debt relief Archives - Page 10 of 12

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

When a Tax Refund Means Bankruptcy

Posted on April 4, 2017by Admin

A review of the past four years shows that Chapter 7 bankruptcy filings, the most common form for individuals, have spiked during tax season or just after tax season. This suggests that taxpayers are using their refunds to file for bankruptcy and wipe out their debt, rather than funding a vacation or splurging on a big purchase.

Filings in March were 26 to 34 percent higher than the monthly average from 2013 to 2016, according to NerdWallet. Additionally, April’s bankruptcy filings were also 15 to 25 percent higher than other months.

Filing for Chapter 7 bankruptcy costs the average consumer approximately $1,500 to discharge their debts. Attorney fees typically cost $1,200 and other court fees total approximately $335. Due to a 2005 law change that made bankruptcy filing more complicated, fees have increased in recent years.

According to the IRS, the average tax refund in 2016 was $2,860, which is enough to cover the average bankruptcy costs.

When Bankruptcy Makes Sense

You should consider Chapter 7 bankruptcy if the following applies to you.

Your problem debt is greater than 50 percent of your annual income. This usually means medical bills, credit card debt or high-interest loans.
You see no way of paying off your debt within five years.
Debt is interfering with other parts of your life, such as hampering your ability to buy a car or save for retirement.

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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, Debt Relief, Student Loans, Timothy Kingcade Posts

How Student Loan Debt Can Affect Your Tax Return

Posted on April 3, 2017by Admin

The average college student who graduated in 2016 will have approximately $37,00 in student loan debt, according to Forbes. Most college grads spend their time and energy on finding a job. However, another concern for new grads is how their debt will affect their 2017 tax filings. Here are a few tips on deductions and credits grads will be entitled to, and also what to do if you are filing as a dependent.

Student Loan Interest Deduction

If you paid interest on student loans in 2016, you most likely qualify for the Student Loan Interest Deduction. Also, if your student loan was not given to you by a family member or your employer, you were enrolled at last half-time in an accredited institution of higher learning and your modified adjusted gross income (MAGI) was less than $80,000, you can claim interest you paid on your loans as a deduction.

American Opportunity Tax Credit

You might also be able to claim a few education tax breaks if you meet the criteria. The American Opportunity Tax Credit allows undergraduate college students to claim the first $2,000 and 25 percent of the next $2,000 they spend on tuition, school fees, books, equipment and other non-living expenses.

Lifetime Learning Credit

The Lifetime Learning Credit can be claimed by college and vocational students. It allows eligible students to claim up to 20 percent of the first $10,000 they paid toward tuition and school fees. Eligible students can also claim 100 percent of the Lifetime Learning Credit if their MAGI is less than $55,000.

If You Are a Dependent

Your parents can claim you as a dependent if you are 19 years old or younger, live with your parents for at least half the year and they provided for at least half of your financial needs. You can also be claimed as a dependent if you are 24 years old or younger and you are a full-time college student. If you earned at least $6,300 in 2016, you have to file a return, even if you are being claimed as a dependent by your parents.

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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. 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, 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

What Actually Happens When You Default on Your Student Loans

Posted on March 31, 2017by Admin

According to the Department of Education, eight million Americans defaulted on their federal student loans last year. Approximately 1.1 million of those former students did so for the first time which is a U.S. high.

The former student loan ombudsman at the Consumer Financial Protection Bureau, Rohit Chopra, told Time Magaizine, “In spite of a booming stock market and falling unemployment, there is obviously a significant block of the labor force that is really struggling.” He went on to say, “New college graduates and new entrants to the workforce are facing a double whammy of flat or declining wages and higher debt.”

Defaulting on student loans is a growing problem for millions of borrowers. As a result, it is important to understand the consequences of doing so. Here are three things you need to know about defaulting on a student loan:

It is more serious than a late payment. In most cases, default occurs when a borrower has not made a payment in 270 days, which is roughly nine months. However, loans that are offered by the Federal Family Education Loan Program (FFEL) are considered to be in default after 330 days or 11 months. When this happens, the entire balance of the loan and interest is due immediately and you lose any eligibility for deferment or forbearance, or any additional financial aid.
Your credit score will drop. The federal government will report your student loan delinquency to credit agencies. If this happens, it will be a long and difficult process to rebuild.
The federal government may garnish your wages. If you default on a federal student loan, the government may take money out of your paycheck before you even see it. Your tax refund can also be held to collect some of your debt. If the debt persists for long enough, the government can also take money out of your social security check. Fortune reported that more than $1 billion has been taken from social security checks since 2001.

