Tag: Kingcade

Bankruptcy Law, Student Loans, Timothy Kingcade Posts

Trump Administration Making It More Difficult for Defrauded Students to Erase Debt

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The Trump Administration has taken steps to make it harder for student loan borrowers who were defrauded by for-profit colleges or universities to erase their debt. United States Department of Education Secretary, Betsy DeVos, moved to make the process more difficult for students and roll back regulations set by the Obama administration.

The Obama administration took a particularly tough stance on for-profit colleges, creating rules that allowed similar claims against for-profit universities to be processed as a group. The Obama administration also created rules that prevented colleges from requiring students to sign an agreement that required them to arbitrate disputes with the colleges.

DeVos’s statement this week made it clear that student loan borrowers will now have to prove their claims on an individual basis and will be held personally accountable for their student loan debt – even if their decision to take out the loans was based on fraudulent information.

The U.S. Department of Education is seeking comments regarding what standard should be set for students to prove their case. The previous administration had used the “preponderance of the evidence standard” to win a case regarding their obligations. However, the Trump administration is considering going to the higher burden of proof of “clear and convincing evidence.”

The Department is hoping to publish a final rule by November 1, 2018. Any loans originating after July 1, 2019, will be affected by the new rule.

Consumer advocates have argued for a more aggressive stance against for-profit colleges. These advocates worry that this proposed rule will have a chilling effect on borrowers who seek relief from student loan debt. Borrowers would need to show that the college intended to mislead or defraud them. Proving intent on the part of the for-profit college can be nearly impossible. On top of this, a higher burden of proof would make winning their cases that much harder.

The proposed rules may also give borrowers less time to apply for relief. Students have six years from the date they discover a breach of contract to file a claim. The new rule limits that length of time to three years from when the borrower leaves school. Oddly enough, this time period coincides with the time period schools have to report how many students are not making payments on their federal student 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, Timothy Kingcade Posts

Miami bankruptcy attorney Timothy S. Kingcade Obtains Successful Order for Chapter 7 Bankruptcy Client

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Court Finds in Favor of Kingcade Garcia McMaken Client- Plaintiff’s Objections to Defendant’s Bankruptcy Discharge Denied

Bankruptcy Attorney Timothy S. Kingcade, founding partner of Miami-based Kingcade Garcia McMaken successfully obtained an Order for his client in a Chapter 7 case (In re: Mirta M. Ramos Case No. 16-27127-BKC-RBR) determining Objection to Discharge. Florida Bankruptcy Judge, Raymond B. Ray signed an order in our client’s favor on July 24, 2018.

“We are extremely pleased with this win for our client.  The Court found that the amount of litigation demonstrated the plaintiff’s personal animosity towards our client, especially after he went as far as to request our client’s bankruptcy discharge be revoked,” Kingcade said.

The matter came before the court for trial on April 20, 2018, upon the Plaintiff’s (Anderson Triggs) Complaint seeking revocation of the Defendant’s bankruptcy discharge. The Plaintiff and Defendant are the parents of a minor child with autism and have multiple other pending family law cases with the Court. In addition, the Plaintiff filed a lawsuit against our client in the State Court alleging civil conspiracy, defamation (libel and slander), tortious interference with a business relationship, intentional infliction of emotional distress and invasion of privacy.

The Defendant was the sole witness at trial and a first-time bankruptcy filer. The Court found that she provided credible testimony with honest answers and displayed no intention to deceive the Court.  In the end, the Court found in favor of our client and the Plaintiff’s attempts to have her bankruptcy discharge revoked were denied.

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Miami-based Kingcade Garcia McMaken was established by managing partner and bankruptcy attorney, Timothy S. Kingcade in 1996. The firm represents clients throughout the State of Florida in Chapter 7 bankruptcy and foreclosure defense cases. The firm is committed to providing personalized service to each and every client, clearly explaining the options according to the unique circumstances of his or her life. The office environment and the service provided are centered on a culture of superior client care for the financially disenfranchised. All partners and associates at Kingcade Garcia McMaken specialize in consumer bankruptcy and foreclosure and have dedicated their practices to this area of the law. Additionally, all attorneys and staff members at the firm are bilingual speaking Spanish.

