credit card debt Archives - Page 19 of 24

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Tips for Seniors Struggling with Credit Card Debt

Posted on May 2, 2017by Admin

If you are a senior struggling with credit card debt, you are not alone. For the first time, middle-class households headed by someone 50-plus years of age carried more credit card debt on average than households of people younger than 50, according to a recent study by Demos National Survey on Credit Card Debt. Half of the respondents said they carried medical debt on their credit cards and a third said they used credit cards to pay for daily expenses.

Seniors carry credit card debt for a variety of reasons. Some are still paying off educational loans or their children’s educational loans. Many seniors are carrying credit card debt into retirement. The debt may have been management when they were working, but has become a burden when their income level drops. Oftentimes, medical debt compounds the problem, as health insurance only covers a portion of healthcare costs.

Here are some tips for seniors to help take control and manage their credit card debt:

Find a nonprofit credit counselor. The sooner you seek help, the better.
Contact your credit card company to see if you can work out a payment plan.
Adjust your lifestyle. Cut your expenses (i.e. – expensive cell phone plans, cable and Internet packages);
Get help with budgeting. Paying off your debts only works if your spending is under control. Know where your money is going every month. Making a few small changes to your monthly expenses can add up and give you more money to pay down debt.
For medical debt, talk with your doctor’s office to see what your options are. Avoid medical credit cards they may offer you; these come with very high interest rates, regardless of your credit score.
Consider a reverse mortgage. There are many ways you can use your home to get through difficult financial times, but there are risks associated with taking this route. Make sure this will solve your financial problem without adding to it.
Consider bankruptcy. If you are struggling with insurmountable credit card or medical debt, bankruptcy may be right for you. This option will allow you to reorganize your financial situation and discharge your debts if you cannot pay them. There are several different types of bankruptcy, so you want to carefully weigh your options. Many bankruptcy attorneys offer free consultations and will advise you on the best course of action.

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 your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What happens when credit card companies sell your debt?

Posted on April 25, 2017by Admin

Barclaycard sold $1.6 billion of credit card balances in the first quarter of 2017 to the personal-loan company, Credit Shop Inc. Oftentimes, the accounts that are sold are ones that the card issuer has determined to be too risky for its business or are already in delinquency. In these type instances, a card issuer can sell the account balances for pennies on the dollars.

Here is what you need to know if your credit card company sells your debt.

The reasons card issuers buy and sell debt. Some debts are more “reliable” than others. For this reason, cardholders pay widely different interest rates, depending on how risky the lender judges them to be. “Subprime” borrowers tend to pay substantially higher interest rates to make up for the possibility that they might not be able to pay back the debt.

How will you know if your debt has been sold? In many you will only find out if your debt has been sold when you hear it from the new owner or a debt collector calls you and demands payment.

What if a debt collector calls? If you receive a call from a debt collector, the Fair Debt Collection Practices Act protects you from abuse and harassment. A debt collector is not allowed to call you excessively or make any threats. They are also prohibited from calling you before 8 a.m. or after 9 p.m. and cannot misrepresent the amount you owe. By law, you have the right to demand documented proof of the existence of the debt and the amount you reportedly owe. This request must be made in writing within 30 days of the first contact from a debt collector. During the time it takes to investigate and reply to your request, all calls from the debt collector must stop.

You also have the right to request that all future contact be made in writing. This can prevent disruptive and embarrassing calls at home or at work. You have the right to sue if a debt collector violates any of these rules.

What responsibilities do credit card companies have? Under the federal CARD Act, which went into effect in 2010, credit card companies are required by law to give cardholders 21 days from the date the statement mails to make a payment. Credit card companies are also required to provide a 45-day written notice before any rate increases. If you receive this notification, consider paying off the account if you are able to or transferring your balance to a low-interest credit card or zero-percent interest card, which overtime will be less costly to repay.

