Timothy Kingcade Archives - Page 2 of 53

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

10 Things Debt Settlement Companies Won’t Tell You

Posted on May 17, 2018by Admin

When facing overwhelming debt, it can seem like there is no way out, the thought of a third-party debt settlement company coming in and negotiating down the debt can seem like a dream come true. While it can be tempting to jump at this offer, there are several important facts that debt settlement companies will not tell you.

It is important to first understand what makes a debt settlement company different from the normal credit counseling service. A debt settlement company assists in negotiating down the individual’s debt. To qualify, the individual must stop making payments on any debts. All of the late fees, interests and penalties will continue to grow during this time, and the debtor will make payments to an escrow account held by the debt settlement company. When a specified amount has been saved, the company contacts your creditors and tries to get them to accept a lower amount to settle the debt.

If it seems too good to be true…

The consumer facing mounds of debt is able to settle the case for less than what he or she owed. In return, the debt-settlement company collects fees from the consumer for having to negotiate the debt. However, like many things that sound too good to be true, it is not always that easy. In fact, the consumer can end up in a much worse financial situation than they were in before. The debt settlement company, on the other hand, comes out earning fees on the payments made by the consumer. Many times, the consumer will never end up seeing the light at the end of the tunnel and will end up filing for bankruptcy anyway. In the meantime, he or she has been making payments in an escrow account, while accruing fees and costs accumulate.

Debt settlement is not an easy process.

The individual has to basically stop paying his or her bills and let all debt go into delinquency or default. The money that would be going towards the debt goes towards the debt-settlement firm and into an escrow account. By stopping payments on current debts, the creditors are supposed to be fooled into believing they will never receive payment, which will make them desperate to take a lower settlement. However, until that happens, it does not mean the collections efforts will stop. The creditors will want to receive payment and will continue doing anything they can to receive it. The debt settlement firm cannot stop the calls from coming, and they cannot stop the collection efforts during all of this.

Debt-Settlement Companies Cannot Ask for Upfront Fees

In 2010, the Federal Trade Commission made it illegal for for-profit debt-settlement companies to charge upfront fees. Firms are not allowed to collect fees from the consumer before they have settled the debts. If the company is settling debts one debt at a time, fees can be collected on that settled amount, but they are not allowed to ‘front-load’ fees.

There are other alternatives to debt relief.

Other debt-relief options are out there. Credit counseling is available, and many non-profits offer education for consumers on how to get rid of debts. Debt management programs offered through non-profit credit counseling services are also available. Additionally, if all else fails, bankruptcy is an available option. It helps to sit down with a bankruptcy attorney to discuss the possible options, as well as the best ones for the specific debtor.

Debt-Settlement Will Not Save Your Credit Score.

The fact that the consumer simply stops paying his or her credit cards, letting them go delinquent means that the individual’s credit is going to take a hit. Even missing a payment for 30 days means that the consumer’s credit score is going to get hit. Once that happens, it can be hard to get it back.

The Consumer May Still End Up Filing for Bankruptcy.

When all is said and done, the debtor may end up back at the point where he or she would have ended up had he or she not sought debt-settlement. The bankruptcy process provides some protections for debtors that debt-settlement does not. All collection efforts stop with the automatic stay, including the fees from accruing. Also, the Chapter 13 bankruptcy process allows a more structured way for the individual to pay back the debt.

Not All Debt Will Be Settled.

It is possible that the debt-settlement company may not end up settling all of the debt. They normally deal with liabilities that are unsecured, like credit cards, medical bills and unsecured loans. Debts that have collateral attached to them, such as mortgages or car loans, can be a little more difficult. Creditors are not under an obligation to work with debt-settlement companies, which is why many debts end up not being successfully settled.

Debt Settlement Lawyers Do Not Represent You.

Many debt-settlement firms will tell consumers that their attorney represents them in negotiations with the creditors. However, half the time that means the attorney is basically letting the debt-settlement company utilize their letterhead. Most of the time, the attorney on the letterhead will never truly represent the consumer, and consumers should never assume or rely on false promises that they are legally protected by representation.

You don’t need them.

One big issue debt-settlement companies do not want you to know is that you can do this alone. Nothing prevents a consumer from negotiating a settlement directly with the creditor. Many consumers are actually successful in working with creditors on a mutually-beneficial solution, independent from third-party intervention.

Prepare for Tax Consequences.