For more information visit, https://www.miamibankruptcy.com/.

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

How Debt Can Sabotage Your Retirement Plans

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Getting out of debt can be tough at any age, but for those nearing retirement age the challenge can be particularly daunting.

According to an Experian study published in 2017, Baby Boomers hold on average approximately $188,828 in mortgage debt and over $27,000 in other debt. Consumers who are considered Generation X who are now entering their 50s hold even more debt, with $231,774 in mortgage debt and $30,334 in other debt.

While it is normally agreed that younger individuals are more likely to carry debt because they are just starting their lives and have a longer period to pay off the debt, the survey showed that only 18 percent of households with workers 50 years or older did not have any debt. The most common types of debt include: credit cards, mortgages and car loans.

People who carry debt tend to have less discretionary income to save for the future, especially when it comes to retirement. However, with pensions being eliminated and the uncertainty of Social Security benefits, the need to save for retirement is more important now than ever. It is a given that workers need to contribute towards their 401(k) accounts, which many do. However, more workers are also borrowing from their 401(k) accounts- and paying the price for it.

In fact, approximately one in six workers over the age of 50 have taken a loan from their 401(k) to pay off some other type of debt, an unplanned major expense, medical bills or other financial issue. In the past, emergency savings accounts were meant to help people through these types of financial issues, but currently, for workers who are over 50 years old have only an average of $10,000 in their savings accounts.

The problem with borrowing from a 401(k) is it can be risky for the borrower. Many times, if the person cannot repay the loan from the 401(k) within a set period for any reason, he or she will end up owing the IRS a great deal of money, which can include a 10 percent early withdrawal tax penalty.

Prior to the 2017 tax law, a person who borrowed from his or her 401(k) had 60 days after leaving a job to repay the loan, or a penalty would be assessed. However, for loans taken from a 401(k) after the start of 2018, and the person leaves a job, the borrower can put the money back into the plan, into an IRA or a new 401(k) plan up until October of the following tax year to avoid the penalty.

How are retirement accounts treated in bankruptcy?  Individual retirement accounts like 401(k)’s and IRA’s are protected in bankruptcy, along with social security and pensions worth up to $1.245 million are all exempt from creditors during bankruptcy. This means that retirement income and savings are out of reach and protected under federal law.  That is why you should never pull from retirement accounts to pay off debt like credit cards or medical bills you cannot afford to pay.

Some people think that filing for bankruptcy means they will lose everything.  That is one of the biggest bankruptcy myths out there.  To the contrary, you will likely get to keep a lot of your possessions including homes, cars and other assets.  A vast majority of Chapter 7 cases are “no-asset” cases, which means the debtor is not required to give up any of their possessions.

Click here to read more on this story.

If you have any 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, Debt Relief, Student Loans, Timothy Kingcade Posts

More Millennials Carry Credit Card Debt than Student Loan Debt

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Student loan debt has said to have been the biggest financial burden the Millennial generation will face, but more and more individuals in this generation say they are in fact, struggling with credit card debt. In fact, credit card debt – as opposed to student loan debt – is the most prevalent type of debt among the group.  According to a recent NBC News/GenForward survey, 46 percent of U.S. adults between the ages of 18 and 34 carry credit card debt. Approximately 36 percent of them carry student loan debt. The survey reported that around three out of four Millennials carried some type of debt. More than 75 percent of those surveyed said they carried at least one type of debt, including credit cards, student loans and car loans. Only one in five Millennials reported having a mortgage debt.

One-fourth of these Millennials who carry credit card debt have balances of more than $30,000. One-fourth say that their balances are below $10,000. Around 11 percent of those in this age group surveyed have over $100,000 in debt with 22 percent of them being debt free.

