Tag: Credit Score

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Life after Bankruptcy: 5 Things You Need to Do After Bankruptcy

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If you recently filed for bankruptcy, you are likely experiencing a sense of relief from having your debts discharged and getting a fresh start financially.  These tips for “life after bankruptcy” will help you avoid future debt problems and improve your credit score once your case is finalized.

Collect and preserve all paperwork from your case. Your bankruptcy attorney should provide you with a copy of your bankruptcy petition (i.e. – 40-50 pages of detailed financial information – including the facts about the debts and assets involved in your case.)  You should also have a notice of bankruptcy filing directly from the court, which shows the deadlines that affected your case.  Finally, you should have a copy of your discharge order entered by the bankruptcy judge. This is important as some lenders require to see a copy of the bankruptcy papers before lending you new credit.

Check your credit reports regularly. You can obtain your credit report for FREE from each of the three main credit bureaus once a year.  It is important to see what creditors are saying about you.  Especially after a bankruptcy, you want to make sure that all of the discharged debt is being reported to the credit bureaus with a zero balance so it does not count against you as outstanding debt.  You also want to make sure the account is not transferred to a new collection agency who falsely pursues you for the discharged debt.

Start a budget and review it regularly. Creating and sticking to a budget is the key to staying on track financially.  It is also a great way to manage your income and expenses and see where every dollar is going.  Just like in the Means Test that compared your income and expenses over a six-month period to standards set by the Census Bureau and the IRS. The concept was to identify those who actually had the means to pay their debts, but who were living an extravagant lifestyle financed on credit cards and other debt.  It’s an urban myth that people who file for bankruptcy live lavishly and are financially irresponsible. Statistics monitored since 2005 show that a very small percentage fit into this category.  Most bankruptcies are caused by an unforeseen illness or medical expense,  job loss, or even a divorce.

Start an emergency fund.  When establishing a budget for yourself, make sure you put aside a portion of your income for savings.  Having an emergency fund will help you avoid incurring unplanned debt or taking out cash advances to cover unexpected costs like a car repair or appliance repair.

Think about new credit.  A great way to rebuild your credit after filing for bankruptcy is to obtain a secured credit card.  You can open this card by depositing money into an account as security.  Your credit limit is the amount you deposited into the account.

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.

Related Resources:

http://blog.credit.com/2014/12/5-things-to-do-after-bankruptcy-103308/

https://www.legalzoom.com/articles/life-after-bankruptcy-get-back-on-your-feet-after-filing-chapter-7

 

 

Bankruptcy Law, Credit, Debt Relief, Foreclosures

Life After Bankruptcy: Getting a Credit Card Again

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If you have recently filed for bankruptcy, you may be wondering about the possibility of getting a new credit card. Before you apply for a credit card, it is important to make sure you have a stable job and the ability to pay your other bills such as rent and utilities.

If bad financial decisions led to your bankruptcy, you may want to avoid getting a credit card for a while. However, if unexpected events such as a divorce or a job loss led to your money problems, you may be able to handle a credit card again.

Below are three important things to consider before filling out a credit card application:

  1. Timing is everything. Your bankruptcy must be discharged before you can get a credit card. Lenders will deny a line of credit during a bankruptcy proceeding because the account can be included in the bankruptcy. It takes approximately three months for debts to be discharged after the initial filing of a Chapter 7 bankruptcy. A Chapter 13 bankruptcy entails a three to five-year partial repayment plan and therefore takes much longer to be fully discharged.
  2. Weigh your options, good and bad. A recent bankruptcy will drag down your credit score for some time. As a result, you will likely receive credit card offerings from subprime lenders. Keep in mind that these credit cards typically come with higher interest rates and low limits. In addition, they typically require frequent fees that are much higher than most. A better option after a bankruptcy discharge is a secured credit card. This type of card is designed for consumers with bad or no credit. They are backed by a security you are required to put down. Secured cards have low limits and high interest rates but do not typically charge annual fees.
  3. Monitor your credit score. If you do get a secured card, do not spend more than 30 percent of the credit limit and pay off the balance every month. If you follow these two rules, your credit score should improve in time.

Click here to read more on this story.

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, Credit, Debt Relief, Timothy Kingcade Posts

New Rule makes it Harder for Medical Debt to Impact your Credit Score

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Consumers are getting some good news when it comes to their credit scores.  A new set of rules have taken effect this week that will make it more difficult for medical debt to damage your credit score, it will also not hurt your chances of qualifying for new credit.

The three credit reporting agencies now have to wait 180 days before putting an unpaid medical bill onto your credit report.  Going back and forth with your insurance company over an outstanding medical bill?  Unpaid medical bills that later get paid by your insurance must be removed from your credit report as well.