The Internal Revenue Service considers debts that are forgiven, cancelled or discharged to be taxable income. If a consumer is successful in reducing or paying off their debts through settlement, they may still owe taxes for the amount that has been written off. In fact, consumers will receive a 1099-C form for any debt that applies as income, and this will need to be reported as gross income for taxes. The only exception to this rule is for taxpayers who are insolvent, meaning they owe more than they own.

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, Credit, Debt Relief, Timothy Kingcade Posts

Yahoo Users Can Sue Over Data Breach

Posted on May 15, 2018by Admin

A federal court has recently ruled that a lawsuit regarding Yahoo’s recent data breach, exposing the personal information of its nearly 3 billion users can go forward. The decision was announced on May 11, after U.S. District Judge, Lucy Kohl, rejected a request from Verizon Communications to dismiss many of the claims made against the company for negligence and breach of contract. Verizon Communications purchased Yahoo’s Internet business in June 2017.

The case stems from three different data breaches that occurred between 2013 and 2016. Yahoo has been criticized with how slowly it reacted to the breaches and informed their users. The breaches were not discovered and revealed until after Verizon agreed to buy Yahoo’s business. Upon discovering this news, Verizon demanded a $4.5 billion cut in the purchase price for the company.

Customers were later informed about the release of confidential information, which increased users’ risks of identity theft. Users were then required to pay for credit freezes and continued monitoring on their credit reports.

Kohl stated that, had customers been informed about the breach sooner, they would have taken measures against identity theft and fraud. By the time the company had informed users of the breaches, many of them had already had their identities stole by hackers who used their personal data to file fraudulent tax returns and make illegal credit card charges.

Initially, the company had said that one billion users were a part of the hack, but it later came out that three billion of the users were affected by the breaches. In fact, the complaint filed by plaintiffs had to be amended in October 2017 after it was revealed that the breach ended up affecting three billion users.

Kohl said the fact the complaint had to be amended to include these additional users highlighted just how serious the issue of security was in the plaintiff’s decision to use Yahoo as an Internet service.

In March 2017, two Russian intelligence agents and two hackers were charged by U.S. prosecutors for crimes connected with the Yahoo breaches. One of the accused hackers, Karim Baratov, pleaded guilty to aggravated identity theft and conspiracy charges.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorneywho 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.consumeraffairs.com/news/yahoo-users-can-sue-over-data-breaches-031318.html

https://www.reuters.com/article/us-verizon-yahoo-breach/data-breach-victims-can-sue-yahoo-in-the-united-states-judge-idUSKCN1GO1TL

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

How Student Loan Debt Can Affect Your 401K

Posted on May 14, 2018by Admin

Student loans and retirement planning may not seem like two things that would affect each other. Usually, the first thought after graduating is to get a job to start paying back student loan debt. However, student loan debt has become an increasing problem when it comes to saving and planning for retirement.

More and more students are graduating with student loan debt today. And for those starting their careers fresh out of college, many are finding it hard to save for retirement along with meeting their monthly obligations, the biggest of these being student loan payments.

New research shows that families age 45 to 54 with zero student loan debt have an average 401(k) balance of $80,000. Take that same age demographic and add the issue of student loans, and the median balance for their 401(k) drops to $46,000. Families who have heads of household younger than 35 with student loans carry a median 401(k) balance of $8,000.

Some companies are helping their employees with student loan debt. In January 2016, Fidelity launched a program to help their own customer service associates pay up to $2,000 of student loan debt annually, with a lifetime maximum of $10,000. Fidelity employees responded well to the program with 8,400 employees taking advantage of it, the majority of them being in the younger demographic.

Another company, Gradfi, a fintech company, started a student loan repayment program, offering this service to 100 employers in 2016. Gradfi is now working with 350 companies across the United States, including Peloton and Pricewaterhouse Coopers. Employers can use these programs to draw in key hires, but also work on retaining employees once they are hired.

One downside to these student loan repayment programs, however, is the fact that these employer payments must be considered as taxable income to employees.

For the time being, it is advisable to factor in both payments on student loan debt and contributions to retirement savings. Every bit helps and making those smaller contributions today will build up to larger contributions over time as student loan debt decreases. Take advantage of employer-matched money when making these contributions, and speak with your financial advisor to see how much you can contribute comfortably.

