Tag: Kingcade

Credit Card Debt

Which Debts Should You Pay First After Paying Off Your Credit Cards?

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Credit card debt is not the only type of consumer debt people struggle with. Once this debt is paid off in full, it helps to have a plan on which debts to tackle next.

According to data from the Federal Reserve and TransUnion, American consumers paid off a total of $82.9 billion in credit card debt in 2020. Credit card balances continued to drop by $49 billion in the first quarter of 2021, which is the second-largest quarterly balance decline seen since 1999. Despite this fact, more than 20 million American consumers have their student loan debts in forbearance.  

For the most part, financial advisors recommend that consumers pay down any debts they have that carry the highest interest rates, which is why credit cards are usually the first focus. With stimulus programs still in place, providing extra income to consumers temporarily, many financial advisors argue a different theory should be followed. 

Instead of focusing on the debt with the highest interest rate, consumers should look at all their debts and consider other options, such as refinancing other debt sources to lower their interest rates or modify payments. Refinancing could be a possibility for unsecured personal loans, as well as for mortgage debt.  With lower interest rates, consumers are encouraged to take advantage of this opportunity to save money and lower monthly payments, making it easier to pay off debts in full. 

Once credit card debt is paid off, many financial advisors recommend that consumers focus next on paying off their car loans. A car loses its value significantly as soon as it is driven, which is why so many consumers find themselves owing more on the car loan than the vehicle is worth. The interest rates of car loans tend to be moderate to high, although not always as high as credit card debt, depending on the consumer. Many times, it is advisable to either sell the car and use the proceeds to pay off what is owed on the loan or to refinance the loan.   

Once personal loans, credit card debt, and car loans are paid off by the consumer, it may then be advisable to pay off outstanding federal student loans. Since payments and interest is paused on federal student loans until September 30, 2021. During this time, any payment will go towards principal and not interest rate. Paying down this debt will only help improve the consumer’s credit score. 

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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.   

Medical Debt

COVID-19 Pandemic Leads to Medical Debt Crisis

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Medical debt is a financial stressor for many Americans, even before the COVID-19 pandemic. Now with the pandemic well into its second year, countless Americans are becoming overwhelmed with medical bills with no end in sight. 

Scientists are studying the long-term effects of COVID-19 on those who contract the virus. Many of them have suffered through several hospital stays, multiple treatments, and several referrals to various specialists. Each of these events, of course, comes with its own set of medical bills. 

According to Credit Karma, medical debt spiked 6.5 percent since the pandemic first hit at the start of 2020, increasing by approximately $2.8 billion. The number of individuals with past due medical debt increased by nine percent during this time, jumping from 19.6 million to 21.4 million.   

Another medical debt survey conducted by Lending Tree found that 60 percent of Americans polled carried some level of medical debt. Fifty-three percent (53%) of them saying that this debt was more than $5,000. Of those surveyed, 72 percent surveyed said that their medical debt has kept them from purchasing a home or having a child in the near future.    

Many consumers have felt forced to rely on credit to pay off their outstanding medical debts caused by a COVID diagnosis. However, paying these debts via credit card only delays payment of what is owed.  

The COVID-19 pandemic has hit consumers and businesses hard. According to a study conducted by the Commonwealth Fund, the Employee Benefit Research Institute, and the W.E. Upton Institute, 7.7 million American workers lost their employee-sponsored health insurance benefits by June 2020, affecting not just the 7.7 million workers but also their 6.9 million dependents. Due to the loss of this insurance coverage, overall cost of medical care has skyrocketed. On top of losing that health insurance coverage, many Americans also lost their job and thus their income source, making paying these high costs nearly impossible.  

Congress passed the $1.9 trillion American Rescue Plan to offset these high medical costs. The bill’s protections provide a short-term solution for those struggling with medical debt. Democratic lawmakers are pushing heavily towards expanding health care and addressing the costs of medical treatment. Some of these efforts have been to reduce the negative effects medical debt has on a person’s credit score. 

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Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney 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, 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 McMaken, P.A. website at www.miamibankruptcy.com.

Credit Card Debt

Should I Contribute to my 401K or Pay Off Credit Card Debt?

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Credit card debt is a burden that many consumers struggle with. Without a large influx of cash, it can be difficult to pay off outstanding credit card bills. Many consumers also struggle with deciding whether they should focus first on paying these debts off or whether they should be taking any extra funds and saving for retirement in a 401(k) or similar plan.  

