Bankruptcy and Foreclosure Attorney Blog

Student loans can be a huge financial burden on recent graduates. With the economy in the state that is, jobs are not as available as they once were. With a degree and no job, you may find yourself in a situation where you default on your student loans. You may think bankruptcy is an option, however, many government-backed student loans and loans back by nonprofit agencies are not discharged in a bankruptcy. This means that whatever you owe you will still have to pay after the bankruptcy.

There is one exception. You can rid yourself of you student-loan-debt if you can prove the debt is a substantial hardship—this is difficult hard to prove.

To have a student loan discharged, David Light, managing editor of Consumer Bankruptcy News, a Florida-based newsletter, said you must prove things:

1. You cannot keep up with your payment schedule.
2. Your future inability to pay and that your financial situation is permanent; and
3. You’ve made a good faith effort to pay

Good faith efforts include: being fully employed as you can be, being upfront and honest with your lender, and while you were employed you were making payments.

Recent graduates have the hardest time proving a substantial hardship because you have no prior history of non-payment.

If you cannot discharge your student loans in a bankruptcy, what are your alternatives? One advantage to student loans is that is has more repayment options than any other type of loan. If you foresee yourself defaulting you need to inform your lender, this is one fatal mistake student-loan-borrowers make frequently. If you talk to you lender early on, the more likely it is a plan can be constructed to fit your condition. Other options include: consolidation, negotiating with the lender, and consulting with a counseling service to get your other financial affairs in order so you can afford to repay the loans. To read more on this topic see The financial burden of student loans.

Contact a Florida Bankruptcy Attorney to discuss whether or not you may be able to prove a substantial hardship and include your students loans in your bankruptcy.

Making the decision to file for bankruptcy is difficult. There is no formula to use in order to determine whether or not you should file for bankruptcy, the decision is personal. You might want to consider filing for bankruptcy if you find yourself in these predicaments:

1. Are paying the minimum on your bills
2. Cannot make a budget for yourself that would get you out of debt in 5 years.
3. Are getting foreclosure notices on your mortgages or other loans.
4. Have experienced a severe financial setback: lost job or costly divorce or illness.

Although bankruptcy does get rid of a majority of your debt, there are some obligations that are not included in a bankruptcy action:

1. Alimony
2. Child Support
3. Most recent back taxes
4. Student loans, unless you can prove a substantial hardship in having to repay them
5. Fraudulent debts
6. Cash advances of $825 within 70 days of filing
7. Fines or penalties of government agencies
8. Recent, large purchases of $550 or more for luxury goods within 90 days of filing.

To read more on this topic see Bankruptcy in Florida.

Contact a Florida Bankruptcy Attorney to help you make the difficult decision on whether you should file for bankruptcy. A bankruptcy attorney can help guide you in the appropriate direction, discuss alternatives that may be available, and protect your interests.

A U.S. Bankruptcy Court judge in Jacksonville gave the owners of the Sawgrass Marriott Golf Resort & Spa in Ponte Vedra Beach a win in the first round of their foreclosure fight with Goldman Sachs Mortgage Co. in late June.

The judge denied Goldman Sachs’ motion to proceed with the foreclosure, granting RQB Resort LP and RQB Development RP another six months to file a reorganization plan and approving the hiring of an investment firm to search for investors to raise capital.

RQB filed for Chapter 11 bankruptcy protection last March; it currently owes Goldman Sachs $193 million. Goldman Sachs told the bankruptcy court that they believe the Sawgrass Marriott is worth significantly less than the $220 million purchase price, and that the resort has not been generating sufficient revenue to service its debt.

RQB management has said that while revenue was down 25 percent in 2009, the resort remained profitable. Sawgrass Marriott general manager Jeff Mayers said that normal operations are continuing as usual.

The Sawgrass Marriott is adjacent to the TPC Sawgrass Players Stadium golf course, where The Players Championship is played every May, as well as the Dye’s Valley Course, which will host another PGA event in October. Neither of these facilities is involved in the Sawgrass Marriott Jacksonville bankruptcy case.

A 58-year-old Leesburg business – the Lucky Lure Cricket Farm – has filed Chapter 7 bankruptcy liquidation after a virus destroyed its cricket colonies.

According to a recent Orlando Sentinel report, the Lucky Lure Cricket Farm supplied millions of the insects to Florida zoos, theme parks and reptile owners every month until a quick-spreading virus contaminated the facility and forced the business into bankruptcy earlier this month.

