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Avoid these Student Loan Repayment Mistakes

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Repaying student loan debt can be a daunting process. It can seem like the end is never in sight.  Student loan borrowers and those who co-signed these loans are not alone in the struggle.  The amount of student loan debt has increased by $110 billion in the last 16 months to a total of $1.41 trillion nationwide. With the higher balances’ students are graduating with every year, that feeling of discouragement is understandable. Here are some of the biggest student loan repayment mistakes to avoid.

Know how much you owe.

It is important that you know what this amount is so that you can plan repayment accordingly. You should know what the interest rate is, as well as how much the monthly payment will be so that you can prepare a budget to keep up with payments. It is also equally as important to keep an eye on that balance as you pay it off.

Structure your repayment plan upon graduation, if not before.

Once you know how much you owe, the next step is to develop a strategy to repay the loans. Financial experts even recommend students work on a repayment strategy while they are still in school. It can be tempting to avoid the inevitable, especially with the grace period most student borrowers get after they graduate. However, the best plan of action is to get ready for the payment plan and make sure your budget accounts for these monthly payments. This way when the borrower begins payments upon the expiration of the grace period, he or she is ready.

Know all your repayment options.

It is also important to know what repayment options are available. One mistake many borrowers make is to not properly research their options for paying back their loans. If you have federal student loans, several different repayment plans may be available for you, and you can pick which plan works best for your life situation.

Change the due date to accommodate YOU.

Many borrowers are unaware of the fact that they can adjust a payment due date if it does not work with their income flow. For instance, if you only get paid once a month at the end of every month, it may be wise to change the payment date to mid-month to allow for income to come in to make the payment on time.

Keep all balance and payment information up to date.

One common mistake that many borrowers also make is to not keep their contact information updated with the lender. This information includes your email address, telephone number and mailing address. Most lenders send bills electronically, but even if the lender sends the bill in paper form to the borrower’s home, it is up to the borrower to make sure the lender has his or her current information. Not receiving the bill is not a valid excuse for missing a payment, as it is the borrower’s responsibility to update his or her information with the lender if anything changes.

Do not be fooled by student loan forbearance.

Another mistake many borrowers make is utilizing the forbearance option too frequently during repayment. It is oftentimes something student loan lenders push, as it can add thousands of dollars to the loan balance, due to the interest continuing to accrue. Forbearance allows the borrower to temporarily suspend their payments during times of financial difficulty. While the option can be helpful if the borrower loses his or her job, it is only meant to be a short-term solution and should only be used if absolutely necessary.

Beware of student loan debt relief scams.

Unfortunately, many borrowers fall prey to scams that are out there, preying on individuals who are looking for the quick fix to help them with their student loan debt. These fraudulent offers often come in the form of an unsolicited phone call, email or letter, where a company tries to offer student loan forgiveness or a way to reduce the borrower’s total debt. Do your research and do not take an offer at face value. These companies are not out to help you. If something sounds too good to be true, it likely is.

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, Debt Relief, Timothy Kingcade Posts

IRS Tax Lien? Chapter 13 Bankruptcy Can Help

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If you are facing an IRS tax lien, you may wonder what your options are to discharge the debt.  For many individuals, the most common method to get rid of a tax debt is through a Chapter 13 bankruptcy. Chapter 13 bankruptcy offers unique debt solutions not available in a Chapter 7 bankruptcy.  Through a Chapter 13 bankruptcy, clients are required to restructure their debt and create a repayment plan that is better designed to fit their ability to pay. The money will go towards the debts that matter the most, like your mortgage, car loan, support obligations, taxes, etc.  The remaining debts, such as your credit cards, medical bills and utility bills will only get a fraction of what is owed.

Chapter 13 bankruptcy allows you to:

  • keep all property;
  • avoid foreclosure and vehicle repossession;
  • pay the fair market value for a car, and;
  • stop lawsuits, wage garnishments, and bank levies.

Tax debt that is secured by an IRS tax lien, the personal liability on that debt may also be discharged, although the lien will be treated differently. It depends largely on the timing of the bankruptcy case, as well as the classification of the debt when it comes to whether the tax debt can be discharged.

