Tag: Kingcade

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

Debt Collectors May Soon Be Able to Text and Email Consumers

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Debt collectors may soon have even more ways to reach consumers who are past-due on their debts. A new proposed rule from the Consumer Financial Protection Bureau (CFPB) may make it possible for debt collectors to contact consumers via email or text communications as they attempt to receive payment on overdue debts.

This news does not come as a pleasant surprise for many. After all, debt collectors do not have a good reputation for this very reason. They can be persistent, if not relentless, when it comes to debt collection.

It is reported that the CFPB received a record 84,500 complaints from consumers about debt collectors in 2017. The industry earns $10.9 billion annually and does whatever it takes to receive payment on a debt.  The industry does not seem to be slowing down either. Since the end of the recession, American consumers have taken on more debt, including car loans, mortgages and credit card debt.

This news follows recent revelations that are now coming out about the direction the CFPB has taken since the start of the Trump administration. Many critics argue that this move is further evidence that the agency is no longer going after corporations for financial abuses as hard as they have in the past. After all, this latest move does not seem to protect consumers as much as it protects the companies seeking to reach these consumers.

Arguably, the number of communications from collectors will increase, if and when this rule takes effect. However, the law does limit the frequency and content of communication being received. The Fair Debt Collection Practices Act (FDCPA) provides rules that collectors must follow. However, this law was originally written in 1977, which means it has not been updated to include email and texting technology. It is unclear at this point whether the law will be modified to reflect the updates in technology.

Without having any strict regulations to guide debt collectors on how often they can communicate with a person via text or email, collectors are essentially free to do what they want when contacting someone. The number one piece of advice we give to people dealing with creditors is to be honest. If you are unable to make a payment, do not make a promise to do so and never hide from creditors.

If you are ready to put an end to creditor harassment and make a fresh start, consult an experienced Miami bankruptcy attorney at Kingcade Garcia McMaken. 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.

Source: https://www.cbsnews.com/news/text-me-debt-collectors-may-soon-be-able-to-text-and-email-consumers/

 

 

Debt Relief, Timothy Kingcade Posts

Mulvaney’s Role in Dismantling Consumer Financial Protection Bureau Highlighted in New York Times Magazine

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After Mick Mulvaney was appointed as the acting director of the Consumer Financial Protection Bureau (CFPB), following the start of President Trump’s term, many consumer advocates feared that he would bring sweeping changes that would undo any of the progress that the CFPB had made in protecting consumers. A recent opinion piece published by New York Times Magazine highlighted many of the events following Mulvaney’s appointment that showed that many of those fears were, in fact, quite valid.

The CFPB was originally created with the assistance of Senator Elizabeth Warren, following the 2008 financial crisis. The agency was meant to be an economic watchdog for American consumers and protect them from predatory lenders. However, after its creation, opponents of the agency in the Republican party disputed efforts made by the CFPB. It was not surprising that President Trump would appoint someone who did not fully support the agency’s mission to run the CFPB soon after being elected.

Shortly after Mulvaney began working at the CFPB, he ordered a total hiring freeze, put many enforcement cases on hold and also informed the Federal Reserve, the agency that funded the CFPB a zero dollar budget, stating that the CFPB could handle its affairs with money already in their account.

Within weeks, Mulvaney announced that he would reconsider one of the bureau’s major long-term initiatives: rules to restrict payday loans, products that are marketed to the working poor as an emergency lifeline but frequently leave them buried in debt.

“Anybody who thinks that a Trump-administration C.F.P.B. would be the same as an Obama-administration C.F.P.B. is simply being naïve,” Mulvaney told reporters. “Elections have consequences at every agency.”

A payday loan is a short-term loan given in exchange for the borrower’s paycheck, along with a fee paid to the lender. Mulvaney was not supportive of the CFPB’s role in restricting payday lenders. While he agreed that these loans were not always financially sound, it was his stated position that borrowers should be wiser and not take out these loans without understanding the terms.

