Debt Consolidation Archives - Page 2 of 2

A Growing Number of Americans Have More Credit Card Debt than Savings

Posted on February 20, 2019by Admin

Many Americans are fighting a never-ending battle between saving money and barely making enough to pay their day-to-day expenses. More and more Americans are relying on credit cards to not only pay for big expenses but everyday expenses, resulting in a major imbalance when it comes to credit card debt and emergency savings. In fact, for many Americans, that emergency savings is essentially non-existent.

According to a new study published by the personal finance company Bankrate, nearly 30 percent of Americans have more credit card debt than they do money in savings. This number is up from 2018 when 21 percent claimed they had more credit card debt than savings.

The increased reliance on credit cards could be indicative of the fact that many households are under a great deal of financial strain. According to Bankrate, 41.2 percent of households nationwide carry some level of credit card debt with the average balance being $5,700. Income may be increasing at a rate of about three percent annually, but the cost of living is surpassing that. Oftentimes, the increase in pay does not keep up with the jump in basic living costs.

According to Federal Reserve data, 39 percent of American consumers say they have enough money in savings to cover a $1,000 car repair or unexpected emergency room visit. The level of savings, of course, does vary by income classification. In 2018, the median American household had $11,700 in savings, but for those who do not have enough to meet even just a $1,000 bill, this amount of savings is never realized.

The recent government shutdown did not make this financial situation any easier for many struggling consumers. The shutdown and lack of pay forced government workers to take on debt just to keep up with expenses, which added to the debt many already carried before the shutdown occurred.

Click here to read more on this story.

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, Debt Relief, Timothy Kingcade Posts

Generation X Carries Most Debt Out of All Generations

Posted on January 14, 2019by Admin

Debt presents a problem for many Americans today, but one generation clearly stands out among the rest in terms of holding the most consumer debt. In fact, according to a recent study published by LightStream Survey conducted by the Harris Poll, nearly 80 percent of all members in the Generation X, ranging from ages 36 to 51, have some level of debt. The report showed that eight in ten members in this age category carry debt.

Coming in just below this were members of the Millennial generation, consumers between the ages of 20 and 35. Approximately 75 percent of all members in this age group carried debt. The next group was the Baby Boomer generation, which includes individuals between the ages of 52 and 70, with 69 percent of them carrying some type of debt.

While all three of these generations carry debt, it is the mindset of those in the Gen X category that presents the most cause for concern. Those surveyed in Gen X reported that they felt it was impossible to pay off a significant debt once it was incurred. Additionally, 25 percent of those in this demographic reported that they were not confident in how they were handling their finances. However, in the survey data, these individuals did state that they would be willing to give up hobbies or extracurricular activities to get rid of their debt payments, which does show some promise.

On average, individuals in Generation X carry $30,334 in “non-mortgage debt.” In comparison, Baby Boomers hold $27,513 and Millennials hold $22,784 in non-mortgage debt.

Getting out of debt can also be problematic for individuals in this generation, as well. Those who are younger may be able to use their savings or cash in their investments to reduce their debt, but it may be too difficult for Gen X members to dip into their retirement savings to pay off debt.

If you are struggling with insurmountable debt, dipping into retirement savings is never advisable. These are protected in bankruptcy along with the following bankruptcy exemptions in Florida. Many individuals are already struggling to pay for obligations, including helping aging parents as well as adult children. While they are not quite at the age of retirement, they are approaching that point, making it too close for comfort to use retirement savings.

Continuing to struggle with debt is a slower, less effective way to pay it off. Many different debt relief options exist, including debt consolidation, debt settlement or negotiation and bankruptcy – but it is important that as a consumer you research your options carefully.

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

Beware of ‘Get Out of Debt Quick’ Scams

Posted on June 19, 2018by Admin

Getting out of debt is a goal for many people, and in a perfect world, a ‘get out of debt quick’ offer sounds too good to be true. However, just like the ‘get rich quick’ schemes, if it sounds too good to be true, odds are it probably is too good to be true.

Debt relief companies prey on consumers who are drowning in debt and going through a great deal of personal stress as a result. While some legitimate debt relief companies do exist, the majority of them are looking to scam individuals who are desperate to get out of debt at all costs and find relief from the numerous collection calls they are receiving.

One of the most important steps an individual can take before choosing to work with a debt relief company is to thoroughly investigate and research the company. With online resources available, as well as review websites, it is easy to find out quickly whether a debt relief company is legitimate or not.

Most importantly, never pay an upfront fee to one of these companies. If the company is requesting this, it is highly likely you will never hear from the company again after the initial fee has been paid. In addition, if the company is guaranteeing that they can eliminate all of your debt that should be a red flag as well. No debt relief company has the ability to guarantee that a creditor will forgive any debt. In fact, the Federal Trade Commission has warned against these types of statements. If a debtor comes into contact with a company that makes any of these statements, the FTC encourages the individual to file a report and expose a possible scam.

The main question you should ask is: How much progress can be made through lifestyle changes and spending habits?

If smarter spending and lifestyle changes are sufficient, a debt management or debt consolidation program may be the best choice. These types of programs work on the balances with the highest interest rates first or consolidate debts by taking out a new loan with a lower interest rate to pay off older balances first. Debt management or consolidation normally requires a monthly fee. These companies will work with your creditors to lower the total debt balance. The hope is that creditors will rather receive a lower lump-sum payment on the debt rather than risk not being paid at all in a bankruptcy situation.

However, sometimes the debt amount can be just too much to handle. Debt settlement may be the best option in these cases, or even bankruptcy if the settlement of the debt is still not enough. Debt settlement can take anywhere from between two to four years for a company to work with creditors to pay down debt. If bankruptcy is the best option, Chapter 7 bankruptcy can be completed in three to six months while Chapter 13 can take anywhere from three to five years.

