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Bankruptcy Filings, Bankruptcy Trends, Consumer Bankruptcy, Consumer Debt, Timothy Kingcade Posts

Consumer Bankruptcy Inquiries Reach Highest Level Since the Pandemic

Posted on May 6, 2025by Admin

People inquiring about filing for bankruptcy have reached its highest level since 2020. Insurmountable debt, years of steep inflation, costly mortgages, and a weakened housing market remain the driving factors.

Legal Service provider, LegalShield, reported bankruptcy legal inquiries jumped in Q1 following three quarters of “high consumer stress.” The index is based on a survey of more than 25 million legal requests.

Prolonged financial stress combined with price pressures driven by tariff uncertainty will likely contribute to a surge in bankruptcy filings this summer.

These bankruptcy warning signs come amid a third straight quarter of elevated consumer stress measured by LegalShield’s Consumer Stress Legal Index (CSLI), pointing to a heightened financial strain that has become a “new normal” for American households.

Tariffs are driving up costs on everything from food and clothing to electronics and cars. The increased costs are typically passed on to consumers.

The share of households more than 90 days late on credit cards and car loans hit a 14-year high at the end of 2024, according to The Federal Reserve Bank of New York, and delinquencies are still climbing. Credit card balances also hit a record high of $1.21 trillion.

Click here to read more.

If you have questions on this topic or are in a 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 Trends, Consumer News, Timothy Kingcade Posts

Fears of a Recession Grow as Trump’s Tariff Policy Takes Effect

Posted on May 5, 2025by Admin

Several economic indicators point to a recession, including declining stock prices and a weakening consumer outlook. Consumer inquiries about bankruptcy surged during the first quarter of 2025 to the highest level since early 2020, reports LegalShield, which predicts “a potential wave” of bankruptcy filings this summer.

What do economists rely on to predict a recession? There are 10 indicators, some of which have been weakening before President Trump announced his tariff policy.

Shifting Stock Prices. In the aftermath of Trump proposing higher tariffs on April 2, the S&P 500 has dropped sharply, down 6% just in the two-plus weeks since then. Lower stock prices reflect declining consumer and business confidence.

Uptick in Foreclosures & Real Estate Trends. Certain real estate segments have shown weakness, with office buildings among the most stressed. A new sentiment survey among real estate investors, compiled by RCN Capital and CJ Patrick Co., dropped to its lowest level since it was started two years ago. The survey takes quarterly readings of optimism or pessimism among investors in residential properties.

Employment Uncertainty. The unemployment rate stood at 4.2% in March. While those numbers are not bad, jobless rates are not a leading indicator for predicting the direction of the economy. However, if the economy does take a dive, unemployment rates will start climbing.

Credit and Interest Rate Movements. With inflation expectations rising, due to higher tariffs, the Federal Reserve is likely to face a tough choice between trying to boost economic activity while trying to keep inflation at bay.

Consumer Outlook and Expectations. Consumers are feeling uneasy about the economy, and that is showing up in the data. Even before Trump’s tariff announcements, consumer expectations were the component that weighed down the leading indicators index. Since then, things have worsened. A more current indicator of consumer sentiment tracked by the University of Michigan showed substantial drops in confidence as of early April, as people prepare for what they think will be rising unemployment and inflation.

Hours Worked in Manufacturing. One key goal of Trump’s tariff policy is to boost jobs in U.S. manufacturing. However, while manufacturing employment may rise, it will take time, years even, for improvements to be reflected.

New Business Orders. This includes consumer goods, and orders for non-defense capital goods. The group also compiles a separate index that tracks new orders. As of the most recent report published in March, one of these components showed weakness, another was flat, and the third, slightly positive. The Trump Administration has changed its tariff policy several times in recent weeks, creating the type of uncertainty that businesses fear.

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student loan debt, Student Loans

Student Loans in Default Will Be Referred to Collection, Says Department of Education

Posted on April 24, 2025by Admin

Beginning May 5, 2025, the Education Department will begin collection efforts on federal student loans that are in default. The action will impact borrowers who have not made payments on their federal loans for more than nine months.

