Tag: Kingcade

Bankruptcy Law, Credit Card Debt, Debt Relief

Tips for Negotiating with Debt Collectors

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Working with a debt collector is normally not a pleasant experience. Debt collectors are persistent when trying to reach a debtor, and many will stop at nothing until they are successful at getting payment. Any time someone is late on or has missed a payment, that person should expect some type of communication from a collector, whether it be in written form or through phone calls. Many times, it is a combination of both. It helps to know your rights when dealing with a debt collector and know how to work with them on negotiating your debt.

Get Verification of the Amount Owed

Never assume that the information the debt collector is providing is completely accurate. Believe it or not, many scams are out there where debt collectors attempt to collect on debt that belongs to another person or is entirely past the statute of limitations. As soon as the debt collector makes contact, ask them to provide written verification of the amount owed.

Also, verify the credibility of the debt collector. Ask for the person’s name, the name of the company, a business address and a phone number. It pays to do some research into the company to see if they are, in fact, a legitimate debt collector. Also, review the amount they say is owed against your own records to ensure that the amount is accurate. Collection agencies are bound by law to send a validation letter within five days of contacting a debtor, listing the debt amount, the original creditor, and what the debtor should do in the event an error is discovered. It could be possible that a debtor owes on a specific debt but in a smaller amount than the collector is arguing they owe. Always verify before making payment.

Debtor Rights

One big mistake many debtors make is assuming that they have no rights when speaking with a debt collector, which is very far from the truth. Because many times, a debt collector’s actions will border on the edge of harassment or threats, the Fair Debt Collection Practices Act, or FDCPA, was enacted, which prohibits a debt collector from deceiving, threatening or harassing a debtor while collecting on a debt. The FDCPA prohibits any type of communication that threatens the debtor, includes profane language, or makes the debtor feel harassed. The collector can also not lie to the debtor, threaten to arrest or deport him or her, or threaten to take the person to court without any intention of doing so. A debt collector is also prohibited in the times that he or she can contact a debtor. Calls cannot be made before 8 a.m. or after 9 p.m. If a debt collector is violating the FDCPA, inform them of the violation and demand that no more communication be made. The collector can be reported to the Consumer Financial Protection Bureau, as well as the Better Business Bureau and the Florida Attorney General.

Look at the Type of Debt

It also helps to know what type of debt is involved when dealing with a collector. Many times, different options exist for payment plans based on the type of debt, whether it be credit card, medical debt, or something secured with collateral, like a car or home. Medical debt creditors tend to be more willing to work out a payment plan than credit card creditors. Also, if the debt involved is a medical debt, double check to make sure that the debt was processed by insurance first. Student loan service providers may also be more likely to work with a debtor on an income-based repayment plan or even may offer a deferment option to allow the debtor to get back on his or her feet first before continuing payment.

Some collectors will work with a debtor on a lump sum payment that is lower than the amount owed in exchange for releasing the debt. Ask if that is a possibility on the balance, and if it is, see if the collector will settle for a partial repayment over receiving nothing.

Be Aware of the Statute of Limitations

As mentioned previously, debt collectors will also try to get a person to pay on a debt that is past the state’s statute of limitations. It is highly possible that a phone call from a debt collector is on a debt that is past the time frame in which they have a legal right to pursue payment. The statute of limitations for Florida is five years for written contracts and four years for oral contracts or revolving accounts, such as credit cards.

Use the “Bankruptcy” Word

Sometimes it does benefit the debtor to mention that he or she is considering filing for bankruptcy. The collector wants to receive payment, and if the debt is something that is unsecured, such as a credit card or medical debt, it could easily be discharged through bankruptcy. If this happens, the creditor will end up receiving nothing. Tell the collector that bankruptcy is being considered not as a threat necessarily but more as a push to motivate them to negotiate. However, only do this if repayment in any form is an actual possibility. Otherwise you could be making empty threats.

Always Get It in Writing

When dealing with debt collectors, any time someone works out an agreement with the collector, it is imperative that he or she memorialize the agreement in writing. This rule of thumb applies for whatever type of agreement is reached, whether it be a debt repayment plan, a change in payment terms, or a lower interest rate. Request that the agreement be sent via mail, and always review the terms very carefully before signing on the dotted line. Make sure nothing has changed from what was originally discussed. Many times, a debt collector may add some additional language that was not agreed upon, and once the contract is signed, the debtor is bound by that agreement. Always review before signing.