Make sure and explore all of your options and make the best decision for your situation. A bankruptcy attorney can help decipher these options and give recommendations on what would be ideal and in your best interest.

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Credit, Debt Relief, Timothy Kingcade Posts

Debt Consolidation: What will it do to my credit score?

Posted on November 17, 2017by Admin

Accumulating debt each month can be stressful and overwhelming. As you research options to lower or eliminate your debt, consolidating credit cards or loans may seem like a good option. But many wonder what effect this will have on their credit score. It all depends on how you consolidate and what you do with your debt moving forward.

Debt Consolidation Loans. This is one of the most popular forms of consolidation. But finding a loan that has decent terms, when you have less than perfect credit can be challenging. Double-check certifications to make sure that you are working with a legitimate consolidation company. Scams are prevalent in the loan consolidation business. Effect on Your Credit: Consolidating credit cards with high balances using an installment loan with fixed monthly payments may improve your credit rating for a period of time. But at the same time, any new loan can cause a short-term dip in your credit score.
Debt Management Plans (DMPs). These type plans are oftentimes confused with debt consolidation. DMPs are offered through credit counseling agencies. You make a “consolidated” payment to the counseling agency, which then pays your creditors- usually at a reduced interest rate. This option requires you to close or suspend your credit card accounts. Effect on Your Credit: If you have a good credit score and adhered to a creditor’s repayment terms in the past, a DMP could have a negative impact on your credit as it indicates that you are experiencing or have experienced difficulty with payments.
Credit Card Debt Transfer. Transferring high interest credit card debt to a card with a lower rate or 0% interest rate card is another way to consolidate. However, it is important to always read the fine print. Effect on Your Credit: It depends on how you use the transfer. You will often see a temporary dip in your credit score when opening a new card. You may also lose points if you open a new card and use a majority of the credit line to consolidate.

Paying down debt can have a tremendous impact on your credit scores. The biggest risk, though, is that it is easy to run up new balances on the cards you paid off in the consolidation. When paying down debt, periodically check your free credit report to see where you stand.

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/2017/11/will-debt-consolidation-help-or-hurt-your-credit-64133/

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

5 Mistakes keeping you in Credit Card Debt

Posted on July 20, 2017by Admin

Approximately 122 million Americans carry credit card debt. In fact, the average debt per household is $8,448. With interest rates averaging 14%, that means Americans are paying more than $1,000 in interest alone each year. Many consumers remain trapped in this cycle. Here’s why:

Failure to create a realistic budget. When establishing a budget for yourself, it is easy to look forward and see how much you will spend. However, the most effective budgets are created by looking backwards, and understanding where your money (every last penny) went.
Not making the tough decisions. Oftentimes, the right decisions are easy to calculate but hard to execute. For example, knowing your car payment is too high but not taking the steps to trade it in and purchase a less costly, slightly older model.
Taking advantage of automation. It’s easy to automate your student loan and retirement payments, but what about your credit card payments? If you plan to become debt-free you can make sure the only money remaining in your checking account at the end of each month is your budgeted spending money. Data has shown that automation is the best way to achieve your financial goals.
Convincing yourself the reward points, miles, cash back, etc. are worth it. Earning cash back and “free” flyer miles are a great way to put some extra money in your pocket. But if you are deep in credit card debt, those flights and reward points are costing you more than the perks.
Trying to borrow your way out of debt. Debt consolidation and balance transfers can help reduce the cost of your debt, but if you have not dealt with your spending problems these tools can be dangerous.

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

Borrowing your way out of Debt

Posted on November 4, 2016by Admin

Oftentimes people take out loans to pay off credit cards or other financial obligations and end up deeper in debt. However, there is a way to use debt consolidation loans successfully.

Emilie Burke of Raeford, North Carolina used a $6,000 personal loan from online lender Upstart to pay off some of the $13,600 credit card debt she incurred as a student. Since taking out the loan last November, she has paid down the balance to $4,500 and reduced her remaining credit card debt to $2,500. She also used balance transfer offers with a zero percent annual rate to lower her credit card interest rates and speed up her debt payoff.

Burke sought help from a financial planner at LearnVest, an online advice site. She then dedicated her earnings from a side job to pay down her debts. She also stopped carrying credit cards altogether. “I figured I couldn’t go back into debt if I didn’t have my cards,” Burke posted on her blog about her journey out of debt.

Five Steps to Successful Debt Consolidation

Objectively assess your situation. If your debts equal more than half of your income, consider consulting a bankruptcy attorney. You are unlikely to be able to pay off your debts within five years, which is typically the longest period you would be forced to do so under a Chapter 13 bankruptcy repayment. If your debt is unmanageable, consider filing Chapter 7 bankruptcy, which erases consumer debt within three to four months.
Avoid high-cost loans. Calculate the total cost of the loan. Add up the monthly payments times the number of payments, plus any other fees. Then compare that number with what you are paying now. Avoid lenders who offer low payments but sky-high interest rates and long terms that will keep you in debt longer. Credit unions tend to offer the best rates and terms on personal loans.
Opt for the shortest possible loan. Choosing the shortest loan will minimize the interest that you will pay. Only use a loan with terms up to three years, if possible. Five years is the maximum you should consider.
Look for direct payment of creditors. If possible, use a lender that will pay your credit card company directly. This will remove the temptation to use borrowed funds for another purpose.
Consider closing your cards. Although this can hurt your credit score, going into further debt can impact your score much worse. According to financial experts, people who closed their accounts were more likely to pay off their debts, regardless of the dollar amount, than those who left them open.

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.