Miami Bankruptcy Archives - Page 8 of 14

A Growing Number of Americans Have More Credit Card Debt than Savings

Posted on February 20, 2019by Admin

Many Americans are fighting a never-ending battle between saving money and barely making enough to pay their day-to-day expenses. More and more Americans are relying on credit cards to not only pay for big expenses but everyday expenses, resulting in a major imbalance when it comes to credit card debt and emergency savings. In fact, for many Americans, that emergency savings is essentially non-existent.

According to a new study published by the personal finance company Bankrate, nearly 30 percent of Americans have more credit card debt than they do money in savings. This number is up from 2018 when 21 percent claimed they had more credit card debt than savings.

The increased reliance on credit cards could be indicative of the fact that many households are under a great deal of financial strain. According to Bankrate, 41.2 percent of households nationwide carry some level of credit card debt with the average balance being $5,700. Income may be increasing at a rate of about three percent annually, but the cost of living is surpassing that. Oftentimes, the increase in pay does not keep up with the jump in basic living costs.

According to Federal Reserve data, 39 percent of American consumers say they have enough money in savings to cover a $1,000 car repair or unexpected emergency room visit. The level of savings, of course, does vary by income classification. In 2018, the median American household had $11,700 in savings, but for those who do not have enough to meet even just a $1,000 bill, this amount of savings is never realized.

The recent government shutdown did not make this financial situation any easier for many struggling consumers. The shutdown and lack of pay forced government workers to take on debt just to keep up with expenses, which added to the debt many already carried before the shutdown occurred.

Click here to read more on this story.

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

Bankruptcy Law

Famous Celebrities Who Went Bankrupt before Becoming Rich

Posted on February 19, 2019by Admin

Sometimes you have to go through hard times before you make it big. In fact, many famous people did just that before they became successful. They represent your typical rags to riches stories, and these life stories go to show that even the most successful people struggle on their way to the top. For individuals thinking of filing for bankruptcy, these stories often give them hope that filing for bankruptcy will be the beginning of greater things to come.

Dave Ramsey

Dave Ramsey is known for his financial advice, so it may seem hard to believe that even he struggled financially at one point in time. However, even his rise to the top had its peaks and valleys. He started with a great deal of real estate holdings through his brokerage firm, Ramsey Investments, but his real estate success was not long-lasting. His holdings ended up being leveraged, resulting in creditors calling in their debts. Ramsey eventually filed for bankruptcy. After bankruptcy, he went a different direction and focused his efforts on financial counseling for his local church. He attended workshops on consumer financial issues and used this knowledge to build his own seminars. Now he is known for his first book and subsequent programs titled Financial Peace. His net worth is over $55 million, and individuals all over the world swear by his program in their own financial success.

Abraham Lincoln

You would not assume that one of our nation’s most famous presidents would have filed for bankruptcy, but it is true. In his 20s, before he entered politics, Lincoln and a partner opened a general store in Illinois, buying their store’s inventory on credit. However, as business did not sore, their debts were not paid off. He ended up selling his sake in the store, but after his business partner died, Lincoln was on the hook for over $1,000 in debt. While technically bankruptcy did not exist at that time, he worked out a payment plan to repay his creditors successfully over the span of 17 years.

Walt Disney

Orlando, Florida is well-known for one specific name, and that name is “Walt Disney.” Like the others mentioned, you would not think that Disney would have gone through something like bankruptcy, but it is, in fact, true. He was barely out of his teen years when he filed for bankruptcy. Disney formed a company called Laugh-O-Gram Studio in 1920 where he made animated fairytales. He formed the company on the assistance of a financial backer, but after that source went broke, Disney was not able to pay off his debts, let alone his animators, forcing the company to file for bankruptcy one year later. He obtained a family loan in 1923 when he started a new company. Five years later, Disney created Mickey Mouse, and his career and the company took off. Disney almost had to file for bankruptcy in 1937 upon the release of Snow White and the Seven Dwarfs, but he was able to get a bank loan to finance the movie. The company took off even further from that point, resulting in the rest of the classic movies we all know and love.