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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.

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

70 Percent of Americans with Credit Card Debt Admit They Cannot Afford to Pay it Off in One Year

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Credit card debt is a major problem for many Americans. Almost half of all Americans currently carry a balance on their credit cards, but the problem is, most of them are not able to pay off the balance. In fact, 70 percent of cardholders say they cannot pay off the balance within one year.

These figures come from a survey released by real estate data company, Clever. They surveyed 1,000 credit card users regarding their credit card use. The study found that 47 percent of all Americans carry a monthly balance on their credit cards. On top of that, 70 percent of those surveyed say that their card balance is more than $1,000.

Additionally, 56 percent of those surveyed said that they have had their credit card debt for at least one year. Of those surveyed, 20 percent of them say they believe it will take them over three years to pay off the debt. Eight percent of them admit that they do not know when they will be able to pay off the debt.

Depending on how high the balance is, the interest rate on the card can make it virtually impossible to ever make progress on the debt. The average credit card APR currently is 17.65 percent. If a cardholder is only making the minimum monthly payment, he or she is likely only paying on the interest for the card.

Credit card debt has hit an all-time high, according to data from the Federal Reserve. As of December 2018, U.S. credit card debt was estimated at $870 billion, which is the highest it has ever been. Credit card balances were also said to have increased by $26 billion from the prior quarter, which is another notable increase.

What seems to be making this problem worse is the fact that Americans rely heavily upon debt to cover everyday expenses. Even something as simple as buying groceries or paying for gas for their cars can add up if charged on a credit card. In fact, the Clever survey reported that 28 percent of them say that they rely on credit cards to pay for their essential living expenses.

It is no secret that credit card usage has gone up in recent years. It is estimated that currently 480 million credit cards are in circulation nationwide. As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.  It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt. We offer additional tips for eliminating credit card debt on our blog.

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

Increase in Bankruptcy Filings Could Indicate an Upcoming Recession

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Bankruptcy attorneys are noticing a trend that could indicate an upcoming recession. The number of bankruptcy filings has long since been used as an economic indicator, and bankruptcy attorneys are reporting their filings have increased.

Bankruptcy filings are still at a much lower rate than they were during the height of the 2007-2008 recession. Many economists are predicting another recession will begin by 2020.

This increase in bankruptcy filings, however, is not necessarily being seen in all 50 states. While more filings have been reported in states, such as Florida and Delaware, other states have not seen the same.

For the most part, anytime a bankruptcy case is filed, or an account goes into default, it is seen as an indicator of the current economic climate, as well as a determining factor as to what is to come.

However, other financial signs can point towards the coming of a recession, including the number of consumers who are delinquent on their mortgages, as well as their car loans.

According to numbers from the Federal Reserve, an estimated seven million American consumers are currently behind by at least three months on their car payments. In comparison, this figure was one million less in 2009, which was the peak of the Great Recession.

The number of retail companies filing for Chapter 11 bankruptcy could also be an indicator of an upcoming economic decline. Recent corporate Chapter 11 bankruptcy filings have included Sears, Toys “R” Us, Sports Authority, CTI Foods, Z Gallerie and the publisher, F+W, just to name a few.

While a number of bankruptcy law firms have reported an increase in filings, they have not jumped the gun on hiring more associates just yet, although it could be a distinct possibility in the future in the event the uptick becomes an upswing in filings. For the most part, bankruptcy filings are relatively recurring, however, some law firms are trying to be cautious in timing out how they handle their workloads.

Other factors that could be behind the increase in bankruptcy filings, include family issues or business disputes between partners.  The increase, economists argue, still points to an economic downturn approaching.

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.

 

Debt Relief, Timothy Kingcade Posts

How to Avoid the Most Common Debt Consolidation Traps

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The debt consolidation industry is filled with pitfalls for consumers. Many of these for-profit companies prey on those struggling with insurmountable debt. Debt consolidation refinances your debt and rolls multiple debts into a single, lower monthly payment. You can use either a personal loan or a credit card to consolidate the debt.

However, this option doesn’t come without risk. What you may not know is that some debt consolidation companies charge high interest rates to go along with the new monthly payment plans they set up for clients. It is important that consumers do their research through the Consumer Financial Protection Bureau (CFPB) to make sure the debt consolidation company is not a scam, as many do exist.