The survey found that Millennials with college degrees were more likely to have credit card debt with 56 percent reported graduating with credit card debt. Forty percent who held credit card debt did not have a college degree.

When it comes to having a personal savings, 62 percent of Millennials owed more in debt than they had in a savings account. Only less than one-fourth had more in their savings account than owed in debt. Approximately one in three Millennials have less than $1,000 in savings. One-fourth of Millennials have no savings at all.

Entering the workforce with such a large amount of debt pushes young individuals to hold off on saving for the future, which leaves many of them unprepared in the event of an emergency. It also puts them at a slower start in preparing for retirement.

When asked if they would have trouble paying on an unexpected financial expense of $1,000 or more, two-thirds of them stated they would have a hard time meeting that obligation. Out of the group surveyed, those who were African-American or Latino would have the hardest time paying these obligations, although the difficulty was not exclusive to just these two groups.

If the Millennials were parents, around 48 percent of them reported that they would have a great deal of trouble in the event a financial crisis; for example, a job loss or medical emergency. Of the Millennials who did not have children, 39 percent of them reported this fact.

Credit card debt and student loan debt have caused a number of Millennials to postpone major life events like starting a family, purchasing a home and saving for retirement.

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 Former Billionaire Known As ‘Catwoman’ Went Bankrupt

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New York City socialite Jocelyn Wildenstein once worth billions of dollars has filed for Chapter 11 bankruptcy protection.  She listed her Citibank account balance as $0 in the filing.  The 77-year-old says she is unemployed and now relies on only social security and the kindness of friends and family to pay for ongoing expenses.

One thing working in her favor is the amount of property she has, which is in the millions.  She listed assets of $16.39 million against $6.38 million in liabilities, and her holdings include an apartment valued at $11.75 million in the Trump World Tower in Manhattan, plus a 2006 Bentley now worth $35,000, according to the bankruptcy filing.

However, her debts are also in the millions and include more than $300,000 owed to various lawyers. And she owes $4.6 million on her apartment, which is currently in foreclosure, according to court papers.

The $2.5 billion divorce settlement she received in 1999 from the late billionaire art dealer Alec Wildenstein has virtually disappeared. But she alleges that her money woes are not a result of overspending, but rather problems with the trust she got in her divorce.

Click here to read more on this story.

If you 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, Student Loans, Timothy Kingcade Posts

New Bankruptcy Rules Proposed for Student Loan Debtors

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According to a recent report from the Consumer Financial Protection Bureau, it is estimated that there are around 44 million individuals with student loan debt. The report showed that around $1.4 trillion is owed by total student loan borrowers. Of this amount, around 11 percent of that debt is past 90 days overdue. These figures show one common theme: student loan debt affects many Americans and not in the good way.

Student loan debt becomes an even bigger problem for those borrowers who are not able to keep up on their payments. It has traditionally been impossible for a borrower to have his or her student loans discharged in bankruptcy, which meant that these individuals were continued to be burdened by immense debt even after bankruptcy was over. It seems counter-intuitive since the purpose of bankruptcy is to get a financial fresh start, which has led to recent proposals to change the way student loans are handled in bankruptcy.

A recent bill, the HIGHER ED Act, H.R. 5549, introduced in April 2018 by Oregon Democratic Congressman Peter DeFazio has proposed significant changes to how student loans are handled in bankruptcy. The legislation would broaden the legal definition of “undue hardship,” which is the standard used by bankruptcy courts to determine if a borrower is eligible for discharge of his or her student loan debt.

The “undue hardship” determination has never been truly defined, and bankruptcy courts have had to decide on what it means on a case-by-case basis, and this inconsistent application has led to inconsistent rulings across the board. Earlier in 2018, the U.S. Department of Education had issued a statement requesting public comments on whether the undue hardship definition needed to be modified. The Department had previously expressed concerns that the undue hardship test has kept borrowers from trying to see relief from their debts through bankruptcy.

