credit card debt Archives - Page 20 of 25 - Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What You Should Know before Closing out A Credit Card

Posted on July 19, 2017by Admin

When closing out a credit card, the effects it can have on your credit score lie in the details. Here are some important facts you need to know before closing out your card.

Age Matters. The age of your credit card that is. The average age of your open accounts makes up 15 percent of your overall credit score. So if the card you are closing out has been open for a long time, it really is better to keep it open and pay it in full, otherwise your score will be negatively effected.
Available Credit. Your credit utilization ratio is important. A low credit utilization ratio would be if you have $300 or less on a credit card that allows you to spend $1,000. A high credit utilization ratio is if you have $993 in charges on a card that gives you a credit limit of $1,000. Lenders do not like you to do this and your score will be penalized as a result.
Automatic payments. If you have been using your credit card to make payments on your car insurance or electric bill each month automatically, make sure and update this information timely before closing out the card. This way you can avoid getting hit with late fees and other penalties.
Rewards. If you have accumulated reward points on your credit card, redeem them first before closing out the card. Otherwise you will likely lose them.
Verify. It can take up to a month or two before the account is closed, so keep that in mind. Mistakes on credit reports are also fairly common. In fact, a recent study revealed that one in five consumers have at least one error on their credit report. It is always a good idea to double-check your account has been completely closed out.

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, 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

Higher Vehicle Costs Driving a Rise in Auto Loan Delinquencies

Posted on July 13, 2017by Admin

The price tags on vehicles continues to the increase, which means consumers are borrowing more money to make their purchases. This in turn is having an effect on household budgets, pushing some families to the max. New cars now cost an average $35,000, compared to an average $31,000 in 2013, according to Edmunds.com.

The monthly payment on a new vehicle with a $31,000 outstanding loan is about $516 a month, before insurance, gas and maintenance costs are factored in.

Used vehicles have also become more expensive. The average loan on a used car bought at a dealership costs about $21,000 and carries an average $380-a-month payment.

Credit requirements have been less strict in recent years, as banks and other lending institutions began pushing auto loans, even sub-prime loans to meet the car-buying demand.

Delinquencies in indirect auto loans- those arranged through a third party, such as an auto dealer- increased to 1.83 percent. Delinquencies in direct auto loans- those arranged directly through a bank- increased to 1.03 percent.

Consumers have over-extended themselves in other areas as well, according to the American Bankers Association. Delinquencies in bank credit cards rose to 2.74 percent. Home equity lines of credit delinquencies rose to 1.11 percent.

There certainly seems to be a correlation. Consumers with credit card debt often struggle with auto loans and mortgage loans, too.

Just like with homes, consumers can end up with upside-down car loans, where the value of the car is worth less than what they owe. This is oftentimes due to higher interest and the terms and conditions of the loan itself. Many consumers who end up trapped in these type loans are considered to be a higher credit risk. They oftentimes end up being sold a lower-quality car at a higher cost.

When filing for Chapter 7 bankruptcy, consumers have some leverage because the lender knows that bankruptcy gives them the option of surrendering the vehicle and canceling all liability. Banks lose a lot of money on repossessions, so they have an incentive to offer a better deal, such as reducing the principal of the loan to the vehicle’s current value.

Related Resources:

http://www.post-gazette.com/business/money/2017/07/10/Car-loans-delinquencies/stories/201707090086

http://www.nolo.com/legal-encyclopedia/car-chapter-7-bankruptcy-29608.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How a debt avalanche strategy can eliminate your debt

Posted on June 28, 2017by Admin

One of the smartest and fastest ways to eliminate your debt is a strategy known as a debt avalanche. To start, you must first take inventory of your debt- meaning you need to write down all outstanding debts- including credit card balances, student loan payments, car payments, etc. and determine the interest rates you are paying on each of the balances.

The debt avalanche strategy begins by ranking each of your debts by interest rate, from highest to lowest. No matter the size of the loan balance, it will always be less expensive (and faster) to pay off your debts in order from highest to lowest interest rates.

For example, your interest rate on a credit card is probably going to run much higher than the interest rate on your vehicle. Tackle those debts with the highest interest rates, first and save as much money on interest payments as possible.

Finally, if the debt inventory process reveals an overwhelming or confusing amount of debt, consider meeting with a financial expert who can discuss your options in greater detail. Sometimes a simple debt consolidation can reduce your payments by thousands, just by reducing the interest amount. If you fear you might be at risk of personal bankruptcy, it is best to meet with a professional as soon as possible to know exactly where you stand. Many bankruptcy attorneys offer free consultations and have appointments available on the weekend.

Click here to read more on this story.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Tips to Remember When Applying for a Balance Transfer Credit Card

Posted on June 19, 2017by Admin

Some debt is unavoidable and not always a bad thing, like taking out a mortgage to purchase your new home. But if you are carrying a lot of high interest credit card debt, you may have trouble reaching certain financial goals. One of the most effective ways to pay off the credit card debt quickly is by transferring the balance over to an interest-free credit card.

Here are three helpful tips for using these cards.

Read the fine print. Do this carefully and find out what your credit limit will be. You will not be able to transfer more than the limit and if you exceed that limit, you will likely face a fee. Find out if there is a penalty, APR. That is when the credit card company increases your interest rate to 25 – sometimes 30% if you pay a single bill late or commit another violation of the terms & conditions (usually listed in the fine print).
Choose your card wisely. Balance transfer credit cards vary and typically offer initial interest rates at 0%, but beyond that there are some big differences. Remember, the 0% interest rate will only last between six and 12 months, after that a more standard interest rate will apply- and typically not a good one. In addition, a lot of balance-transfer cards will charge a balance transfer fee. The fee will typically be between 3% and 5% of the sum of what you are transferring. For example, if you are transferring $20,000 and paying a 4% balance transfer fee, it will cost you $800.
Pay off your debt within the “promotional” period. To make the most of your balance transfer, set a goal of paying off the debt before the 0% rate expires. This will require you curb your spending habits. Canceling your cable package and instead streaming movies and TV shows can save you $1,500 or more a year. Take your lunch to work three days a week, instead of eating out every day. Making small changes like this to your daily routine can really add up.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

U.S. Credit Card Debt Expected to Surpass $1 Trillion this Year

Posted on June 13, 2017by Admin

According to a recent report from the Federal Reserve, credit card debt in the United States is $8,038 per household. That is $940.2 billion total- up from $885.4 billion at the same time last year.

This comes after a first-quarter debt reduction when people oftentimes use their end of year bonus to pay down credit card debt in the New Year. While this year’s Q1 payment was 14% higher than the previous year, it is still almost 9% behind the effort in 2015.

WalletHub is predicting an additional $60 billion in new credit card debt in 2017, which would easily push the United States over the $1 trillion mark.

Here are some tips to quickly pay off credit card debt.

2017 Credit Card Debt Study: Trends & Insights

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.

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.

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.