Miami bankruptcy attorney Archives - Page 82 of 106 - Kingcade Garcia McMaken, P.A. Bankruptcy Attorneys

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Creditor Protections for IRA’s & Beneficiaries

Posted on December 13, 2016by Admin

Whether you have a Traditional or Roth Individual Retirement Account (IRA), the tax benefits allow your savings to grow and compound more quickly than in a taxable account. Another benefit is creditor protection in the event of a bankruptcy. But what about when you pass away, are your beneficiaries protected?

The Supreme Court has helped clear up this issue in recent years. Just like protection offered to pensions, 401(k)s and Social Security, IRAs are protected from creditors in bankruptcy proceedings. This means that if you declare bankruptcy, your IRA assets are usually safeguarded and cannot be seized.

Another benefit to IRAs is the simplicity in selecting a beneficiary (or beneficiaries) who will receive the money once you pass. However, beneficiaries are not always afforded the same creditor protection as the original account owner, and this is something to consider when determining who your IRA beneficiary should be.

The U.S. Supreme Court has ruled that an inherited IRA for a non-spouse beneficiary no longer is protected from creditor’s claims when the beneficiary files for bankruptcy. The rationale is that once the owner dies and the non-spouse beneficiary takes ownership of the account, the assets are no longer considered retirement funds, and can thus be seized in bankruptcy.

The reason this only applies to non-spouse beneficiaries is because a spouse is able to roll over inherited IRA assets into their own account. When this type of transfer occurs, the assets are once again protected. However, a non-spouse cannot combine inherited IRA assets with their own retirement assets.

Many parents list their children as beneficiaries of their IRA accounts, but this can present a problem if the children have financial issues or file for bankruptcy. One of the best ways to get around this is to establish a trust, such as a conduit trust, and list the trust as beneficiary of the IRA instead of the child. As the assets are not legally owned by the beneficiary, but instead owned by the trust, the assets are protected from creditors in many cases. However, keep in mind once the income is paid out to the beneficiary (i.e. – leaves the trust), that income is no longer protected.

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, 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.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Wells Fargo, Ocwen and other Creditors Sued for Violating Chapter 7 Discharge

Posted on December 12, 2016by Admin

Secured creditors Wells Fargo, Ocwen, RAS Boriskin and Duane Morris must pay a debtor who filed Chapter 7 bankruptcy $7,000 in emotional distress damages and $39,142 in punitive damages for willfully violating the discharge order.

Judge Cecelia G. Morris of the U.S. Bankruptcy Court for the Southern District of New York concluded that the creditors harassed the debtors for years by filing an illegal foreclosure action against the debtors’ property and sending numerous collection letters after their debt had been discharged in bankruptcy.

The debtors received more than 100 calls and notices for collection of the discharged debt in the past five years. This case is particularly noteworthy for the large amount of punitive damages and the emotional distress damages the debtors received, who represented themselves pro se.

The debtors in the case filed for Chapter 7 bankruptcy and their nonexempt assets were liquidated by a trustee and the proceeds were distributed to their creditors. They received a discharge of all of their debts in 2009.

The debtors alerted the secured creditors to their violations by contacting them after the discharge, but the creditors insisted they were doing nothing wrong. Instead of taking steps to correct the problems, the creditors and their attorneys wrote threatening letters to the debtors. The court found evidence that the creditors and their attorneys received notice of the debtors’ bankruptcy and discharge on at least 15 different occasions, but failed to stop contacting them.

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, 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.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Delinquencies on the Rise for Subprime Auto Loans

Posted on December 6, 2016by Admin

Subprime auto loans are back in a big way, and according to recent data have climbed to the highest level in a decade, with large increases in loans to borrowers with credit scores below 660. The number of subprime auto loans becoming delinquent has climbed to the highest level since 2010 in the third quarter and is following a pattern similar to the months leading up to the 2007-2009 recession, according to data from the Federal Reserve Bank of New York.

New auto loans to borrowers with credit scores below 660 have nearly tripled since the end of 2009. In 2016, approximately $50 billion of new auto loans per quarter have gone to those borrowers thus far. About $30 billion each quarter has gone to borrowers with credit scores below 620.

The increasing delinquency of subprime auto loans is concerning because it comes as the overall economy is on the mend and the employment rate is improving. The credit quality of other types of loans has improved.

Delinquency rates declined in the quarter for mortgages, student loans and credit cards. The number of individuals with a new foreclosure notation on their credit reports hit the lowest level in 18 years of data.

The increase in auto loans, particularly the subprime sector, has raised alarms among some regulators in Washington. The rate at which auto loans for borrowers with credit scores below 620 has climbed for 10 consecutive quarters, especially on loans made to those with the lowest or subprime credit scores.

Lenders know that subprime borrowers are more likely to default and become delinquent on their loans and charge them higher interest rates. The mistake during the financial crisis was that while the lenders expected higher defaults among subprime loans, they failed to anticipate just how high it would rise.

Click here to read more on this story.

