Bankruptcy Law

What is a ‘No Asset’ Chapter 7 Bankruptcy Case?

In a no-asset Chapter 7 bankruptcy case, the person filing for bankruptcy keeps all of their property because it falls within the exemptions provided under federal law or the law in their state.

With a Chapter 7 liquidation bankruptcy, a filer surrenders their assets to the bankruptcy estate, which uses them to pay off creditors. But in reality, this is only true of non-exempt property. Many of our cases, are in fact, ‘no asset’ cases. Bankruptcy law recognizes that filers need to retain some property so they can survive the process with something on which to build a future after bankruptcy.

Florida’s bankruptcy exemptions can be used to protect essential assets. Some of these exemptions, apply to a specific asset, such as a home or a car. Other exemptions are known as ‘wildcard exemptions’ and can be applied to any type of personal property that has a certain value.

There are occasions where the bankruptcy trustee will choose to abandon certain non-exempt property. For instance, if the filer has a vehicle with a loan on it that is almost as much as the car’s worth, the trustee may not see it as worthwhile to liquidate the asset and may choose to abandon it instead.  In this situation, even though technically the filer has property to sell, the case may still be declared a “no asset” case.  

Florida has one of the most generous homestead exemptions in the country. To use Florida’s exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.

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.   

Debt Relief

Credit Counseling vs. Bankruptcy- Which one is right for you?

When it comes to dealing with debt, you have options.  Debt relief can ease the burden of overwhelming debt, but it’s not right for everyone. Given a person’s financial and personal circumstances, certain considerations should be kept in mind when making the determination between credit counseling and bankruptcy.

If the consumer has a steady income and can pay back his or her debt within a few months to a year, credit counseling may be the wise choice for him or her. However, if the person has an overwhelming amount of debt in comparison to his or her income, filing for Chapter 7 or Chapter 13 bankruptcy may be the better option.  

Credit counseling involves consumer education from a certified credit counselor regarding a variety of topics, including improving a credit score, managing money, preparing, and sticking to a budget, and improving the person’s credit score. The goal is to educate the consumer and prepare him or her to handle his or her finances independently to avoid the need to file for bankruptcy.  

Credit counselors can be found through the assistance of the consumer’s bank or credit union, as well as a consumer protection agency. It is extremely important that the consumer does his or her research before selecting a credit counseling agency. The National Foundation for Credit Counseling (NFCC) can also be an excellent resource for finding credible nonprofit credit counseling agencies.

This type of credit counseling should not be confused with the credit counseling that is required when filing for bankruptcy. Bankruptcy courts require filers to receive debt and credit-related financial counseling at least 180 days before filing for bankruptcy. 

A legitimate nonprofit credit counseling agency should offer free credit counseling services and should not charge a fee upfront before offering these services. These free consultations normally last up to an hour and should provide long-term solutions for the consumer on how to handle his or her debt. 

Unfortunately, credit counseling scams do exist. It is important that the consumer does his or her research to ensure that the agency selected is not one of them. Never provide personal or financial information to the agency until the consumer is sure the credit counseling agency is legitimate.  Research the company with the Better Business Bureau to see if any scams have been reported.

It is equally as important that the consumer realize when enough is enough and when bankruptcy is the better course of action. Many times, the financial burden becomes too much to handle through counseling along. At this point, it may be wise to move forward towards formally filing for bankruptcy. Before making this decision, the consumer should consult an experienced bankruptcy attorney and talk to him or her about the situation. An experienced bankruptcy attorney will be able to help the individual make the decision of whether to pursue credit counseling first or file for bankruptcy. Additionally, the attorney will be able to guide the person as to which form of bankruptcy, Chapter 7 or Chapter 13, would be best.

Please click here to read more.  

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.   

Credit Card Debt, Debt Relief

The Best Way to Conquer Credit Card Debt

Many consumers find themselves still struggling with large amounts of credit card debt. Much of this credit card debt is carried over from previous years. Certain steps can be taken to tackle credit card debt and either pay it off in full or reduce the amount owed to a more reasonable number.   

