More Baby Boomers Filing for Bankruptcy, up 300% in Recent Years

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More baby boomers are filing for bankruptcy than in previous generations, according to recent reports. Consumers over the age of 65 are reporting more debt now than ever before, and as a result, more of these individuals are filing for bankruptcy as a means of getting out from under this debt burden.

According to figures from the Consumer Bankruptcy Project, the number of people over the age of 65 who have filed for bankruptcy has tripled since 1991. The study looked at 895 personal bankruptcy cases involving filers ranging in age from 19 to 92. What they found was more older Americans are filing for bankruptcy as a way to seek protection from creditors and protect their assets. In fact, the number of filers in this age group has increased anywhere between 200 and 300 percent since 1991.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How Debt Collectors Trick Consumers into Reviving Old Debts

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Creditors can be extremely creative when attempting to collect on a debt. Many of them rely on the fact that most consumers do not truly understand the laws surrounding debt collection. The average consumer may not know creditors only have so long to collect on a debt under the state’s statute of limitations. After that time has passed, the creditor or debt collector is barred from taking legal action to collect on the debt.  But that does not mean they can’t stop trying to collect on it.

The problem is many debt collectors will still attempt to get payment on the debt, even after it is past the legal statute of limitations. This practice is often referred to as “zombie debt collection.” Their hope is that the consumer will pay on the bill, even just a partial amount, reviving the debt, and then giving the debt collector the legal right to sue to collect on the remaining debt.

It is important that consumers be aware of what the statute of limitations is for their given state. In Florida, debt collectors may not collect on a debt that is more than five years past due for written contracts, such as personal loans. For other debts, including those with revolving accounts, such as credit cards, the statute of limitations is four years.

Bankruptcy Law, Debt Relief

How Is Debt Handled in Divorce?

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When a couple goes through a divorce, their property and finances are not the only thing that is divided in the legal proceedings. Many times, couples end up having to divide debt. The following rules determine how debt is handled in divorce.

Equitable Distribution

In Florida, property and debts are handled using the concept of equitable distribution. Many states require that property and debt be divided equally under the concept of community property, but Florida requires more of an equitable or “fair” division of assets and debts. This normally results in a relatively equal division, but equitable does not always result in a precise, equal division.

Bankruptcy Law, Credit

Tips for Renting an Apartment After Bankruptcy

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Filing for bankruptcy gives individuals a financial fresh start, relieving the stress of debt and collection calls.  However, declaring bankruptcy can add some additional obstacles to the apartment- hunting process, but not to worry: You can rent an apartment after declaring bankruptcy.  It comes down to the application process, and we have some important tips for you.

Honesty Is the Best Policy.

It can be tempting to want to hide the fact that you recently filed for bankruptcy, but unless the apartment or rental home is a property that does not require a credit check for rental applications, this fact will be discovered quickly. The last thing an applicant wants is for the landlord to find this out after the fact before the renter has any chance to explain the situation. If a bankruptcy is on the individual’s history, it is best to be upfront from the beginning. Honesty is the best policy.

Bankruptcy Law

How to Time Your Bankruptcy Filing

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Deciding when to file for bankruptcy can be a complicated one. Many times, it makes sense to delay filing for bankruptcy, while other times it makes sense to file right away.  In some situations, people are able to work out a plan to pay off their debt without having to file at all. If someone is struggling with making that determination, a bankruptcy attorney can help talk that person through his or her life situation and can help the individual decide when a good time would be for filing for bankruptcy.

Modifying a Mortgage

Bankruptcy is often used as a means of delaying foreclosure. In a Chapter 13 bankruptcy case, a bankruptcy filing will often allow the person to catch up on past-due payments while continuing to make current ones. However, sometimes a mortgage modification may be all the filer needs to hold onto his or her home. If the person files too quickly, he or she may have a harder time obtaining a modification of the mortgage. In fact, once a bankruptcy case has been filed, many lenders will not even talk to the borrower in terms of negotiations over the mortgage. If the borrower is anticipating a mortgage modification, it may be best to wait before filing for bankruptcy.

Income Qualifications

If someone is wanting to pursue a Chapter 7 bankruptcy case, he or she will need to pass the “means test” requirements set by the bankruptcy courts in Florida. If the filer’s income is too high, he or she will be prevented from pursuing a Chapter 7 liquidation bankruptcy case. Not passing the means test does not necessarily mean the person cannot pursue any type of bankruptcy. The filer may still qualify for a Chapter 13 bankruptcy plan, which requires him or her to repay a portion of the qualifying debts over a three to five-year period. The means test calculates the person’s income over a period of several months. Therefore, if the person’s income has dropped recently, he or she may still be able to qualify for Chapter 7 by holding off on filing for a few months.

Keeping Certain Property

Many times, the filer may have certain property that he or she would lose in a Chapter 7 bankruptcy case, such as an incoming tax refund. If the case is filed too soon, that tax refund may be liquidated and used to pay off certain debts. If the potential filer expects a large income tax refund, he or she may wish to hold off on filing for bankruptcy temporarily and use that money to pay for living expenses over the course of a few months before filing. However, make sure that the expenses being paid with this refund are for necessities and not luxury items. Otherwise the bankruptcy trustee may see the filer as trying to conceal or hide this income before filing. Also, this situation only matters for property that does not fall under an exemption, including the personal property exemption for Florida filers.

New Incoming Debts

If the filer anticipates some additional debts coming in the near future, it may also be wise to hold off on filing for bankruptcy. For most cases, a Chapter 7 bankruptcy case will only liquidate debts the filer has as of the date the petition was filed. Any debt that is incurred after the date of filing will stay with the filer after discharge. If the filer anticipates a major medical expense that will result in debt or necessary home improvement expense, it may be best to wait for filing until after that expense has been incurred, making it possible for that debt to be discharged.

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/file-bankruptcy-or-wait-29955.html