This new rule builds additional time between patients and insurance companies to resolve such matters.  Up until this point, there was no grace period and medical debt could appear on your credit report as soon as it was reported as an unpaid debt.  Medical offices tend to do this on their own schedule, sometimes as early as 30 days, while insurers may take longer to fully process claims.

The new waiting period carves out time for patients, their doctors, and insurers to work through legitimate grievances, and makes it harder for unpaid bills to hurt your credit score.  It also allows much-needed time for those suffering from illness and injury to sort out who owes what.

Credit bureaus have taken steps to remove medical bill collections that are less than 180 days old.  One out of five credit reports contain overdue medical debt, according to a 2014 report by the Consumer Financial Protection Bureau. That means 43 million Americans have unpaid medical debt negatively affecting their credit.

If you are on a fixed income or struggling financially, letting the medical provider know you are not able to pay will give them a reason to offer you a discount or be placed on a reasonable payment plan.  If you cannot pay, tell them why you cannot pay.  Some states require hospitals provide free or reduced care to consumers within certain income limits.  Florida is one of these states.

Click here to read more on this story.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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, 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 You Should Know before Closing out A Credit Card

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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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Related Resources: http://www.cnbc.com/2017/07/12/10-things-to-know-before-closing-a-credit-card.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Mark Your Calendars: Starting July 1, certain negative marks will vanish from credit reports

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Starting July 1, many people with tax liens, civil judgments and certain medical debts will see a boost to their credit scores.  The three largest credit bureaus- Experian, Equifax and TransUnion, will no longer report a tax lien or civil judgment on a consumer’s credit report if it does not include the person’s name, address and either their social security number or date of birth.  Existing liens missing this information will also be expunged.

Consumer-friendly changes will also be made to the way medical debts are reported. According to the new rules, bureaus will not display medical collections until at least six months after the account became delinquent.  They will also remove any existing medical collections that insurance companies have paid or are paying for.  After the liens and judgments are expunged, some consumers can expect to see their credit score increase by as much as 40 points- enough to affect a loan approval or the terms.  The leading scoring company, FICO, estimated that out of 200 million “scorable” consumers, roughly 12 million will have a lien or judgment disappear from their report.

Starting July 1, the credit bureaus also will check lien and judgment data every 90 days to make sure the information is still accurate. These changes come as credit bureaus have been put under pressure from regulators and state attorneys general to improve the accuracy of credit reporting.  To confirm their data is correct, consumers should get a free copy of their credit report from each of the three bureaus once a year at www.annualcreditreport.com.

Click here to read more on this story.

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

The Surprising Debts Holding Many Americans Back

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According to a recent survey, student loans and credit card bills are not the only debt holding many Americans back.  Credit Sesame, a site consumers can use to check their credit score, analyzed more than 5,000 user accounts and found they had significant amounts of debt from medical expenses, utility bills and cell phone charges.

Consumers whose medical debt had gone into collections had an average of three accounts, with a combined total of $3,670 in collections.  The average balance for customers who had cell phone bills in collections totaled $887 per account.  Customers whose utility bills were in collections owe $368 on average per account, the study concluded.

Not surprisingly, having those bills in collections hurt consumers’ credit scores.  The average credit score for someone whose medical debt is in collections is 552.  Those who have delinquent cell phone accounts have average scores of 550.  And those who have outstanding utility bills have a score of 542.

Lenders see applicants with lower credit scores as riskier than applicants with higher credit scores.  They oftentimes make you pay for this risk by charging a higher interest rate.  A poor credit score can affect your ability to rent an apartment, as landlords often check an applicant’s credit score before allowing you to sign a lease.

Utility companies may require you pay a deposit before setting up your service.  Even certain jobs and employers can discriminate against applicants who have a less than perfect credit report. Certain jobs, particularly those in upper management or the finance industry, require a good credit history.  Note: employers check your credit report and not your credit score.  They are not necessarily checking for bad credit, but for items that could affect your job performance.

Click here to read more on this story.

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.

Related Resources:
https://www.thebalance.com/side-effects-of-bad-credit-960383

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

6 Credit Score Killers and How to Avoid Them

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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.

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.

Related Resources:

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

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

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Delinquencies on the Rise for Subprime Auto Loans

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Subprime auto loans are back in a big way, and according to recent data have climbed to the highest level in a decade, with large increases in loans to borrowers with credit scores below 660.  The number of subprime auto loans becoming delinquent has climbed to the highest level since 2010 in the third quarter and is following a pattern similar to the months leading up to the 2007-2009 recession, according to data from the Federal Reserve Bank of New York.

New auto loans to borrowers with credit scores below 660 have nearly tripled since the end of 2009.  In 2016, approximately $50 billion of new auto loans per quarter have gone to those borrowers thus far.  About $30 billion each quarter has gone to borrowers with credit scores below 620.