Related Resources:

http://www.nasdaq.com/article/what-happens-when-credit-card-companies-sell-your-debt-cm776572

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

The New Shape of U.S. Household Debt

Posted on April 14, 2017by Admin

Household debt in America has been reshaped in ways that could potentially affect how financial experts are able to help manage a consumer’s liabilities. The overall debt of U.S. households is $100 billion smaller than it was in 2008. According to the Federal Reserve Bank of New York, it also looks a lot different now than it did then.

Mortgage debt remains the largest debt burden. However, its share of household debt has declined along with that of credit card debt, while the share of student loan debt and auto loan debt has grown.

By the end of 2016, mortgage debt accounted for 71 percent of household debt, down from almost 79 percent in 2008. Student debt had more than doubled since 2008 and more than tripled since 2003 to 10.4 percent.

Auto loan debt had a 9.2 percent share at the end of 2016, which is approximately one-third larger than it was in 2008. All three types of debt had larger shares of households’ income than credit card debt.

All of this means that housing debt fell $1 billion from its peak in 2008 of $9 trillion, while student loan debt rose $700 billion and auto debt rose $350 billion.

Financial experts attribute the change in household debt to a change in the demographics of U.S. debt. Households that are headed by those 60 years old and older now account for just over 22 percent of outstanding U.S. debt, which is up from 16 percent in 2008.

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 your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Man Used 31 Credit Cards in Poorly Planned Financial Scheme

Posted on April 10, 2017by Admin

Federal officials say 28-year-old Janzaybe Khan, was living the good life in an illegal $165,000 spending spree until his luck ran out. He used 31 credit cards and spent more than $59,000 on gift cards, precious metals and cash advances.

Some of the proceeds were transferred into Khan’s bank account, while others were transferred to various individuals, according to the U.S. District Attorney’s Connecticut office. Court documents reveal Khan was able to qualify for and utilize 31 credit cards by falsely stating his income, assets, address and employment history.

After maxing out his credit cards, Khan filed for Chapter 7 bankruptcy and attempted to discharge all of his credit card debt.

In his bankruptcy filing with the court, Khan falsely stated that the majority of his debt was the result of gambling losses. Khan also made a number of false statements under oath during an examination by the U.S. Trustee in his bankruptcy case. The U.S. Bankruptcy Court refused to discharge Khan’s debts.

Instead, Khan was arrested on a criminal complaint charging him with bank fraud, conspiracy to commit bank fraud, and making a false oath and false statement under penalty of perjury in a bankruptcy case. The complaint alleges that the financial institutions that issued Khan’s credit cards incurred losses of more than $165,000 as a result of the scheme.

Bank fraud and conspiracy to commit bank fraud each carry a maximum sentence of 30 years imprisonment.

Click here to read more on this story.

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

Delinquencies on Timeshare Rentals Reveal Another Sign of Consumer Debt Weakness

Posted on March 10, 2017by Admin

Americans are getting more behind on their timeshare rental payments, according to Fitch Ratings. Approximately 3.75 percent of timeshare borrowers were behind on their bills in the fourth quarter, up from 3.37 percent in the same period a year earlier, and the highest level since the end of 2011, according to the report.

According to Fitch, the defaults are evidence that loan companies are becoming less strict when financing to customers. These companies are also writing off more loans. The default rate rose to 0.70 percent in the fourth quarter from 0.61 percent in the same period a year earlier.

Other pockets of weakness include online consumer loans and subprime auto loans, which we have touched on in previous blogs. These rising delinquencies come as Americans have increased their debt at the fastest pace in three years.

U.S. household debt increased by $226 billion in the last three months of 2016, bringing total consumer debt to $12.58 trillion. The numbers, which include mortgages, student loans, auto loans and credit card debt, are dangerously close to the $12.68 trillion high-water mark in 2008.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How a Balance Transfer Affects your Credit Score

Posted on March 1, 2017by Admin

If you are struggling to pay down credit card debt, the interest is not making it any easier. Transferring the debt over to a 0% interest credit card can save you money in the long run. But applying for a new credit card, or any type of new credit requires a “hard inquiry” to determine if you qualify.

This can have a small, but short-term effect on your credit score. The five biggest factors in determining your credit score include: credit utilization, payment history, types of credit, credit inquiries and the ages of your accounts.

