Chapter 7 Archives - Page 12 of 16

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

Changes on the Horizon for Bankruptcy and Student Loan Debt

Posted on May 16, 2018by Admin

In the past it has been nearly impossible to discharge student loans in bankruptcy. This issue has kept many individuals from filing for bankruptcy as they have seen it as not helping relieve them of the biggest debt they carry: student loan debt. That all could change after the U.S. Department of Education announced this year that it will be reviewing its policies and potentially changing the way student loan debt is treated in bankruptcy.

It is estimated that student loan borrowers in the U.S. owe a total of $1.5 trillion in student loan debt. According to the Brookings Institute, around 40 percent of these individuals will end up defaulting on their loans by the year 2023.

The current test for showing that student loan debt should be discharged bankruptcy is the undue hardship test. However, this standard is very subjective, and does not leave a definitive standard across the board of what amounts to undue hardship. Even Florida bankruptcy courts vary in their determination on what defines undue hardship.

The most commonly-used test is the “Brunner Test,” which requires the borrower to show that he or she cannot maintain a basic standard of living while making student loan payments. The borrower has to show that this undue hardship would last throughout the entire repayment period in a Chapter 13 bankruptcy, and he or she will need to show that efforts have been made to try to repay federal loans.

The Department of Education is looking for ways to clearly define the undue hardship standard. According to Clare McCann, a deputy director of higher education policy at New America, it is likely the Department will broaden the definition.

The Chair of the Federal Reserve, Jerome Powell, recently testified before Congress that the student debt crisis has the possibility of seriously hurting the economy if changes are not made.

A date has not been given for when the determination will happen, but it is one step closer to a change that will make a difference in the current student loan debt crisis in the country.

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. 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, Debt Relief, Timothy Kingcade Posts

Steps to Take if You Want to Buy a Home after Bankruptcy

Posted on March 21, 2018by Admin

After filing for bankruptcy, you are going to want to begin rebuilding your credit as soon as possible. You can start by checking your FREE annual credit report on AnnualCreditReport.com to get reports from the three major credit bureaus: Equifax, TransUnion and Experian.

Your report may show late and missed payments on credit cards, mortgages and credit accounts you may have opened or closed. Bankruptcy provides you with a clean slate, which means you have a second chance to pay your bills on-time and in full.

If your credit score is in the low 600s, your credit is still too low for most decent loans with good terms, but you can work quickly to get it back up in the mid-700s.

After bankruptcy, when accessing and utilizing credit again, keep your credit card balances relatively low compared to the card’s limit. For example, less than 30% is typically advised while using just 10% of the available credit is even better.

Once your credit score improves, you can then find the right mortgage lender, real estate agent, and the right attorney to move forward with the purchase of your new home.

Still not convinced? A testimonial from one of our clients in regards to 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.

If you have any 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

How to Know If You Qualify for Chapter 7 Bankruptcy

Posted on February 11, 2018by Admin

The bankruptcy Means Test determines whether your income is low enough to file for Chapter 7 bankruptcy. The test is designed to keep high-income earners from filing Chapter 7 bankruptcy and limited to consumers who truly need it and cannot afford to repay their debts.

If the Means Test proves your income is too high to file Chapter 7 bankruptcy, you can file Chapter 13 bankruptcy and repay a portion of your debts (typically over a three-to five-year period). Even with the requirements to pass the Means Test, it does not mean you have to be penniless to file Chapter 7. In fact, you can earn significant monthly income and still qualify for Chapter 7- depending on the expenses you have.

The Means Test determines if you qualify for Chapter 7 by deducting specific monthly expenses from your “current monthly income” (i.e. – your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly “disposable income.” The more disposable income you have, the more likely you will be required to repay your creditors.

The first step of the Means Test is to determine whether your income is more or less than the median income in your state. Median income levels vary by state and household size. Also, each county and metropolitan region has different allowed amounts for categories of expenses, such as necessities, housing, and transportation. You can enter your zip code into the Means Test Calculator to determine the income requirements for your specific location.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How long does bankruptcy stay on my credit report?