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, Debt Relief, Timothy Kingcade Posts

Second Landlord This Month Held in Contempt of Court for Willful Violation of the Bankruptcy Automatic Stay

Posted on May 11, 2018by Admin

Miami bankruptcy attorney Timothy S. Kingcade’s Motion Granted by Judge, Creditor Required to Cease and Desist all Eviction Proceedings and Pay Attorney’s Fees and Other Sanctions

MIAMI – (May 11, 2018) This is the second time this month Bankruptcy Attorney Timothy S. Kingcade, founding partner of Miami-based Kingcade Garcia McMaken and Attorney Kristina Gonzalez, have successfully obtained an Order for a client in a Chapter 7 case, requiring the creditor to cease and desist all eviction proceedings and pay attorney’s fees. The creditor in the case (In re Danny Looney Case No. 17-25332-LMI), Massmar Investments, LLC, was listed in the bankruptcy petition and was advised multiple times that the client was in bankruptcy.

“This is a victory today for our client. The landlord in this case chose to completely disregard the automatic stay put in place that protects bankruptcy clients from harassment and repossession of property. Despite having notice of the bankruptcy, the landlord continued with eviction proceedings, disregarded the law and harassed my client to no end,” Kingcade said. “Unfortunately, this is something we are seeing more of in my practice.”

The Order directs creditor, Massmar Investments, LLC to cease and desist any further eviction proceedings and dismiss the wrongfully filed eviction case, abide by the automatic stay, and pay attorney’s fees to Kingcade Garcia McMaken for having to bring forth the action.

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Miami-based Kingcade Garcia McMaken was established by managing partner and bankruptcy attorney, Timothy S. Kingcade in 1996. The firm represents clients throughout the State of Florida in Chapter 7 bankruptcy and foreclosure defense cases. The firm is committed to providing personalized service to each and every client, clearly explaining the options according to the unique circumstances of his or her life. The office environment and the service provided are centered on a culture of superior client care for the financially disenfranchised. All partners and associates at Kingcade Garcia McMaken specialize in consumer bankruptcy and foreclosure and have dedicated their practices to this area of the law. Additionally, all attorneys and staff members at the firm are bilingual speaking Spanish.

For more information visit, https://www.miamibankruptcy.com/.

Bankruptcy Law, Debt Relief

Can Debtors Recover Damages for Emotional Distress for Violations of the Automatic Stay?

Posted on May 10, 2018by Admin

One of the benefits of filing for bankruptcy involves the automatic stay, a measure that goes into effect as soon as the bankruptcy case is filed. This automatic stay puts a halt to any collection proceedings or efforts, giving the filer reprieve from the continuous calls and communications from creditors seeking to receive payment on their debts.

Actual and Punitive Damages

Under the Bankruptcy code, if an individual undergoing a bankruptcy is injured by a “willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and – in appropriate circumstances – may recover punitive damages.” 11 U.S.C. § 362(k)(1). It is up to the court to determine whether “actual damages” includes damages for emotional distress, and this normally comes down to the question of whether the violation was accidental or intentional.

Was the Violation of the Automatic Stay Deliberate?

In some situations, a creditor can violate the automatic stay accidentally or unintentionally. Other times, the violation can be deliberate , and in complete disregard for the law. The stay is automatic, and many creditors, if they have a registered contact with the court, will find this out as soon as the stay is instituted. However, if the creditor is a smaller company, they may not find out quite so quickly, which means if the creditor continues to contact the debtor, that initial contact could be an accidental violation of the stay.

To seek damages for the violation, the filer needs to show the court that the creditor violated the automatic stay willfully. The creditor must have known that the contact or communication was prohibited but did so in spite of that knowledge. If the filer expressly gave someone employed by the creditor the information regarding the bankruptcy, then he or she has the evidence needed to show that the violation was willful.

Court Treatment of Violations of the Automatic Stay and Emotional Distress

Four circuits, including the first, third, ninth and 11^th circuits, have affirmed that emotional distress damages are available if a creditor violated the stay. In recent cases, the courts have reviewed the legislative history and found evidence that the emotional consequences of the debtor were considered when creating the automatic stay. The history showed that Congress meant to protect not only the financial interests of those filing for bankruptcy, but the non-filing ones, as well. However, the fifth and seventh circuits have not been as strong in their rulings when it comes to emotional distress damages. These courts have been skeptical in the ability the bankruptcy court has to award emotional distress damages in a bankruptcy matter.

Filing a Claim

If a filer believes that he or she has been victim to a willful violation of the automatic stay, it is recommended that the individual consult a bankruptcy attorney before proceeding. The attorney can help determine what the best course of action is, given the circumstances of the case. A motion may be appropriate to request the judge to issue an “order to show cause,” requiring the creditor to provide the reason why the violation occurred. If damages were particularly significant, a lawsuit for these damages may be necessary and justified.