Some of the biggest pitfalls in debt consolidation occur when a consumer falls prey to one of the many scams out there. The Internet is full of scam artists who pretend to be online lenders offering deals that are simply too good to be true to people who are struggling financially. Many of these individuals have been turned down for credit and loans in the past, so they may jump at the chance when someone offers them the opportunity of a reduction in debt.  Debt consolidation is oftentimes a temporary fix to a bigger problem.

Before agreeing to any deal found online, the consumer needs to conduct a thorough background check on the company before going any further. If the company is asking for a large fee upfront or requires the person to make several months of payments before starting, these statements may raise some red flags that it is a scam. The Better Business Bureau is another good resource to see if the company has complaints filed against them.

Another mistake many consumers make is to apply for multiple loans at the same time in hopes that one will be approved. However, what they are not aware of is the fact that every loan application triggers a look into the person’s credit history. Every time a lender pulls someone’s credit history, this causes that person’s credit score to drop.

One helpful tip before making any decisions on a consolidation loan is to know where the consumer’s credit score stands before making any applications. That way the consumer can ask the lender what minimum credit score they require before applying.

Additionally, many consumers make the mistake of assuming that they do not need to keep making payments on their current credit cards while waiting for the debt consolidation process to finalize. Even if the consumer is approved for a balance transfer, he or she will still need to pay at least the minimum payments on the multiple credit cards since balance transfers can take a couple of weeks to process. Check the balance on each card even after the transfer goes through or loan payment is made to ensure that no balance is left on the card. If the card does still show a small balance, be sure to make payment by the due date to avoid a late fee and negative hit to your credit score.

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, Credit, Timothy Kingcade Posts

How Long Do Debt Collections Affect Your Credit Report?

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When you are being pursued by debt collectors, the incessant phone calls can make you feel anxious and stressed.  The number one piece of advice we give when dealing with creditors is to be honest with them.  Never make a promise to pay if you are unable to do so and do not avoid creditors or collection attempts.

A collections action is essentially any type of collection on a debt. Whenever a creditor submits an account to collections, a notification is submitted to the credit reporting agencies. This notification will almost always result in the consumer’s credit score dropping. The more collections that show up on the person’s credit report, the bigger the drop will be. Any type of collections will show up on a credit report, including credit cards, medical bills, loans and mortgages.

Once a collections action is reported, it will stay on a person’s credit report for seven years.  The same time period applies for missed or late payments. To put these figures in comparison, a Chapter 7 bankruptcy case will stay on a person’s credit report for ten years and Chapter 13 bankruptcy for seven years.

Credit reports treat debts all in the same manner, so if the collection is for a secured debt, such as a home or car, it will be treated the same way as credit card debt. However, medical debt is treated somewhat differently than other unsecured debt. New rules regarding medical debt have made it more difficult for it to impact your credit score as quickly. The new rule builds additional time between patients and insurance companies to resolve such matters.  Up until this point, there was no grace period and medical debt could appear on your credit report as soon as it was reported as an unpaid debt. The three credit reporting agencies now have to wait 180 days before putting an unpaid medical bill onto your credit report.

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.

Related Resource:

https://www.myfico.com/credit-education/faq/negative-reasons/how-long-negative-information-remain-on-credit-report

 

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

President Trump Plans to End Student Loan Debt Forgiveness Program

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The White House has released President Trump’s budget proposal for 2020, and many of the cuts take aim at the student loan debt crisis. Here are some of the specific proposals, which could affect borrowers’ ability to pay off their student loan debt.

  • The end to public service loan forgiveness. According to Trump’s proposed budget, the Public Service Loan Forgiveness Program would be eliminated. The effects could adversely impact members of the U.S. Armed Forces, police officers, firefighters, first responders, prosecutors, public defenders, and other public servants.
  • A change to federal student loan repayment. The number of income-driven repayment plans would be reduced to just one. Current plans, such as PAYE and REPAYE, allow borrowers to repay their federal student loans based on income, family size and additional factors, and can result in student loan forgiveness.  The changes would favor undergraduate borrowers who typically earn less than graduate school student loan borrowers. Monthly student loan payments would be capped at 12.5% of income and after 15 years of monthly payments, any remaining student loan debt would be forgiven.  This is five years earlier then the current income-driven repayment options. Graduate student loan borrowers would see the opposite effect – a five year increase to student loan debt repayment before their loans are forgiven.
  • The end to subsidized student loans. Subsidized student loans has traditionally meant that the government pays the interest costs on federal student loans while borrowers are enrolled in school. The rationale behind eliminating these type loans is to save the federal government money by collecting additional interest.  This could result in the cost of a higher education being that much more expensive due to additional interest costs.