Roughly 5.3 million borrowers are in default on their federal student loans. The announcement marks an end to a grace period that began during the COVID-19 pandemic. No federal student loans have been referred for collection since March 2020, including those in default. Under President Biden, the Education Department tried multiple times to grant forgiveness of student loans, only to be stopped by courts.

Beginning May 5, the department will begin involuntary collection through the Treasury Department’s offset program, which withholds government payments — including tax refunds, federal salaries and other benefits — from people with past-due debts to the government (i.e. – federal student loan debt). Those borrowers who are in default on their federal student loans could be at risk of having their wages garnished.

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.

Foreclosures, Housing Market Trends

Florida Foreclosures Spike in the Aftermath of Last Year’s Hurricane Season

Posted on April 22, 2025by Admin

Florida led the nation in foreclosures in 2024, and all signs point to a continuation in the trend. A report by property data firm ATTOM shows that Lakeland ranked No. 1 nationwide for the most filings in 2024, with one in every 172 homes foreclosed on.

After a six-month period of decline, foreclosure filings abruptly increased in October, revealing the impact back-to-back hurricanes had on the market.

Hillsborough, Broward, Miami-Dade and Orange counties had the most foreclosures in Florida. Among U.S. metro areas with populations greater than 1 million, Orlando, Jacksonville and Miami had the first, third and fourth highest rates in the nation.

Foreclosures can oftentimes be a precursor to bankruptcy, and both have risen dramatically over the last 12 months.

Several major Florida metros ranked in the top 10 U.S. cities whose residents have the highest levels of financial distress. Tampa ranked No. 8, while Jacksonville, Orlando and Miami ranked third, sixth and ninth.

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Choosing the right attorney can make the difference between keeping your home or losing it in foreclosure. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure, please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

REMEMBER: In Florida, the homeowner has rights when it comes to foreclosure! But do not delay.

Consumer Debt, Credit Card Debt

The Emotional Burden of Debt on Your Mental Health

Posted on April 8, 2025by Admin

Today, as the U.S. is facing economic uncertainty and high inflation, consumers are feeling an increase in financial pressure. Everyday costs are on the rise, and struggling to afford the basics is a challenge for many.

The result? Higher levels of debt are becoming more widespread.

Debt can cause a lot of damage, and not just to your credit score. Carrying any amount of debt can be stressful, but carrying substantial amounts of debt can be debilitating to a consumer’s emotional well-being. Credit card debt can cause stress, which can lead to depression, anxiety, and other health problems.

Over half of the adults in the U.S. with a debt problem are also living with a mental health issue, according to a study from the Royal College of Psychiatrists.

High levels of debt can also lead to stress and arguments within marriages. In fact, arguments about money are one of the top causes of divorce in America, after infidelity. Debt and stress often go hand in hand. It’s natural to worry about debt and if you will ever get out of it.

According to the Stress in America survey conducted by the American Psychological Association, 87 percent of Americans reported the rising cost of living as a significant source of stress. The survey also found an increase in the percentage of Americans stressed about the economy, and finances in general.

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student loan debt, Student Loans

Lawsuit Filed Against the Trump Administration for Shutting Down Access to Income-Driven Repayment Plans Used by Millions

Posted on April 1, 2025by Admin

A teacher’s union has filed a lawsuit accusing the Trump administration of unlawfully shutting down access to income-driven repayment plans used by millions of student loan borrowers.

The American Federation of Teachers filed the lawsuit in federal court and took aim at the Education Department’s decision to suspend borrowers’ ability to enroll in affordable repayment plans.

The department made the change after a federal appeals court ruled that Democratic President Joe Biden’s administration lacked authority to pursue a student debt relief program designed to lower monthly payments for borrowers and expedite loan forgiveness for some.

In the days that followed the 8th Circuit’s decision, the Education Department directed student loan servicers to stop accepting and processing income-driven repayment applications and removed the application form from the department’s website.

In the lawsuit, the American Federation of Teachers, argued that the Education Department did so even though the 8th Circuit’s decision did not bar the department from offering several other types of income-driven repayment plans that were not the subject of the litigation.

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 www.miamibankruptcy.com.

Wage Garnishment

Can a Debt Collector Garnish Your Wages Without Telling You?

