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

Make Managing Your Student Loan Debt an Objective this New Year

It’s almost the New Year and if managing your student loan debt is one of your resolutions in 2016- this post is for you.  Student loan debt is the only form of consumer debt that has grown since the peak of consumer debt in 2008.  Balances of student loans have surpassed both auto loans and credit cards, making student loan debt the largest form of consumer debt outside of mortgages, according to the Federal Reserve Bank of NY.

Below are some actionable items that can help you start off on the right foot when it comes to managing your student loan debt in 2016.

Take Inventory of your Debt. Create a detailed list of all of your liabilities starting with the highest cost debt, first.  Private loans are often more costly than federal loans, due to their higher interest rates and less flexible repayment terms.  Begin to pay down the highest cost obligations more aggressively.

Alert your Lender and Prepay your Loans. Even if it is a small amount each month, a prepayment will reduce the amount of interest you pay and the length of time you have the loans outstanding. You may need to let your lender know that you want to pre-pay your loan with the extra payments.

Check and See if your Loans are Tax Deductible. In certain cases, student loan debt is tax deductible. Your deduction can reduce the amount of your income subject to tax by up to $2,500 subject to income limitations. Remember, the student loan interest deduction is claimed as an adjustment to income.

Consider Consolidation. If your goal is to purchase a home this year, you may want to lower your monthly student loan payment to qualify for better mortgage terms.  Consolidating your loans and lengthening your repayment schedule can help improve your mortgage approval prospects.

Live Below your Means.  A sound financial plan begins with spending less than you make. This can be difficult to do- but once you are free of debt imagine the possibilities of what you can do with the extra cash- savings, vacations, etc.

Consider Borrowing against Home Equity while Creating a Repayment Plan. If you own your home, you should consider a “cash out refinance” to benefit from potentially lower cost debt that may be tax deductible. You should also consider a home equity line of credit as you may qualify for a lower interest rate and tax deduction.

Whatever you decide, make sure the approach you take is a methodical one.  Write down a list of your financial obligations and think measurable objectives.  You have options and help is here.

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.

Related Resources: http://www.forbes.com/sites/markavallone/2015/12/16/6-ways-to-better-manage-your-student-debt-in-2016/

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How a Rise in the Federal Funds Rate Could Hurt Your Credit Card Debt

As many consumers turn to credit cards this holiday season to fund gifts, vacations and dinners out- a Federal rate hike could be the essential “anti-holiday” gift.  The annual percentage rate is expected to increase on most credit cards and if it does, it will affect many card holders on their next bill.

That’s because the hook for most variable-rate consumer borrowing, whether credit cards, adjustable-rate mortgages, or home equity lines of credit, is the prime rate. And that rate moves with the federal funds rate. Today, prime is 3.25 percent, and card issuers add a certain percent on top of it to set the annual percentage rate (APR).

This is a non-issue for consumers who pay off their balances.  However, for those who carry a balance month-to-month, it will affect the entire balance, not just new purchases.  If this turns into a series of rate hikes, it could make paying off a big balance take longer and cost more.

In a recent report, a quarter point-rise in the federal funds rate would cost cardholders $1 billion annually, and a full percentage-point hike almost $6 billion, according to the Consumer Financial Protection Bureau.

The good news? In most cases, if you got a promotional rate on a balance transfer, that rate is fixed. So anyone who has taken advantage of such offers would not see their transferred balance affected by rate increases until the promotional period ends.

If you are carrying a large balance on a card with a double-digit APR, there are still opportunities to transfer balances at a zero percent rate, fixed, for a year or more.

Consumers are advised to call their credit card company to see if they qualify for a lower rate. But make sure your credit is the same or better than it has been in the past. If issuers find your financial situation has changed for the worse when they check your record, they can cut your credit limit, or even decide they do not want you as a customer anymore.

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 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, Timothy Kingcade Posts

This County wants to ease the burden of student loan debt for its residents

Lawmakers in Montgomery, Maryland are in the process of developing legislation that would allow them to “establish a loan authority,” a move that would give the county the ability to leverage its municipal borrowing power to extend the lowest interest rates to its residents.  It’s also a way the county hopes to attract young, college-educated workers and entrepreneurs.