What Is the Status of the Tax Debt?

The first question to ask yourself is what the timing or status of the tax debt is? Your IRS tax account transcripts will be able to provide this information, including the date of the filing of the tax return, the date the tax was assessed and whether any events have occurred that could have stopped time periods for the debt, as well as whether any liens have been recorded against the property the taxpayer owns. If the IRS has secured a lien on the taxpayer’s land, county land records should be able to pull this information up, as well.

IRS Lien as a Secured Debt

If the IRS has properly secured a tax lien on your property, this means the debt is a secured one for purposes of bankruptcy. The taxpayer’s personal tax debt may be able to be discharged, but the lien will remain on the property. What this means is if you are not able to pay off the entire amount owed on the lien, with interest, during the Chapter 13 bankruptcy case or repayment plan, the IRS retains the right to seize the property once bankruptcy is finalized to receive payment on the debt.

Can Tax Debt Be Unsecured?

Tax debt can also be unsecured and discharged, but for this to happen, certain requirements must be met, including:

  • The due date for the most recent tax return must be more than three years before the filing for bankruptcy;
  • The tax return must have been filed at least two years prior to the bankruptcy filing;
  • The tax claim must have been assessed at least 240 days before filing for bankruptcy;
  • The tax return must also be from a non-fraudulent filing; and
  • The taxpayer must not have engaged to willfully evade or defeat the tax debt.

If all these requirements are met and the debt is not otherwise secured by a lien, it will be classified as an unsecured debt. This classification is ideal for debtors who are looking to discharge the debt completely.

During a repayment plan through Chapter 13, these unsecured debts are normally paid at a pro rata distribution, which means they are paid after secured and priority debts are paid first. Anything that is not paid at the end of the repayment period is then discharged.

List All Tax Debts

When filing for bankruptcy, it is important you list all your tax debts, including tax authorities to whom you owe the debt. That authority has 180 days to then file a proof of claim where they indicate what the tax debt is it that you owe. If the taxing authority does not file an official proof of claim, the claim may be discharged without any payment. This situation is rare, but it occasionally does occur.

Incurring Debts Post-Filing

Life does not stop simply because you have filed for bankruptcy. If you do incur additional tax debt after filing for Chapter 13 bankruptcy, that debt may then be added to your case as a post-petition debt. That debt will then be lumped in and paid back as part of your Chapter 13 repayment plan.

Not all bankruptcies are the same. It is important to understand the difference between Chapter 7 and Chapter 13 bankruptcy when considering your options. It is equally important to have a Miami bankruptcy lawyer on your side that will take the time to help you find the best plan to work for you.

If you are facing an IRS tax lien, we can help. 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.irs.gov/businesses/small-businesses-self-employed/declaring-bankruptcy

https://www.alllaw.com/articles/nolo/bankruptcy/tax-debts-chapter-13-bankruptcy.html

https://www.thebankruptcysite.org/resources/bankruptcy/chapter-13/tax-debts-chapter-13-bankruptcy

 

 

 

Student Loans, Timothy Kingcade Posts

40% of Borrowers Could Default on their Student Loans

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If you are struggling with student loan debt, you are not alone. Today, 70 percent of college students graduate with a significant amount of debt. More than 44 million Americans collectively hold nearly $1.5 trillion in student debt. That means that roughly one in four American adults are paying off student loans.

As the amount of debt has increased, so have the amount of defaults. In fact, it is estimated that around 40 percent of student loan borrowers will default on their student loan obligations by the year 2023. Student loans now make up the second largest consumer debt next to mortgage debt.

It is estimated that college graduates of the Class of 2017 walked away with nearly $40,000 in student loan debt. This figure is $3,000 more than the previous class in 2016.

Thirty-two percent of borrowers who held a balance of $5,000 or less in student loan debt defaulted at least once within four years as compared to 15 percent of borrowers defaulting who owed $35,000 in student loan debt.

