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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

The Top Ways to Avoid a Financial Crisis, according to a Bankruptcy Judge

Posted on February 7, 2019by Admin

No one wants to think about what he or she would do if faced with a major financial crisis. However, what if the unthinkable happens, and you find yourself facing a financial situation you never thought you would encounter? Some bankruptcies are precipitated by events that are beyond a person’s control – for example, a major health crisis, a job loss or divorce. But a number of causes are entirely within a person’s power to stop. After 12 years serving as a bankruptcy judge, the Hon. Margaret Cangilos-Ruiz, the chief judge for New York’s Northern District Bankruptcy Court says she has seen it all. In a recent interview with MarketWatch, she shared her insight on how people can avoid bankruptcy and setting foot in her courtroom.

Monitor Your Credit Cards

It can be very easy to rely on credit cards to make all of your daily purchases. However, when that bill comes in the mail, and you see just how much these small purchases add up to, the outstanding balance can be more than you predicted. It can also be tempting to only pay the minimum balance listed on the statement, promising yourself that you will be catch up on the payments eventually. A good rule of thumb is to never carry a credit card balance from month to month. If at all possible, it is best to pay the balance in full, but if this cannot happen, put together a plan to pay off the balance completely over time.

Not only should you not carry a large balance for too long on your credit cards, it also helps to pay them on time. As soon as you miss one or two payments, your card’s interest rates will skyrocket, making it even more difficult to pay down the balance. As soon as you receive the bill, make sure you do not put it aside and forget to pay it. You will be saving yourself hundreds of dollars in fees and penalties for the long run.

Monitor Your Credit Score / Report

It also helps to keep an eye on your credit score. A good credit score will make it easier for you to take out a loan in the future for big purchases, such as a home or a car. Also, you never know when you will hit a rough patch down the road and will need to take out a loan to help finance medical bills or pay off an unexpected expense. By periodically checking your credit report, you can keep track of your score and also make sure that no incorrect accounts or mistakes are on your credit report. It is best to discover these issues ahead of time and fix them before they become a bigger problem.

Practice Responsible Spending Habits

Paying off your credit card and creating a budget is one thing, but these cannot be possible without controlling your spending. One of the biggest ways to do this is to limit how much you spend on “non-necessary” items and differentiating between something you want and something you need. If there is a large item that you want, save up for that item and only purchase it when you have enough money to pay for that item. Keep an eye on the small purchases you make on a daily basis, as those do add up. Many consumers find success in allowing themselves to use a certain amount of cash every month on non-necessary expenses. Once the cash is gone, they are not able to purchase anything more of their “wanted” items. Resist the urge to rely on credit cards to pay for a cup of coffee or a new shirt after you go through your cash allowance for the month.

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.

Bankruptcy Law, Credit, Credit Card Debt, Debt Relief

Residents in Southern States Struggle the Most with Credit Card Debt

Posted on January 29, 2019by Admin

Credit card debt is a problem for many Americans, but it seems it is a bigger problem for those living in southern states. According to research produced by creditcards.com, the large majority of credit card debt is carried by individuals living below the Mason-Dixon line.

According to the creditcards.com study, approximately 40 percent of Americans earn enough money to pay their balances off in full every month. However, for the remaining 60 percent, those balances grow more each month, and the cardholder only ends up paying interest on the card through monthly payments, never quite making progress in paying it down.

The study ranked the states not necessarily based on the total debt held by individuals in those states. They were also ranked by the number of months it would take to pay down the average total credit card debt by making payments on the balances equal to 15 percent of that state’s monthly income.

While New Mexico tops the list of states when it comes to credit card debt, with the average balance is $8,323, southern states including Louisiana, West Virginia, Alabama, Arkansas, Mississippi, and Georgia follow New Mexico in terms of high balances being carried from month-to-month. The researchers that conducted the study correlate the high credit card balances with lower income in these states.

In the states with higher income levels, these cardholders are more likely to be able to pay off their balances in full every month. The lower the income and higher the balance, the less likely the cardholder will be able to ever conquer his or her debt. Further, the study showed that in the wealthier states, a credit card payment that was equal to 15 percent of that state’s median monthly income will be much more manageable than it would be in states with lower income. It just so happens that the states with the lower income were also southern states.

People living in the Miami metro area, which includes both Fort Lauderdale and West Palm Beach, carry the second-highest credit card debt balances in the country, second to San Antonio, Texas. Texas was reported as being a state with three of the five cities that reportedly had the highest credit card debt.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt. We offer additional tips for eliminating credit card debt on our blog.

Please click here to read more.