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.

 

Bankruptcy Law, Timothy Kingcade Posts

How Do Bankruptcy Courts Handle Income Tax Debt in Chapter 7 Bankruptcy?

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We have all seen or heard the advertisements promising to significantly reduce or even eliminate tax debt. Many of these companies are offering just that – empty promises, while charging clients unethical fees. Of all the types of debts handled in a bankruptcy case, income tax debt tends to be one of the non-dischargeable categories, along with student loan debt and child support obligations.

However, there are certain tax obligations that can be discharged in a Chapter 7 bankruptcy case depending on the following factors:

When You Can Have Your Tax Debt Discharged in Bankruptcy:

  • You must have filed a tax return. This must have occurred at least two years prior to the bankruptcy filing;
  • The taxes must be income taxes. Taxes other than income tax, including payroll taxes and fraud penalties are non-dischargeable in bankruptcy;
  • You must not have committed fraud or willful evasion. If you filed a fraudulent tax return or attempted to evade paying taxes (i.e. – using a false social security number on your tax return) your tax debt cannot be discharged in bankruptcy;
  • The debt must be at least three years old. For the tax debt to be eliminated in bankruptcy, the debt must have been originally due at least three years before filing for bankruptcy;
  • The tax debt must have been assessed by the IRS at least 240 days before you file for bankruptcy.

A Chapter 7 bankruptcy can wipe out your personal obligation to pay the debt and prevent the IRS from garnishing your wages. Whether you should file for bankruptcy may be a matter of timing, depending on the age of the income tax debt.  An experienced bankruptcy attorney who specializes in this area of law can best advise you on the next steps to take.

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.

Related Resources:

https://www.nolo.com/legal-encyclopedia/bankruptcy-tax-debts-eliminating-29550.html

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Changes on the Horizon

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An estimated $1.5 trillion is owed in student loan debt nationwide, which makes it a pressing issue in the current political arena. In fact, student loan debt is expected to be a major issue in the upcoming election given the fact that more than 40 million American consumers carry student loan debt. The following are some potential changes that borrowers may see in the future.

One of these proposed changes has been to radically modify the costs of attending a public university. Currently, the average student graduates from a state public university with somewhere near $35,000 in student loan debt, which stays with the borrower for quite some time following graduation. This balance goes up even more if the college is out-of-state or private. The House Democrats have recently proposed the Aim Higher Act, legislation which would increase the amount of grant-based federal aid and would also offer financial incentives to states to either reduce tuition or eliminate it altogether at state universities. The latter may seem like a pipedream, but some states, such as New York, have recently proposed laws that would offer free tuition at state universities for students who qualified under income guidelines, so long as the student commits to staying and working in New York upon graduation.

These proposals only deal with students who are getting ready to attend college. What about the others who already have student loans and are struggling to pay them? Proposals have been made to create a federal program that allows borrowers to refinance both their federal and private student loans at a lower interest rate. This possibility could make payments more reasonable for borrowers by lowering interest rates on outstanding loans. However, opponents to this idea argue that a refinancing program would only benefit higher-income earners as opposed to those groups who could benefit from them most.

Another potential change to student loans could come in the form of caps on how much interest can accrue on a loan. Borrowers normally end up paying essentially double what they took out originally by the time interest is fully paid. Many state legislators have proposed capping the amount of interest at a certain percentage of the total original principal balance, making the repayment process more feasible.

At some point, many financial experts advocate that all of the programs in the world will do nothing without addressing the total debt owed already. Student loan forgiveness or cancellation could be seen as a way of not only stimulating the economy but also freeing many from the burden of debt. Programs, such as the Public Service Loan Forgiveness program, already exist, but those only apply for graduates working in specific industries. Other programs could potentially appear with the same goal in mind in the future.

Student loan advocates have been arguing for years that more oversight needs to occur for lending. States, including New York and Massachusetts, have bills that are currently pending which involve this issue, and it is highly possible more states will propose similar legislation.

Reform may also come in the bankruptcy court. Traditionally, student loans have been next to impossible to discharge in bankruptcy. The courts apply an “undue hardship” test when determining if a borrower’s loan obligations should be discharged, but no uniform test exists, leaving courts to vary in their interpretation of the law. The fact that these loans are so hard to discharge in bankruptcy is a leading reason why many people decide not to file for bankruptcy and continue struggling financially. If student loans were able to be discharged in bankruptcy, this change could open the doors to financial freedom for countless borrowers struggling with student loan debt.