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Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Americans are Dying with an Average of $62K of Debt

Posted on March 29, 2017by Admin

According to data released in December 2016 by Credit.com, approximately 73 percent of consumers have outstanding debt when they die. On average, those consumers carried a total of $61,554, including mortgage debt. Excluding mortgages, the average balance was $12,875.

The data was collected by Experian’s FileOne database, which includes 220 consumers. Out of the 73 percent of consumers who had debt when they died, approximately 68 percent had credit card balances. The second most common kind of debt was mortgage debt at 37 percent, followed by auto loans at 25 percent, personal loans at 12 percent and student loans at six percent.

Most debt is eligible for cancellation after the borrower dies, such as federal student loan debt. However, the deceased person’s estate becomes responsible for most debt. If someone has enough assets to cover their debts, the creditors get paid and beneficiaries receive whatever remains. If there are not enough assets to satisfy debts, creditors lose out. In most cases, family members do not become responsible for the debt.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

9 Common Tax Errors People Make

Posted on March 24, 2017by Admin

Small errors on your tax return can cost you big time. If you want to get your tax refund as quickly as possible and avoid fines, don’t make these nine common errors.

Wrong or Missing Social Security Numbers. All of the tax information that gets reported to the IRS is tied to your Social Security number. As a result, if you provide the wrong number, the IRS will not be able to match up your return with the information that your employer and financial institutions have provided.
Wrong Names. The IRS receives many returns on which people’s names are incorrect. Double check your Social Security card to ensure you are providing your legal name.
Filing Status Errors. Some filing statuses can give additional tax breaks, but it is critical to choose the right one for your particular situation. Often, taxpayers make mistakes in choosing a filing status for which they don’t qualify, such as, head of household for unmarried individuals.
Math Errors. Tax software typically catches math errors; however, if you make a simple data-entry mistake, your numbers will still be off. Double check everything with a calculator to avoid this problem.
Errors in Figuring Credits or Deductions. Some tax breaks are complicated and the IRS says that errors in figuring the earned income tax credit, child and dependent care credit and the standard deduction are particularly common. The best way to avoid these errors is to follow instructions carefully in calculating these credits and deductions.
Incorrect Bank Account Numbers. If you use direct deposit to get your refund, make sure you have provided the correct routing number and account number. If you don’t, your refund won’t get processed correctly.
Not signing or dating your tax forms. It is easy to forget one of these key final steps after spending hours or days preparing your return. However, an unsigned tax return is not valid. Also, if you are filing a joint return, both spouses have to sign.
Errors with validating an electronically filed tax return. If you file electronically, you have to select a personal identification number to use to validate your return. Often, taxpayers do not understand the procedure or fail to provide the correct number.
Not Correcting Erroneous Tax Information Forms. If there are errors on your W-2 form from your employer or on your 1099 forms from financial institutions, you should not ignore them. Rather, talk to the reporting party and ask them to correct the error. Otherwise, the IRS will flag a mismatch between what you filed and what the other party filed and it will be up to you to prove you are right.

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Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

More than 1.1 Million Borrowers Defaulted on Their Federal Student Loans Last Year

Posted on March 22, 2017by Admin

An average of 3,000 borrowers default on their federal student loans every day. The number increased 17 percent from 2015 to 2016, according to a consumer Federation of America analysis of U.S. Department of Education data.

Despite a growing economy, 42.4 million Americans owed $1.3 trillion in federal student loans last year. By the end of the year more than 4.2 million borrowers were in default. This is up from 3.6 million the previous year, meaning that 1.1 million borrowers went into or re-entered default last year.

How to Avoid Defaulting on Student Loans

If your debt is unmanageable, you have options:

If you have federal student loans, you can qualify for income-based repayment plans. The percentage of federal student loan borrowers enrolled in repayment plans has quadrupled over the past four years. Keep in mind you must re-apply every year for income-based repayment.
If you have private loans you have limited options. Some lenders offer forbearance if borrowers can’t make their payments. The benefits are not as vigorous as they are with federal loans and typically last no more than 12 months.

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Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Trump Administration Erases Restriction on Big Student Loan Fees

Posted on March 21, 2017by Admin

The Trump administration recently repealed the Obama guidelines and instructed guarantee agencies to once again go after defaulters with big fees. Agencies had previously been charging fees of up to 18.5 percent when people defaulted on their student loans. However, in July 2015 the Obama administration issued a memo forbidding such practices as long as the borrower entered into the government’s loan rehabilitation program within 60 days of defaulting and started paying again.