If the bill succeeds in the next legislative session, Montgomery would join a growing list of states entering the student loan market to ease the burden of student loan debt for its residents. Minnesota, Maine, North Dakota, California and Connecticut have passed legislation that allows them to refinance student loans, while politicians in Virginia and Wisconsin are fighting for the same. Proponents say student loan debt has become a significant economic barrier, keeping people from full participation in the local economy.

However, refinancing federal student loans through state authorities could mean forfeiting consumer benefits like income-driven repayment plans and public-service loan forgiveness.  At this time, there are few options for lowering interest rates on student loans.  Consolidating federal loans will bring down the rate by only a small percentage, because the interest is calculated by taking an average of those rates. Consumers who are considering these programs need to evaluate what they might be giving up.  If the interest rate difference is not that much, it may not be worth it.

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, Credit, Debt Relief, Timothy Kingcade Posts

What is “good debt” and how to make it work for you?

The word “debt” predominately carries a negative connotation.  However, some debts are good for you as all financing is not created equal.  So what is good debt?  Good debt is “any debt that offers a return on investment.” For example, a mortgage is often considered good debt. Other examples of good debt include: federal student loans (which offer greater protections for borrowers and come with the potential return of a higher salary and improved job prospects), and low interest lines of credit taken in order to invest in stocks or retirement funds.

Bad debt is any credit that you are taking out and using without a clear-cut plan of paying it back.  Think of using a high-interest credit card to fund a shopping trip or taking out a payday loan to cover extra holiday spending.

Most credit score models reward consumers for having a diverse portfolio of accounts and revolving debt, like credit cards, depending on how much of the credit you are going to use and pay off each month.   Making on-time payments and keeping your balances low on these cards is important when it comes to keeping a healthy credit score.

So how can consumers avoid taking on bad debt?  First, remember that you do not have to take every credit card that comes your way.  Ask yourself if you will be able to pay off the debt.  If you do not have a plan to pay off the debt, it is probably a bad debt.

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 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

RushCard Disruption Reveals Flaws in Prepaid Debit Cards

Thousands of account holders of one of the most popular prepaid debt cards, the RushCard, found themselves unable to access their funds for the better part of two weeks.  Essentially, they could not purchase groceries, pay rent or purchase gas using their cards because of a so-called “technology transition,” the company said.  Hip-hop mogul, Russell Simmons who is the founder of the card simply said he was “praying” for those affected, in a since-deleted tweet.

It’s a sad reality that the poorer you are the more you pay for banking in America- but it can also be dangerous to live outside the mainstream banking system as this type of problem is not limited to RushCard. The Pew Charitable Trusts reported in June that about 23 million Americans use prepaid cards such as RushCard regularly, up about 50% between 2012 and 2014, with many treating them like bank accounts and having their pay checks directly deposited to the card.

It’s not the first time that a prepaid debit card backed by a celebrity and marketed directly at the financially most vulnerable segment disappointed consumers. Last year, Suze Orman and Bancorp Bank shut down their approved card project.  Part of the card’s marketing pitch was that this might be a way for Americans with poor credit to rebuild their damaged FICO scores.  However, the minimum annual cost to use Orman’s product for a typical “unbanked” consumer came closer to $81 in fees.

For many individuals, using these type cards seem like a rational choice, as a number of banks are beginning to charge fees for smaller accounts. The banking industry has stopped serving those who are “too poor to bank”, pushing them into the arms of non-bank service providers to provide the most basic services: to cash pay checks, pay bills or transfer money.  But in reality, consumers are forking over approximately 10% of their income for these services when they use these type cards.

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 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

Debt Collectors can now Robcall to Collect Student Loans

If you are currently in default on your student loans, you may begin receiving continuous calls from collectors to pay up. A budget agreement, which is awaiting President Obama’s signature, contains a provision that allows the government to collect federal debts using automated calling systems to mobile phones.