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

For-Profit College Debt Strikers Plead with Obama to Discharge their Loans before Trump’s Inauguration

Posted on December 5, 2016by Admin

More than 1,000 students (calling themselves the Debt Collective) from for-profit schools are protesting, claiming their colleges used manipulative financial tactics while providing them with a subpar education.

They released a statement and video on Monday, pleading with President Obama to discharge their student loans before President-elect Trump’s inauguration. The Debt Collective claims that the Obama Administration has yet to provide the relief it promised. One former Corinthian student said she had $32,000 of student loan debt and was unemployed, despite having applied to about 300 jobs in the criminal justice field. She said she had either received no response or had been told she did not qualify.

The Department of Education refunds federal loans to students enrolled in the last 120 days before a college closes in what is called a closed school discharge. ITT Tech closed its doors in September. But students who left the school before that 120-day time frame or who graduated but still feel they were defrauded by their college must instead file a “borrower’s defense to repayment” claim.

The Obama Administration had planned to resolve back-logged relief claims from Corinthian and ITT Tech students by the spring of 2017, but will likely now be under additional pressure to speed resolution of the claims.

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, 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.

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

Bankrupt Student Can Discharge Debt because it “Technically” Was Not a Loan

Posted on December 1, 2016by Admin

A financial agreement between a student and an educational institution is not considered a student loan and as a result in the bankruptcy case ( D’Youville Coll. v. Tucker (In re Tucker), the borrower was able to discharge her debt.

Judge Michael J. Kaplan of the U.S. Bankruptcy Court for the Western District of New York concluded that because the debt was not “an education benefit overpayment or a loan,” the exception to discharge under Bankruptcy Code Section 523(a)(8)(A)(ii) does not apply.

The financial agreement entered into between both parties was “no more than an agreement to pay for tuition, fees and other registration costs (whatever they turn out to be), at some unspecified future time, and not for an ‘educational benefit overpayment or loan’ as contemplated in §523(a)(8)(A)(i), the court said.

This case is similar to two other recent cases in the Western District of New York, with the exception that in this one, there was no promissory note signed by the debtor.

Exceptions to discharge under the Bankruptcy Code are construed narrowly and a creditor must prove by a preponderance of the evidence that its claim falls within one of those exceptions.

The court sided with the borrower in this case because it did not find a specific amount due in the financial agreement. The agreement contained a monthly interest provision and indicated that an adjustment would be made for financial aid received at a later time.

The financial agreement between the parties was “nothing more than a running account,” the court said.

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

Xerox Ordered to Pay $2.4 Million to Settle Illegal Debt Collection Charges

Posted on November 30, 2016by Admin

Many of us know Xerox as the company that handles office supplies, printers and similar products. However, back in 2009 the company acquired ACS and has been operating as a lender of student loans through Xerox Education Services (XES).

The division has come under much scrutiny in the past year for allegedly violating debt collection laws and overcharging borrowers. Now the company has decided to settle the charges by paying a $2.4 million settlement.

The initial investigation began in December of 2015. After analyzing the company’s loan servicing practices, officials found that XES had failed to properly process applications for federal loan relief associated with the Income-Based Repayment Plan under the Higher Education Act. This forced student loan borrowers to pay more than they needed on their debt. They were also hit with more late fees when they could not afford to make their payments.

The company was charged with violating debt collection regulations by making frequent and repeated phone calls to borrowers and not investigating credit reporting disputes. This led to false information being reported to credit agencies.

Under the settlement, XES will pay $2.4 million, which will be be used as restitution for borrowers who tried to apply for relief but were not able to enroll. The company has also agreed to credit late fee overcharges, reform service members’ accounts, stop its illegal debt collection practices, and establish a “Borrower Advocacy Group” that will help loan recipients apply for income-based repayment plans.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Florida Debt Counselor Filing Bankruptcy, Owes More Than $100 Million

Posted on November 28, 2016by Admin

A Florida businessman who made his fortune as a debt counselor during the Great Recession has filed for Chapter 7 bankruptcy. Timothy McCallan, of Melbourne, is listing more than $100 million in liabilities. He was hit with a judgment for $107 million in an Alabama bankruptcy for Allegra Law, a large debt settlement law firm that was shut down for massive fraud.

Court investigators in the Allegro case have been pursuing McCallan, because his companies, Americorp and Seton Inc., provided record-keeping and data services to Allegro.

Now the businessman is telling a Florida court he needs protection from that claim among others in his bankruptcy filing. An Alabama bankruptcy judge had McCallan arrested and jailed for a time, and declared that McCallan had committed a fraud on the court.

“Thousands of customers signed up for debt settlement services offered by McCallan and paid him more than $100,000,000. Almost none of the money was paid to creditors of the customers as promised by McCallan,” U.S. Bankruptcy Judge William R. Sawyer wrote in an opinion entered in February.

McCallan, who owns a $1.5 million home on the Florida coast, has been ordered to turn over records related to the Allegro Firm. Most recently, McCallan told the court he had been delayed because of damage to his home during Hurricane Matthew, which side-swiped the Florida coastline in early October. But investigators in the Allegro case later learned McCallan’s home suffered no damage.

Click here to read more on this story.

