Bankruptcy Law

How Often Can a Person File for Bankruptcy?

If you have filed for bankruptcy protection in the past and have found yourself facing financial trouble again, it is possible to file for bankruptcy a second time.  In fact, approximately eight percent of bankruptcy filers end up needing to file again at some point. Ultimately, how often someone can file for bankruptcy protection depends on the type of case he or she filed initially, as well as how much time has passed since that first case.  

One of the more commonly used forms of consumer bankruptcy is the Chapter 7 bankruptcy also known as a “liquidation” bankruptcy. This form of bankruptcy lasts a few months, allowing the filer to work closely with the bankruptcy trustee to sell any nonexempt assets to pay off qualifying debts. At the end of the case, the remainder of the filer’s debts, which are usually credit cards or other unsecured debts, are discharged. A Chapter 13 bankruptcy is another form of consumer bankruptcy, also known as a repayment or reorganization bankruptcy. In a Chapter 13 bankruptcy, the filer works with the bankruptcy trustee on a repayment plan, which lasts anywhere from three to five years, where the person pays off his or her debts, liquidating what is left at the end of the case.  

While no limit exists as to how many times a person can file for bankruptcy, the Bankruptcy Code does impose certain limits to ensure that the system is not abused.  The clock begins running on the date the first case is filed with the bankruptcy court, not the date of discharge.  

Filing Chapter 7 after Another Chapter 7 Case 

For someone who has filed Chapter 7 bankruptcy, he or she must wait eight years from the date of the first filing to be able to pursue a second Chapter 7 case. The reason this period is the longest between bankruptcy cases has to do with how short a typical Chapter 7 case tends to be, as well as the fact that the filer does not need to enter into any repayment plan to finalize it.  

Filing Chapter 13 after a Chapter 7 Case 

If the consumer wishes to file a Chapter 13 bankruptcy case after receiving a Chapter 7 discharge, he or she will need to wait four years to file. It is important to note that if the person did successfully finalize the Chapter 7 case and received a discharge of his or her debts, filing a Chapter 13 case soon after receiving that discharge will prevent him or her from receiving a second discharge of debts.   

Filing Chapter 7 after a Chapter 13 Case 

Consumers wishing to file a Chapter 7 bankruptcy case after filing a Chapter 13, must wait six years before doing so. However, this waiting period can potentially be waived if the consumer paid back 100 percent to his or her unsecured creditors in the previous repayment plan. Occasionally, if it can be demonstrated that the filer paid at least 70 percent back of these debts and acted in good faith, the waiting period can be waived, as well. However, considering how long a Chapter 13 case can take, it is possible that a filer could end up proceeding with a Chapter 7 case just one year after receiving a bankruptcy discharge in a Chapter 13 case, especially if that case took up to five years to complete.  

Filing a Chapter 13 Case after Another Chapter 13 Case 

If the consumer had previously filed for Chapter 13 bankruptcy and received a discharge, he or she must wait two years from the date of filing before proceeding with another Chapter 13 case. Considering how long a Chapter 13 case can take, it is very rare to see a Chapter 13 case be filed so soon after a previous Chapter 13 discharge.  

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

Best Ways to Pay Off a Large Credit Card Bill

Many Americans ended the year 2020 with large credit card balances, and now with the new year in full swing, they may be looking for ways to chip away at that debt. Carrying a high balance on credit cards not only makes life harder, but it can present a major threat to that person’s financial stability. Several different options are available to consumers seeking to reduce or pay off their large credit card balances. What works for one consumer may not work for another. Ultimately, it depends on the person’s credit history and current financial situation as to what will work for him or her.  

Personal Loans 

One popular method to pay down a credit card has been by taking out a personal loan to pay off the balance. This method is also known as debt consolidation, and it can be a successful way for consumers to pay down several large balances at once. By taking out a personal loan, he or she can use this money to pay off all these outstanding balances, leaving just the loan balance to pay a monthly basis. It effectively transfers credit card debt to a one, singular debt with a lower interest rate. Not only does this make repaying the amount easier, but it can also often save a lot of money in interest that would otherwise build up over time on multiple credit card balances.  

One nice benefit to paying down credit card debt through a personal loan is the borrower will be provided a repayment schedule. This means an end is in sight, and the borrower will know exactly when he or she will be debt-free, so long as he or she keeps up making the monthly payments. In comparisonsimply making the basic minimum monthly payments only extends how long the person will paying on the debt. It could take years or even decades to eventually pay down the amount owed.  