However, the CFPB and Warren previously viewed payday companies as predatory lenders who took advantage of borrowers who were desperate to get out of a bad financial situation.

‘These are entities that suck up billions of dollars a year from people making $25,000 a year. And it’s going into the pockets of the wealthiest people in the world.’

Borrowers take out these loans in a last-ditch effort to pay for an emergency expense but very rarely are informed of the terms in fine print, or misinformed of the consequences if they fail to pay the loan off timely.  If a borrower cannot pay the loan off at the end of the period, the companies often roll the older loans into new ones with even higher fees.

Many states offer protection for borrowers when it comes to predatory lending and payday loans. However, it was Warren’s position and the original mission of the CFPB to provide uniform protections for all borrowers nationwide. Florida offers consumers who take out payday loans from licensed lenders certain protections, including the following:

  • A borrower may borrow up to $500 per loan;
  • A borrower can only have one outstanding loan at a time;
  • The maximum fee that can be charged is 10 percent of the total amount borrowed, plus a $5.00 verification fee;
  • The loan contract cannot exceed 31 days but can also not be less than seven days;
  • Contract terms that otherwise limit your rights as a borrower are prohibited;
  • A borrower must pay a previous loan in full and wait a full 24 hours before entering another loan;
  • If the borrower is not able to pay the loan in full at the end of the term, the lender must give a 60-day grace period without any additional charge.

The New York Times Magazine piece also highlighted the fact that Mulvaney received campaign donations in the past from many different payday lenders, which leads one to question the motivation behind the CFPB’s sudden change in policy when it comes to payday loans. Mulvaney is now working as the President’s Chief of Staff, but the changes made at the CFPB have had longstanding ramifications when it comes to consumer protection from predatory lending practices.

Click here to read more on this story.

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.

Additional Resources:

https://www.accountsrecovery.net/2019/04/16/nyt-feature-details-how-mick-mulvaney-took-apart-the-cfpb/

https://www.flofr.com/sitePages/PaydayLenders.htm

 

Bankruptcy Law, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

The Best Ways to Pay Off Credit Card Debt In Retirement

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When someone is entering retirement, the last thing that person wants to deal with is mounds of credit card debt. For the most part, retirees are living on a fixed or limited income, which means they have very few financial resources to pay off any lingering debt they may be carrying.

A fixed income also means there is little ability to handle any unexpected financial crises, which can include a costly home repair or medical expense.  In the event the unexpected happens, some retirees are forced to rely on credit cards or personal loans to cover the costs.  The interest on a personal loan or a single missed credit card payment, can cause the debt to spiral out of control quickly.

Here are some debt payoff tips for seniors struggling with credit card debt.

Refinance your debt.

One possible way to pay off a large amount of credit card debt is through refinancing or consolidation of the credit card debt. This payment could be made through a home equity line of credit (HELOC) if you own your home and hold a good amount of equity in it. A HELOC carries a lower interest rate than other methods of consolidating or refinancing debt since it is attached to collateral and is a secured loan.

Credit card debt can also be paid by consolidating all cards into one card through a balance transfer. By doing a transfer, the cardholder can attack one, larger debt, rather than pay minimum payments on multiple cards every month. However, these transfers normally come with a promotional period which means the cardholder can only benefit from the zero or low interest rate for a set period. After that time period expires, the cardholder will soon find his or her rates increase significantly.

Examine your budget.

Paying off your credit card debt can be nearly impossible, if you do not establish a set budget. By putting together a list of necessary expenses and reviewing what purchasing habits put you into debt, you cannot cut unnecessary expenses and free up money to go towards your credit card debt. It is also recommended that you avoid using your credit cards during this time period when you are working on paying off outstanding balances.

Target the card with the highest interest rate.