Here is an explanation of how each of these can be affected when you do a balance transfer.

Your Credit Utilization: Suppose you owe $10,000 on Card A, which has a limit of $12,000. You are using 83% of your available credit. But now you open Card B and move all $10,000 onto it (it has a credit limit of $10,000). You are now using a total combined available credit of 45% (a combined $22,000 on both cards). The new lower credit utilization will help boost your credit score.
Payment History: If you made regular, on-time payments on your old card, doing the same with the new card will not cause you to see a drop in this area.
Types of Credit: Diversity is key. Having a good mix of credit cards, auto and mortgage loans that you pay on time every month will help you generate a good credit score. Since you were using a credit card previously, you will likely not see any difference here after a balance transfer.
Credit Inquiries: Applying for a new credit card will put an inquiry on your credit. As long as you are not applying for multiple lines of credit at the same time, you are probably only looking at your credit score dropping 5 points, which is only temporary.
Age of Credit. Once you receive your new card, keep the old one. Do not cancel it. You want to keep your oldest cards open so you can build up that history for as long as possible.

Bottom Line: Opening a new account and transferring the balance over can save you money, as long as you do not charge more on the new one and focus on paying it down. Do not expect a huge jump at the very beginning, but as you begin to pay down your balance by making on-time payments, you will see your credit score improve. The new lower credit utilization will help boost your credit score.

Related Resources:

http://www.cbsnews.com/news/how-a-balance-transfer-affects-your-credit-score/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Three Simple Ways to Pay Off Credit Card Debt

Posted on February 28, 2017by Admin

Many consumers know the problem with using credit cards is that oftentimes you end up paying for purchases after you buy. The average interest rate on a credit card is 13.51%- if you carry over a balance. As of September 2016, cardholders carried on average a balance of $7,527. When you pay off your credit cards in full or have your debt discharged in bankruptcy, you have more disposable income for your financial goals and can better plan for your future. But how do you get there?

Here are three simple steps to eliminating your credit card debt.

Step one: The obvious- Stop using your credit cards. Pay in cash for all of your purchases. For online purchases use PayPal or your debit card. Using a “cash only” system allows you to spend what you have.

Step two: Make extra payments toward the principal. Lenders are required to show you how long it would take to pay off your credit card if you only made the minimum payments. Request your statements be mailed to you, online you may not be able to see this number. It will certainly give you a wake-up call. For example, the average American with $7,527 in debt, would spend 11 years paying the card off if they only paid the minimum balance. The interest would cost you $2,869!

Step three: Set financial goals and SAVE for them. Set up savings accounts for your big purchases. For example, if you are going to need a new car in the next 6 months or are planning a family vacation this summer.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

The Effects Debt Has On Your Emotions

Posted on February 24, 2017by Admin

The average U.S. household carries debt- more than $132,000 in fact, including mortgages. Approximately 40 percent of households have credit card debt. The interest on credit cards alone is costing as much as $1,300 per household per year.

If you are struggling with debt, understanding the common emotions and actions surrounding debt can help you take positive steps moving forward to help improve your financial and mental health.

Powerlessness. If you have a large amount of debt, it can make you feel powerless. The best way to fight back is to take control. Get on a budget and stick to it. Knowing that you are taking control and have a plan in place will help you regain a sense of power.

PTSD-like symptoms. A recent survey found that one in four people who are in debt have symptoms similar to post-traumatic stress disorder, or PTSD. That number is even higher for millennials. Among people age 18-34 who are in debt, 36 percent suffer. Symptoms can include denial, avoidance (such as not paying bills), and not being able to sleep.

Fear & Anxiety. Debt can make us anxious. Be proactive and set up auto-pays on recurring bills you have. It will give you one less thing to think about. Put credit cards away (only temporarily, remember not to close out the accounts).