The thought of paying back student loan debt can be daunting. How can you stay on top of your student loan debt to avoid falling into default? One tip is to utilize student loan consolidation, which helps you manage your student loan debt into one Direct Consolidation Loan. Another recommendation if your interest rates on your student loans are particularly high is to look into refinancing to adjust the rate to a lower amount.

When it comes to bankruptcy and student loan debt, there are some misconceptions. One being, that student loans are never dischargeable in bankruptcy. In fact, there are ways to file for bankruptcy with student loan debt.

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. 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.

 

Debt Relief, Timothy Kingcade Posts

‘Overbiffing’ is the Latest Trend in Illegal Debt Collection

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A new trend is occurring involving unfair debt collection practices known as “overbiffing.” This practice occurs when a creditor or debt collector overstates a debtor’s balance in hopes of getting more money than what is owed.

A recent case in New York highlighted the problem. In the case, a New York debt collector overstated account balances for thousands of consumers in an effort to defraud them into paying more than they actually owe. The debt collector also used abusive and illegal tactics to get consumers to pay. The Fair Debt Collect Collections Practices Act (FDCPA) specifically prohibits this type of behavior, as was addressed by the court.

The “overbiffing” term comes from the act that the debt collector is trying to accomplish. The scam these companies are trying to accomplish is to tell the individual that what they are paying, which is an overstatement of what they owe, will pay the person’s “balance in full,” which is shortened to “BIF.” Of course, these “balance in full” payments are well over what that person owes.

One such debt collector is based in Buffalo, New York, named Robert Heidenreich, also known by the name “Bobby Rich.” The debt collectors working for Heidenreich have been accused of overstating balances that they say consumers owe on accounts. Regulators in this case used forms to compare the actual balances these consumers owe to the amounts that these scammers are saying that they owe. What these regulators found was that the difference between these two amounts was in the hundreds or even thousands of dollars.

Heidenreich’s employees were also accused of misleading the consumers about who was calling. Many of the employees knowingly violated the FDCPA by posing as attorneys or even law enforcement, as a scare tactic. Threatening legal action when one does not have the right to do so or impersonating an attorney or law enforcement is a blatant violation of the FDCPA. These employees would tell the consumer that they had committed a crime and were about to either be arrested or served with notice of a legal proceeding regarding the debt. The consumer would then be directed to another debt collector pretending to be an attorney, who would take payment over the phone on the alleged amount owed. If the consumer questioned the person on the phone, the debt collector would become aggressive and even abusive in response, which is another violation of the FDCPA.

If you have been contacted by a debt collector who is committing one or more of these actions, it is important you know your rights. Per the FDCPA, any third-party debt collector is not allowed to use threatening or abusive language when communicating with the debtor regarding a debt. The FDCPA also prohibits third-party debt collectors from misrepresenting who they are, as well as the consequences of not paying the debt. If a third-party debt collector has done any of these actions, you may have a valid claim for damages under an FDCPA violation.

As a consumer, you also have the right to request validation of the debt from the debt collector. This validation must be produced in writing and must include how much is owed and to whom the debt is owed. You should then take that information and check to make sure that the amount given is, in fact, correct. This information can be validated, for example, with information on the consumer’s credit report.

If a debt collector has violated any provision of the FDCPA, it is important you report the debt collector to the state attorney general’s consumer affairs division, as well as the FTC.

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, Credit Card Debt

More than Thirty Percent of Homeowners Paying for Home Renovations with Credit

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Despite the fact that American homeowners hold more equity in their homes than ever before, a growing number are using credit cards for major renovations. This trend has financial experts scratching their heads as to why these homeowners are choosing to use credit cards in lieu of less risky options to pay for major home expenses.

According to a recent study done by home improvement website Houzz and Synchrony Financial, of the home renovations completed in 2017, over 36 percent of them were funded by credit cards. This figure has jumped over 25 percent from 2011 where 29.5 percent of home renovations were paid with a credit card.  It appears as if this number is steadily increasing over the years.

In the survey, 85 percent of those who responded said that they utilized cash or savings to pay for their renovations, which is the ideal situation. However, 33 percent of them said they used credit cards to pay for the renovations, while only 15 percent of them used a home equity loan.