P.T. Barnum

Even the creator of one of the greatest shows on earth went through his fair share of financial struggles. P.T. Barnum is one of the founders of Ringling Brothers and Barnum & Bailey Circus, a show that lasted from 1871 to 2017. Barnum began his career at 25 when he purchased the Scudder’s American Museum in New York City, one of the most popular attractions in the city at that time. However, the building burned down five times, resulting in Barnum to continually put out money to refurbish the building. The cost of keeping up with building expenses was not supported by the museum’s revenue, forcing him into eventual bankruptcy. He ended up conducting lectures on “The Art of Money Getting,” which allowed him to repay his past debts. It was not until he was 64 when he joined forces to create one of the most famous circus attractions of all time.

Willie Nelson

Willie Nelson is one of the most well-known country singers of all time, but even Nelson struggled financially. Growing up during the Great Depression, his family struggled to pay their living expenses, and Nelson even had to pick cotton to earn money for his family. Oddly enough, his cotton picking sparked his desire to perform. At age 13, he chose to sing in local dance halls to earn money. He became a disc jockey at a local radio station in Texas, which allowed him to do his own recordings, thus sparking his career. While he never formally filed for bankruptcy, he went through extreme financial difficulties after the IRS claimed he owed over $32 million, resulting in them seizing his assets in 1990. He was able to eventually settle the debt, but it was definitely a defining experience for him. He even released an album called The IRS Tapes: Who’ll Buy My Memories. All profits from the sale of that album went directly to the IRS.

Elton John

Another famous singer, Sir Elton John, went through his own financial struggles. He first came onto the music scene with the release of the single Your Song in 1970. After that, he released hit after hit, resulting in enormous fame and wealth. He lived quite the lavish lifestyle, and eventually in 2002, that lifestyle caught up with him. He declared bankruptcy after properties he owned incurred a large amount of debts. It is estimated that he spent somewhere near 1.5 million British pounds monthly around that time, which definitely led to his financial issues. However, he has managed to bounce back after he entered into a contract to perform in Las Vegas at Caesars Palace in 2003. He also contributed on several Walt Disney movies, including The Lion King, resulting in a steady cash flow, bringing his wealth currently to approximately $450 million.

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Bankruptcy Law, Credit Card Debt, Debt Relief

Study shows women struggle more with credit card debt than men

Posted on October 11, 2018by Admin

Credit card debt is a problem for many Americans but according to a recent study by WalletHub, it appears to be more prominent among women.

Credit card spending is at an all-time high. Last quarter, consumers ran up nearly $30 billion in credit card debt, the highest seen since the 2008 financial crisis.

In this study, women cardholders reported that they were struggling with their card payments, on top of other monthly expenses. In fact, one in four female cardholders reported that they did not feel confident at all in their ability to pay their bills in full monthly. This figure is double the percentage of men reporting the same sentiments.

Approximately 31 percent of women surveyed reported that they were able to pay their credit card monthly statement balances completely in full once or less in the past six months.

What does this mean for female cardholders? According to these figures, if we had two groups of individuals, one group female and one group male, each carrying $5,700 of credit card debt, paying this balance off in full will end up eating up much more of the total annual income for the women than the men.

Federal reserve figures report that the average female salary is $41,554 annually while their male counterparts earn on average $51,640 annually. Paying just shy of $6,000 in credit card debt ends up taking a much larger percentage of their annual income, making it much harder to keep up with other monthly expenses.

Single mothers are a subgroup that is suffering particularly hard. Many of these women are already on tight budgets, and when a major expense hits, it can be hard for them to keep up with monthly bills, let alone pay a credit card off in full. Some even rely on credit cards to cover daily expenses.

Did you know that one of the leading causes of bankruptcy in America is divorce? Many people say issues regarding money cause divorce, but money problems after divorce can also be equally troubling. In many instances, single mothers become the sole financial providers for themselves and their children.

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

How to Handle Creditor Harassment

Posted on October 8, 2018by Admin

Dealing with creditors and debt collectors is one of the worst parts of dealing with debt. Even the thought of continuous debt collection calls can keep a person up at night. Debt collectors are oftentimes relentless when making these calls and can cross the line from a legal standpoint. It is important to remember, that as a consumer you have rights when it comes to debt collection.

The Fair Debt Collection Practices Act (FDCPA) was created to protect consumers from harassment and threatening behavior from third-party creditors.