Related Resources:

https://www.thebalance.com/your-rights-when-a-creditor-violates-the-automatic-stay-316196

Bankruptcy Law, Credit, Debt Relief

5 Ways to Erase Your Credit Card Debt

Posted on May 9, 2018by Admin

Credit card debt can be frustrating to no end and is easily one of the most common debts individuals who later file for bankruptcy find themselves battling. Every situation is different, and while there is not a single solution for getting out of credit card debt, certain tips and tricks can help individuals who find themselves drowning in this type of debt.

Use All Resources to Pay the Debt

The most common method used in the past was to take all resources available to pay off the debt. While it is an effective method, it is one that requires a lot of dedication, as well as a lot of time. It starts with the individual cutting up their credit cards and using cash only to pay for essential living expenses. It is recommended that the person first sit down to make a list of all cards he or she has, writing down the interest rate for each card, as well as the minimum payment on each.

Utilizing what is known as the “debt avalanche” method, the person targets one credit card balance at a time. This means that the person pays the minimum payments on all other cards with the exception of the first card with the highest interest rate. To come up with the amount the borrower can afford to pay towards this car, he or she will need to create or revise a budget, eliminating all unnecessary expenses, and see what amount is left after all living expenses are covered. The person will throw all of the money towards the first debt, and as soon as that debt is paid, the card with the next highest interest rate is handled and so on until all debts are paid.

However, when the card’s interest rate is too high, the individual has too many debts to handle or he or she has no extra money to contribute to paying the cards off, other options may need to be used.

Balance-Transferring Card

If the individual still has a good credit score, it is possible he or she could transfer the balance from one or more of these cards to a newer one with a lower interest rate. Many cards offer a limited-time 0 percent annual percentage rate for a certain period of time and waive a balance transfer fee during this period. This time period can allow the payer a chance to catch up without the debilitating interest rates preventing any progress. However, the key is the person needs a good credit score, as well as savings or funds available to pay off the balance during this period of time with 0 percent APR.

Credit Card Consolidation Loan

Sometimes paying off the credit card debt can be too much to pay without help. In these situations, credit card consolidation loans are a possibility. According to Bankrate, the average rate for these loans is 16.84 percent for credit cards these debtors are facing, which can be near impossible to conquer. A credit card consolidation loan allows the person to pay off the credit card balance with a loan for the same amount but a lower rate. The rates for these loans start around 10.00 percent with lower fees than the credit cards. These personal loans are available for borrowers with less than perfect credit, but the borrowers will need someone to cosign the loan or at least put up collateral to cover the loan.

Debt Management

Another option is for the borrower to enroll in a debt management program or plan (DMP) and receive assistance from a credit counseling service. A qualified credit counselor will work with the individual to put together a budget, create a plan to pay off the debt and to work with the creditors to negotiate the debt. Also, under a DMP, the person will consolidate the debt into one monthly payment with a small monthly fee that is capped by the state. This option is available for individuals with poor credit, and the process can take approximately four to five years.

It is important that the person find a company who is qualified, such as the Financial Counseling Association of America. If a company promises the debtor that it will be able to completely get rid of the debt, it is likely a scam. Do the homework before choosing a company.

File Bankruptcy

Sometimes, the individual has no choice but to file for bankruptcy if the amount of debt is too much to handle. It is at this point that a bankruptcy attorney needs to be consulted. An attorney can help the person determine whether other options exist, and if no other option does exist, the attorney can advise the individual on what type of bankruptcy is best for his or her situation, whether that be Chapter 7, 11 or 13 bankruptcy.

Debt Relief, Student Loans, Timothy Kingcade Posts

Student Loan Debt is Doubling, Tripling, and Even Quadrupling for Some

Posted on May 8, 2018by Admin

For a number of individuals, what they borrow in student loans can end up being only a portion of what they wind of up owing. Student loan debt stands at a staggering $1.5 trillion and outstanding student loan debt has tripled over the last decade in the U.S. This is in part due to many borrowers seeing their balances spiral out of control. According to Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, “There are ways these loans are structured that encourage this ballooning.”

Many schools have hired consultants to ‘encourage’ struggling borrowers to put their loans into forbearance, which provides a temporary postponement of payments, for a three-year window, according to an April report by the Government Accountability Office (GOA). While forbearance prevents a borrower from defaulting and accumulating late fees, there are better options, such as income-driven repayment plans.