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.

 

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

Understanding the Benefits and Disadvantages of Utilizing Balance Transfers

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Credit card debt can be difficult to manage, especially if a card carries a particularly high interest rate. If someone is only paying the minimum monthly payment, it is likely he or she is only paying on the interest accrued that month and never making progress on the principal. One possible option to pay down a high credit card balance is to transfer the balance to a credit card with a zero or lower interest rate. However, balance transfers come with their own set of risks, as well as benefits, which should be explored before someone chooses to pursue this option.

A balance transfer occurs when the outstanding credit card balance from one card is transferred to another one. This transfer is normally done because the new card offers a lower interest rate. Many cards even offer promotional periods of zero percent interest. The purpose of transferring the balance is this period with no interest accruing should give the debtor time to pay down or even completely pay off the balance. It is a simple solution to a complicated problem.

Many cardholders choose to utilize balance transfers if they hold several balances on multiple credit cards. They feel like they are juggling the minimum monthly payments on each card without ever truly making progress. By taking all these balances and transferring them into one card, it can be a way to consolidate debt and make payments easier. After the transfer, the debtor will only have one card to pay rather than multiple cards.

Balance transfers come with their own set of disadvantages and risks, however. Many times, the costs grossly outweigh the benefits of the transfer.  Any of these promotional low rates come with a set time limit before the interest spikes back to a rate that may be even higher than the original card. Some of the cards also come with fees and penalties if the balance is not paid before the promotional period expires. If the consumer is not careful, he or she may end up not only with a rate higher than previously held but also zero progress made on the balance.

Some consumers make the mistake of transferring a balance to a new card and making payments while still using the card. If any progress is going to be made on the balance, it helps to not use the card and add to the balance. However, if the person relies on a credit card for daily expenses, it may be wise to use a different card while paying on the card with the balance transfer.

When a consumer applies for a new credit card, the cardholder should expect a hit to his or her credit score, as well. It may not be a significant drop, but it could be if the cardholder already has a poor credit rating. If the balance is not paid off at the end of the promotional period, the cardholder could end up with a card with a high balance and a bad credit score, thus negating the whole point of the balance transfer. It is for this reason the consumer should be sure that he or she can handle making large payments on the balance after the transfer is made. Do not apply for a balance transfer if you do not believe you are up for the challenge of paying down the debt.

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.

 

Credit Card Debt, Debt Relief

National Credit Card Debt Hits Record High at $870 Billion

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Credit card debt has hit an all-time high, according to data from the Federal Reserve. As of December 2018, U.S. credit card debt was estimated at $870 billion, which is the highest it has ever been. Credit card balances were also said to have increased by $26 billion from the prior quarter, which is another notable increase.

It is no secret that credit card usage has gone up in recent years. It is estimated that currently 480 million credit cards are in circulation nationwide. The increase reported as of December 2018 is to be expected to an extent, given the fact that credit card usage does go up during the holidays. However, it is still significant that this marks the first time that credit card balances have reached the levels they were at during the height of the 2008 recession.

When it comes to national consumer debt, credit cards come in fourth, behind mortgages, student loan debt and car loans. However, when compared to these other categories of debt, credit card usage has increased significantly more.

The number of credit card delinquencies has also increased. At the end of 2018, 37 million credit card accounts were more than 90 days delinquent. These numbers are up two million from the end of 2017. It was reported by the Federal Reserve that these 37 million credit card accounts add up to over $68 billion of debt that is more than 90-days past due.

Americans over the age of 60 hold a significant portion of this credit card debt. This group accounts for approximately 30 percent of the total credit card debt reported. It is a problem that is becoming more widespread, especially in the Miami area, as more of these seniors are struggling to keep up with daily expenses while living on a fixed income.

As bankruptcy attorneys, we see credit card debt as one of the most common problems facing those with serious financial challenges.  It is not surprising with the high interest rates, unreasonable fees, harassing debt collection calls, penalties and never-ending minimum payments that do not even make a dent in your actual debt. We offer additional tips for eliminating credit card debt on our blog.

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.

Related Resources:

https://www.bloomberg.com/news/articles/2019-03-05/u-s-credit-card-debt-closed-2018-at-a-record-870-billion