The announcement came after a report was released that found a double-digit increase in defaults. It also came after Sen. Elizabeth Warren asked Education Secretary Betsy DeVos to keep the guidelines in place.

The loans that are affected by the changes are loans through the Federal Family Education Loan Program (FFEL) that were taken out before 2010. There are approximately seven million borrowers with $162 billion of outstanding debt in the FFEL program.

Related Resources:

https://consumerist.com/2017/03/17/trump-administration-eases-restriction-on-student-loan-debt-collectors/

http://www.newser.com/story/239949/trump-change-means-student-loan-defaulters-face-big-fees.html

Credit, Debt Relief, Timothy Kingcade Posts

Consumer Credit Scores to Exclude Some Debt and Liens Starting July 1st

Posted on March 17, 2017by Admin

The nation’s three largest credit-reporting agencies will soon exclude tax liens and some civil debts from their reports. The change by Equifax, Experian and TransUnion will take effect July 1^st. According to the Consumer Data Industry Association, it is part of a plan to ensure that consumer identifications in the data are accurate and current.

The provision is likely to improve millions of American’s credit scores. If reports on those tax liens and civil debts do not include the consumers’ names, addresses and Social Security number, they will not be reported. Additionally, the records will not be included without courthouse visits to obtain newly filed and updated public records at least every 90 days.

However, there are some controversies surrounding the changes. Although they are likely to help consumers appear more credit-worthy, the updated policies could potentially make loan-screening more difficult for lenders.

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Bankruptcy Law, Credit, Debt Relief, Student Loans, Timothy Kingcade Posts

Bipartisan Bill Could Help You Pay Off Your Student Loans

Posted on March 16, 2017by Admin

A new bill in Congress aims to encourage companies to offer help to their workers in paying off their student loan debt. Earlier this month, a bipartisan group of 31 lawmakers sponsored legislation that would make employer contributions to their staff’s student loan payments tax deductible. It would be similar to contributions companies make to their workers’ 401(k)s.

“Some companies are already offering this benefit because they see the advantage it gives them when recruiting and retaining younger employees, but we want to encourage more to participate so we can help both struggling graduates and our economy,” said Representative Rodney Davis, a Republican from Illinois who introduced the bill along with Representative Scott Peters, a Democrat from California.

Consulting firm PwC was one of the first companies to initiate a student loan benefit program last year. The company offers new employees $1,200 a year toward their loans for up to six years. Since then, several other companies have launched similar plans.

“Adding tax relief to the equation could elevate student loan assistance alongside 401(k) contribution as one of the most valuable financial benefits a company can offer its workers that directly impact their quality of life today,” said Scott Thompson, the CEO of Tuition IO, a company that helps employers put student loan benefit plans in place.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Beware of a New Scam Involving Cash Advances

Posted on March 15, 2017by Admin

The Better Business Bureau (BBB) recently warned consumers to beware of a new debt collection con where scammers pose as debt collectors who claim to be collecting on cash advances.

Here is how the scam works:

You receive an automated call from a company claiming to be collecting a payment for a cash advance. Next, the recording will prompt you to stay on the line and speak with an agent.

If you stay on the line, the agent will request that you pay your debt immediately using a wire transfer or a prepaid debt card. If you refuse, the agent will use threats of arrest, lawsuits or garnished wages to intimidate you.

Keep in mind that the use of threats in debt collection is in violation of your rights as a consumer under the Fair Debt Collection Practices Act.

If you receive one of these calls, the BBB suggests you do the following:

Just hang up. If you don’t have any outstanding loans, hang up.
Get an official notice. Ask the debt collector to provide an official “validation notice” of the debt. In the US and most of Canada, debt collectors are required by law to provide the information in writing. The notice must include the amount of the debt, the name of the creditor and a statement of your rights.
Confirm the agency is real. Ask the caller for his/her name, company, street address and telephone number.
Do not provide any information they do not have. Until you have verified the call, do not provide or confirm a bank account, credit card number or any other personal information.
Check your credit report. If you are unsure if you have outstanding debt, check your credit report with one of the three national credit reporting companies: Equifax, TransUnion or Experian.
Place a fraud alert on your credit report. If the scammer has personal information, alert the three credit reporting companies that you have been contacted.

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