Posted on January 15, 2018by Admin

A common question you might have after filing for bankruptcy is how long will it remain on my credit report? When you file for bankruptcy, it is considered “public record” and is maintained by the court where the case was filed.

Under the federal Fair Credit Reporting Act, bankruptcies can be reported for 10 years from the filing date. The three major credit reporting agencies will remove Chapter 13 bankruptcies seven years from the date the case was filed. This type of bankruptcy involves paying some or all of the debt back over time.

Chapter 7 is a more straightforward bankruptcy and eliminates almost all unsecured debts, including credit card debt and medical bills allowing consumers to gain a fresh start financially. Chapter 7 bankruptcy can remain on a consumer’s credit report for up to 10 years.

However, there are ways to speed up the removal process. Removing a bankruptcy requires filing a separate dispute with each of the three major credit bureaus. This dispute can either be over inaccurate information in your credit report or an inquiry to the credit bureau about how your bankruptcy was verified. This process is lengthy, but it can be worth it.

While you are waiting for your bankruptcy to be removed from your credit report, make an effort to rebuild and improve your credit. It is a bankruptcy myth that you cannot rebuild your credit after filing for bankruptcy. Make sure you have accurate and positive credit information moving forward.

If you have any questions on this topic or are in a 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 website at www.miamibankruptcy.com.

Related Resources:

http://blog.credit.com/2013/04/when-can-i-get-a-bankruptcy-off-my-credit-report-65750/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Beware of these Holiday Debt Traps

Posted on December 22, 2017by Admin

The holidays are officially here and if you have some last minute shopping to do this weekend, make sure and avoid these common holiday debt traps. Last year shoppers took on an average of $1,003 worth of debt, up from $986 in 2015. The merriment and excitement of holiday shopping can be replaced with anxiety and fear of debt in the New Year.

Keeping up with the Joneses. The pressure to purchase the latest and greatest holiday gifts ranging from expensive electronics to brand new cars all contribute to holiday debt. From the tree, to elaborate light displays and decorations, if not limited to a budget can all leave you with debt in the New Year.

Hot holiday toy crazes. On average, parents plan to spend $495 per child, according holiday shopping data from Rubicon Project. When the ‘must-have’ toy items start to run out, prices increase. Plan accordingly, and budget throughout the year for holiday spending.

Store credit cards. Avoid store credit cards at all costs. The 10% off the day of purchase can have big consequences if a single payment is missed on one of these cards, such as 29.99 percent APR.

Holiday parties. Hosting hordes of holiday visitors and entertaining guests can cost hundreds of dollars, not only adding to your grocery bill, but your utilities in the month of December.

Indulgent spending. The problem is that many consumers do not plan for holiday spending. Sometimes, they mentally plan to go into debt. We advise planning ahead for the next season, start checking items off the list in February or in the summer months when fewer people are buying and prices are lower.

Related Resources:

http://www.wbir.com/article/money/magnify-money/watch-out-for-these-holiday-debt-traps/507-493900752

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Reasons to File Bankruptcy before Divorce

Posted on December 13, 2017by Admin

Financial stress caused by the way couples view and spend money can ultimately lead to divorce. If you are facing both of these issues, does it make sense to file for bankruptcy or divorce, first? The bottom line: Divorce will most likely not make the financial pressure go away, oftentimes it compounds it.

Here are some reasons why you should file bankruptcy before divorce.

You will save money filing jointly. If you are still married, you can file your bankruptcy case together. This will allow you to pay one court filing fee, one set of documents and scheduling, one meeting of the creditors and one attorney fee.

Filing for bankruptcy together will free you of any liability on joint debt. If you file for bankruptcy before divorce you will be off the hook for paying joint debt acquired during the marriage. However, if you file for divorce first and receive a divorce settlement, you may still be responsible for some (or all) of the joint debt. Essentially, you may have to cover your spouse’s liability.

Filing jointly doubles the exemption amounts. When you file for bankruptcy, you are allowed to keep some property in order to regain a fresh start. These exemption amounts are usually limited or capped. However, if you file a bankruptcy case with your spouse, in most states you and your spouse will each be able to claim a full set of exemptions.