If debt consolidation is not a possibility and you are struggling to pay multiple credit cards, one method that is recommended is to focus on paying one card at a time. This method does take time and patience, but it can be successful. Look at what credit cards you have and list what interest rate is on each card. Take the card that has the highest interest rate and throw whatever extra money you may have towards that card first, while continuing the minimum monthly payments on the other cards. Once that card is paid, then focus on the credit card with the next highest interest rate and so on, until all cards are paid in full.

Work a part-time job.

Retirement does not always mean that you will never hold another job. In fact, many retired individuals choose to take a part-time job not only to earn some extra money, but to socialize and be out with people. Many retirees find a great deal of success in part-time consulting or freelance work after retiring from a long-term professional career.

For seniors struggling with insurmountable debt, help is here. Do spend your golden years being hounded by creditors.  Credit card debt is one of the most common problems we see facing those with serious financial issues. The stress can become compounded with collection calls and the threat of lawsuits.  Bankruptcy not only gives people a financial fresh start, but it is a powerful tool that can be used to protect valuable assets, including property, vehicles and retirement savings.

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.

Source:  https://www.theladders.com/career-advice/5-ways-retirees-can-tackle-their-credit-card-debt

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Protecting Bank Accounts During Bankruptcy with Pre-Bankruptcy Planning

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One of the most important assets someone going through a bankruptcy case wants to protect, aside from retirement accounts or their home, are their bank accounts. After all, no one wants to lose all the cash they have available to pay for daily expenses. How money in a bank account can be protected depends heavily, however, on the type of bankruptcy exemptions used and what planning was done pre-bankruptcy to protect that money.

One of the benefits of filing for bankruptcy involves the automatic stay, a measure that goes into effect as soon as the bankruptcy case is filed. This automatic stay puts a halt to any collection proceedings or efforts, giving the filer reprieve from the continuous calls and communications from creditors seeking to receive payment on their debts.

Are the Funds Exempt?

In any bankruptcy case, certain property is protected from being liquidated and used to pay off qualifying debts. This practice is done through bankruptcy exemptions. In a Chapter 7 bankruptcy case, the bankruptcy trustee cannot take this exempt property to pay off debts. While the bank account itself is not necessarily exempt, the money in that account could be protected if it qualifies under one of Florida’s bankruptcy exemptions. After all, Florida has quite generous bankruptcy exemptions, when compared to other states.

If you own a home, you will likely find Florida’s bankruptcy exemptions quite favorable. You can exempt all the equity in a residential property that meets Florida’s guidelines. In addition, Florida has unlimited exemptions for annuities and the cash surrender value of a life insurance policy.

Money in the account that is from wages from the head of family is exempt up to $750 per week or the greater of 75 percent or 30 times the federal minimum wage. Under Florida Statute §222.11, this money includes paid or unpaid wages during the last six months. Additionally, any money that is income for a person other than the head of family is also protected up to 75 percent or 30 times the federal minimum wage, whichever is the greatest of the two. Additionally, if you are a federal government employee, pension payments that are needed for support and were received for up to three months before the bankruptcy filing are exempt.

Pre-Bankruptcy Planning

If any funds are not otherwise covered by a bankruptcy exemption, they could be protected through pre-bankruptcy planning. However, this planning must be done with caution and properly so a bankruptcy attorney should be consulted before any actions are taken. Bankruptcy laws allow you to take property that would not be exempt and convert it into exempt property, so long as you are acting in “good faith.” The key here is to act in good faith. Bankruptcy filers who conceal or hide their assets in hopes of fooling the bankruptcy court, will result in the case being thrown out due to bankruptcy fraud. It is for this reason that you should proceed with caution when doing any pre-bankruptcy planning.

One possible method of converting nonexempt cash into an exempt asset before filing is to pay your mortgage down, especially considering Florida’s generous homestead exemption. You may also make an annual contribution to your retirement account or other retirement funds with any nonexempt cash to ensure that it goes to an asset that is protected. Money can also be used to pay down debts that would not be discharged in bankruptcy, including child support, spousal support, taxes, and student loan debt.  Ensure your balance is low by using your funds to pay necessary bills before you file.