Debt Relief, Timothy Kingcade Posts

Simple Steps to Help Reduce Your Debt

Posted on January 25, 2019by Admin

Debt can cause a lot of problems in life. It can not only cause damage to your credit score, but it can also affect your emotional well-being, even your relationships. It can make the person feel like he or she is drowning with no possible relief in sight. Given the 126.2 million American households, the average household has around $8,161 in revolving debt, approximately $6,577 of which is credit card debt. With nearly 248 million Americans over the age of 18, that comes out to a total of $3,353 in credit card balances per US adult, according to cardrates.com.

Here are some steps to take to help manage and reduce your debt.

Step 1: Review Your Debt

The first step is to take an inventory of what type of debt you owe. This inventory can be done by creating a master list of what all is owed, from credit card debt to loans to medical bills. A person’s credit report can be the best source for getting a clean list of what is owed. For this list, write down the name of the creditor, how much owed on each bill, the minimum monthly payment, the payment due date, and the interest rate on the debt. This list will give you a good picture of what all is outstanding and how to then attack the debt.

Step 2: Decide How Much Can Be Paid

The next step before conquering the debt is to put together a monthly budget and decide how much can be paid towards the expenses. Add up all of your monthly costs, including living expenses, car, food, utilities, and any minimum payments on debts. Make sure to leave some wiggle room for unexpected expenses, such as emergencies that may arise. The remaining amount on your budget should be what you can put towards your debt repayment plan every month.

Step 3: Contact Creditors

Once you have determined how much you can pay towards your outstanding debts, the next step is to reach out to your creditors to discuss repayment. Many lenders are more than willing to work with debtors on a repayment plan or to even lower interest rates on outstanding obligations. See if any of them will negotiate with you on a debt repayment plan or will settle the debt for a flat amount. However, be cautious when negotiating debt settlement with third-party agencies, as scams exist to take advantage of those looking to get out of debt. If you cannot afford to pay the debt, tell the debt collector that. Never promise to pay an amount you cannot afford and never provide them with your bank account and routing information.

Step 4: Attack One Bill at a Time

Looking at all of those debts can seem daunting, but the best method is to often tackle one bill at a time. Taking the bill with the highest interest rate or the one with the smallest balance is best. By taking on the card with the highest interest rate, you can save yourself a great deal of money on interest payments. However, taking the smallest debt first can help give you some momentum in that you will feel a sense of accomplishment after paying off a debt completely in full. Once that first debt is tackled, take on the next debt and so on, until all of the outstanding debts are paid in full.

Step 5: Keep Paying on Other Bills

While you are paying off the targeted bill, it is important that you continue paying the minimum monthly payment on the other debts. In addition, keep paying the full amount that you decided would go towards your debt in your prepared budget. As you eliminate debt, simply put that extra money towards another debt, taking the snowball effect. This tactic will make it possible for you to pay off your debt quicker than you would if you only made the minimum payments on all of the accounts.

Step 6: Be Creative with Your Options

Staying disciplined to your plan is the best method for attacking the debt, but it also helps to be a little creative. For example, use your annual tax refund or a job bonus to pay down the debt or enlist the help of an experienced bankruptcy attorney to eliminate the debt. Try to come up with extra ways to earn money and use that extra income to go towards paying down debt.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial difficulties. It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even begin to make a dent in the actual debt owed. We offer additional tips for eliminating credit card debt on our blog.

Click here to read more.

Bankruptcy Law, Credit Card Debt, Debt Relief

Credit Card Debt Repayment Tips

Posted on January 21, 2019by Admin

If you are facing credit card debt, you are not alone. Given the 126.2 million American households, the average household has around $8,161 in revolving debt, approximately $6,577 of which is credit card debt. With nearly 248 million Americans over the age of 18, that comes out to a total of $3,353 in credit card balances per US adult, according to cardrates.com. There are ways to get out of credit card debt. Here are some quick tips and repayment methods.

Repayment Methods

Several different repayment methods are commonly used and are successful in paying down credit card debt quickly. The first of these is the debt avalanche method, whereby the cardholder focuses on paying off the credit card with the highest interest rate first, then focusing on the card with the next highest rate after that one is paid and so on. The next method is the debt snowball method where the cardholder pays off the smallest debt first. It is hoped that this first debt paid off will motivate the person to continue making payments as he or she continues to pay off debt. If it is at all possible to adjust your budget so that you can focus your efforts on paying down debt through one of these methods, this situation is ideal.