The FDCPA protects consumers from the following creditor behavior:

Contacting your employer regarding your debt or another party, except for contacting them to get information on your location;
Contacting you at unreasonable hours, either very early in the morning or late at night;
Calling you at work after being told to no longer contact you at your place of employment;
Calling excessively or repeatedly;
Using threatening or abusive language or behavior;
Threatening a lawsuit when they have no intent to pursue a lawsuit;
Threatening to publish or share your information because of your failure to pay a debt;
Any other abusive, obscene or threatening behavior.

The important first step to take when faced with a debt is to ask for confirmation on the amount owed. In fact, the debt collector is required to notify you that you have the right to request this validation within 30 days after receiving the first written communication from the debt collector. Requesting validation of the debt can also be done over the phone. By requesting validation of the debt, the consumer is making the debt collector verify that the debt is actually owed.

If the amount is accurate and you still are not able to pay on the debt, it is always recommended that you speak directly with the creditor and explain the situation. Tell them that you are unable to pay. Never provide your bank account, routing number or debit card information to the creditor.

The FDCPA also dictates other requirements as to when the collector can call, which is only between the hours of 8 a.m. and 9 p.m. The debt collector is also restricted from using any language or tactics that may be deemed harassing, threatening or abusive. If the debt collector tries to contact other third parties, such as friends or family members of the individual, they may not disclose information on why they are trying to reach the debtor but can only contact them to get the correct contact information for them.

The ideal situation would be for the creditor to work with you on an affordable repayment plan option. Many times, a letter from the debtor is not enough to get the collector to stop communication, and at this point, an attorney may be needed to write a letter. If a third-party debt collector persists in this behavior, you may be entitled to file a legal claim for an FDCPA violation and sue them for damages, which can include attorney’s fees plus an additional $1,000.

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

Betsy DeVos Loses Student Loan Lawsuit Brought by 19 States – Protections for Student Loan Borrowers Upheld

Posted on September 13, 2018by Admin

A Washington federal court judge ruled this week that U.S. Secretary of Education Betsy DeVos and the department’s postponement of the Borrower Defense Rule was ‘procedurally improper.’ The lawsuit, brought by 19 states and the District of Columbia, accused her department of delaying regulations meant to protect students who took out loans to attend college from predatory lending practices.

The Obama administration created the Borrower Defense Rule following disclosures that some for-profit colleges lured students with promises of an education and diplomas that would allow them to get jobs in their chosen fields. However, in the end the diplomas and degrees were not recognized by employers, leaving student loan borrowers with massive amounts of debt and nothing to show for it.

Federal student loan borrowers who attended a school that misled them about the quality of their education may qualify for loan forgiveness under the borrower defense repayment rule.

The Borrower Defense Rule changed the regulations for forgiving student loans in cases of school misconduct and required “financially risky institutions” to be prepared to cover government losses in those instances, according to U.S. District Judge Randolph Moss’s 57-page ruling.

Moss continued, by postponing the effective date of those regulations, the Education Department deprived students “of several concrete benefits that they would have otherwise accrued. The relief they seek in this action — immediate implementation of the Borrower Defense regulations — would restore those benefits.”

Moss’ decision also included claims by two student loan borrowers in a lawsuit filed on behalf by the consumer advocacy group, Public Citizen.

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Bankruptcy Law, Credit, Credit Card Debt, Debt Relief

Credit Card Debt Increasing at An Alarming Rate for the Floridians

Posted on September 5, 2018by Admin

Credit card debt is a problem for many Americans across the country, but for Floridians, this problem is growing at what experts say is an alarming rate. According to recent figures released by the credit reporting agency, Experian, Floridians are using their credit cards more than ever, increasing their debt at the nation’s second fastest rate.

The State of Nevada tops the list of states with the highest credit card rate, but Florida is a close second. In fact, credit card balances have increased 8.59 percent as compared to the same time last year. Currently, the national average is at 6.58 percent, and Florida’s rate is well above this national average.

According to Experian, credit card debt nationally is at an all-time high, reaching $786 billion by the end of 2017. It is up 6.7 percent from 2016. The average American holds a credit card balance of $6,354. The use of store credit cards, mortgage debt and debt overall also increased approximately three percent.