If you use any money that would be nonexempt to buy assets that would be considered luxury items or unnecessary or extravagant expenses, you could face civil and criminal penalties for your actions. The bankruptcy court will look carefully at whether you misrepresented your asset values, whether the investment or property purchased was worth less than the money you used to purchase it, whether the assets were given to a family member or friend with whom you have a close relationship, and whether your lifestyle radically changed as a result of the purchase.

When filing for bankruptcy, you will be required to disclose all asset transfers made outside of the ordinary course of business within 90 days before filing the petition. Any transfers made to a friend or relative within one year of filing must also be disclosed.

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.

Source:

https://www.nolo.com/legal-encyclopedia/florida-bankruptcy-exemptions-property-assets-bankruptcy.html

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Why You Should Never Use Your 401(k) to Pay Down Debt

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When someone is facing a large amount of debt, it can be tempting to want to use all available resources to pay off that debt. Even if it means taking money out of retirement accounts. However, this could end up costing more than anticipated, delay retirement- and oftentimes the inevitable.

If bankruptcy is in your foreseeable future, the last thing you want to do is use assets that would otherwise be protected in bankruptcy to pay off debts that could be discharged in the bankruptcy case. Unsecured debt, such as credit card debt, personal loans and medical bills, end up being discharged at the end of a bankruptcy case, so it would not be worthwhile to use retirement savings to pay off these debts only to file for bankruptcy later.

Funds in your 401(k) are protected by federal bankruptcy law. While many assets can be used to pay off debts, retirement account funds are protected and cannot be touched under the Employee Retirement Income Security Act (ERISA). This law sets minimum protection standards for anyone who voluntarily contributes to a retirement account in the private sector. Florida also allows for exemptions for IRA accounts in bankruptcy.

The problem is many individuals try to avoid bankruptcy at all costs, and they see using assets, such as retirement savings, as an easy way to pay off debt.  But this does not come without consequences. Taking money out of retirement accounts too early can have some negative tax implications. If you take money from a retirement account and are under the age of 59 ½, you can incur some tax penalties as a result, including a 10 percent early withdrawal penalty. Money should never be taken prematurely from your retirement accounts without first consulting a financial advisor and accountant.

If you are struggling to pay off debt, including credit cards, medical bills or personal loans, you should consult with an experienced bankruptcy attorney to discuss the real possibility that bankruptcy may be the best option for you. It is recommended that you consult these professionals before taking the money out of retirement accounts. We have filed bankruptcy petitions for clients with more in their retirement accounts than on their credit card statement. A Chapter 7 bankruptcy allows you to hold onto all of your retirement savings and keep every penny of your 401(k).

However, this is only the case if the money remains in your 401(k) retirement account.  Removing funds from the 401(k) or any retirement account before filing for bankruptcy turns the funds from a protected asset to an unprotected asset.  It is important to speak with an attorney, especially if you have recently lost your job and have considered pulling from your retirement savings to help pay for day-to-day living expenses.

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, Debt Relief

The Differences Between Secured Debt and Unsecured Debt

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When it comes to debt and how it is handled in a bankruptcy case, two main categories exist, namely secured and unsecured debt. Even if you are not at the point yet where you will be filing for bankruptcy, knowing the type of debt involved can make a big difference, especially when money is tight, and you are worried about which debt to pay first: the mortgage or the credit card bill.

The main difference between secured and unsecured debt is the fact that one debt is secured by collateral and the other is not. Secured debt is debt that is guaranteed by collateral, which is something of value that the lender can seize for payment in the event the borrower is no longer able to pay on the debt.