Balance Transfers, Personal Loans or Consolidation

However, sometimes the finances are simply not there to attack credit card debt in one of these repayment manners. Sometimes you need that extra assistance to help pay off these debts. If that is the case, a couple other options exist for the American consumer. The first of these is use of a balance transfer to a zero rate or low interest rate credit card. This option can be helpful if the individual is able to pay off the card during the introductory rate period. These cards and balance transfers often do have a rate increase after a period of time has passed. Therefore, it is important that you keep up with payments after the balance is transferred and make the effort needed to pay off the card during the zero-interest rate period before the interest rates go up.

Another method is use of a personal loan. Banks offer these unsecured loans to consumers who have decent credit scores and can qualify for a lump sum loan to pay off their credit cards after receiving the loan funds. However, one thing to keep in mind is that these loans do need to be paid back, and many of them come with higher interest rates since they are unsecured obligations. While the credit card bills will stop after the balances are paid, the consumer will still need to pay the monthly payments on the loan. Despite this fact, a personal loan can be a quick way to pay off major credit card debt into one monthly loan payment. Consolidating the payments alone can be one major benefit for using this method in attacking your credit card debt.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges. It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never ending minimum payments that do not even make a dent in your actual debt. We offer additional tips for eliminating credit card debt on our blog.

Click here to read more on this story.

Credit Card Debt, Debt Relief, Timothy Kingcade Posts

How to Free Yourself from Holiday Debt

Posted on December 26, 2018by Admin

On average shoppers spent approximately $1,007 this holiday season. The retail trade association expected shoppers to spend between $717.5 billion and $720.9 in November and December, which is up over 4 percent from 2017’s total of $687.87 billion. While shopping for the holidays can be exciting, the post-holiday period can be stressful. If you ended up overspending this holiday, we have some tips to help you get out of debt – FAST.

Review your financial situation.

You cannot eliminate debt without having a clear picture of where you stand financially. Make sure you compile all receipts and documents related to your holiday expenditures. Aside from the gifts, do not forget to include food and costs related to holiday entertaining. Many people who end up with high credit card bills at the end of the holiday season say they never planned on spending as much as they did. If you do not plan your expenses ahead of time, it can be easy to end up purchasing way more than you originally intended. Planning can go a long way in lowering your holiday spending costs.

Come up with a plan.

Write down all your debt amounts along with the interest rates. Focus on the higher-interest rate debts first and consider paying more than the minimum to eliminate the debt faster. We offer some important tips for eliminating credit card debt. Some utilize the snowball method whereby they focus all their efforts in paying a higher interest card down, focusing on one card at a time. Another method is through the “island” approach where the consumer has two credit cards: one which is paid in full every month and the other card, which is a promotional no-interest or low-interest rate for big purchases, allowing the person to finance those large purchases over time.

Sell what you do not need.

With all the sales going on over the holidays, it can be easy to over buy. Most of these items either end up in the garage or saved for next year. Check through your closets and look for those unnecessary gifts and items you bought during the holiday that you can sell. Also, consignment is a great way to get some extra cash post-holiday. Everything from clothes you no longer wear, to baby toys, baby clothes and accessories- many of these stores are eager to give you cash for the same.

Pay More than the Minimum.

Consumers traditionally take approximately four months or more to pay off debt incurred during the holiday season. Many times, they are only able to make minimum monthly payments, which can prolong their ability to pay off the debt in full. Minimum payments often result in the person only paying the interest incurred that month, and if the cardholder is spending on top of the balance already owed, the debt can balloon quickly.

Get help.

Credit card debt is a major problem for many Americans. The ability to conveniently shop and pay the balance later has led to many people living in a cycle of debt, especially after spending over the holidays. The credit card system is designed for consumers to lose.

Credit card debt is one of the most common problems facing those with serious financial issues. With skyrocketing interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt, the people we work with frequently point to credit card debt as among their most troubling financial issues.

At Kingcade Garcia McMaken, the number one piece of advice we give to our clients, family members and friends when dealing with creditors is to be honest. If you are unable to afford payment- tell them that, never make a promise to pay and never give a creditor your bank account number or credit card information.

Bankruptcy Law, Credit, Credit Card Debt, Debt Relief

Average U.S. Household Carries more than $8,000 in Credit Card Debt

Posted on December 11, 2018by Admin

Americans are borrowing more this year, as the average household carries $8,284 in credit card debt, according to the personal finance site WalletHub. This total surpasses the previous year, where the amount of debt was $8,107 per household.

The total amount of credit card debt held by Americans is now at a staggering $974.2 billion, which is three percent more than the $949.9 billion reported last year. Miami is reported as the second highest metropolitan area with the most credit card debt in the U.S.

One major problem with these figures is how close the debt is to being at the point where it is considered “unsustainable” when comparing the debt held to the average income being brought in by the average American.