Paying Off Credit Card Debt

Credit cards come with high interest rates, which can make paying the balance off impossible. The larger the balance gets, the harder it can be to pay down, which is why it can often be a good idea to focus on paying this debt down first. Additionally, paying down the credit card balance to zero will also noticeably improve the consumer’s credit score. A better credit score will eventually benefit him or her for when it comes time to make a big purchase, such as a car or a home. It will also eliminate the monthly payment from the consumer’s budget, allowing him or her the chance to save for the future, including retirement.  

Bankruptcy Law, Consumer Bankruptcy

Will Filing Chapter 7 Bankruptcy Prevent Vehicle Repossession?

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When someone is behind on his or her car payments, a Chapter 7 bankruptcy case may allow him or her to catch up on these missed car payments, saving the vehicle from repossession. The ability to do this depends on how far behind the borrower is on his or her payments and whether the loan is already in default.   

While a Chapter 7 bankruptcy case will not permanently prevent the person’s vehicle from ever being repossessed, it can provide the borrower a chance to catch up on missed payments or negotiate with the lender before the loan goes into default.  

Bankruptcy Law, Consumer Bankruptcy

The Cost of Filing Bankruptcy in 2021

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Filing for bankruptcy comes with its own set of costs. It may seem counterintuitive that a person who is having difficulty paying his or her bills can pay extra costs to receive relief from his or her financial obligations. However, just because someone is not able to pay his or her bills should not prevent them from hiring an attorney to file their bankruptcy case. While “do it yourself” projects may be a good idea around the house, there are reasons to let a professional handle your bankruptcy filing.

Consumer Bankruptcy, COVID-19

Personal Bankruptcy Filings Drop in Light of COVID-19 Pandemic Relief

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Personal bankruptcy filings are down, leaving many financial analysts questioning whether the drop in filings can be attributed to financial relief offered from governmental pandemic relief programs or to other economic factors. This stimulus relief offered consumers a much-needed financial boost, but the question remains how long this boost will hold off future bankruptcy filings. 

student loan debt, Student Loans

What $10,000 in Student Loan Cancellation Would Look Like

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Lawmakers have been calling upon President Biden to move forward with an executive order that would cancel up to $50,000 in federally backed student loan debt. Other amounts have been considered, the lowest amount being $10,000. How this cancellation would look across the country would vary, however, depending on the state and the borrower.  

According to the Student Loan Hero, $10,000 in student loan forgiveness would cost approximately $315 billion. This amount of loan forgiveness would erase outstanding student loan balances for 34 percent of all student loan borrowers, according to their review of Department of Education data.  

COVID-19, Debt Collection

Debt Collection Lawsuits Pause While One Debt Collector Continues to Pursue Collections

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At the start of the COVID-19 pandemic, most debt collectors hit the pause button on collection lawsuits due to widespread national lockdowns. However, one of the largest debt collectors, Sherman Financial Group, continued to pursue its collection efforts. 

According to a study conducted by the Wall Street Journal, Sherman Financial Group had the largest increase of any debt collection firm between March 15, 2020 and December 31, 2020. The study analyzed filings from five state-court districts from the start of the pandemic to the end of 2020. The number of filings went up by 52 percent from the previous year. In comparison, debt collection filings went down by 24 percent with respect to the industry overall. 

Lawyers in the News, Legal Awards

Kingcade Garcia McMaken Awarded ‘Best Bankruptcy Lawyers in Miami’ for 2021

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The Miami-based bankruptcy law firm of Kingcade Garcia McMaken has been awarded one of the ‘Best Bankruptcy Lawyers in Miami’ for 2021, by Expertise for obtaining the highest scores in consistency, qualifications, reputation, experience & professionalism.

“We are extremely honored to have received this award,” says Founding Partner and Managing Shareholder, Timothy S. Kingcade. “In today’s competitive legal environment, clients have an increasing number of options when choosing an attorney. It is important that clients and potential clients know how serious we take quality customer service and business ethics. This is a true testament to the commitment we have to our clients and the standards we uphold as a law firm.”

COVID-19, Foreclosure Defense, Foreclosures

Emergency Mortgage Relief Could Extend Through 2022

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Since the start of the COVID-19 pandemic, millions of homeowners have benefited from the mortgage relief programs offered by the federal government, and some private lenders.  Now that a year has passed, approximately 2.5 million homeowners are still enrolled in some sort of mortgage relief program, whether it be payment suspension or mortgage forbearance, according to the Mortgage Bankers Association (MBA).  

It is for this reason that the Consumer Financial Protection Bureau (CFPB) wants to extend these provisions and programs further into the future to ensure that these homeowners are not forced into foreclosure.