Credit card debt can be a slippery slope and is one of the most common problems facing those with serious financial issues. With exorbitant interest rates, fees and penalties, making only the minimum payment does not even begin to make a dent in the total balance.

Credit card companies design fee and repayment structures to keep you from ever getting out of debt. An unexpected job loss or serious medical diagnosis, even a trip to the emergency room can put significant financial strain on individuals and families who are already facing mounting credit card debt.

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Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How Former Billionaire Known As ‘Catwoman’ Went Bankrupt

Posted on July 20, 2018by Admin

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

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

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

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

Click here to read more on this story.

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

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

Understanding the Deceptive Practices of Student Loan Companies

Posted on June 6, 2018by Admin

Over 44 million Americans are finding themselves in over their heads when it comes to student loan debt. It can be hard to see an end in sight when facing six figures of student loan debt following graduation, but for many, student loans are almost considered a “given” if someone wants to pursue a higher education. Private student loan companies are now trying to make it even more enticing to take out more money to cover these costs.

In the grand scheme of things, government loans still constitute the majority of what is borrowed. Currently, private student loans account for less than 10 percent of all student loan debt, which is a relatively small percentage.

Private lenders have been hoping for this to change and have been actively lobbying for legislation that would lessen the restrictions the government has on student loans, specifically when it comes to graduate students.

This legislation, known as the Prosper Act, was written and proposed by Republican lawmakers last year. It caps the amount of federal student aid graduate students can receive. This cap on federal aid leaves a gap between what the students are able to borrow and how much tuition costs. Concerns have been expressed that students will have no choice but to seek private loan options to pay for the remainder of these costs not covered by government aid.

The next step is for these private loan companies to make their product more appealing to borrowers. What better way to do this than by making friends with the borrowers themselves? Many of these companies, in fact, are now making their product seem more like they are a lifestyle company than a lender.

One such company, Laurel Road, has partnered with MoviePass, a movie theater subscription service. The company has announced that if an individual refinances his or her student loans with Laurel Road, that person will be eligible for one year’s subscription.

Another private lender, Social Finance, Inc. (SoFi) has made small changes to its branding by changing how it refers to its borrowers. Instead of “customers,” these individuals are now referred to as “members.” It may seem like a small change, but this difference in designation also includes invitations to exclusive “member only” events, like cocktail parties and cooking classes. SoFi brands itself as more of a social club than what it actually is– a private financial institution. In 2017, SoFi offered 323 nationwide member events for its over 14,000 “members.” The company also offers an app that allows its members who meet at events to communicate to each other through the app.

The Laurel Road partnership is just one example of private lending companies trying to rebrand student loan debt as something more “fun.” The problem is further compounded when these loan companies do very little to educate their borrowers on the terms of the loans. When borrowers fail to pay back the debt as it becomes due, many of these lenders have been accused of illegally harassing their customers. Borrowers have become so desperate to pay back their debts, in fact, that some have even resorted to game show antics to find a way out. Recently, a new game show called “Paid Off with Michael Torpey” has offered student borrowers a chance to compete on TV with the prize being having their student debt paid off. The series is premiering on TruTV in July 2018. Many have criticized this new program, saying it trivializes a very serious, growing problem. However, it does demonstrate what lengths borrowers will go to in order to get some relief from their crippling debt.

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

Study Finds Parent PLUS Loans to African American Families Can Be Predatory

Posted on June 1, 2018by Admin

College is expensive and finding ways to pay for tuition and associated costs can be difficult for many students, as well as their family members. When options are limited, sometimes parents resort to taking out loans themselves to help their children pay for the costs of a higher education. Recently, one such loan has been criticized, the Parent PLUS loan for its terms and conditions, and also the effect it has on the parents who sign on the dotted line, not fully knowing what they are agreeing to.

A study recently issued by New America reports that a higher percentage of low-income African American parents rely on the use of Parent PLUS loans more than low-income whites. The study recommends making the use of Parent PLUS loans off limits to any family of limited financial means and offering additional, and affordable federal loan options for lower income families.

Families often resort to the parent PLUS loans after their children have maxed out other federal loan options. Many of the features of Parent PLUS loans have given them the reputation of being a loan of “last resort.” The limits tend to be fairly generous, the underwriting limited and the interest rates high.