However, one word of caution should be made with respect to personal loans. While they do tend to have lower interest rates overall, personal loans are unsecured forms of debt, which means that they do have higher interest rates than traditional loans. If the consumer has a less than perfect credit history, the interest rate may be even higher. Additionally, since the personal loans tend to be for larger amounts, their monthly payments are more than the person’s minimum monthly credit card payment. Proper budgeting can help make this easier for the consumer, however.  

Balance Transfer Cards 

If the consumer is not able to secure a personal loan to pay off debt, a balance transfer credit card can also be another method to accomplish the same goal.  Many credit card companies offer promotional rates for balance transfer cards, giving the consumer an introductory period with zero percent APR for a set period of time. Usually, this period is anywhere from twelve months to 18 months. The purpose of having this promotional period of time is to give the consumer an opportunity to catch up on payments and pay down his or her debts quicker. However, it is key that the consumer pay off or significantly pay down the debt during this set timeline. Once the promotional period expires, an interest rate will be imposed, and the consumer may even end up finding himself or herself paying a higher interest rate than before. If no progress has been made on the balance of the card, the consumer may end up in a no-win situation.  

At the end of the day, what works for one consumer may not necessarily be a good choice for another. It is best to do the homework and explore what options are available for debt repayment. 

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.   

Debt Relief, student loan debt, Student Loans

Student Loan Changes on the Horizon in 2021

Changes are on the horizon for student loans in 2021. Student loan reform has been an issue discussed for years, if not decades, but several events that occurred in 2020 have pushed the issue to the forefront. The presidential election, the coronavirus (COVID-19) outbreak, and the current economic climate have all pushed lawmakers to realize that student loan reform is a very real issue, and one that requires immediate action. The following possible changes could be coming in the new year.  

Student Loan Cancellation 

A number of recent legislative proposals have brought up the idea of student loan forgiveness. One proposal was included in the Heroes Act stimulus package proposed by House Democrats. In the legislation, lawmakers proposed to cancel up to $10,000 in student loan debt for borrowers who could demonstrate that they were struggling financially. Unfortunately, even though the legislation moved forward to the Senate, this portion of the original bill was removed. Senators Elizabeth Warren (D-MA) and Chuck Schumer (D-MA) have proposed legislation that would cancel $50,000 in student loan debt for borrowers who earn less than $125,000 in annual income. Lawmakers have pushed on President Elect Joe Biden to make a statement as to whether he supports or does not support student loan cancellation. Biden has stated that he would not likely pursue an executive order to cancel student loans, but rather, he encouraged Congress to consider immediate cancellation of $10,000 of student loans across the board. However, the fate of this proposal hinges on whether Republicans will retain control over the Senate. If they do, it is unlikely that student loan cancellation will move forward. 

Deferment for Student Loan Payments 

COVID-19 legislation, namely the CARES Act, brought about a pause for all outstanding federal student loan payments. In March 2020, this legislation paused payments on federal student loans, stayed student loan debt collection on defaulted loans, and stopped interest from accruing on all federal student loans. The legislation was created to help borrowers who were struggling financially during the pandemic. This “pause” is expected to expire as of January 31, 2021 unless Congress introduces legislation to extend this measure.  Discussions have occurred regarding extending the forbearance period past January 31, but no decision has been made to date. How this proceeds could depend a great deal on COVID-19 numbers, the current unemployment rate, and the economy.   

Student Loans and Bankruptcy  

One major change that could be occurring in 2021 has to do with how student loans are handled in a consumer bankruptcy case. For the most part, student loans have been all but impossible to discharge in both Chapter 7 and Chapter 13 bankruptcy cases. Borrowers must file a separate case within the bankruptcy matter, naming the lender, and providing evidence of undue hardship on behalf of the borrower. Courts across the country have been inconsistent in how they have applied this test, leaving disparity across the board in how they are treated. However, a number of recent legal decisions have indicated that change could be come as to how loans are handled in bankruptcy cases. President Elect Biden has made statements indicating he would like to see student loans discharged in bankruptcy, and Congress also has bipartisan support for similar measures. If student loan cancellation does not occur, this may be the next viable path for student loan reform.    

Employer Paid Student Loans 

The idea of employer paid student loans has gained a lot of support. The CARES Act includes provisions that provide tax incentives for employers to assist their employees with repayment of their loans. Under the CARES Act, employers can make a maximum of $5,250 in tax-free payments towards student loans per employee. The legislation makes both private and federal student loans eligible for this benefit, so long as the payments go towards principal or interest on what is defined as a “qualified education loan.” Employers have the option of choosing either tuition assistance or student loan repayment, but they cannot choose both options. This legislation was set to expire at the end of 2020, but the new stimulus package passed by Congress shortly around Christmas extended the benefit through the end of 2025. 