Not surprisingly, Navient (formerly Sallie Mae) and Nelnet, two companies that service federal loans, have been strongly advocating for this.  They both argue that debtors who receive robocalls are more likely to repay their debts.  Currently, loan servicers are allowed to robocall people only after they have consented to being auto-dialed and who have verified their cell phone numbers. (Only about a third of customers fall into both of those two categories.)

In an interestingly twist, the bill puts the Federal Communications Commission (FCC) in charge of implementing the robocalls- an organization that has been fighting against automated calls to cell phones recently.  Just last week, the FCC started publishing  reports on consumer complaints about cell phone robocalls to give software developers tools to build apps that will block them.

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

What happens to your debts when you die?

Your debts become the responsibility of your estate. When you pass away, any debts you leave behind could take from the assets you had hoped to leave your loved ones.  In some cases, family members can even be responsible for your debts. This is the reason many people purchase life insurance- not only to leave their loved ones something when they pass, but also to take care of any outstanding debt and final expenses.

Mortgages and home-equity loans

If the property has a mortgage, the lender does have some protection, at least up to the value of the property. However, federal law states that lenders cannot force the joint owner to pay off the mortgage immediately after the co-owner dies.   This also applies to any relative who inherits the home and lives in it.  This means the family member or co-owner can simply take over the monthly mortgage payments.  If there is an outstanding home-equity loan, a lender can force the person who inherits the home to repay the loan immediately, which could result in the home being sold.

Auto loans

If the vehicle is not paid in full, the lender has the right to repossess the car.   But typically, whoever inherits the car can just take over the payments.  It is unlikely the lender will take action.

Credit cards

When the estate runs out of assets, the credit card companies are out of luck.  This is due to the fact that credit card debt is not secured by assets the way mortgages and car loans are.  Any joint account holder would be responsible for the bill, but people who are simply authorized users of the card would not be.

Student loans

Lenders do not have any recourse if the estate does not have assets to repay other unsecured obligations, like student loans.   Even if your relatives are not responsible for your debts, collection companies can still legally call to discuss the debts to find someone who is authorized to pay them, according to the FTC.  It is important to know, debt collectors cannot mislead family members into thinking they are responsible for the debts.

Caveats

These are the circumstances in which spouses or other people would be responsible for your debts.  These include:

  • They co-signed on a loan;
  • Are joint account holders;
  • Are spouses in community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

What is protected?

Creditors typically cannot go after your retirement accounts or life insurance proceeds.  However, if the life insurance beneficiaries you named are no longer living, your death benefit may go into your estate and then be subject to creditors.  That is one reason why it is important to make sure your policy names the proper beneficiaries.

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 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 atwww.miamibankruptcy.com.

 

 

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

Law School Grad Tries to Discharge Student Loan Debt in Bankruptcy

A recent law school graduate with close to $300,000 in student loan debt is asking for the U.S. Supreme Court’s help in getting it discharged in bankruptcy.  Courts including the U.S. Courts of Appeals for the Seventh and Eighth circuits are split on what constitutes “undue hardship,” the determining factor as to whether a debtor is eligible for a bankruptcy discharge.  The U.S. Court of Appeals for the First Circuit is also on the fence with the issue.

Law school debt has been getting more attention recently.  Lawmakers on both sides have “sharply criticized U.S. law schools” for burdening students with crushing debt and non-marketable degrees, according to Bloomberg Business.

This particular student’s alma mater – Florida Coastal School of Law in Jacksonville, FL – has received some negative press about its graduates’ debt.  Those in the 2015 graduating class that had debt (93 percent) carried a balance of almost $163,000. In addition, the median Law School Admission Test (LSAT) score for Florida Coastal students was in the bottom 25%.

This student has failed the bar exam for the third time and is living at home with his parents below the poverty line. According to the debtor’s petition, he has struggled with depression and misdemeanor convictions, which make it difficult to find work in the legal field.

It is extremely difficult to prove undue hardship in the Seventh Circuit, without the presence of a serious medical condition, like Alzheimer’s disease or being paralyzed in a car accident.  The bankruptcy laws are supposed to be uniform, but there is a split on what the courts consider undue hardship.