This new trend seems to be led by the millennial generation. These younger homeowners prefer to use credit in lieu of a long-term loan to pay for major expenses. Of the homeowners surveyed between the ages of 25 and 34 years old, 41 percent of them paid for home renovations with credit cards. Of the older demographic, specifically homeowners over the age of 55 years old, only 30 percent of them used credit cards for major renovations.

This younger generation of homeowners is more likely to pay off these expenses over the course of time. According to the survey, over 60 percent of those individuals intend to pay those credit card balances over the course of time. In fact, many of these homeowners make these large expenses by using a promotional card, many of which offer low or no interest for a specific period. If the homeowner can pay off the expenses within that period, they will not have to pay on any interest. The problem arises when the homeowner is not able to pay the balance before the promotional period expires. If that happens, he or she will be paying a large interest rate on the remaining balance. This possibility of incurring interest is additionally why many older homeowners prefer to pay for renovations with a home equity loan.

Another reason these younger homeowners are using a credit card for payment is the quick access they have to the funds. Applying for and being approved for a home equity loan can be a much longer process, and if the homeowner needs the money quickly, a credit card may seem like the better option. However, the consequences of using a credit must be weighed against the benefits before determining which option is best for you.

Please click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

 

 

Bankruptcy Law, Debt Relief

Bouncing Back from Bankruptcy Can Happen Sooner than you Think

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There are many misconceptions surrounding the amount of time it takes to rebuild credit after bankruptcy.  But a new study reveals that individuals who file for bankruptcy can improve their credit score sooner than they think.

According to a recent study by LendingTree, more than 40 percent of consumers end up having a credit score of 640 one year after filing for bankruptcy. Approximately 65 percent of filers see the same score, at least, three years after the bankruptcy case is over.

What the study showed was that it is possible to bounce back from a bankruptcy, and relatively quickly. With proper planning and financial insight, it is possible for a bankruptcy filer to get back on his or her feet financially.

It helps to first evaluate how you got to the situation where bankruptcy was needed. Were you spending beyond your means and relying too heavily on credit? Perhaps a medical crisis brought on the debt or an unfortunate event like the loss of a job or a divorce caused the hardship.

The next step is to work on rebuilding your credit. One of the best ways to get credit back to where it once was is to pay all bills on time every month. Missing a payment is such an easy way to hurt your credit score. Put together a budget, see what your monthly expenses are, and stick to that budget. Make sure you have enough income every month to meet your monthly obligations, and set up automatic payments, if needed, to be sure no bills are missed.

In addition, the use of a secured credit card can also help rebuild credit. While these cards do have higher fees and lower spending limits, they can be excellent ways to build up credit and show that you can continue making payments on a card on a regular and consistent basis.

Once you use a secured credit card for a period of time, try to find a card with a lower interest rate. However, the key is to not overspend with this card. Use the card for only necessary expenses and make sure that the balance is paid off in full on a monthly basis.

Experts also recommend that you set up an emergency fund or savings account in the event you run into a financial crisis again in the future. Try putting away a small amount of money regularly on a monthly basis, if not setting up an automatic transfer into savings if possible. By having this emergency fund there, you are protecting yourself from having to rely on credit again in the event a major crisis occurs.

Following these tips and recommendations can help you rebuild your credit after bankruptcy. It may seem like the impossible dream, but with hard work and determination, it is possible.

See what some of our clients have to say about their credit score after filing for bankruptcy…

My credit score said on all three reports 775, I couldn’t believe that I had such a great score before 10 years. Tim for me was the best move I have made for my situation. I have no regrets, I am glad the past is the past. – Bill T.

Hi Tim- I just wanted to send a quick note and thank you and your team for handling my bankruptcy case.  It is only a month or two after discharge, and my credit scores are already in the upper 600’s.  I’ve sent a screenshot if you would like to use this to show prospective clients. – C.S.