The repayment options that parents are given on these loans are very limited, which only increases the risk that the borrower parents will default on the loan obligation. By having parents take these loans out, creates a level of “intergenerational debt” that can be crippling.

An additional problem with Parent PLUS loans have been the fact that lenders have issued these loans without evaluating the borrower’s ability to repay them. Without properly qualifying the borrower, issuing the loan simply puts them in a situation where he or she ends up falling behind on payments.

These loans were originally intended for families with more financial resources and in higher income tax brackets whose children may not qualify for need-based aid. In fact, most of the PLUS borrowers are from families earning more than $75,000 annually, many of them coming from upper class, Caucasian families with only 10 percent of Caucasian families earning less than $30,000 taking out these loans. However, for African American families, one-third of these individuals who have ended up taking out a PLUS loan earn less than $30,000, which is the opposite of what the study found with Caucasian families in the same tax bracket.

Because of the high fees associated with these loans, repaying the Parent PLUS loans can be difficult. If the parent is already struggling to make monthly payments, few options exist for that parent when it comes to repayment options. Currently the only income-based payment plan is an income-contingent repay (ICR) plan. To qualify, the parent must convert the loan into a federal Direct Consolidation Loan, and the minimum monthly payment in an ICR is normally 20 percent of that person’s disposable income. The monthly payment may be lower, but the interest rate does not decrease. At some point, it becomes nearly impossible for that parent to get caught up.

The study recommends making these loans off-limits to families in the lower-income categories and encourages the Department of Education to allow students from these brackets to borrow more from themselves rather than resort to having their parents take out these types of loans.

The study also recommends no longer allowing schools to characterize these loans as “aid” in financial aid award letters. They also recommend requiring parents who take these loans out to complete counseling that makes it abundantly clear to them that these loans are their sole obligation and not their children, as well as explain the terms of the loans so that they are clearly understood.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

When will a Bankruptcy be removed from My Credit Report?

Posted on May 31, 2018by Admin

Making the decision to file for bankruptcy is never an easy one. Many people hold off on filing for fear of what bankruptcy will do to their credit once all is said and done. However, having a bankruptcy filing on a credit report does not necessarily mean the end of your finances or your ability to access new credit in the future. It is possible to begin rebuilding credit after filing for bankruptcy.

What Type of Bankruptcy?

The most common types are Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy is also known as a liquidation bankruptcy. This type of bankruptcy involves the bankruptcy trustee liquidating assets that are not otherwise exempt and paying off the qualified debts with the proceeds. Chapter 7 bankruptcy allows you to get a fresh start financially and erase past debts, but a legitimate concern consumers have is the effects it will have on their credit score and their ability to take out credit again.

A Chapter 7 bankruptcy filing will take approximately 10 years from the date of filing before the case will come off of the filer’s credit report. On the other hand, a Chapter 13 bankruptcy is known as a reorganization bankruptcy. This case allows the filer to work with the bankruptcy trustee to put together a repayment plan to pay for some or all of the filer’s debts over the course of three to five years. A Chapter 13 bankruptcy case will be automatically deleted from the person’s credit report seven years from the date of filing.

Can the Process Be Faster?

It is possible to have the bankruptcy removed from the person’s credit report sooner than is normally allowed. There is a big misconception that bankruptcy cannot be removed from a credit report and that you will be penalized for 10 years, not being able to access new credit. The truth of the law or the way law is written, there’s a maximum amount of time a bankruptcy can remain on your report, but there is no minimum amount of time.

This is done by filing a dispute with all three of the credit bureaus. It is recommended that the person reviews the bankruptcy filing and the specific debts related to the bankruptcy that appear on the credit report. If any incorrect items are found, the person can file a dispute.

When a credit dispute is filed with one of the bureaus, it must be verified and validated for it to stay on that person’s credit report. If the disputed items are not verified within 30 days of the dispute, they must be removed from the credit report, including bankruptcies.

Getting Back on Your Feet.

Chapter 7 bankruptcy allows you to get a fresh start financially and erase past debts, but a legitimate concern consumers have is the effects it will have on their credit score and their ability to take out credit again.

One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit score and your financial future. To the contrary, after filing for bankruptcy you can begin restoring your credit right away.