Posted on March 25, 2025by Admin

If you have fallen behind on credit card payments, you know first-hand the lengths creditors will go to collect on what you owe. One of these methods goes beyond incessant phone calls, letters, and text messages, it’s called wage garnishment. This is when a creditor is given legal permission to collect what is owed by deducting a portion of money from your paycheck before it reaches your bank account.

This can cause big issues with your finances, especially if it comes without warning. So, can debt collectors take your money without telling you, first?

The simple answer is no. The law dictates specific steps a creditor must take to be able to garnish a person’s wages to satisfy a debt. Without these protections, a creditor could simply take money out of the person’s bank account.

The wage garnishment process starts with the creditor or third-party debt collector filing a lawsuit to formally collect the debt. If this lawsuit is successful, the creditor or collector will receive a judgment against the creditor. This legal judgment gives the creditor the authority to then ask the court to issue a wage garnishment order, allowing them to satisfy the debt by garnishing the consumer’s wages. Once signed, this order is sent to the consumer’s employer to start the garnishment.

The good news is certain steps can be taken to stop a wage garnishment.

Filing for bankruptcy in Florida puts an automatic stay on wage garnishment, which immediately stops Florida wage garnishment. The automatic stay lasts for as long as the bankruptcy. With the automatic stay in place, you will be able to take home your entire paycheck.

One important thing to keep in mind is creditors can only garnish a certain percentage of the consumer’s paycheck. Federal law dictates that the amount garnished from a person’s wages cannot be more than 25 percent (25%) of his or her disposable income or the amount taken that by which the person’s take-home pay exceeds 30 times the federal minimum wage, whichever of these two figures is less.

One exception does exist when it comes to wage garnishments. Federal law dictates that the consumer’s wages, as well as his or her social security benefits, can be garnished to pay student loan debt and back taxes owed. The U.S. Department of Education and IRS are given authority under federal law to garnish the consumer’s wages without a court judgment or even filing the lawsuit. No official garnishment order is needed for either entity to garnish a person’s wages.

A person can take certain steps to stop a wage garnishment before it even starts. One thing a consumer can do is to work directly with the creditor to negotiate a payment plan to pay down the debt in lieu of a wage garnishment. Many times, creditors prefer this be done before the collection action is even initiated, saving them the legal fees associated with starting a legal proceeding. Payment plans also allow the consumer to set a reasonable amount for a monthly payment, one that will fit with his or her budget. Negotiating a payment plan once the garnishment order has been issued can be a little harder, so it is recommended this action be taken before that order is issued.

Bankruptcy Law, Rebuilding Credit

How to Re-establish Healthy Credit Habits After Bankruptcy

Posted on March 7, 2025by Admin

Sometimes people hold off filing for bankruptcy for fear of what it will do to their credit and financial future. While filing for bankruptcy will impact a person’s credit score, this damage is not irreparable.

The good news is after bankruptcy, you can immediately take steps that can have a positive impact on your credit history.

Pull a copy of your credit reports for free by visiting https://www.annualcreditreport.com/.
Make sure your credit reports are accurate. The accounts that were discharged in bankruptcy should be closed. If any discrepancies are found, these errors should be reported right away to the credit bureaus via a formal dispute.
Prioritize making future payments on time. It sounds simple, but on-time payments and responsible credit card use can significantly help you recover from bankruptcy.
Open a new line of credit. After some time has passed and you feel financially stable, consider opening a new line of credit with a reputable lender to reestablish healthy credit habits.
Creating a budget is important after completing a bankruptcy case. Write down all necessary living expenses and track how much of the consumer’s income can be used to go towards paying these costs. A good rule of thumb when budgeting is to follow the 50/30/20 rule. What this entails is 50 percent of the consumer’s income goes towards meeting his or her needs. Another 30 percent would be set aside for items that are considered not necessary or are wanted, while 20 percent of the monthly income goes towards savings.

Your credit scores will not rebound overnight after bankruptcy. However, if you use credit responsibly and avoid late payments, you can establish a favorable credit history over time and get back on solid financial footing.

Click here to learn more.

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.

Tax Debt

When Can Taxes Be Discharged in Bankruptcy?

Posted on March 5, 2025by Admin

If you are considering filing for bankruptcy, you may be wondering if your tax debts can be discharged. Although the automatic stay will delay the IRS from contacting you about your debts, taxes are treated differently than other kinds of debt when you file bankruptcy.