Mortgages and auto loans are classic examples of secured debt. If you default on your mortgage or your car loan, the bank can foreclose on your home or repossess your vehicle to satisfy the debt. In comparison, unsecured debt is debt that is issued to someone but is not guaranteed by collateral.  The most common types of unsecured debt include payday loans, credit card debt, student loans, and medical bills.

When you are not able to continue paying on your unsecured debt, the lender cannot collect your property to satisfy the debt. However, they can report your account as delinquent, which will hurt your credit score. They can also pursue a legal judgment against you for the debt, resulting in a possible wage garnishment.

For the most part, secured debt tends to carry a lower interest rate on the amount owed. The main reason for this difference is the lender has some type of guarantee that they will receive payment, even if you default later. The lender does not have that same guarantee with unsecured debt. It is for this reason that unsecured debt tends to carry a higher interest rate because the investment is seen as more risk for the lender.

When it comes to a bankruptcy case, secured debt is handled differently than unsecured debt. If you are filing a Chapter 7 bankruptcy case, unsecured debt normally ends up being discharged at the end of the case, while secured debt can stay with the asset. If you are struggling to pay unsecured debt, such as credit cards or medical bills, filing a Chapter 7 bankruptcy case may be a viable option for dealing with the debt. If you are struggling to pay for both secured and unsecured debt, a Chapter 13 bankruptcy case may be a good option to allow you to continue paying on your mortgage and stay in your home while discharging unsecured debt at the end of the payment period. An experienced bankruptcy attorney can evaluate your financial situation, after looking at the different types of debt you are carrying to determine which plan is best for you.

Click here to read more on this story.

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, Debt Relief, Timothy Kingcade Posts

How To Know If You Are Being Scammed By a Debt Collector

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Scams are everywhere, especially when it comes to debt collection. Many times, a debt collection scam will even try to get you to pay on a debt you do not owe. It helps to know what red flags to look for to avoid becoming the next victim of a debt collection scam.

One of the reasons why debt collection scams are so dangerous is that they take advantage of someone when they are at their weakest. These scammers are aware that the person they are calling is already in a difficult financial situation, and can be easily taken advantage of.

For the most part, these types of scams play out in the same manner. The scammer contacts a person and tells him or her that they are calling on behalf of a collection agency, law firm or other government agency and that they are reaching out to collect on an overdue debt. If the caller refuses to comply, the scammer then makes threats of wage garnishment, telling their friends, family or employer of the outstanding debt, even threatening arrest and jail time.  If the person answering the phone is savvy enough to know that no company can legally do these things, the threats will have no effect. However, many times, the person answering the phone plays right into the scammer’s hands.

If you are on the receiving end of one of these calls, you need to know your rights. The first of these is the right to receive written confirmation of the debt. Under U.S. law, debt collectors are required to provide a written validation notice of any debt, when requested. In this notice, the collector must include the amount owed, the name of the original creditor, and a statement of the person’s rights. If a debt collector refuses to provide this information, this refusal is a red flag that the call is a scam.

If you have any suspicions that the caller is not legitimate, do your research. Make sure the caller is real by asking for the company’s name, telephone number and street address. Never provide credit card information or bank account information over the phone. If the collector is legitimate, the company will likely have all this information already. Also, if the collector asks for payment through PayPal or other electronic transfer, this is another red flag that the call involves a scam.

More recent scams have attempted to collect on debt that is past the statute of limitations. You may have owed this debt at one point in time, but after a certain length of time has passed, the debt is no longer legally collectible. However, scammers hope that the caller does not know this fact and will make payment, thereby ‘re-activating’ the debt. For personal loans, the statute of limitations in Florida is five years, while oral contracts and revolving accounts, such as credit cards, the statute of limitations is four years. The written verification provided for the debt should allow you to confirm whether the debt is past the statute of limitations.

If you see any of these red flags, hang up immediately. Do not give the person on the other end of the phone any information and report the call to the Federal Trade Commission or the Florida Attorney General’s Office. It also helps to know your rights under the Fair Debt Collections Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, deceptive, unfair or threatening practices when collecting on a debt.