Retail Cravings. Nearly two-thirds of women and 40 percent of men have spent money to improve their mood, according to research. If you overspend, any euphoria you experience will surely diminish once the bills arrive in the mail. When you feel yourself wanting to spend, ask yourself what’s really going on. Think of the HALT acronym: Are you hungry, angry, lonely or tired? Address these feelings head-on without the use of a credit card.

Lowered defenses. Lowered defenses might be caused by anything from having a couple of glasses of wine to a break-up, to battling a cold. Be smart about your spending. To resist online impulse buys, delete credit card information stored on your computer and mobile devices.

Celebration. Did you recently receive a bonus or land a big account? When it comes to the risk of debt, feeling overly happy can be just as dangerous as feeling overly sad, which can oftentimes cause a financial splurge. Put any financial gain toward your debt or into savings.

Related Resources:

http://www.wbrc.com/story/34555906/6-ways-debt-can-wreak-havoc-with-your-emotions

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Qualifying for a loan is getting harder for some consumers

Posted on February 15, 2017by Admin

Banks are becoming more selective when it comes to approving loans for those with less than perfect credit. The data is surprising as many consumers seem to be benefiting from job growth and lower debt levels. However, 11.7% of banks have tightened their standards for auto loans in the first quarter, from 3.3% last year, according to the Federal Reserve and Deutsche Bank.

Credit card standards were strengthened by 8.3% of banks, compared to none in the fourth quarter. With the economy in its eighth year of recovery, lenders are extending their reach to those with cash flow pressures, borrowers at low – and middle class income levels to increase revenue.

The share of delinquent personal loans and credit card debt increased in the third quarter to 3.53% and 1.33% respectively, according to TransUnion and UBS. Out of those consumers surveyed, 18% said they expected to default on a loan payment in the next 12 months, up from 12% in December.

The number of subprime auto loans (those requiring a FICO score of 600 or lower) that were at least 90 days delinquent reached the highest level since 2010 in the third quarter at 6 million. The number of bad loans were by auto finance companies, not banks.

Two-thirds of the households who earn less than $40,000 say financial concerns have increased over the past six months for them. The latest numbers reflect the incomes of many low- to moderate-income working families are not keeping up with the costs of rising health insurance deductibles and monthly expenses.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

6 Credit Score Killers and How to Avoid Them

Posted on February 14, 2017by Admin

There are financial missteps you can make that are guaranteed to lower your credit score. One of the biggest factors in determining your credit score is your past payment history, but there are other things you may be doing that can affect your score in a negative way.

A first missed payment. Per a FICO study, a single 30-day late payment can cause a good credit score of 780 to fall 90 to 110 points. An average score of 680, can fall by 60 to 80 points. You can avoid missing payments by setting up auto-pay from a linked checking account every month. If auto pay makes you uneasy, you can set up automatic alerts that will remind you when your bill is due.
A maxed out credit card. Credit utilization is the second most important factor of credit scores, so reaching your card’s credit limit can be problematic. What’s worse, is if you have multiple cards you are doing this with. Remember, for optimal credit score results, it is recommended you keep the amount of debt you owe collectively and on individual cards below 30%, and ideally 10% of your credit limit.
An error. This happens more often than you might think. A report from the Federal Trade Commission discovered that one in five Americans had an error on their credit reports. Staying on top of your credit score and monitoring it for mistakes can help.
An account in collections. That medical bill you thought insurance covered or a utility bill you forgot to pay in college can drop your score 50 to 100 points (if it winds up on your credit report). That account can legally stay there for up to seven years, plus 180 days from the date of your first missed payment. Keep an eye on your mail for any outstanding debts and resist the urge to ignore a call from a debt collector.
Applying for several credit cards or loans at a time. These credit inquiries account for 10% of your credit score. Keep credit applications to a minimum. Making several requests in a short period of time can cause your credit score to dip.
Closing out your old credit cards. Another component of your credit score, 15%, is the length of your credit history. Closing old credit cards, especially your oldest card, makes your credit history seem shorter than it really is.

Related Resources:

http://finance.yahoo.com/news/5-big-credit-score-killers-110000016.html

https://www.thebalance.com/things-that-hurt-credit-score-960510