If you can prove the tax debt is the result of fraud or mistake, you may be able to get it discharged. Also, if you can show that paying your taxes would create an undue hardship, this can allow you to have your tax debt discharged.

Income tax is the only kind of tax debt that can be discharged in Chapter 7 bankruptcy. In Chapter 13 bankruptcy, tax debt can generally not be discharged. Instead, it can be repaid throughout the life of your Chapter 13 repayment plan, which can last 3-5 years.

Here are three basic rules that will tell you if your tax debts are eligible for discharge.

The Three-Year Rule. Your tax debts must be three years old from the date they were due, not from the date that you filed. Tax returns are due on April 15^th each year. Calculate three years from the time the taxes were due.
Your Tax Returns Must Have Been Filed for Two Years Before Bankruptcy. Taxes must be filed for two years prior to the bankruptcy filing to prevent delinquent taxpayers from filing late returns one day and bankruptcy the next.
The Taxes Must Have Been Assessed More Than 240 Days Ago. The IRS must formally determine that you owe the taxes you are trying to eliminate in bankruptcy more than 240 days before you file the paperwork with the court. Note that an offer in compromise will delay the 240-day rule while it is pending plus an additional 30 days.

Tax Debt in Chapter 7 vs. Chapter 13 Bankruptcy:

Your tax debt can be discharged under Chapter 7 if:

It is income tax.
The debt is at least three years old.
You did nothing fraudulent to evade paying your taxes.
You filed a tax return for the debt you hope to discharge at least two years before filing for bankruptcy. A late filing beyond the allowed extensions could disqualify your debt as dischargeable.
You must pass the 240-day rule, meaning the IRS must have assessed the tax debt at least 240 days before your filing.

Tax Debt in Chapter 13 Bankruptcy

Chapter 13 bankruptcy can be a better option in dealing with tax debt under the following conditions:

Tax debt older than three years might be forgiven, depending on your amount of disposable income (deducting necessary expenses).
Discharged tax debt will not incur additional interest or penalties.
IRS tax liens can be satisfied in a Chapter 13 repayment plan.
The IRS must abide by your Chapter 13 repayment plan, provided all income is included in the plan and you meet all current tax obligations.

It is important to remember that there is no ‘one-size-fits-all’ answer to when taxes can be discharged in bankruptcy. The answer often depends on the type of bankruptcy being filed and circumstances surrounding the case.

SOURCE: https://www.debt.org/bankruptcy/does-bankruptcy-clear-tax-debt/

Debt Relief

Consumer Debt by Gender: What’s the Difference?

Posted on February 25, 2025by Admin

Despite attempts at financial equality, men on average earn more than women, which has an impact on personal finance. Women tend to be more cautious with money, when it comes to spending, saving, borrowing, and investing.

In contrast, men feel more social pressure to display wealth and status, going into debt, if necessary to do so. Also feeling pressure to create financial stability as the breadwinner in their relationships.

On average, women are still responsible for the majority of household duties and child rearing responsibilities, which has a significant impact on their lifetime earning potential. Women also suffer more financial consequence from divorce.

Gender does not affect a person’s ability to manage money, build credit, use debt responsibility, or invest for the future. But external factors like societal pressures assigned to gender roles can have a financial impact.

Following decades of narrowing the gender wage gap, 2023 threw a curve ball. For the first time in 20 years, the gender pay gap widened significantly, according to the Annual Income in the United States Report from the U.S. Census Bureau.

Women who worked full-time were paid about 82.7 percent of a man’s salary in 2023, down from 84 percent in 2022. Full-time male workers made a median salary of $66,790, while full-time female workers made $55,240. That’s a difference of $11,550 per year, a gap that only widens further for women of color, those with disabilities, and women working part-time.

Experian compared debt balances among men and women and found that men carry more debt in all categories except student loans.

Studies also report women feeling more stressed by finances than men. A recent nationwide Bankrate study reported more than 2 in 5 women (or 46 percent) say money issues have negatively affected their mental health, prompting feelings of anxiety, depression, sleeplessness and stress. That number compares with 38 percent of men.

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.