It saves you time. If one spouse files for bankruptcy in the middle of the divorce case, the bankruptcy judge may take jurisdiction of any property settlements, which can cause delays. Filing a joint bankruptcy will eliminate most (if not all) unsecured debt, such as credit cards, medical bills and personal loans for both spouses, allowing the divorce to go much smoother when negotiating debt and property division.

It reduces stress. Eliminating debt and reducing financial pressures can in turn reduce stress in the marriage. If the marriage ultimately cannot be saved, it can help the divorce proceed more amicably.

Keep in mind, if your spouse files for bankruptcy before or during the divorce case and you do not, you may ultimately be responsible for all of the marital debt. This is because your spouse used the bankruptcy case to eliminate his or her liability on your joint debts.

Related Resources:

https://www.thebalance.com/six-reasons-to-file-bankruptcy-before-the-divorce-316343

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Subprime Warning Issued by the Fed As Household Debt Hits New All Time High

Posted on November 30, 2017by Admin

U.S. household debt has grown $605 billion in the past 12 months, with $116 billion, accumulating in the latest quarter, according to the Federal Reserve Bank of New York. Debt is ballooning on mortgages, student loans and auto loans. Credit card debt has increased 3.1 percent in the latest quarter.

Total U.S. household debt was $12.96 trillion in the three months to September, up $116 billion from the prior three months. Debt levels were $605 billion higher than during the third quarter of 2016.

Auto loans grew by $23 billion and credit card balances increased by $24 billion, while student loans saw a $13 billion increase. Credit card balances increased by $24 billion. The combined credit card limit rose for the 19th consecutive quarter, with a 1.5% increase.

Some financial experts are saying this build-up is reminiscent to the financial crisis of 2007 and 2008. Federal data shows an increase in credit cards and auto loans moving into delinquency.

Aggregate household debt increased for the 13th consecutive quarter, rising by $116 billion (0.9%) to a new all time high. As of September 30, 2017, total household indebtedness was $12.96 trillion, an increase of $605 billion from a year ago and equivalent to 66% of US GDP, versus a high of around 87% in early 2009.

If you are struggling with debt, know your rights and what debt collectors can and cannot do. The Fair Debt Collections Practices Act (FDCPA) limits the tactics that debt collectors can take to collect on a debt.

Click here to read more on this story.

Related Resources:

http://www.zerohedge.com/news/2017-11-14/fed-issues-subprime-warning-household-debt-hits-new-all-time-high

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

7 ways to rebuild credit after filing for bankruptcy

Posted on November 22, 2017by Admin

Nearly 800,000 people filed for bankruptcy in the United States last year. Several counties in Florida made the top 100 areas for the highest incidence of bankruptcy, including Miami-Dade County, which saw more than 400 personal filings per 100,000 people from April 2015 to March 2016.

Chapter 7 is often the most preferred method of filing because it involves no repayment of debt and in states like Florida, exemption laws can be used to benefit and retain property throughout the filing process. In fact, Florida has one of the most generous homestead exemptions in the country. You can exempt an unlimited amount of value in your home or other property covered by the homestead exemption.

It is important consumers know that immediately after filing for bankruptcy they can begin improving their credit score. Here are seven steps you can take to begin rebuilding your credit after filing for bankruptcy.

Know your credit score. Go to annualcreditreport.com and pull your three credit reports (Experian, Equifax and TransUnion). Make sure all of the debts affected by the bankruptcy are listed. Also confirm all information is accurate on each of the reports.
Pay bills on time and in full. Raising your credit score after bankruptcy is all about getting back to basics. Set calendar reminders or set bills on auto-pay so you are not late on a payment. Do not spend more than you can afford each month and pay your cards off in full so you do not incur any interest charges.
Open a new bank account. When you open a new checking or savings account you are demonstrating financial stability. This can also provide you with a clean slate to practice good financial habits.
Apply for a secured credit card. These cards are one of the easiest ways to build credit and improve your credit score. Secured credit cards borrow money against a deposit the consumer has already made. Compare interest rates and select a card with the best rate and low annual fee.
Create and stick to a budget. This should be based on your income minus expenses for rent, utilities, groceries and other expenses. Creating a budget will help you stay on track when it comes to your finances.
Start a savings account. Having an emergency savings means you will be less likely to have to access credit when an unexpected expense occurs. Research shows that having as little as $250 saved up for an unexpected expense can protect you from having to resort to pay day loans and credit cards.
Be patient with yourself. If you made mistakes, learn from them. You should not feel ashamed after filing for bankruptcy. The more active of a role you take in rebuilding your credit, the sooner you can bounce back after bankruptcy.