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 Card Debt, Debt Relief, Timothy Kingcade Posts

Tips to Protect Yourself from Zombie Debt Collectors

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Debt collectors can be persistent when it comes to trying to collect on a past-due account. While many of these efforts may be completely valid, debt collectors will even try to collect on debt that is not legally collectible, otherwise known as “zombie debt.”

What exactly is zombie debt? A zombie debt is a past-due account that is outside of the statute of limitations, meaning it is not legally collectible. Every state has a statute of limitations which sets how long a creditor has to sue on an unpaid debt.

Florida’s statute of limitations varies depending on the type of debt. For example, written contracts such as personal loans, the statute of limitations is five years. So once this type of debt is more than five years past due, the lender can no longer sue to collect money owed. For other debts, the statute of limitations is shorter. Oral contracts and revolving accounts such as credit cards have a statute of limitations of four years.

However, just because the timeline has passed does not mean the creditor will stop trying to collect on the old debt. Many debtors will mistakenly pay on a debt that is past the statute of limitations because they are not aware of this legal protection.

It is extremely important that you not pay on a debt that is past the date for the statute of limitations.  A single payment can reactivate the debt and reset the clock on the statute of limitations. This tactic is otherwise known as re-aging an old debt, and it is one that is commonly used by debt collectors to trick debtors into paying on a debt that they would not be legally obligated to pay.

If a debt collector contacts you on a debt, the first step to take is to request written verification on the debt. The debt collector must provide you with information to show how old the debt is and how much is owed. If the debt is past your state’s statute of limitations, you will not be legally required to pay back the debt.

It also helps to know your rights when it comes to communications from debt collectors. Under the Fair Debt Collection Practices Act (FDCPA), third-party debt collectors are prohibited from engaging in collection tactics that are harassing, threatening or illegal. If the collector is contacting you before the hours of 8:00 a.m. or after 9:00 p.m., they are in violation of the FDCPA.

The same rule applies if they contact you at work if you have informed them that they are not to contact you there. They are prohibited from using threatening or abusive language when trying to collect on the debt, as well. They also cannot misrepresent who they are by saying that they are an attorney or litigation firm when contacting you. They are also not allowed to threaten a lawsuit if they know they have no grounds to file one, especially if the statute of limitations has expired.

If you feel you have been a victim of zombie debt collection, first request that the debt collector provide you written documentation verifying the debt and check for any discrepancies. It is important that you respond to all court summonses to ensure that a debt collector does not win a court case by default.

If you have received notice of a lawsuit on a debt that has expired per the statute of limitations, do not ignore the suit and simply assume the court will recognize on its own that the debt is old. Courts give you a limited time to file an answer to a legal complaint, and by not responding, you could end up with a default judgment that is not in your favor. If you receive a notice of a claim for a debt that has expired, it is important that you contact an attorney who can file an answer on your behalf stating that the debt is past the statute of limitations and further protect your legal rights.

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, Credit Card Debt, Debt Relief, Timothy Kingcade Posts

How to Lower Credit Card Debt and Improve your Credit Score

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Having a good credit score can make many things in life easier, especially when it comes to purchasing a new home or vehicle. However, it can be easy to get off track. Credit card debt with a high interest rate is one way to lower your credit score, but for many Americans, that is exactly what has happened to their financial situations.

The problem of credit card debt may be more widespread than we think. According to Experian, the average American consumer owes more than $6,000 in credit card debt. This figure has gone up three percent in just one year. This amount of debt can be very difficult to get out of, even for someone earning a decent annual income.

Retail credit cards can be particularly tempting, especially when offered a great deal at the cash register, but these cards come with high interest rates and can be easy to rack up debt. Unless you are able to pay the retail card off in full after making the purchase, it is not recommended that you sign up for these department store cards.

Many consumers believe that not having a credit card is best when it comes to staying out of debt, but it is important to at least establish a credit score. Having one card, using it for minimal expenses and making payments on the balance in full on a regular basis every month can be an excellent way to establish that strong credit score. In fact, by having a high credit score, you have a better chance of getting a card with a low interest rate when opening the account.