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. 

Coronavirus, COVID-19, Debt Relief

Floridians Hope to Receive Relief from Second Round of Stimulus Payments

As coronavirus (COVID-19) continues to affect the economy, many have been wondering when another relief package would be passed by Congress. After the CARES Act was passed in March 2020, providing the first source of stimulus payments, consumers have been anticipating a second source of stimulus payments to help during their continuing financial struggles. Fortunately, at the end of December 2020, a second stimulus relief package was passed by Congress and signed by the President, providing them with a sense of reprieve.

As compared the $2 trillion CARES Act passed last March, this second package totals $900 billion. Additionally, while the previous package provided $1,200 per taxpayer, this new bill provides $600 per individual making less than $75,000 annually. The new legislation provides $600 per child, while the previous legislation provided $100 less per child.  

Additionally, unemployed Americans will receive a $300 weekly federal payment in unemployment benefits. This payment is expected to last through March 14, 2021, unless otherwise extended. 

The federal eviction and foreclosure moratoriums have been extended to allow further relief for renters and homeowners who are struggling to make payments. A total of $1.4 billion has been designated for renter’s assistance for Florida renters.  

A second set of Paycheck Protection Program (PPP) loans have been issued with this new legislation for businesses continuing to struggle in light of the COVID-19 pandemic. 

Amounts are based on 2019 incomes and 2019 tax returns. Individuals whose tax refunds were issued via direct deposit through the IRS and those who receive Social Security through direct deposit should be the first to receive payments.    

Direct deposits have already begun and are continuing to roll out over the next several weeks. Consumers are encouraged to go to the IRS tracking site to find out when they should expect to receive their second stimulus relief check.

Please click here and 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.   

Bankruptcy Law

How Will Filing For Bankruptcy Affect My Spouse?

Filing for bankruptcy when someone is married can be a joint process, or it can be done by only one spouse proceeding with the case. Ultimately, it depends on the type of debt and the financial situations for both spouses. For example, if one only spouse owes a specific debt or debts, then that spouse may be able to proceed on a bankruptcy alone, especially if the other spouse has good credit and very few other debts. Proceeding with a single bankruptcy case while married can be complicated, and in certain situations, it can adversely affect the non-filing spouse, but not always 

Joint Debts

In any marriage, parties bring in their own, individual debts, and debts are almost always incurred during the marriage, as well. One spouse may choose to take out a loan, not naming the other spouse on the debt, which means only the spouse whose name is on the debt is responsible for what is owed. If that spouse is not able to continue making payments on the debt, he or she can proceed with a bankruptcy to discharge that debt. If the debts listed in that bankruptcy case belong to the filing spouse alone and not the non-filing spouse, discharging the filer’s debts and liabilities should be a straightforward process. It becomes more complicated if any of the debts listed in the bankruptcy case belong to the non-filing spouse. In these situations, these joint debts will normally remain with the non-filing spouse. 

If the filing spouse pursues a Chapter 7 bankruptcy case and names debts that belong to both spouses, unfortunately creditors who were pursuing payment from him or her can now pursue payment from the other spouse. The filing spouse may receive a clean slate with a bankruptcy discharge of these debts, but this shift in ownership will only push off responsibility for payment of these debts to the non-filing spouse. If, however, the filing spouse files a case under Chapter 13 bankruptcy and begins his or her repayment plan, his or her spouse will also be protected under the case’s stay so long as the filing spouse remains current on all bankruptcy plan payments. If the filing spouse does not stay up on his or her repayment plan, the non-filing spouse may soon find himself or herself fielding calls from joint debt creditors.  

Credit of the Non-Filing Spouse 

Another commonly expressed concern has to do with the credit score of the non-filing spouse. A person filing for bankruptcy should almost always expect a drop in his or her credit score, but should this be expected for the non-filing spouse, as well? Like many things in the law, it depends. If a joint debt is involved and is included as part of the filing spouse’s bankruptcy case, this bankruptcy filing may show up on the other spouse’s credit report. Additionally, if the married spouses intend to apply for any type of joint financing in the future, the bankruptcy on the one spouse’s credit history will make that process a little more difficult.

Joint Property 

While joint debts are fair game in a bankruptcy case, the same goes for joint property, especially if that property was acquired by both spouses after they were in a relationship. If the joint property happens to not fall in one of the categories of property protected under Florida’s bankruptcy exemptions, the asset is fair game to be sold to pay off the filing spouse’s debts. If the non-filing spouse is able to successfully argue that he or she brought the property into the marriage, acquired it by gift during the marriage, acquired it as part of an inheritance, or is able to pay the debt associated with the joint property, that asset may be able to stay with the non-filing spouse.  