The first step is to push the pause button on spending and inventory the situation. The consumer’s debt cannot be conquered until the spending stops. It is important to review what has been purchased the past few months, determining how much has been spent and what is owed. It also helps to write down what the interest rate is for each card, noting the balance owed and the minimum monthly payment. Taking this first step will allow the consumer to be able to put together a budget and a plan to pay off the debt over time.  

Once the consumer has a chance to review his or her debt situation, the next step is to select a strategy to pay down the debt. Two of the most common methods include the snowball method and the avalanche method.  

With the snowball method, the consumer arranges his or her credit card balances from smallest to largest balances. The consumer focuses his or her attention on the card with the smallest balance first, paying down as much as possible on that card while continuing to make the minimum monthly payments on the other cards. Once the first card is paid in full, the consumer focuses on the card with the next smallest balance until all cards are paid off in full. The snowball method requires a great deal of patience and discipline, but it can be an effective way to pay down debt. However, this method does involve paying more in interest over time since credit cards with higher balances tend to have higher interest rates. 

The avalanche method works similarly to the snowball method, but the consumer focuses on the credit card with the highest interest rate first. This method allows the consumer to get out of debt quicker than the snowball method since it focuses on the larger balances with the higher interest rates first, but it can be hard to stay motivated with this method since seeing the results of the consumer’s efforts can be harder to immediately see. 

Another method to pay down credit card debt involves consolidating the debt through a personal loan or balance transfer.  Many credit card companies offer balance transfers, allowing the consumer to transfer multiple credit card balances to one card with a zero or low introductory interest rates. It is important that the consumer pay the balance down before that promotional period expires, however. Otherwise, the interest rate can skyrocket at the end of the promotional period, leaving the consumer in a worse position than before. A personal loan can also be used to pay off all the consumer’s credit card balances. This method allows the consumer to focus his or her attention on one, fixed monthly payment over time in lieu of multiple credit card payments.      

Please click here to read more.  

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.   

COVID-19, student loan debt

New PPP Loan Rules Make It Easier for Student Loan Borrowers to Obtain Funds

New rules with respect to who can receive financial assistance through the Paycheck Protection Program (PPP) will open the door for struggling student loan borrowers who have previously been unable to qualify for the PPP loan program. These new regulations took effect on March 1, 2021.  

The funds received through the PPP were meant to offer financial assistance to struggling businesses, allowing them to stay in operation during the COVID-19 pandemic. For the most part, these loans are forgiven later. Previously, any business that was owned 20 percent or more by an individual who had defaulted on his or her student loan payments was considered ineligible for PPP loan assistance. This rule clearly shut out a large group of individuals and businesses who arguably could use the governmental assistance.  

The Biden administration has changed this rule, effective March 1, 2021. A default or delinquency on student loan payments will not automatically disqualify a PPP loan applicant. This change comes along with several others, including priority access for businesses employing 20 or fewer individuals.  

Over the past several years, student loan debt has surpassed credit card and auto debt with over 42 million Americans carrying some amount of student loan debt. Of this number, approximately one-third of them are in either delinquency or default on these loans.  

According to a report by the Center for Responsible Lending, a large number of these borrowers are self-employed. Approximately 800,000 self-employed Americans are reportedly behind on their student loan payments. Additionally, 500,000 minorities have also be excluded from PPP assistance due to the status of their student loans.   Student loan reform advocates have praised this change, saying that small business owners have been bearing the brunt of the financial struggles suffered during the COVID pandemic.

Please click here to read more.  

For borrowers who are struggling with student loan debt, relief options are available.  Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt.  It is important you 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 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 Collection

Can a Debt Collector Try To Collect on Debts Discharged in Bankruptcy?

