Tag: Paycheck Protection Program

Bankruptcy Law, Bankruptcy Trends, Consumer Bankruptcy

Bankruptcy Filings on the Rise

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With federal pandemic aid programs ending, many Americans are finding themselves in difficult financial situations. Rising interest rates and high inflation make these situations all that much worse. As a result, bankruptcy courts are now seeing a spike in bankruptcy filings.

According to data from Epiq, the total number of bankruptcy filings increased in January 2023 by 19 percent, to 31,087 filings from one year ago. Additionally, the number of American consumers who filed for bankruptcy in Chapters 7, 11, and 13 increased by 20 percent from one year ago.

Debt Collection, Debt Relief

Predatory Debt Collectors Barred from PPP Loans Under New Bill

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New legislation introduced this week will effectively bar all predatory debt collectors from receiving money from funds received under the federal government’s Paycheck Protection Program (PPP).  

The measure has been introduced by Representatives Suzanne Bonamici (D-Ore.) and Marie Newman (D-Ill.). In announcing the proposed legislation, the lawmakers pointed to an analysis conducted by the Washington Post in January 2021. The Post reported several incidents where debt collection companies had harassed consumers for payment on debts after they had received their own financial assistance from federal PPP loans. It was their hope that this legislation will curb these practices and will effectively block predatory debt collection firms from receiving PPP money themselves.  

COVID-19, student loan debt

New PPP Loan Rules Make It Easier for Student Loan Borrowers to Obtain Funds

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New rules with respect to who can receive financial assistance through the Paycheck Protection Program (PPP) will open the door for struggling student loan borrowers who have previously been unable to qualify for the PPP loan program. These new regulations took effect on March 1, 2021.  

The funds received through the PPP were meant to offer financial assistance to struggling businesses, allowing them to stay in operation during the COVID-19 pandemic. For the most part, these loans are forgiven later. Previously, any business that was owned 20 percent or more by an individual who had defaulted on his or her student loan payments was considered ineligible for PPP loan assistance. This rule clearly shut out a large group of individuals and businesses who arguably could use the governmental assistance.  

The Biden administration has changed this rule, effective March 1, 2021. A default or delinquency on student loan payments will not automatically disqualify a PPP loan applicant. This change comes along with several others, including priority access for businesses employing 20 or fewer individuals.  

Over the past several years, student loan debt has surpassed credit card and auto debt with over 42 million Americans carrying some amount of student loan debt. Of this number, approximately one-third of them are in either delinquency or default on these loans.  

According to a report by the Center for Responsible Lending, a large number of these borrowers are self-employed. Approximately 800,000 self-employed Americans are reportedly behind on their student loan payments. Additionally, 500,000 minorities have also be excluded from PPP assistance due to the status of their student loans.   Student loan reform advocates have praised this change, saying that small business owners have been bearing the brunt of the financial struggles suffered during the COVID pandemic.

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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.  

Coronavirus, COVID-19, Debt Relief

Floridians Hope to Receive Relief from Second Round of Stimulus Payments

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As coronavirus (COVID-19) continues to affect the economy, many have been wondering when another relief package would be passed by Congress. After the CARES Act was passed in March 2020, providing the first source of stimulus payments, consumers have been anticipating a second source of stimulus payments to help during their continuing financial struggles. Fortunately, at the end of December 2020, a second stimulus relief package was passed by Congress and signed by the President, providing them with a sense of reprieve.

As compared the $2 trillion CARES Act passed last March, this second package totals $900 billion. Additionally, while the previous package provided $1,200 per taxpayer, this new bill provides $600 per individual making less than $75,000 annually. The new legislation provides $600 per child, while the previous legislation provided $100 less per child.