The current debt load is said to be $177 from this point of “unsustainability.” What is even more worrisome is the Federal Reserve is expected to increase interest rates on December 19.

The study reports that American credit card debt is nearing the highest point it has been since the Great Recession. Financial experts are concerned that it could go past that point in 2019 if things do not change.

Not all the figures from this study were so dismal. Many Americans have worked diligently to pay off their debt, and WalletHub’s data showed that Americans paid off $40.8 billion in credit card debt in the first quarter of 2018. This figure represents the second-largest quarterly payoff of debt ever reported, which is promising. However, the study did also report that since that time, Americans have added $38 billion back to their credit card debt balances.

Many consumers have looked for resources to find debt relief. For some, credit counseling is a valid option, although it is important you know what to look for when choosing the right credit counseling agency. Our attorneys are here to help you if you are struggling to deal with credit card debt and wish to know your options.

Click here to read more on this story.

Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Going into the holiday season with debt? Proven ways to keep your finances in order.

Posted on November 29, 2018by Admin

The holidays are upon us, and so is the biggest shopping season of the year. U.S. shoppers have already spent $1.75 billion online, up 28.6 percent from 2017. Many people rely heavily on credit cards to make these purchases, and before they know it, their balances quickly spiral out of control. Here are some helpful tips to keep credit card spending under control and help you maintain your finances during the holiday season.

The first of these tips is to know your debt situation before you begin shopping. If you are already in debt, the thought of going even deeper into debt can be daunting. It helps to make a few rules first with yourself before beginning your shopping. The first of these rules is to set limits on your buying. Put together a list of everyone you will be purchasing gifts for before shopping. Set a limit on how much you will be spending for each person on your list.

If you have a large family, focus your efforts on the children first and suggest a holiday gift exchange or Secret Santa program for the adults. Keep in mind that it is not how much you spend on each person but the thought you put into the gift that counts. Consider making something if you cannot spend a great deal of money or give the gift of time or fun experiences for family members.

If you still want to purchase an item for your family members, you do not necessarily need to go with luxury items for gifts. Many stores have discount sections with gifts that are thoughtful and creative, and there is nothing wrong with shopping at a discount store for items. You can use these items as standalone gifts but also as craft supplies to make something unique and personal for your loved one. Many drugstores have a special holiday section that offers inexpensive gifts.

Sometimes you may also have money available to use without even knowing it. If you do have a credit card, check into whether you have credit card rewards that will allow you to purchase gifts using those points. You should also look into using store rewards programs when purchasing your gifts to get special bonuses, as well, for after the holidays. Use caution if you decide to utilize store credit cards, the risks oftentimes outweigh the rewards.

Sometimes using a credit card to make a purchase is unavoidable. If possible, try using a credit card with a zero percent APR on any of these purchases. Make sure you pay off the balance during the introductory period before being hit with penalties on these purchases. Most of these timeframes are anywhere from 12 to 20 months. Be sure to keep the purchases down to an amount that is manageable to pay off in the end.

After the holidays, consider doing a balance transfer on purchases made during the holiday season to a card with a zero percent introductory APR. Many credit card companies have special offers in January based on the assumption that consumers will spend more than they can handle over the holidays. Another option to pay off debt is a consolidation loan through your bank or financial institution.

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Bankruptcy Law, Credit, Credit Card Debt, Timothy Kingcade Posts

Repayment Trick to Help Pay Down Credit Card Debt Faster

Posted on November 26, 2018by Admin

If you are struggling with credit card debt, you are not alone. As of September 2018, the Federal Reserve reported that Americans have more than 1 trillion dollars in revolving debt, which includes debt like credit cards. Many people are only able to make the monthly minimum payment on their credit cards each month. However, a new repayment trick is helping consumers get out of credit card debt faster.

The study produced by researchers at several universities, including Harvard Business School, University of Pittsburgh, the Ohio State University, and the Yale School of Management, show that a repayment by purchase method of paying off credit card debt can be even more successful when it comes to getting the balance down to zero.

This method is also known as a form of budget reckoning where you, as the account holder, review your credit card statement as soon as it is received to evaluate where most of your purchases are made. Rather than make one small payment based on the minimum payment quoted or even just a random lump sum, these researchers believe that by paying off certain expenses, you are more likely to make headway when it comes to paying off the balance.

The research recommends that you look at specific line items and see which items can be paid off each month. For example, instead of making a payment of a random amount, such as $100, add together the number of meals charged that month and pay that amount to cover all the food items purchased that month. You could also target a certain expense, such as a clothing purchase or a travel expense.

By paying off a specific item or type of expense, you are holding yourself accountable for what you spend every month. In addition, researchers argue that the cardholder feels more of a sense of accomplishment after paying off a specific item rather than throwing a minimum amount towards a large balance.