In a recent study written by Jason Juliano at the University of Pennsylvania Law School, it was found that around 40 percent of borrowers who included their student loan debts in their initial bankruptcy filings ended up with some or all of their debt obligation discharged. That number does not seem too bad until it is compared with the 0.1 percent of filers who actually attempted to discharge their student loan debts. This number shows that people simply do not even feel it is worth trying to discharge their student loan debts.

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

All of the federal courts of appeals, with the exception of the Boston 1st U.S. Circuit Court of Appeals and St. Louis 8th U.S. Circuit Court of Appeals have adopted what is commonly referred to as the Brunner test in defining undue hardship. The test goes through three factors when making this determination:

  1. If the borrower had to continue to pay back the loan, would he or she be able to maintain a minimal standard of living?
  2. Are the borrower’s financial difficulties expected to continue for the next several years, or are they temporary?
  3. Has the borrower made efforts to keep up with student loan payments before deciding to file for bankruptcy?

Under the Brunner Test, the borrower must be able to show that the debt has made it impossible for him or her to support themselves and their families and that the financial situation is not expected to change without the debt being discharged or lifted.

The Department of Education is taking the comments and data received this year and hopes to re-evaluate this criterion. The Department also hopes to change the weights given to each of the three factors and make the discharges more accessible to student loan borrowers who desperately need relief.

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, Credit, Timothy Kingcade Posts

How to Spot a Debt Collection Scam

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Debt collection scams are an all-too-common occurrence these days as scammers look for ways to take advantage of people already in a bad financial situation. A recent scam has been reported by the Federal Trade Commission (FTC), where scammers have been calling residents regarding fake power bills. These callers are threatening to turn off the person’s electricity if they do not immediately pay them over the phone.

Last year, the FTC received a total of 2.7 million complaints with debt collection scams being the largest category of complaints. Not all scams are the same, and some scammers, like the utility ones, are far from sophisticated in their schemes. However, the FTC is reporting that many collections scams have become more advanced. The individuals contacting the callers are using names of real local businesses or are posing as lawyers. Some of their claims are so believable that the person on the receiving end of the call believes they are legitimate.

It is important to always have your guard up. Ask for the name of the business contacting you and do the research before simply paying the debt. Also, be aware of what methods the company is using to make threats. For example, if the company trying to collect upon a debt is saying that they will only accept payment in the form of a prepaid gift card, that is a red flag that the caller is perpetuating a scam. The same goes for a company threatening to have someone arrested for nonpayment. Other legal avenues are available for a company collecting on a payment, and the first option is not to have that person arrested.

When someone gets a call from a potential scam, after asking the name of the company, it is recommended that the caller get off the phone and call the company back by using the phone number accessible via the consumer’s own records. Inform the company that someone has made contact and is demanding payment. That company will want to know whether its name and identity is being used. The company will also be able to verify whether any actual debt collection is being pursued against the caller.

If the person on the other end of the phone is a legitimate third-party debt collector and is still using harassing techniques, the consumer still has rights. Under the Fair Debt Collection Practices Act (FDCPA) a consumer is protected from debt collectors who are using unfair, abusive or harassing debt collection practices. Many debt collection agencies resort to scare tactics to get individuals to pay on their bills, but these tactics can become illegal if they cross the line from persuasive to abusive.

If an individual is facing debt collection proceedings, bankruptcy may be a viable option for him or her. After a petition for bankruptcy has been filed, an automatic stay goes into effect which puts an immediate stop to any pending collection proceedings which can give the individual relief from ongoing collections attempts and contact from debt collectors.

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, Credit Card Debt, Debt Relief

Tips for Eliminating Credit Card Debt

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Credit card debt is a problem for many people today. While having a credit card is not necessarily a bad thing, if you are unable to pay off the entire balance each month, the interest, fees and finance charges can accumulate quickly.  This can eventually cause your credit card balance to spiral out of control. It helps to know what steps to take to eliminate credit card debt before it becomes too big of a problem.

  1. Use all your resources.

One tip that helps in attacking credit card debt is to maximize all the resources available to you. It can take a lot of time and dedication, but it does get the job done. To be successful with the method of throwing all your resources at your debt, you need to do the following:

  • Rely on cash-only to pay for expenses. Make sure these expenses are essential in nature and not frivolous, causing you to waste more money rather than make progress.
  • Put together a list of all credit card debt, detailing the interest rate for each card and the minimum payment on each card.
  • Use the debt avalanche method to attack the debt. What this entails is the person chooses the card with the highest interest rate, and he or she uses all extra money that he or she has available at paying off that card. After that card is paid off, the money that was used to pay that card goes to the next one, and so on. The idea is the money that goes towards the card snowballs in size, helping to pay each one down quicker than the person would be able to do with just meeting monthly minimum payments.
  • Find extra money to pay towards credit cards by creating a realistic budget and sticking to it.
  1. Consider a Balance-Transfer Credit Card.

If the person has a good credit rating, it is possible that he or she could open a new credit card with a lower interest rate for the sole purpose of transferring the balance from a current card with a higher interest rate. Many cards offer promotions for zero-percent annual percentage rates (APRs) with no balance transfer fees during that limited time period. This idea may seem like a bad one since it encourages the person to rely on a credit card to pay off another credit card. However, it can be a good idea if the person has good credit and is dedicated to paying off the balance on the new card, once the old balance is transferred. It is also important that the card holder take advantage of the introductory period to make sure the interest rate stays low while the amount is paid off. Once the period is over, the interest rate could jump up, thus bringing the cardholder to square one.

  1. Credit Consolidation Loan

Another method that is possible to pay off credit card debt is through a credit card consolidation loan. These loans are also referred to as debt consolidation or personal loans. Many of them are unsecured, meaning the person does not need to have assets or collateral to cover the obligation. The interest rates on these loans are usually lower than what the credit card interest rates would be, which makes it a little easier for the borrower to pay back the loan and make progress rather than pay the minimum payment owed on the credit card. Another benefit is the loan allows the person to only make one monthly payment rather than several different minimum payments on various credit cards. It is possible the borrower will need a cosigner, depending on his or her credit score, to back up the loan.

  1. Debt Management Plan

Another option that is available to individuals struggling to pay off credit card debt is a debt management plan. Debt management plans line the debtor up with a credit counselor who works with that person to create a budget and a plan to pay back the debt. The counselor will also speak with the person’s creditors on behalf of that individual and can often negotiate down the debt amount or terms of repayment. It is important to find a quality company when choosing a debt management company. Do research before jumping into the first choice and ensure that the company is legitimate and not a scam. An average debt management plan can take anywhere from four to five years for a person to successfully clear his or her debt.

  1. File for Bankruptcy

If none of these options work or if the debt is simply too much, bankruptcy may be the best option. Chapter 7 is the fastest form of consumer bankruptcy and forgives most unsecured debts like credit card debt, medical bills and personal loans.  There are certain qualifications a consumer must meet in regards to income, assets and expenses to file for Chapter 7 bankruptcy, which is determined by the bankruptcy means test.

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.usatoday.com/story/money/personalfinance/2018/06/26/credit-card-debt-5-cost-effective-ways-you-can-erase/714014002/

 

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

When Is the Right Time to File for Bankruptcy?

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Making the decision to file for bankruptcy is never an easy one.  For some, it can be difficult to get past some of the myths associated with filing for bankruptcy.  Sometimes by waiting, an individual facing a lot of debt can find himself or herself in an even worse situation. So, when is the right time to file for bankruptcy?

A recent study from the Consumer Bankruptcy Project and an article from the Notre Dame Law Review highlighted that the longer people wait to file bankruptcy, the more they end up struggling- not only financially, but in their personal lives as well.

The following factors are indicators that you should consider filing for bankruptcy, or at least sit down with an experienced bankruptcy attorney to discuss your options in more detail.

  • If your debt amount is more than 40 percent of your income. The higher the debt-to-income ratio a person has, the less likely it is he or she will earn enough money to ever pay back the debt;
  • If you are using debt, such as credit cards or unsecured personal loans, to pay for other debts;
  • If your debts include items that can be liquidated in bankruptcy, such as medical debt, credit cards or personal loans;
  • You are using payday loans to help cover necessities before your next paycheck. This is oftentimes a sign your expenses are exceeding your income;
  • If you are forgoing necessities such as healthcare, prescriptions, or food;
  • If the collection calls have reached a breaking point;
  • If you have been threatened with a lawsuit, are being sued by a creditor or your wages are being garnished.

If someone is on the fence as to whether to file for bankruptcy, he or she should schedule a free consultation with a bankruptcy attorney.

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, Student Loans, Timothy Kingcade Posts

Student Loan Borrowers Seeing Some Relief from Bankruptcy Judges

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Student loan borrowers are beginning to see some relief in bankruptcy court when it comes to discharging student loan debt. At the start of 2018, the Department released a statement that it was reviewing student loan bankruptcy laws with respect to how difficult it has been for borrowers to receive a discharge of their student loan debt in bankruptcy. Following this statement, some bankruptcy court judges have lessened the standards borrowers are held to when deciding on whether the loan obligation should be discharged.

Since the statement was made by the Department and subsequent request for comments on the current policy, no updates have been given as to whether the Department would be making official policy changes. In the meantime, bankruptcy court judges seemed to have taken a cue from the Department and are now making rulings to make loan repayment terms easier on borrowers for the meantime.

A recent Wall Street Journal report found that judges were more becoming more lenient when dealing with individuals saddled with student loans. Current college graduates are now entering the workforce with well over six figures in student loan debt. Unless these graduates land a job making an income that is comparable to this debt, these individuals soon find themselves unable to make student loan payments. Bankruptcy is meant to provide individuals drowning in debt with a way out, but the current policy with respect to student loan debt has dictated that this obligation stays with the debtor even after a bankruptcy discharge of all other debts.

The study looked at 50 current and former bankruptcy court judges, reviewing bankruptcy cases where the filer had student loan debt. The study showed that a number of the judges were very sympathetic to the cause of the individuals in front of them who were not able to pay their current student loan debt obligations. In fact, many of them understood the struggle all too well with student loan debt since they may also carry debt from law school, or they may be influenced by the struggles they see with their law clerks finishing or graduating from law school. It is estimated that the average lawyer holds just under $120,000 in student loan debt.

These judges are required to follow the legal standard that a borrower must pass the “undue hardship test,” which has traditionally been a strict standard. It has also been a standard that has never been clearly defined by bankruptcy law and has been applied inconsistently from court to court.

Congress has never given a clear definition for what undue hardship consists of, but many courts have used the “Brunner” test to determine what this means.

The Brunner test requires that the borrower show that he or she has made a good faith effort in repaying the debt, that the financial circumstance is such that the person cannot have a reasonable standard of living if he or she has to repay the debt, and this financial situation is likely to continue in the future.

Even though the judges’ hands may be tied by the legal standard, they may seek other, more creative solutions to help the borrowers ease their burdens. They may not be able to completely cancel the debt in all situations, but they have tried to help alleviate some of that burden. In some cases, however, some of the more sympathetic judges have completely cancelled the borrower’s past due debt obligation.

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.

Related Resources:

https://studentloans.net/bankruptcy-judges-taking-it-easy-on-some-student-loan-borrowers/

https://lendedu.com/news/some-judges-push-to-ease-bankruptcy-rules-for-student-loan-debt/