The Eight Circuit uses a “totality of the circumstances test,” which is a more flexible standard.  It allows bankruptcy courts to consider a variety of factors when determining undue hardship.  As a result, if a debtor lives in Arkansas – in the Eight Circuit – like in this case, there is a good chance the high court will grant the certiorari.

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, Credit, Debt Relief, Timothy Kingcade Posts

Tax Scams on the Rise

Tax scams are on the rise and small businesses are just as vulnerable as consumers. Authorities report that there have been a rise in calls across the country from scammers claiming to be affiliated with the Internal Revenue Service. In case you are not aware of how the tax scam works, criminals use fear and intimidation practices to coerce victims into sending them money. They basically call victims and leave a threatening voicemail message stating you have a warrant out for your arrest because of a tax violation.

Here is what you need to know to protect yourself and your business from falling prey to this scam.

Get armed with the facts. Remember that these types of scams work on fear and the victims lack of information. Verifying facts is the greatest weapon against these criminals.

Don’t be fooled by professionalism. The scammers sound professional, going as far as to provide phony IRS badge numbers and altering the caller ID numbers to appear as if the calls are coming in from an agency. They also have personal information on their victims to make the scam sound more legitimate.

These tax scams have cost around 4,550 victims more than $23 million since October 2013.  And these are just the ones who report it, many victims of scams are afraid to report the crime, which means the loss is likely much higher.

The IRS has released the following facts regarding how the agency contacts individuals.

1. The IRS does not call and demand immediate payment. The agency only calls after first sending you a bill in the mail.
2. The IRS does not demand you pay taxes without letting you question or appeal the amount you owe.
3. The IRS does not require you pay in a specified way, such as a prepaid debit card.
4. The IRS does not ask for your credit or debit card numbers over the phone.
5. The IRS does not threaten arrest for not paying.

If you receive calls for these types of tax scams, hang up and report it to your local law enforcement agency immediately. You can visit “Tax Scams and Consumer Alerts” on IRS.gov to get additional information.

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 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

‘Doctors’ Loophole’ in Student Loan Debt-Forgiveness Helps more Americans than Intended

The federal government is getting ready to forgive billions of dollars in student loan debt for doctors and other professionals with expensive educations, under a law designed to help “modestly paid” workers in public service.

At issue is the 2007 student loan forgiveness program that allows borrowers who have made a decade of payments and work for government or nonprofit entities, have the rest of their debt forgiven.  The program was designed to encourage young Americans to pursue traditionally hard-to-fill positions, such as: public defenders, social workers, teachers and modestly paid doctors in underprivileged  areas.

However, the program is helping far more than intended, many of the borrowers being well-paid.  Thousands of workers with expensive graduate degrees are set to discharge five- and six-figure student debt amounts as they approach typically lucrative careers.

The biggest beneficiaries will be med school students, who owe an average of $180,000 upon graduation and are increasingly working for nonprofit hospitals to qualify for the program.  What is being called the “doctor’s loophole,” financial advisors estimate that many will have 80% or more of their original balances forgiven.

The government will not start forgiving loans under the program until 2017, a decade after it was signed into law. But the estimated tab is growing quickly as enrollment surges.  As of September, about 295,000 borrowers in all fields had submitted paperwork and were on track to have debt forgiven under the program, according to the Education Department. That is an increase of 368% from two years prior, likely reflecting growing awareness of the program and a boom in higher-education attainment during the recession. The agency projects a total 600,000 borrowers will have loans forgiven over the next decade.

Supporters of the program note it is achieving the goal of increasing interest in jobs that are tough to fill, like public defender positions.  A surge has been reported in applications for legal positions, partly linked to lawyers hoping to shed their law school debt.

The typical borrower in the program owes between $60,000 and $70,000 in student debt, with 1 in 4 owing more than $100,000, according to a Government Accountability Office report. This suggests most enrollees are workers with postgraduate degrees.  Critics say the program does little to help the millions of Americans who truly need the relief from student loan debt, like those borrowers who did not complete college and have much smaller loan balances or who graduated with degrees that pay far less in today’s economy.

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.