If you are in a financial crisis and are 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

Increase in Personal Bankruptcy Filings among LuLaRoe Consultants Spark Speculation

Posted on November 10, 2017by Admin

A number of women who currently or formerly sold clothing through LuLaRoe have seen income from their “small businesses” decline dramatically in recent months, forcing some of the women to file for bankruptcy.

The personal bankruptcy filings- from January 2016 to October 2017- came up during a search of court records because the women or couples filing said they were “doing business” as Lularoe or LuLa Roe.” At least 24 have been identified, but it is estimated the number is much higher.

Experts noticed on average that the families reported a “quick downward fall” in income from their business from around 2015 to when they filed. For example, one woman, a single mom in California reported she made $61,330 in 2016 from “operating a business,” which is presumed to be her LuLaRoe business since it is the only one she says she owns.

But from January to July 2017, she had only made $10,547.42 from her business, less than half she had made midway through the year before. She reported her average net income in 2017 from her business was $184.39 a month.

She was spending just as much in some months, if not more, on “operating expenses” for her business as she was making, according to the filing. For example, in May 2017 she earned $1,796.12, but spent $2,666.13 to keep her business afloat.

She lists $28,991 in assets and $8,000 worth of “inventory.” Her $85,253.43 in debts include thousands of dollars on multiple credit cards and almost $1,000 owed to her Paypal merchant account. She filed for bankruptcy in July of 2017.

Some of the other women identified, listed unpaid unsecured business loans, which shows a “clearer tie to the LuLaRoe” business.”

The co-founders of LuLaRoe appeared on CBS This Morning to speak out against the recent allegations the company is facing about merchandise quality and refund policy complaints. A $1 billion lawsuit was filed on October 23 by two former consultants on behalf of all LuLaRoe consultants alleging the company is operating a pyramid scheme.

Related Resources:

https://www.cbsnews.com/news/lularoe-clothing-retailer-founders-speak-out-against-pyramid-scheme-accusations/

https://www.buzzfeed.com/stephaniemcneal/lularoe-bankruptcy?utm_term=.bjkXAJ1kn#.vva5gXLwK

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Bankruptcy Filings Hit 10-Year Low

Posted on November 7, 2017by Admin

Bankruptcy filings have taken another plunge, marking a 10-year low for any 12-month period, according to the latest numbers from the Administrative Office of the U.S. Courts (AOUSC).

Annual filings totaled 790,830 through September, compared with 805,580 in the previous year. This was the lowest number of bankruptcy filings for any 12-month period since June 2007, according to the AOUSC. However, the statistics show that Chapter 12 filings totaled 508, an increase from 458 in 2016.

The 2005 amendments to the Bankruptcy Code made Chapter 7, 11 and 13 bankruptcies more complex and expensive, but did not do the same for Chapter 12. The national wave of bankruptcy filings that began in 2008 reached a peak in September 2010 when nearly 1.6 million bankruptcies were filed, according to the AOUSC.

Breakdown of Filings by Chapter for the 12-month period ending Sept. 30, 2017 are as follows:

Chapter 7 filings totaled 486,542, down from 498,367 in 2016.
Chapter 11 filings totaled 7,052, down from 7,450 in 2016.
Chapter 12 filings totaled 508, an increase from 458 in 2016.
Chapter 13 filings totaled 296,599, down from 299,150 in 2016.

Click here to read more on this story.

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 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.