When a borrower’s student loans go into forbearance the interest on the debt continues to accumulate. Borrowers are often shocked by the new, higher balance. Another disappointment is the 2007 program, Public Service Loan Forgiveness, which allows certain student loan borrowers in government or non-profit public service jobs to wipe out their remaining debt after 10 years of on-time payments. However, a number of students claim that after making 10 years of payments and trying to obtain forgiveness on the remaining balance, were told they did not qualify because they had the ‘wrong type’ of loan. The Consumer Financial Protection Bureau issued a report last year about how many people believe they are paying their way toward Public Service Loan Forgiveness only to learn they do not actually qualify for one technical reason or another.

Click here to read more on this story.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Cambridge Analytica to File for Bankruptcy After Misuse of Facebook Data

Posted on May 4, 2018by Admin

Cambridge Analytica, the political consulting firm that has found itself in a firestorm of controversy recently, announced on Wednesday that it would be closing operations and filing for bankruptcy. This announcement comes after the company has been the focus of political scrutiny due its business practices and the part it has allegedly played in the presidential campaign of Donald J. Trump.

For those who are not already aware of the scandal, it was discovered two months ago that Cambridge Analytica and Facebook were involved in the compromise of personal information of about 87 million individuals. It was alleged that this personal information was given to Russian bots or other companies and individuals who were a part of creating propaganda to help influence the Presidential election.

In a statement, Cambridge Analytica said the controversy had driven away essentially all of its customers, resulting in having to file for bankruptcy in both the United States and Britain. It will also be shutting down the elections division of SCL Group, the Cambridge British affiliate.

However, now that the announcement has been made, many are questioning who will hold the company’s intellectual property, which includes the voter profiles that were a part of the data release from Facebook. Where will this information go now that the company is no longer in business?

The company said it conducted its own independent investigation, results of which were released on Wednesday. In its results, Cambridge Analytica seemed to downplay the assertions that were made by former employees about how it acquired the data from Facebook, and the information also downplayed the role Christopher Wylie, the contractor who ended up being the whistle-blower on the whole deal, calling the role Wylie played “very modest.”

Cambridge Analytica is financially backed by a wealthy Republican donor, Robert Mercer, who is said to have invested at least $15 million of his money in the company. The company has been said to have offered tools to help identify the personalities of the typical American voter and ways to influence their behavior. These techniques were what led the company’s work for the Trump campaign, as well as other candidates in the 2014 and 2016 elections. It was the help these techniques gave to the Trump campaign, however, which has brought the company under such scrutiny, scrutiny that has apparently led to the company’s financial downfall.

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 attorneywho 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, Timothy Kingcade Posts

Can a Person File for Bankruptcy More Than Once?

Posted on May 2, 2018by Admin

Many clients want to know if a previous bankruptcy filing is going to prevent them from being able to file again. Many factors go into when and whether it can be done, but the two biggest factors are what type of bankruptcy was filed previously and how long ago the case was filed.

No Bar for Subsequent Filings Exist

The good news for bankruptcy filers is there are no limits on the number of times a person can file for bankruptcy. However, the bankruptcy courts do not want to see individuals misuse the system with multiple filings made in bad faith. It is for this reason that the law does impose certain statutory requirements and prerequisites that filers must meet to be able to file again. If an individual has filed for bankruptcy previously, it is important that he or she contact an experienced bankruptcy attorney to discuss the options available, as well as the requirements for filing again.

Previous Chapter 7 Bankruptcy Filing

If the previous bankruptcy filing was a Chapter 7 case, the individual must wait at least eight years from the date of the previous bankruptcy filing before filing a second filing, if that person wants to file another Chapter 7 case. However, if the person filed a Chapter 7 bankruptcy case for the first filing but now wants to go forward with a Chapter 13 reorganization case, the time is shorter, and that person must only wait four years from the date of the first bankruptcy filing date.

Previous Chapter 13 Bankruptcy Filing

If the previous bankruptcy filing was Chapter 13, certain time limits do apply. If the previous case resulted in a bankruptcy discharge, the filer must wait at least six years from the date the first Chapter 13 case was filed before he or she can file for and get another discharge in a later Chapter 7 case. However, exceptions do exist to this rule. If the filer paid back all of his or her unsecured debts or at least 70 percent of the unsecured debts were paid, and the plan was to pay them back in good faith, the six-year rule does not apply. If the later case is a Chapter 13 bankruptcy again, the filer cannot get a later Chapter 13 bankruptcy unless the case has been filed at least two years after the date the first case was filed.

