Tag: credit card debt

Bankruptcy Law, Credit, Timothy Kingcade Posts

What Debt is Dischargeable through Bankruptcy?

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Bankruptcy laws specify that only particular types of debts can be discharged through bankruptcy. Chapter 7 and Chapter 13 bankruptcy allow borrowers to eliminate their unsecured debts. Unsecured debts include items such as credit card debt, medical bills, utility bills, service bills, personal loans, payday loans and judgments. Secured debts which are backed by some form of collateral, like a house, and debts incurred through fraudulent activity, student loans, tax debts, child support and alimony are typically not dischargeable in bankruptcy.

When you hire Kingcade & Garcia, P.A. our attorneys will provide a complete evaluation and give you an honest and accurate assessment of your financial circumstances. We help clients analyze their finances and determine the best path to debt relief. This past year our firm handled more than 1,500 bankruptcy cases, bringing debt relief to individuals, families and business owners throughout South Florida. If you are struggling with insurmountable debt do not wait any longer, set up your FREE office consultation today by calling (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Timothy Kingcade Posts

Florida consumers carry 3rd highest debt in country

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Over the past few months, we have heard a lot about Americans tightening their financial belts and using extra income to pay down debts. And for some, the post-holiday period is about paying off those Christmas bills. However, new numbers released by Equifax show that many consumers, especially those in Florida, are still carrying high credit card balances.

Equifax monitors credit throughout the country. The group’s recently released numbers indicate that consumers in Florida, California and Texas are maintaining higher credit card debt levels and people in other parts of the country. While these states face some of the toughest budget issues in the nation, so do their individual residents.

According to Equifax, Florida residents have $47.6 billion of collective credit card debt. This is the third highest total in the country. California ranks highest with $90.6 billion in debt, and Texas is number two with $48.8 billion in credit card debt. These states still have “a lot of debt to tackle,” as one senior vice president at Equifax put it.

Many individuals would like to pay down their credit card debt, but it seems that each month brings new financial challenges that stand in the day of reducing debt. When credit card debt becomes overwhelming, chapter 7 bankruptcy may be a good debt relief option. In this form of debt, consumers who cannot meet their financial obligations have an opportunity to discharge unsecured debt such as credit card bills.

CreditNet, “Many Americans still face serious credit card debt problems,” Thomas Astery, 28 Jan 2011

Bankruptcy Law, Credit, Timothy Kingcade Posts

Credit card company tries to collect on old debts

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For people struggling with debt, receiving letters demanding payment is a frequent occurrence. But for individuals who believed their debt was “charged-off,” receiving such a letter can be a shock, especially if the creditor is now demanding payment of many years of interest.

This is the situation one couple found themselves in recently. After working hard to pay off outstanding debt, the couple thought they were positioning themselves to rebuild their credit score. Then they received a letter from Capital One requesting payment for a $2,000 credit card debt from ten years ago. The company also added interest for the past decade, and they are claiming the couple now owes more than $5,000 for that debt.

The couple has not received bills or requests for payment since 2000, and their financial counselor did not see any outstanding debt with Capital One. The couple reasonably believed that the company had written the debt off, and they no longer owed anything.

In fact, that’s true. The outstanding $2,000 plus interest is not collectible. The state in which the couple lives has a statute of limitations for collecting debts, so Capital One cannot sue the couple over this debt. But the letter demanding payment nearly tricked them into paying money they do not technically owe anymore.

According to Capital One, the company sent out this kind of demand letter to comply with a new federal regulation. Technically, creditors must send out notifications if they are still charging interest on old debts. However, the company is likely using this as an opportunity to try to convince debtors to pay back money that they no longer owe.

It is important for individuals who have received similar letters to know that they are not in danger of facing a lawsuit to collect that payment. The company can send demand letters, but they cannot legally take any action other than asking for payment.

Source: LA Times, “Capital One dredges up decade-old, charged-off debt,” David Lazarus, 1 Feb 2011

If you have any questions on this topic or are in need of a financial fresh start, please contact our experienced team of bankruptcy and foreclosure defense attorneys at (305) 285-9100. 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, P.A. website at www.miamibankruptcy.com.