Related Resources:

http://www.orlandosentinel.com/business/brinkmann-on-business/os-timothy-mccallan-bankruptcy-20161121-story.html

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How Trump’s Presidency Will Affect Consumers

Posted on November 21, 2016by Admin

The battle for consumer rights against powerful corporate and special interests has always been an uphill battle, but the road ahead just got considerably more difficult with this month’s election results. President-Elect Donald Trump released a statement on his website saying that he plans to “dismantle” the Dodd-Frank Act, which would be detrimental for consumers’ protection rights.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law by President Obama in 2010 in order to protect consumers from irresponsible lenders who used hidden fees and fine print to take advantage of them. The purpose of the Dodd-Frank Act is to prevent the excessive risk-taking that led to the Great Recession and the housing bubble burst in the mid-2000’s.

One of the greatest threats consumers’ face during Trump’s presidency is the fate of the Consumer Financial Protection Bureau (CFPB). The CFPB was one of the most significant outcomes of the Dodd-Frank Act. The Bureau is a consumer watchdog that protects American families from unfair and abusive financial practices. It sets clear rules and ensures that the highest financial standards are met. The CFPB monitors the actions of mortgage lenders, banks, credit unions and other financial companies.

Unfortunately for consumers, the future of the CFPB during Trump’s administration is unclear. While he spoke out against the Dodd-Frank Act, saying that it “has made it impossible for banks to function,” he has not mentioned his plans for the Consumer Financial Protection Bureau. However, the Republican Party has called for repeal of the Dodd-Frank Act and abolishment of the CFPB. Opponents of consumer protections clearly feel empowered to push the agenda of predatory lenders, abusive debt collectors and others who target struggling individuals and low-income families.

Related Resources:

https://consumerist.com/2016/11/09/from-healthcare-to-financial-protection-how-will-the-trump-white-house-affect-consumers/

https://www.greatagain.gov/policy/financial-services.html

https://www.whitehouse.gov/economy/middle-class/dodd-frank-wall-street-reform

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Credit Card Companies want you to give up Your Right to Sue. Here’s how to protect your Rights

Posted on November 17, 2016by Admin

Before signing up for a new credit card, scan through the fine print and search for the word “arbitration.” What you will find is that the company requires you to resolve all conflicts through a binding dispute resolutions process, rather than going to court.

These clauses are common among cell phone carriers, financial institutions and online service providers such as Netflix and Amazon. Some companies provide the option to opt-out of mandatory arbitration, if you act quickly enough. In fact, more than a quarter of the more than 400 credit card contracts analyzed by the Consumer Financial Protection Bureau included an opt-out provision.

For Citi Card customers, you may even have gotten a chance for a do-over. This past year, the issuer revised its customer agreements, giving them a new opportunity to opt-out of the company’s standard arbitration agreement.

As with many opt-out notices, instructions can be vague and time is of the essence. Here are some guidelines consumers should follow when requesting an opt-out.

Follow instructions. Read the opt-out provision carefully and follow the instructions exactly. It is necessary to include enough information to identify the person and convey their intent to opt-out.
Identify yourself. If the directions are vague, use a standard business letter format, with the date and address at the top. Include all pertinent details such as your account number, customer ID and your contact information.
Be direct. Be as clear and concise as possible in your writing. If you go to court, the lawyers for the company will try and argue that you were not clear or did not mean what you said.
Keep records. If an email option is given, use that. An email automatically generates a time stamp. If you do not need to send a physical letter, keep a copy for your records. Save any responses you receive and send the letter certified mail, so you receive confirmation of its receipt.

Click here to read more on this story.

Debt Relief, Student Loans

Four Ways President Trump Could Affect Your Student Loans

Posted on November 16, 2016by Admin

President-elect Donald Trump has plans to address student debt and college affordability, but many of the details remain unclear. Trump and the Republican Party did not emphasize higher education in their campaign platforms and any changes to the current federal student loan system would require congressional backing.

Here’s what we may be able to expect:

Income-driven repayment changes are likely. According to Trump’s proposed student loan program, he would cap repayment at 12.5% of a borrower’s income. He did not indicate whether this repayment cap would apply to all federal loan borrowers or only for those who apply for income-driven repayment, as is the current standard.
Private Banks may begin issuing federal student loans. Trump wants to restore a system where private banks issue federal student loans as opposed to the government. This was a process that occurred up until 2010, when the federal government revamped the program and began originating all federal student loans through its Direct Loan program. The Obama administration cited billions of dollars in cost savings as a result of the switch, and used the savings to offer more Pell Grants for low-income students.
Students’ prospective earnings could dictate their ‘loan worthiness.’ Trump wants to let colleges have a say in lending decisions and make them share the risk of student borrowing with lenders. It would be up to colleges and banks to decide together which students could take out student loans.
College costs could be reduced by limiting the ‘administrative bloat.’ Trump said in an October speech that he would take steps to cut tuition costs. In that same speech he said he planned to reduce the tremendous ‘bloat’ in college administration. By reducing the unnecessary costs of compliance with federal regulations, colleges would be able to pass the savings along to their students.

Related Resources:

http://www.latimes.com/business/la-fi-trump-student-loans-20161111-story.html