American Express offers a similar plan called “Pay It Plan It,” which lets cardholders split up large purchases of more than $100 to repay them over time. A fixed monthly fee comes with the use of this program.

We offer some important tips for eliminating credit card debt. Some utilize the snowball method whereby they focus all their efforts in paying a higher interest card down, focusing on one card at a time. Another method is through the “island” approach where the consumer has two credit cards: one which is paid in full every month and the other card, which is a promotional no-interest or low-interest rate for big purchases, allowing the person to finance those large purchases over time. Keeping to a strict budget is important if you are planning on using this approach.

Please click here to read more…

Credit, Credit Card Debt

More than Thirty Percent of Homeowners Paying for Home Renovations with Credit

Posted on October 30, 2018by Admin

Despite the fact that American homeowners hold more equity in their homes than ever before, a growing number are using credit cards for major renovations. This trend has financial experts scratching their heads as to why these homeowners are choosing to use credit cards in lieu of less risky options to pay for major home expenses.

According to a recent study done by home improvement website Houzz and Synchrony Financial, of the home renovations completed in 2017, over 36 percent of them were funded by credit cards. This figure has jumped over 25 percent from 2011 where 29.5 percent of home renovations were paid with a credit card. It appears as if this number is steadily increasing over the years.

In the survey, 85 percent of those who responded said that they utilized cash or savings to pay for their renovations, which is the ideal situation. However, 33 percent of them said they used credit cards to pay for the renovations, while only 15 percent of them used a home equity loan.

This new trend seems to be led by the millennial generation. These younger homeowners prefer to use credit in lieu of a long-term loan to pay for major expenses. Of the homeowners surveyed between the ages of 25 and 34 years old, 41 percent of them paid for home renovations with credit cards. Of the older demographic, specifically homeowners over the age of 55 years old, only 30 percent of them used credit cards for major renovations.

This younger generation of homeowners is more likely to pay off these expenses over the course of time. According to the survey, over 60 percent of those individuals intend to pay those credit card balances over the course of time. In fact, many of these homeowners make these large expenses by using a promotional card, many of which offer low or no interest for a specific period. If the homeowner can pay off the expenses within that period, they will not have to pay on any interest. The problem arises when the homeowner is not able to pay the balance before the promotional period expires. If that happens, he or she will be paying a large interest rate on the remaining balance. This possibility of incurring interest is additionally why many older homeowners prefer to pay for renovations with a home equity loan.

Another reason these younger homeowners are using a credit card for payment is the quick access they have to the funds. Applying for and being approved for a home equity loan can be a much longer process, and if the homeowner needs the money quickly, a credit card may seem like the better option. However, the consequences of using a credit must be weighed against the benefits before determining which option is best for you.

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

How to Lower Credit Card Debt and Improve your Credit Score

Posted on October 24, 2018by Admin

Having a good credit score can make many things in life easier, especially when it comes to purchasing a new home or vehicle. However, it can be easy to get off track. Credit card debt with a high interest rate is one way to lower your credit score, but for many Americans, that is exactly what has happened to their financial situations.

The problem of credit card debt may be more widespread than we think. According to Experian, the average American consumer owes more than $6,000 in credit card debt. This figure has gone up three percent in just one year. This amount of debt can be very difficult to get out of, even for someone earning a decent annual income.

Retail credit cards can be particularly tempting, especially when offered a great deal at the cash register, but these cards come with high interest rates and can be easy to rack up debt. Unless you are able to pay the retail card off in full after making the purchase, it is not recommended that you sign up for these department store cards.

Many consumers believe that not having a credit card is best when it comes to staying out of debt, but it is important to at least establish a credit score. Having one card, using it for minimal expenses and making payments on the balance in full on a regular basis every month can be an excellent way to establish that strong credit score. In fact, by having a high credit score, you have a better chance of getting a card with a low interest rate when opening the account.

What happens if you do have credit card debt that has gotten out of hand? If possible, it is best to make a larger payment than the minimum payment amount. If any extra money is available in the person’s budget, it is best to put that extra money towards paying the debt. In addition, it can help to focus efforts on one card at a time, usually the card with the highest interest rate first. Once that card is paid, focus all the money that was going towards the first card on the next one and so on until the accounts are paid in full.

If you are not able to keep up on payments, contact the credit card company to negotiate a lower payment. If you fall behind on payments, it may be wise to contact a credit counselor to discuss repayment plans or negotiate the debt amount. If you are not able to make either of these options work, it may be time to talk to a bankruptcy attorney to discuss the options available to help eliminate the debt.

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