Case Dismissed with Prejudice

However, other exceptions exist to the rules listed above. The filer can be prohibited from filing a later bankruptcy case if the bankruptcy court dismissed the previous bankruptcy case with prejudice, meaning the person who had filed the case failed to comply with court orders, filed multiple cases with the purpose of deceiving creditors or the case was not filed in good faith.

Related Resources:

http://www.attorneys.com/bankruptcy/can-a-person-file-for-bankruptcy-more-than-once

http://www.alllaw.com/articles/nolo/bankruptcy/how-often-file.html

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

Disabled no longer face big tax hit when student loans are forgiven

Posted on May 1, 2018by Admin

Borrowers who have had their federal student loans forgiven due to “total and permanent” disability determinations will no longer have to pay federal income taxes on the amount forgiven. This change is great news for borrowers who anticipate having loans forgiven in the future. However, if the disabled borrowers were granted loan forgiveness prior to the rule change in December, the benefit does not extend to them as the Tax Cuts and Jobs Act is not retroactive.

According to a report issued by the U.S. Government Accountability Office (GAO) in December 2016, the United States Department of Education forgives an estimated $2 billion in loans owed by disabled borrowers annually.

Disabled borrowers include veterans who are no longer able to work due to service-related injuries but also anyone who is determined to be “totally and permanently disabled” by a physician and is now receiving disability benefits from the Social Security Administration. According to the GAO, over 213,000 people were approved for discharges due to total and permanent disability (TPD) in 2014 and 2015. The typical amount forgiven in 2015 was around $17,500, an amount which would be then considered taxable income by the IRS.

In 2016, the Department of Education, utilizing a computer matching software, identified an additional 387,000 borrowers who appeared to be eligible for loan forgiveness. Notifications were then sent to these individuals regarding their eligibility, also warning them of the tax consequences. An additional 19,000 in new approvals for loan forgiveness were then made.

However, the fact that only 19,000 followed through showed that borrowers may have been either intimidated by the paperwork or scared of the tax consequences of the student loan forgiveness.

Now that no federal tax implications are tied to loan forgiveness for disabled borrowers, lawmakers want to see the Department automatically clear out the debt of those who do meet the eligibility requirements by using the same or similar computer matching program that was previously used. In fact, on Feb. 15, eight lawmakers sent a letter to Secretary of Education Betsy DeVos and VA Secretary David Shulkin, asking that the process begin in discharging these debts.

“Veterans who have served our country with honor and sustained a debilitating service-connected disability are still facing the burden of payments on debt that is eligible to be forgiven,” the letter said. “Delaying benefits owed to our veterans due to a lack of coordination among federal agencies is unacceptable.”

Certain issues may delay borrowers from filing for a TPD discharge, especially if the filer is not a veteran. Delays have been known to happen at the Social Security Administration level.

“Borrowers with disabilities who are eligible for loan discharge may still struggle to get relief from the burden of their student loans,” the Consumer Financial Protection Bureau’s student loan ombudsman, Seth Frotman, reports. “Borrowers complain to the Bureau about problems related to every stage of the TPD discharge process.”

Once approval has been given for the disability and the borrower has been approved for loan forgiveness, it is also still possible that the approval can be taken away if the borrower fails to submit to annual income verification that is required for the three years following the approval, also known as the three-year monitoring period. The IRS is not notified that the loan has been forgiven until after the three-year period has been completed.

However, if the borrower was given TPD discharge through a VA application, he or she will not need to do the three-year monitoring period.

The Consumer Financial Protection Bureau (CFPB) suggests borrowers do the following when seeking TPD loan discharges:

Provide proof of disability from a physician, the Social Security Administration or Veterans Administration;
If the borrower’s loans are in default, it is recommended that he or she apply for discharge as soon as possible. Any payments being taken out of social security benefits will then stop while the application is being reviewed;
Remain in touch with the loan servicer during the three-year review period;
Discuss other options if the borrower has been turned down for a TPD discharge. Other income-based repayment plans do exist to help ease the burden if the borrower cannot get a total discharge.

There are ways to file for bankruptcy with student loan debt. 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 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.credible.com/news/student-loans/disabled-no-longer-face-big-tax-hit-student-loans-forgiven/