Foreclosure Defense, Foreclosures

Foreclosure Filings Increase First Month After Moratorium Is Lifted

Foreclosure filings have increased, just one month after the moratorium on foreclosures and evictions was lifted, according to data from ATTOM. Foreclosure filings have increased 27 percent nationwide. When compared to where these numbers were in August 2020, foreclosure filings in August 2021 were 60 percent higher.

ATTOM estimates that a total of 15,838 properties received a foreclosure filing during August 2021, whether it be through a notice of default, a bank repossession, or a scheduled auction.

Bankruptcy Law, Student Loans, Timothy Kingcade Posts

More than 1 million student loan borrowers default each year

Student loans are a problem for many Americans, but recent loan statistics show just how serious the problem is. More than one million student loan borrowers reportedly go into default on their loan obligations every year, surpassing auto loans and credit card debt.

In fact, the amount of student loan debt Americans carry has tripled in size over the last decade and is now over $1.5 trillion.

Default occurs when a borrower has not made a payment on their loans in over a year, thus triggering the debt being sent to a third-party debt collector.

Why are so many borrowers defaulting on their loans? For many of them, continuing to make the payments has become not feasible. Because of this, it is estimated that approximately 40 percent of borrowers are expected to default on their student loan obligations by the year 2023.

According to a report from the Urban Institute, a progressive Washington, D.C., think tank, within four years after graduating or leaving school, approximately one-fourth of all borrowers have defaulted.

Borrowers who end up defaulting on their loan obligations are less likely to carry some type of debt that requires a risk assessment, like a mortgage or credit card, but they are more likely to have medical bills or utility bills that end up being sent to collections. All these additional debt obligations can put added pressure on the borrower, and for this reason, many of the borrowers will put the student loan payments dead last next to other obligations.

Those who defaulted on their student loan obligations were found to live in an area where the median income was $50,000. Those who did not default on their loan obligations typically lived in areas where the average income was around $60,000.

The report further showed that the amount of the loan balance did not seem to matter. Even those who carried a small loan balance still struggled to pay off their debt.

What happens to a borrower’s loan when it goes into default?

As soon as someone’s student loan goes into default, their credit score will take a hit of approximately 60 points, dropping the average defaulter’s score to 550, which is a “poor” score. If the borrower stays current, the average credit score has been in the high 600s.

If the case ends up going into collections, the borrowers find themselves in the danger zone of receiving a judgment against them and wage garnishment. Collections judgments and wage garnishments can be extremely difficult to shake in bankruptcy cases, which can make the situation even worse if the borrower falls into a dire financial situation.

If someone finds himself or herself not able to make student loan payments, the first recommendation is to contact the student loan servicer. Many of these servicers will work with borrowers on payment plans that are capped at a monthly payment based on a percentage of the borrower’s income. The borrower can request the loan be put in forbearance, which temporarily postpones payment of the debt- however, the interest on the loan will continue to accrue. If the loans are in default, contact the loan servicer to see what can be done to get the account in good standing. The worst thing that a borrower can do is to ignore the loan payment requests.

Click here to read more on this story.

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



Bankruptcy Law, Credit, Timothy Kingcade Posts, Uncategorized

Student Loan Default in the U.S. and Steps the Govt. is taking to address the Problem

With student loan debt approaching $1.2 trillion it has become a threat to our children’s futures. Senator Elizabeth Warren, D-Mass., a leading consumer activist and advocate for student loan reform in Congress recently co-sponsored a bill, “Keep Student Loans Affordable Act of 2013.” The new bill would have rolled back interest rates and frozen them for a year at 3.4 percent. During that year, Warren and her colleagues planned to reform the student loan system to eliminate profits, provide better consumer protection and address “the college affordability problem,” which, she says, forces families into debt in the first place.

The bill unfortunately failed, but Warren is continuing to press for the following changes:

– Eliminating government profits from the student loan program.

– Reducing the burden of student debt on existing borrowers by letting them refinance their loans during this period of historically low interest rates.

– Restoring basic consumer protections, such as bankruptcy relief. Under current law, student loans cannot be dismissed when someone files for bankruptcy protection.

President Obama gave his support to Warren’s key issue saying that, “government shouldn’t see student loans as a way to make money; it should be a way to help students.” The urgency from Warren and other advocates is that students and their parents are increasingly turning to loans to pay for higher education, as college costs have become out of reach for most families.

Nationally, about 11 million students take out college loans each year. One reason loan numbers are spiking is that college costs have soared since 1982-83, by 257 percent at four-year state colleges and universities and by 166 percent at four-year private colleges and universities, according to the College Board. At the same time, state support of public colleges and universities has slipped. State funding for public universities dropped by 23 percent between 2007 and 2012, Warren said.

Defaulting on student loans can have a lasting impact on your financial future. The Federal Student Aid website lists the following consequences of defaulting on your student loans: The outstanding amount of the loan-both principal and interest- becomes due immediately; the borrower loses eligibility for any additional student aid or forgiveness program; you are reported to credit bureaus; the overall debt will increase as interest keeps building, which can include late fees, collection fees and court fees. The following consequences can also result: Wages may be garnished; tax refunds may be withheld; pay can be withheld and the lender may even file a lawsuit against you.

The debt that students are taking out to finance their lives and futures is crushing! Student loans are the toughest because they start so early, when students are trying to launch their careers and gain their financial footing. This is also the time young people are the most vulnerable and have the fewest resources available to them.

If you are having trouble making your student loan payments or you have recently defaulted on your federal or private student loans, contact an experienced Miami bankruptcy attorney. Although student loans are often not dischargeable in bankruptcy court, an attorney can help you eliminate other debts and obligations so you can take control of your finances and better handle your student loan debt.

Related Resources: