Tag: Miami bankruptcy attorney

Bankruptcy Law

Impounded Cars Cannot Be Held After Drivers File for Bankruptcy

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Drivers in Chicago who are without their vehicles may be able to get their cars back from city impound lots after filing for bankruptcy, according to a new federal appeals court ruling. The 7th U.S. Circuit Court of Appeals ruled this week that the city’s policy of keeping impounded vehicles belonging to bankruptcy filers despite the fact that an automatic stay has been issued by the bankruptcy court is against federal bankruptcy law.

More specifically, the court argued that this policy essentially discourages drivers from filing for bankruptcy and violates the most basic of protections offered by a bankruptcy filing. It is the court’s belief that the city is doing this to generate revenue rather than help protect their constituents.

Eugene Wedoff, a retired bankruptcy judge who represented the debtors, argued that a Chapter 13 bankruptcy case was meant to allow the filer to get back his or her life by putting property in the filer’s hands. By keeping these impounded vehicles away from their owners, they argue the city is violating their rights.

Bankruptcy Law

How Are Assets & Financial Accounts Protected in Bankruptcy?

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When filing for bankruptcy, a common concern individuals have is how bankruptcy will affect their assets. If you are filing for Chapter 7 bankruptcy in Florida, you can use Florida bankruptcy exemptions to protect your property.  In addition, residents are provided unlimited exemptions for homestead, annuities, and the cash surrender value of a life insurance policy.

Florida has one of the most generous homestead exemptions in the country. To use these exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.

Many people are misled to believe that bankruptcy can only make problems worse by causing them to lose their home, vehicle or their ability to ever take out credit, again. This could not be further from the truth.

In fact, those filing for Chapter 7 or Chapter 13 can keep almost everything.  Depending on your specific case, Florida bankruptcy laws allow you to keep the following:

  • Homes
  • Cars
  • Retirement accounts
  • Pensions
  • Wages
  • Personal property
  • Savings
  • Veteran’s or Worker’s Comp. Benefits

Type of Bankruptcy Filed

One deciding factor lies in what type of bankruptcy is being filed. Under a Chapter 7 bankruptcy case, the filer turns over assets that are not otherwise protected under Florida’s bankruptcy exemptions to the court where they are liquidated and used to pay off that person’s creditors. Depending on what falls under Florida bankruptcy exemptions, if the filer has a great deal of assets, this bankruptcy may not be ideal. With a Chapter 13 bankruptcy, the filer’s assets are not liquidated. Instead, an affordable repayment plan is prepared by the court allowing the consumer to pay down his or her debts over three to five years.

Bank Accounts

In a Chapter 7 bankruptcy case, the average filer’s bank accounts are not affected. The exceptions to this, include:

  • When the filer’s bank or credit union account balances exceed the allowed exemption amount;
  • When the filer owes money to the bank or credit union where the funds are deposited;
  • When specific institutions implement policies to freeze the bank accounts.

The protections of the bankruptcy automatic stay, which go into effect immediately upon filing for bankruptcy halt any collection activity, garnishment, and lawsuits against you.

401(k) Accounts

If the filer has money in a 401(k) account through his or her employer, this money is considered safe for the most part. Under Florida bankruptcy law, a filer’s retirement accounts are protected so long as the 401(k) plan is qualified under the Employee Retirement Income Security Act (ERISA). Under 11 U.S.C. Section 522; Fla. Stat. Ann. § 222.21, ERISA qualified retirement plans are fully exempt, including 401(k)’s, 403(b)’s, profit sharing and money purchase plans. However, make sure the account is ERISA protected before making any assumptions.

Traditional or Roth IRA Plans

If the filer has an IRA, including a Roth IRA, this type of plan is treated differently than a 401(k) that is ERISA protected, meaning these accounts are more vulnerable in a Chapter 7 bankruptcy case. Further, any funds that are withdrawn from a retirement account are not considered protected in a Chapter 7 bankruptcy case and are considered fair game for creditors.

Other Retirement or Pension Benefits

Other financial accounts are protected under Florida bankruptcy law, including public employee retirement benefits, municipal police pensions, and firefighter pensions. Teacher retirement pensions, as well as state and county retirement benefits, are similarly protected under Florida bankruptcy exemptions.

Annuity Income

If the filer receives money through an annuity, the rules are a little different. If the annuity was funded through an ERISA-protected IRA or other qualifying account, the filer should be able to exempt up to $1,362,800 of its value, up until 2022 when it is subject to change. If the annuity is also tied to a condition of illness, disability or length of service, the money from the annuity may also be exempt. Because annuities tend to be a little more complicated, it is recommended you consult with a bankruptcy attorney regarding protecting annuity funds.

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

 

Bankruptcy Law, Credit, Debt Relief

How a Bankruptcy Affects Co-Signers

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To obtain financing or approval for a loan, many consumers will resort to asking a loved one or family member to co-sign the loan for them. If the individual is not able to continue paying on the loan and defaults, the lender will be able to seek payment on the debt from the co-signer. However, what happens when the borrower who took out the loan files for bankruptcy? Does the co-signer receive relief from the obligation, as well?

What is a Co-signer?

A co-signer or guarantor is a person who takes on a financial obligation along with a borrower who often either has poor credit or limited credit. Deciding to sign a loan as a cosigner is more than just being a reference, a co-signer or guarantor is responsible for paying back the debt if the borrower is unable to do so.

A lender may see the borrower as a lending risk and will require him or her to find someone with a more solid financial history to co-sign the obligation. A co-signer may be needed for a personal loan, a student loan, an application to rent an apartment or other space, or a lease on a car, equipment or furniture. The responsibilities that accompany co-signing a loan are more than being a second signature on a lending application. By co-signing, that person is essentially taking on full responsibility for the loan in the event the original borrower defaults.

While a bankruptcy discharge may relieve the borrower, who is defaulting on the obligation, from responsibility or liability on the debt, the discharge does not always lift this burden from the co-signer on the debt. It often depends on the type of bankruptcy being filed as to what type of protections co-signers have regarding their debts.

Chapter 7 Bankruptcy

At the time of filing for Chapter 7 bankruptcy, the filer will receive protection from collection on his or her debts through the automatic stay. However, protection from the automatic stay does not also extend to any co-signers on debts. This lack of protection leaves the creditors completely free to pursue collection on the debt from the co-signers on the loan.  If the borrower wishes to maintain a good relationship with the co-signer, it may be wise for him or her to take certain steps to protect the co-signer. The person may choose to reaffirm the debt, especially if it involves a secured debt, such as a home loan, car loan or other secured credit account. By reaffirming the debt, the borrower is giving up the benefit of bankruptcy discharge on that specific debt. Many creditors will accept payment plans or partial payment on the debts in lieu of receiving nothing. If they discover the co-signer has substantial assets, they may be less likely to accept anything other than full payment, however, so this may not be a possibility.

Chapter 13 Bankruptcy

While a Chapter 7 bankruptcy case does not offer much protection for co-signers, a Chapter 13 bankruptcy case offers a little more. A Chapter 13 bankruptcy involves a three-to-five-year long repayment plan, which gives the borrower more time to pay off the co-signed debt. When a Chapter 13 case is filed, the automatic stay issued will protect both the borrower and co-signer from collection on any consumer debts, which is called the Chapter 13 co-debtor stay. The stay will be in effect unless the court lifts it upon request of a creditor or dismissal of the case. The co-debtor stay may also be lifted if the bankruptcy court converts the Chapter 13 case to a Chapter 7 bankruptcy case. Otherwise, a co-signer will receive considerably more protection under a Chapter 13 bankruptcy.

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.nolo.com/legal-encyclopedia/cosigner-liable-debt-file-bankruptcy.html

 

 

student loan debt

5 Tips to Keep in Mind Before Taking out a Direct PLUS Loan

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Many parents will do anything possible to help their children get a higher education, and that desire to help often takes the form of financial aid. It is estimated that at least 3.4 million individuals have taken out a Direct PLUS Loan to help pay for their child’s college education.  Before considering these loans, it is important to be aware of the risks that come with this form of financial assistance.

Direct PLUS Loans allow parents of eligible college students to take out loans for their children’s education through a federal government program. The U.S. Department of Education is the lender, which is why many borrowers believe that these loans offer a safe and secure option to pay for their child’s education.

  1. Loan Eligibility, Amount Available and Fees. Not all parents are eligible to take out Direct PLUS Loans. First, they must be taken out on behalf of biological and adopted children, although some situations allow for stepparents of dependent students to take out these loans. Parents can take out enough money needed to have their child attend college; minus any amount of financial aid the student receives. Since the tuition and expenses vary from college to college, no maximum amount is set on how much a parent can take out through the PLUS program.Interest rates on PLUS loans are set by the federal government and are currently at 7.6 percent. Since these loans are unsubsidized, this means that interest on the loan begins accruing immediately. Payments on the loans can be deferred by the borrower until his or her child finishes college, but the balance will grow since the interest continues to accrue. If no deferment is requested, the parent will need to start paying right away. Borrowers also will have to pay a loan fee along with interest charges, which varies depending on the year. The fee comes out proportionately from each loan disbursement, but it does not increase the total amount of the loan.
  2. Limits on Repayment Programs. Parents have a handful of repayment options available for PLUS loan programs. The standard repayment plan involves equal payments made over the course of ten years. Borrowers can also request a graduated repayment plan, which allows the borrower to start off with lower payments, building up every two years over a ten-year period. Borrowers can also pay under an extended plan, which spreads the payments out over 25 years instead of 10. The monthly payments are lower, but the borrower ends up paying much more in interest in the long run. However, parent borrowers are limited on the types of repayment plans they may have in addition to these plans, while student borrowers have more options available to them.
  3. Repayment Responsibility May Not Be Transferred. Many parent borrowers take out PLUS loans on the assumption that they can eventually transfer the debt to their child upon graduation. However, this option is not available for a PLUS loan. Responsibility for repayment stays with the parent who is the legal borrower. This fact is important for the parent to realize if loan payments present a problem later as the parent approaches retirement age.
  4.  Impact on Credit Score. Any time a borrower takes out a loan, it should be expected that his or her credit score will take a hit, and that includes PLUS loans. If a parent takes out a PLUS loan, he or she should expect the loan, its balance, and payment history on the loan will appear on the parent’s credit score. So long as the borrower makes payments on time, this fact should not cause too much of a problem. However, if the parent is not able to keep up and misses a payment, the damage to the borrower’s credit score could be significant.
  5. Consequences of Defaulting on the Loan. It is extremely important that the parent borrower be able to handle the payments associated with the PLUS loan. Defaulting on a PLUS loan comes with serious financial consequences and can put the borrower at risk of wage garnishment, as well as offsets on his or her tax refunds or Social Security disbursements.

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

Medical Expenses Lead to More Than 60 Percent of Personal Bankruptcy Filings

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Many different factors play into why a person decides to file for bankruptcy. For many consumers, the cost of healthcare and staggering medical bills play a major part in why they file bankruptcy.

According to a recent report published by the American Journal of Public Health, 66.5 percent of all bankruptcies are related to medical debt, whether it be the cost of medical care or the time away from work required due to the injury or illness. The study reviewed court filings for a random sample of 910 Americans who filed for bankruptcy between the years 2013 and 2016. They found that 530,000 families file for bankruptcy annually due to either a medical issue or medical bills.

Medical bills often come at a completely unexpected time, which is a big reason why they play such a major role in personal bankruptcy. The cost of medical care is high enough as it is, and it only takes one major medical crisis to set someone back thousands of dollars. When a person is already living on a limited income to pay for basic living expenses, these unexpected medical bills can put him or her in a serious bind. If a major medical crisis also leads to the loss of a job or if the person is under-insured, the results can be even more devastating.  Even if someone does have savings, one trip to the hospital could quickly deplete that account.

Medical expenses were not the only reason people filed for personal bankruptcy. The study also reported that 45 percent surveyed cited not being able to afford their mortgages as their reason for filing. Other factors also included student loan debt, a major life event, such as a divorce or job loss. Many consumers reported a combination of two or more of these factors as a leading cause of why they filed for bankruptcy.

Other factors that played a role in personal bankruptcy filings had to do with the location of the filer. The report showed that someone who lives in a larger, metropolitan area is more likely to fall behind on their basic living expenses when compared to someone else who lives in a more rural part of the country. Additionally, medical debt statistically is more common in certain areas of the country when compared to others.

The filer’s age and stage of life also plays a role the reason behind filing for bankruptcy. The number of bankruptcy filings for individuals between the ages of 18 and 54 declined between 1991 and 2016. However, bankruptcy filings have gone up for individuals over the age of 55. In fact, the number of individuals over the age of 65 who filed for bankruptcy have tripled since 1991. Many filers in this age group attributed the cost of healthcare as to why they filed for bankruptcy.

The good news is if medical debt does make up a large part of the total debt the filer is carrying, this category of debt is considered unsecured and can be discharged in a Chapter 7 or Chapter 13 bankruptcy case. Unsecured debt is debt that is not otherwise tied to an asset, including credit card and medical debt. Rather than struggle with paying medical bills for too long, a consumer who finds himself or herself in a troubling financial situation due to a medical crisis should consult with a bankruptcy attorney to see if bankruptcy is a good option for him or her.

How is Medical Debt Handled in Bankruptcy?

In bankruptcy, medical debt is treated the same as credit card debt. Medical bills are listed as general unsecured debt and can be easily wiped out in a Chapter 7 bankruptcy filing.  Making the decision to file for bankruptcy is never an easy one.  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. Filing for bankruptcy can help protect valuable assets, including your home, car, IRA and social security.  It will put an end to wage garnishment and any lawsuit being filed to collect on the debt, thanks to the protections of the automatic stay.

Those who have experienced illness or injury and found themselves overwhelmed with medical debt should contact an experienced Miami bankruptcy attorney. In bankruptcy, medical bills are considered general unsecured debts just like credit cards. This means that medical bills do not receive priority treatment and can easily be discharged in bankruptcy. Bankruptcy laws were created to help people resolve overwhelming debt and gain a fresh financial start. Bankruptcy attorney Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Source: https://www.businessinsider.com/causes-personal-bankruptcy-medical-bills-mortgages-student-loan-debt-2019-6

 

student loan debt, Student Loans

Lawsuit Filed Against Betsy DeVos for Failure to Cancel Defrauded Students’ Debt

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More than 150,000 student loan borrowers have filed a lawsuit against the U.S. Dept. of Education and Education Secretary Betsy DeVos alleging they are being deprived of student loan debt forgiveness they are rightfully entitled to. The lawsuit accuses the Department of Education of failing to implement an Obama-era regulation known as “borrower defense, ” which allows students to have their federal student loans cancelled if their school misled them or engaged in other misconduct.

The attorney representing the Plaintiffs in the case say, “The law is clear: Students who experienced fraud should not be required to pay back federal loans that should never have been made by the Department in the first place.”

Borrower Defense Applications continue to pour in, but it has been reported that the Dept. of Education has not approved or denied a claim since June 2018.  The majority of the complaints concern “for-profit” schools, of which there are some 7,000 around the country, which take in around 15% of government financial aid.

Last year, a federal judge ruled that DeVos’ delays of the borrower defense protections were unlawful.  Still, the agency continues to neglect the applications.

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

Chapter 7 vs. Chapter 13 Bankruptcy. Which option is right for you?

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There are two types of bankruptcy available to consumers who are struggling with debt- Chapter 7 and Chapter 13 bankruptcy. Choosing the right one is critical to success in eliminating your debt. Below is a comparison guide to help you best decide which bankruptcy is right for you.

Chapter 7 is a form of liquidation and it is often considered the most straightforward type of bankruptcy. Consumers are essentially given a financial fresh start, oftentimes within three months of filing.

Contrary to the bankruptcy myths surrounding Chapter 7, it does not mean you will lose your home, car or retirement savings. In most Chapter 7 cases, filers do not have assets above the legal threshold, which is set by state law and therefore they do not have to lose anything- only their debt.  If a person is filing for Chapter 7 bankruptcy in Florida, they can use Florida’s bankruptcy exemptions to protect valuable property.

Chapter 13 restructures your debt into an affordable repayment plan. The debtor’s obligations are combined into one monthly payment to the bankruptcy trustee, which is then distributed to the creditors. Chapter 13 takes into account your income and expenses, the amount of your debt, the types of debt, and even your property value when setting the repayment plan. If you are behind on your mortgage payments, Chapter 13 allows you to get caught up on these payments and save your home from foreclosure.

Chapter 13 plans can last anywhere from three to five years, but most are five-year plans.

If you are struggling to keep up with your Chapter 13 payments, or have recently lost your job or become ill, Chapter 13 may no longer be the right option for you. You can convert a Chapter 13 bankruptcy to a Chapter 7 bankruptcy at any time if you become eligible. Many of our clients are surprised to discover they never have to go to court or see a judge in order to convert their Chapter 13 filing to a Chapter 7.

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.

 

 

Bankruptcy Law

How to Time Your Bankruptcy Filing

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Deciding when to file for bankruptcy can be a complicated one. Many times, it makes sense to delay filing for bankruptcy, while other times it makes sense to file right away.  In some situations, people are able to work out a plan to pay off their debt without having to file at all. If someone is struggling with making that determination, a bankruptcy attorney can help talk that person through his or her life situation and can help the individual decide when a good time would be for filing for bankruptcy.

Modifying a Mortgage

Bankruptcy is often used as a means of delaying foreclosure. In a Chapter 13 bankruptcy case, a bankruptcy filing will often allow the person to catch up on past-due payments while continuing to make current ones. However, sometimes a mortgage modification may be all the filer needs to hold onto his or her home. If the person files too quickly, he or she may have a harder time obtaining a modification of the mortgage. In fact, once a bankruptcy case has been filed, many lenders will not even talk to the borrower in terms of negotiations over the mortgage. If the borrower is anticipating a mortgage modification, it may be best to wait before filing for bankruptcy.

Income Qualifications

If someone is wanting to pursue a Chapter 7 bankruptcy case, he or she will need to pass the “means test” requirements set by the bankruptcy courts in Florida. If the filer’s income is too high, he or she will be prevented from pursuing a Chapter 7 liquidation bankruptcy case. Not passing the means test does not necessarily mean the person cannot pursue any type of bankruptcy. The filer may still qualify for a Chapter 13 bankruptcy plan, which requires him or her to repay a portion of the qualifying debts over a three to five-year period. The means test calculates the person’s income over a period of several months. Therefore, if the person’s income has dropped recently, he or she may still be able to qualify for Chapter 7 by holding off on filing for a few months.

Keeping Certain Property

Many times, the filer may have certain property that he or she would lose in a Chapter 7 bankruptcy case, such as an incoming tax refund. If the case is filed too soon, that tax refund may be liquidated and used to pay off certain debts. If the potential filer expects a large income tax refund, he or she may wish to hold off on filing for bankruptcy temporarily and use that money to pay for living expenses over the course of a few months before filing. However, make sure that the expenses being paid with this refund are for necessities and not luxury items. Otherwise the bankruptcy trustee may see the filer as trying to conceal or hide this income before filing. Also, this situation only matters for property that does not fall under an exemption, including the personal property exemption for Florida filers.

New Incoming Debts

If the filer anticipates some additional debts coming in the near future, it may also be wise to hold off on filing for bankruptcy. For most cases, a Chapter 7 bankruptcy case will only liquidate debts the filer has as of the date the petition was filed. Any debt that is incurred after the date of filing will stay with the filer after discharge. If the filer anticipates a major medical expense that will result in debt or necessary home improvement expense, it may be best to wait for filing until after that expense has been incurred, making it possible for that debt to be discharged.

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/file-bankruptcy-or-wait-29955.html

 

student loan debt

A Growing Number of Bankruptcy Filings Are Being Driven by Student Loan Debt

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Student loan debt is playing a large part in many recent bankruptcy filings, according to a recent study from LendEDU. According to their data, 32 percent of people filing for Chapter 7 bankruptcy report having some amount of student loan debt, showing that student loan debt is definitely a growing concern when it comes to consumers considering filing for bankruptcy.

LendEDU reported that, of this 32 percent of total consumers, student loan debt made up almost half of their total average debt. The student loan debt crisis is said to be reaching an all-time high with the total national amount exceeding $1.5 trillion.

According to the Student Loan Hero, the average undergraduate student leaves with $29,800 in student loan debt. This figure does not even begin to consider those students who must take out more loans to pay for necessary expenses or other students who continue with graduate studies. Many of these students end up carrying six figures of student loan debt after graduation.

The data reported by LendEDU only covers filers who are pursuing a Chapter 7 bankruptcy and not a Chapter 13 bankruptcy, which is an option that offers a restructuring of debt over the course of three to five years.

This LendEDU study points to an even bigger problem involving the burden student loan debt places on young consumers. Many of them struggle with keeping up with basic living expenses, on top of their student loan obligations, which makes it very easy for them to fall behind in payments. Eventually, many of these borrowers feel they have no other choice but to declare bankruptcy to pay them off. The bankruptcy may not end up discharging their loans, but it will erase other debt that makes it hard for them to continue paying their obligations. Student loans are normally non-dischargeable in bankruptcy cases, which is a large part of the problem.

Taking these facts into consideration, this would mean that if the people surveyed by LendEDU who fall in the 32 percent carrying student loan debt, they will only receive partial relief through the average bankruptcy case. If 49 percent of their debt is still considered non-dischargeable, that is still a large sum to continue paying following a bankruptcy discharge.

Borrowers must prove that paying their loans  would be an undue financial burden, a legal standard which has traditionally been very difficult to meet. Movement is being made towards possibly fixing this issue by allowing student loan debt to be treated just like any other unsecured debt in a bankruptcy case.

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.

Source: https://www.businessinsider.com/people-filing-for-personal-bankruptcy-carry-student-loan-debt-2019-6

 

Bankruptcy Law, Debt Relief

U.S. Supreme Court Issues Ruling Setting Sanctions for Bankruptcy Debt Collections

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The U.S. Supreme Court issued a ruling this week that would hold creditors in contempt and face serious civil penalties if they attempt to collect on a debt that was canceled in a bankruptcy case. The ruling came out Monday, following an appeal from the U.S. Ninth Circuit Court. The Justices unanimously ruled that a court may hold a creditor in civil contempt if it is found that the creditor’s collection of the old, discharged debt is “objectively unreasonable.”

The fact that this ruling came as a unanimous decision is a win for consumers and provides a set standard for cases in the future. This case was an appeal from a circuit court ruling that found that creditors should be given some amount of leniency, even when it is unreasonable for them to believe that the bankruptcy discharge order is not applicable to the debt they are trying to collect.

The legal standard adopted by the Supreme Court was originally advocated by the U.S. Department of Justice. Justice Stephen Breyer penned the unanimous decision where he wrote that “a court may hold a creditor in civil contempt for violating a discharge order if there is no fair ground of doubt as to whether the order barred the creditor’s conduct.”

Since the Supreme Court sets the standard all lower courts must follow, this rule now provides a test judges can use when facing cases involving debt collectors who are continuing to collect on a debt after it has been discharged in bankruptcy. Therefore, all courts will need to review future claims under the question of whether there exists a “fair ground of doubt’ as to whether the creditor’s conduct might be considered lawful under the bankruptcy discharge order.

Up until this time, courts, including the Ninth Circuit, followed the good-faith standard, which allowed for these types of collections if the creditor was said to be collecting on the debt in “good faith.” The standard was extremely subjective and creditor friendly.

Justice Breyer clearly stated that this standard is meant to be an objective one and not a subjective standard. Courts are to review the facts of the case as to whether the violation was done on an objectively unreasonable understanding of the bankruptcy court’s discharge order.

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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.

Related Resources:

https://www.courthousenews.com/supremes-set-sanctions-rule-for-bankruptcy-collections/