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.

 

Additional source:

 

https://www.debt.org/faqs/americans-in-debt/consumer-florida/

Bankruptcy Law, Student Loans, Timothy Kingcade Posts

How the Student Loan Debt Crisis Got So Bad

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Student loan debt is a problem that plagues over 40 million Americans. It is currently estimated that more than $1.5 trillion is owed in student loan debt nationwide. With an outstanding balance this large, many are asking: how did this problem get so out of hand?

Former Consumer Financial Protection Bureau (CFPB) Ombudsman and the current Executive Director of the Student Borrower Protection Center, Seth Frotman, recently gave an interview to Yahoo Finance where he provided his input on the situation. Since he was on the front lines when it came to government protection of student borrowers, Frotman believes that loan balances have gotten out of hand as a result of decades of predatory lending and weak government regulation over the student loan sector.

Frotman resigned from the CFPB in August 2018 in a letter where he accused the current administration of not protecting student borrowers from predatory lending and other similar practices. In his letter, Frotman accused the administration of not enforcing lending violations and protecting bad lenders in the process.

In the interview, Frotman gave some background as to how student loans have been handled in past decades. For the most part, student loans are issued by banks or federally-backed private lenders. Given the fact that someone asking for a student loan normally does not have an extensive credit history, it is important that these borrowers are protected when taking out money to attend college.

However, over time, the cost of going to college began to skyrocket. It is estimated that the average cost of tuition for a private non-profit four-year university is $35,830, which is twice what a college student would have paid two decades ago. As tuition costs went up, the loans students had to take on to pay for going to college also went up. The result of this increase attracted other less-than-reputable lenders who saw a huge money-making opportunity.

In Frotman’s words “no one was minding the store” when it came to student lending, as more and more companies joined the student lending game. Unfortunately, the 2008 recession caused even more problems. Congress ended up bailing out the banks’ student loan arms hundreds of billion dollars to ensure that students still had access to loans to attend college.

As a result, however, the government ended up owning a great deal of student loan debt. The government ended up entering contracts with banks and loan providers that serviced student loans, including Navient, Nelnet, Great Lakes and FedLoan. These contracts are expected to expire this summer, leaving many, including Frotman, to worry about what will happen next. The current Education Secretary, Betsy DeVos, has mentioned that she would consider an exclusive contract to just one company to service billions of dollars of existing student loans, which has raised a lot of opposition. However, until a decision is made, it is expected that the existing contracts will be extended.

Lenders are required to follow a series of rules and regulations when it comes to providing student loans, but it was discovered recently by a government watchdog that the Department of Education was not holding loan providers accountable under these regulations. Some of these violations included misleading borrowers into putting their loans in forbearance, putting delinquent accounts into forbearance without borrower approval, and generally not holding servicers accountable.

The situation is expected to get even worse. It is estimated, as of February 2019, that 11.5 percent of student loans are at least 90 days delinquent or are in default. It is possible this number underestimates just how many borrowers are behind on their payments, including those in forbearance or loans that are deferred, which means the number of loans that are past-due could be even higher.

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.

 

Foreclosures, Timothy Kingcade Posts

‘Hardest Hit’ Federal Funding Money Spent on Luxury Hotel Stays by Florida Officials

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Florida officials have come under fire after it was discovered that they were using money from a federal fund meant to help homeowners struggling with finances and facing foreclosure to pay for vacations and luxury hotel stays.

This information was discovered by the Special Inspector General for the Troubled Asset Relief Program. The alleged misuse of funds took place between 2011 and 2016. Officials from the Florida Housing Finance Corp. used money from the Hardest Hit Fund to pay for all costs to attend conferences in Orlando, Miami, Boston, Nashville, and San Diego. While this part may seem appropriate, it was later discovered that only two hours of the total four days charged were related to the Hardest Hit mortgage relief program. The remainder of the time was spent for relaxation and enjoyment.