Collection Calls 

The automatic stay protects the person filing for bankruptcy from collection proceedings, including phone calls from debt collectors. In a Chapter 13 reorganization bankruptcy case, the co-debtor shares that protection. However, this does not always mean collection agencies will not try to pursue payment from the non-filing spouse. Collection agencies will do this in an effort to trick the non-filing spouse into making payment.  However, if the spouse that did not file for bankruptcy is on the receiving end of one of these calls, he or she should request proof of responsibility for the debt amount. If the debt solely belongs to the filing spouse, the non-filing spouse can then demand that the calls stop. If a bankruptcy case has already been filed by the spouse, direct those phone calls to the filing spouse’s bankruptcy attorney after making the formal request that the calls cease.  

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.   

Bankruptcy Law

How to Know which Type of Bankruptcy is Right for You

Making the choice to file for bankruptcy is not an easy decision to make, but it is the first step towards a financial fresh start. However, choosing which type of bankruptcy to pursue can be a difficult decision to make.  

Typically, consumers choose between a Chapter 7 “liquidation” bankruptcy or a Chapter 13 “reorganization” bankruptcy. Both forms of bankruptcy have their positive attributes, as well as their negative ones, and it ultimately depends on the consumer’s financial situation and the goals he or she wants to achieve as to which type of consumer bankruptcy will be best for him or her.  

COVID-19, Credit Card Debt

Credit Card Debt Falls 9 Percent Despite Decline in Economic Conditions

The coronavirus (COVID-19) pandemic has hit the country’s economy hard, but this fact does not seem to be reflected in the nation’s credit card debt According to statistics from credit reporting agency, Experian, credit card balances have declined at a record rate in 2020.  

Economic crises tend to lead to a change in consumer behavior. World War II pushed consumers to change their spending habits in ways they had not done before. The COVID-19 pandemic with forced lockdowns and widespread unemployment has likewise put things into perspective for American consumers, pushing them to change their spending habits, as well, including how they use their credit cards.  

Bankruptcy Law

The Pros and Cons of Filing Chapter 7 Bankruptcy in 2020

For someone struggling financially, a Chapter 7 bankruptcy case can offer him or her a fresh start and freedom from insurmountable debt. The year 2020 has pushed many consumers to the brink financially, and bankruptcy can offer the help a person needs to start the New Year debt-free.  

Pros of Filing Chapter 7  

As soon as a Chapter 7 bankruptcy case is filed, the consumer receives immediate protection from his or her creditors. This protection comes from the automatic stay that is issued by the court upon filing. The automatic stay puts a pause on all collection actions, including collection phone calls, legal proceedings to collect on a debt, wage garnishments, evictions, and foreclosures. The automatic stay also gives consumers a chance to breathe and work with the court and bankruptcy trustee.   

Coronavirus, COVID-19, Credit Card Debt

More Americans Paying Rent on Credit Cards with No Second Stimulus Relief Bill in Sight

The coronavirus (COVID-19) pandemic has hit the country hard.  Many people have been left with no choice but to use their credit cards to pay for basic living expenses, including their rent. Financial analysts fear that this trend could be a warning sign that, without a second stimulus relief package from Congress, the nation’s economy is heading towards another crisis.  

According to statistics from the Federal Reserve Bank of Philadelphia, an increase of approximately 70 percent has been reported on the number of consumers using their credit cards to pay their rent. What this indicates is that the person using their credit to pay for the most basic of living expenses is significantly struggling, does not have any savings to pay for unexpected expenses, and is at risk of losing his or her home.  

Credit Card Debt

The 5 Best Ways to Pay Down Credit Card Debt during COVID-19

The coronavirus pandemic has compounded the stress of credit card debt for many Americans today.  Consumers have relied more than ever before on their credit cards to cover bills and necessary purchases due to the financial impact related to job losses and shutdowns.  The following methods can prove to be helpful for consumers looking to pay down their credit card debt during the COVID-19 crisis.  

Debt Snowball Method 

One method of paying down credit card debt which many consumers have had success with is known as the debt snowball method. This method works by focusing all payments on the credit card with the lowest balance first, while making minimum payments on all others. Once that card is paid in full, the consumer then focuses on the one with the next lowest balance, and so on, until all credit cards are paid off in full. By taking the smallest balance first, the consumer is likely to see progress being made paying down his or her debt. Seeing the actual progress can be motivation to keep paying down all remaining credit cards. This method is not a quick fix, however, although it does work successfully over time.