A bankruptcy discharge gives a person a fresh financial start, freeing him or her from the stress of collection calls and aggressive debt collection practices. However, the fact that a debt has been discharged successfully in a bankruptcy case does not necessarily mean debt collectors will still not try and attempt to pursue collection of the debt. What happens in these situations?  

Under the U.S. Bankruptcy Code, a discharge is a permanent court order that prohibits creditors from pursuing any type of collection on discharged debts. These prohibited actions include filing legal cases to collect on the debt, as well as communications with the consumer via personal contacts, letters, and phone calls. Essentially, the discharge in a Chapter 7 or Chapter 13 bankruptcy case relieves the filer from any personal responsibility to pay off the debt.  

Not all consumer debts are dischargeable in a bankruptcy caseCertain debts are prohibited as a matter of public policy from being discharged, including government-backed student loans, child support, alimony, tax debt, and any debts incurred because of improper or illegal behavior.  Creditors for these debts can continue collecting on them even after the bankruptcy case is finalized.  

Coronavirus, COVID-19, Credit Card Debt

How the Pandemic is Changing Americans’ Credit Card Habits

The coronavirus (COVID-19) pandemic has changed the way of life for consumers in both good and bad ways. One change has to do with the way Americans utilize their credit cards post-pandemic. 

A recent study conducted by Money and Morning Consult surveyed how American consumers have been using their credit cards during this crisis. What the study found was Americans are continuing to use their cards. However, the way by which they are using their cards has changed.  

Credit Card Debt, Debt Relief

Average American Consumer Carries over $90,000 in Debt

Most American consumers carry some form of debt. In fact, debt has become a way of life for many Americans. Whenever a big purchase needs to be made, consumers will often apply for financing to pay for this purchase. This can include items like a home, car, furniture, or even for basic purchases.  

According to data from the credit agency, Experian, as of 2019, the average American consumer has $90,460 in debt from various sources, including mortgages, student loan debt, personal loans and credit cards. Escaping this debt load can be tricky, and Experian’s data shows that certain generations struggle more than others when handling consumer debt. 

Credit Card Debt

What Happens to Credit Card Debt When a Person Dies?

After an individual dies, one of the big questions that comes up from those handling the estate of the deceased is what happens to that person’s debt? These debts can include medical bills, taxes, and credit card debt. One of the main concerns brought up by clients is whether they will be personally responsible for the credit card debt of their deceased relative. The good news is only the estate will be responsible for any outstanding debt and not the family of the deceased.

Whether the person has a will or no will, his or her estate will need to be processed through probate court. If the deceased had a will, he or she will have named a personal representative who will handle the estate, and if the person has no will, the court will appoint someone to administer the estate.

Debt Relief

Debt Relief Services: Helpful or Harmful?

Although filing for bankruptcy can provide considerable relief to those who are facing insurmountable debt, bankruptcy is not always the best choice for everyone. While some may not qualify for bankruptcy, others may wish to use an alternative solution to solve their debt problems. This is where debt relief programs come in, claiming to help consumers negotiate with their creditors and provide a solution to settle the debt.

However, is it safe to use a national debt relief organization to resolve your debts? While some report positive experiences with these companies, others (many others) have reported negative experiences that resulted in them spending more money in the long run. Also, many consumers have been taken advantage of by debt relief companies that ended up collecting fees without actually providing any debt relief services.

Credit Card Debt, Debt Relief

Tips for Conquering High-Interest Debt

Being saddled with debt is a stressful experience, but paying it down can be even more difficult, especially if that debt has a high interest rate. It helps to identify and prioritize these debts.

Of the types of high-interest debts, credit card debt is arguably the most common and most expensive to pay down. One reason credit card debt can be so hard to escape is the fact that it is revolving. What this means is the consumer has access to a continuing stream of credit, which can make it tempting to continue adding to the outstanding balance owed. In fact, there is nothing preventing the consumer from adding more to the debt until he or she reaches the credit limit.