The expenses totaled $40,000 for what they claimed were “routine meetings” in some of the finest hotels and luxury resorts in Florida, including stays at the Vinoy Renaissance St. Petersburg & Golf Club and the Hyatt Regency in Orlando. The expenses are considered a direct violation of federal regulations in how the relief funds should have been used.

Florida currently has one of the highest rates of foreclosures, as well as highest rates of denying funding from the Hardest Hit Fund to struggling homeowners who need it the most. “Florida has the lowest homeowner admission rate for relief funds offered by the organization, one of the highest withdrawn application rates and has consistently denied homeowners at higher rates than the national average,” according to the Troubled Asset Relief Program (TARP).

Unfortunately, this is the not the first time a misuse of funds has occurred when it comes to The Hardest Hit Fund.  Back in 2017, it was reported that millions of dollars in foreclosure assistance was squandered by government agencies.

The Hardest Hit Fund was created in 2010 by the U.S. Treasury Department. The fund carried $9.6 billion at the time of its creation to help 18 states specifically, including Florida, who were hit hardest by foreclosures during the end of the recession. In Florida, the money is disbursed by the Florida Housing Finance Committee. However, since its creation, Florida has come under scrutiny for how slowly the agency disburses money to homeowners in need. Back in 2015, it was reported that only 20 percent of the applicants who requested relief in Florida were accepted. The national average acceptance rate is about 48 percent. At the same time, money is being used by federal employees for bonuses and vacations.

Stephen Auger, executive director for Florida Housing, was forced to resign in 2016 after an audit showed he allowed the agency to pay for a $52,000 lobster and filet mignon dinner to honor the lenders who worked directly with lower-income borrowers.

All this information was disclosed in an 85-page report from the federal special inspector general. Florida was one of the states that had a “culture of inappropriate spending” of the Hardest Hit funding. Florida Housing charged the fund approximately $18,000, which was the most of any state, just to send their employees to national housing conference that had nothing to do with the fund at all.

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Choosing the right attorney can make the difference between whether or not you can keep your home. 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.

Bankruptcy Law, Credit Card Debt, Debt Relief

Americans Will End Up Paying $122 Billion in Credit Card Interest in 2019

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It is a staggering headline, but just last year Americans paid banks $113 billion in credit card interest, according to a recent study from MagnifyMoney. That is up 12% from interest paid in 2017, and up 50% from 5 years ago. And the amount of interest is only set to increase in 2019.  Credit card debt plagues consumers from all walks of life. The larger the debt, the more likely that cardholder is accruing interest.

What is causing this increase in interest? Financial analysts believe that now since a decade has passed since the big financial crisis in 2008, consumers are feeling more confident in their abilities to borrow more. As a result, the total amount of credit card debt has reached a record high, since before the recession. However, borrowers are also paying more when it comes to interest on the amounts they borrow, as banks have passed recent Federal Reserve rate hikes onto their customers.

The average APR on credit cards has gone up approximately four percentage points over the past five years. The average APR on a credit card is 16.86 percent, according to the Federal Reserve.

The problem with credit card interest is it can make paying down your debt very difficult. In fact, according to the Federal Reserve’s Survey of Consumer Finances, 40 percent of all active credit card users carry a balance from month to month on their cards.

While credit card interest can make paying down the overall balance very difficult, certain methods can help in conquering your debt.  If a consumer is struggling to pay multiple credit cards, the snowball method can help in paying one card down at a time. Using this method, the consumer tackles the card with highest balance or highest interest rate. The consumer continues to pay the minimum amount owed every month on the other cards while putting all other money on the first card. Once that first card is paid in full, the consumer then takes the second card with the second highest rate or second highest balance. This process continues until all cards are paid off in full. While this method can take some discipline, it is a method with proven success.

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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.