What happens if you do have credit card debt that has gotten out of hand?  If possible, it is best to make a larger payment than the minimum payment amount. If any extra money is available in the person’s budget, it is best to put that extra money towards paying the debt. In addition, it can help to focus efforts on one card at a time, usually the card with the highest interest rate first. Once that card is paid, focus all the money that was going towards the first card on the next one and so on until the accounts are paid in full.

If you are not able to keep up on payments, contact the credit card company to negotiate a lower payment. If you fall behind on payments, it may be wise to contact a credit counselor to discuss repayment plans or negotiate the debt amount. If you are not able to make either of these options work, it may be time to talk to a bankruptcy attorney to discuss the options available to help eliminate 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.

Bankruptcy Law

Financial Options for Students to Discharge Private Student Loans in Bankruptcy

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Many students take out a combination of federal and private student loans to cover the costs of a higher education. Discharging federal student loan debt has been difficult for borrowers struggling to make payments- but there are ways to file for bankruptcy with student loan debt. Private student loans are not handled in the same manner as federal loans when it comes to bankruptcy.

Student borrowers who were not able to repay their loans or did not qualify for public service loan forgiveness or flexible student loan repayment plans, often considered bankruptcy as a back-up plan. After July 1, 2019, this concern will be even more pressing as Congress is hoping to end certain repayment programs, including public service loan forgiveness. For these students, the good news is they will be able to have their private student loans forgiven in bankruptcy, unlike their federal loans.

If the loan is a federal loan, it will only be discharged in the event the borrower is able to claim undue hardship, meaning he or she will need to file a petition for determination of undue hardship with the bankruptcy court. This hurdle can be a tough one for the borrower to clear and often results in the borrower not being able to clear the debt through discharge.

Additionally, if you have private loans that were for a school that is not accredited, the loans can likely be discharged in a bankruptcy. For these loans to be protected and not discharged, the school must be considered an “eligible educational institution” or the private loans must be for a “qualified higher education expense.” To qualify as a private student loan, an accredited school must have also offered Title IV federal loans.

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, Debt Relief, Student Loans, Timothy Kingcade Posts

What Happens to Student Loan Debt When You Die?

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One of the more common questions asked by student loan borrowers has to do with what happens to the obligation if the borrower dies before the loan is paid in full. Does the loan die with that person, or will their loved ones be held responsible for paying it off after the borrower’s death?

According to the U.S. Department of Education, if the borrower of a federal student loan dies, the loan is automatically canceled, and the debt is discharged by the government. Unfortunately, private student loans do not offer the same liability protections. Whether or not your private student loans will be discharged when you die depends upon your student loan contract. It is important to check the terms regarding death and disability discharge in your student loan contract.

Some private loans, including Sallie Mae’s Smart Option Student Loan or New York HESC’s NYHELPs loans, do offer death and disability forgiveness in the event the borrower dies or becomes permanently disabled.  However, not all lenders are so generous.

If the student loan borrower is married, many believe that the spouse of the deceased remains liable for the debt. With traditional student loans, if the spouse is not listed as a joint account holder or a co-signer, the spouse is not legally liable for the debt. If the spouse did co-sign for the loan, he or she may still be liable for the student loan just as he or she would with any other co-signor obligation.

If the borrower lives in a community property state with his or her spouse, and the borrower dies, the spouse will be considered liable for the debt, regardless of whether the spouse’s name was ever on the original student loan unless the state has exceptions in its own laws. The states that are community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

The state of Alaska is unique in that married couples can choose to opt into a community property situation, but it is not required. For the other states that are not community property states, so long as the debt was never co-signed or jointly in the name of the deceased borrower, the surviving spouse will not be held responsible for the debt.

One important issue that should be addressed involves the tax implications of the student loan debt of the deceased being forgiven. Even if a student loan is cancelled or discharged due to a death or disability, the deceased’s estate may owe taxes on the amount that is forgiven before the estate can be closed. Therefore, while the surviving spouse or loved ones of the deceased may be in the clear when it comes to the actual debt itself, they may still owe something when it comes to taxes on the amount that was forgiven.

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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.