The increasing delinquency of subprime auto loans is concerning because it comes as the overall economy is on the mend and the employment rate is improving.  The credit quality of other types of loans has improved.

Delinquency rates declined in the quarter for mortgages, student loans and credit cards.  The number of individuals with a new foreclosure notation on their credit reports hit the lowest level in 18 years of data.

The increase in auto loans, particularly the subprime sector, has raised alarms among some regulators in Washington. The rate at which auto loans for borrowers with credit scores below 620 has climbed for 10 consecutive quarters, especially on loans made to those with the lowest or subprime credit scores.

Lenders know that subprime borrowers are more likely to default and become delinquent on their loans and charge them higher interest rates.  The mistake during the financial crisis was that while the lenders expected higher defaults among subprime loans, they failed to anticipate just how high it would rise.

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, 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 consumers need to know about FICO 9

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If you do not already know, there is a new credit score called FICO 9.  The new score comes with some important changes in the way people who have medical debt and other consumer debt are scored.  So with all of the different credit scoring models out there- what makes FICO 9 so different?

First, FICO is the most widely used credit score in the country. In fact, 90% of all credit lenders (whether they are offering you a mortgage, car, or personal loan) use the FICO score in some way to determine your credit-worthiness.

More than 64 million Americans have some kind of medical collection record on their credit reports, according to Experian. A staggering 99.4% of medical debts are reported to credit bureaus by collection agencies, damaging consumers’ credit scores in the process. Consumer advocates have long been pushing to make credit scoring models more lenient on people who have medical debt.

With FICO 9, medical collections will be treated differently from non-medical collections, like credit cards.  Your credit score will be less damaged by a medical bill you cannot afford to pay as opposed to a department store credit card you ran up the balance on.

This is a big win for consumers. Many people who struggle with medical debt get that way through no fault of their own.  Whether you get sick or there is an accident that causes you to miss work, even with health insurance you cannot always control how high your medical bills become.

Click here to read more on this story.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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, Student Loans, Timothy Kingcade Posts

Top 5 Bankruptcy Myths Debunked

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Filing for bankruptcy is not an easy decision and many people fear a social stigma after they file.  The truth is the stigma against debtors and those who file for bankruptcy has greatly decreased over the last 20 years, and there is no indication that debtors will be treated less favorably after filing for bankruptcy.  In fact, it is oftentimes easier to reestablish your credit after filing for bankruptcy, because you are essentially given a “clean slate.”

To make the bankruptcy process a little easier to understand, we have dispelled the top five bankruptcy myths.

Myth 1: You will lose everything. You may think that filing for bankruptcy means you have to give up your home, your car, your flat screen TV, and all of your assets.  This is simply not true. The vast majority of Chapter 7 cases are no-asset cases, meaning the debtor gives up no possessions. This happens for two reasons. First, you can allot for basic assets, called exemptions that are necessary for day-to-day living. What you can exempt varies from state to state, so be sure to discuss exemptions with an experienced bankruptcy attorney. For possessions that are not part of the exemption, creditors likely don’t want them.  Under Chapter 13, you keep all of your assets, but the value of them figures into your repayment plan.

Myth 2: You will be relieved of all your debts. Both Chapter 7 and Chapter 13 bankruptcy will provide you relief from most of your debts. However, there are some exemptions. These include: recent taxes, child or spousal support, student loan debt, and debts that are the result of fraud you have committed.

Myth 3: Paying off your debt is a better option. Filing for bankruptcy is the biggest financial decision you will ever make, but it doesn’t mean it is a bad idea. If your debts are more than 50% of your annual income and you cannot pay them off in five years, bankruptcy is likely your best option.

Myth 4: Filing for bankruptcy means I have failed. Given that the number one reason for filing for bankruptcy is due to medical debt, this could not be less true.  No surprise, the cost of medical deductibles has grown seven times faster than wages have risen. Many bankruptcies are likely the result of stagnant wages, not poor financial mismanagement.  Whatever your reason is for filing, think of bankruptcy as a tool that can help you get a fresh start and take control of your finances.

Myth 5: Bankruptcy will ruin my financial future. A report from the Federal Reserve Bank of Philadelphia showed that those who filed for Chapter 7 bankruptcy in 2010 had an average credit score of 538.2 on Equifax’s scale of 280 to 850. But the average score jumped to 620 by the time those bankruptcies were finalized, approximately six to eight months later. There are many ways to rebuild your credit after filing for bankruptcy. There are certain limitations you will face after filing, but taking advantage of the right financial tools can go a long way in helping you get back on the right path for your financial future.

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.

Related Resources:

http://www.csmonitor.com/Business/Saving-Money/2016/0613/Five-bankruptcy-myths-dispelled