The Lucky Lure was Florida’s oldest commercial insect farm; a University of Florida entomologist said that the densovirus, which wiped out several similar European farms, has no known cure and is almost impossible to remove.

The Lucky Lure’s owner, Beth Payne, consulted with UF entomologists and tried to restart her business several times by investing in cleaning and sterilization equipment but was unsuccessful. She says she believes the virus came from a tainted shipment of worms from California.

The Lucky Lure shipped 32 million crickets in six months in 2009, and was expecting 2010 to be an even better year for sales. A box of 1,000 crickets cost from $10.50 to $21, depending on the total number of boxes ordered.

Payne’s husband, a former Hollywood cameraman who died in 2008, purchased the Lucky Lure in the late 1980s when he moved to Florida. Lucky Lure supplied crickets to Disney’s Animal Kingdom, Busch Gardens, SeaWorld, the Central Florida Zoo and Botanical Gardens and other major Florida attractions.

Florida Ponzi scheme operator Scott Rothstein, sentenced recently to 50 years in prison on five felony counts of bilking investors out of $1.2 billion, turned over 27 luxury cars and boats to the bankruptcy trustee in charge of liquidating his assets.

But the feds also seized over 300 pieces of jewelry that Rothstein’s wife, Kimberly, says belongs to her. And she wants it all back.

Kimberly Rothstein’s attorneys filed papers in the U.S. District Court in Fort Lauderdale saying that the government should not be able to seize assets that were gifts from her husband prior to his criminal acts, and are solely her property.

Kimberly Rothstein, who was married to her husband just two years ago, currently faces a lawsuit brought by the Rothstein law firm bankruptcy trustee to recover $1.1 million in assets that he says she wrongly received.

According to that suit, Kimberly Rothstein used the law firm’s American Express card to purchase more than $880,000 worth of jewelry, spa services, plastic surgery treatments, shoes, clothing, handbags, hotel rooms, meals and other personal expenses. She was also reimbursed by the firm for charitable contributions as well as contributions to several political campaigns in 2008.

In addition to the return of her jewelry, she is also seeking dismissal of the bankruptcy trustee lawsuit.

Former Jacksonville Jaguars quarterback Mark Brunell has filed for Chapter 11 bankruptcy protection, due primarily to a number of lawsuits he faces over failed business loans and bad real estate deals.

Brunell, who reportedly earned over $50 million during his 11 years in the NFL, was most recently the back-up quarterback last year for the Super Bowl Champion New Orleans Saints. He currently lives in Ponte Vedra Beach, Florida, and is a free agent this year.

An article in the Florida Times-Union reported that Brunell is currently involved in a lawsuit stemming from a $2.2 million loan made by CNL Bank in 2005 for a real estate project in Jacksonville Beach. CNL started foreclosure proceedings on the property in May of 2009.

Brunell also had a judgment entered against him and his partners in two Michigan real estate deals worth $1.1 million.

In a statement, Brunell said that he had been making the payments on the real estate loans himself when the partnership known as Champion LLC – which includes former Jaguars players Joel Smeenge and Todd Fordham – could no longer service the debt. He said he was filing Chapter 11 bankruptcy because he could no longer afford to shoulder the burden of those payments alone.

Brunell also said he remains committed to the Jacksonville community, and to continuing to support his Brunell Family Foundation that raises funds for critically ill children and their families.

HUD has announced that another $1 billion in federal funds will be made available to purchase and renovate abandoned homes in areas hardest hit by the foreclosure crisis. Most of the money is likely to go to Florida, California, Arizona and Nevada.

According to a report at the Huffington Post, HUD Secretary Shaun Donovan made the announcement at a media breakfast earlier this week:

Most of the money will go to benefit states such as Nevada, California, Florida and Arizona, which have been most affected by the housing crisis, providing them with funding to purchase and rehabilitate vacant homes.

The reallocated money could help Las Vegas more than any other single city, Donovan noted.

But there's evidence that the country has too many houses on the market already, the fallout of over-zealous construction during the boom years. In Las Vegas, for instance, there are 9,517 new homes sitting empty and in the first quarter alone 5,600 homes were repossessed by lenders, according to recent reporting in the New York Times. Donovan responded to this directly: "We have seen substantial improvements in many badly depressed markets... I wouldn't say Las Vegas is a good example of what's happening around the country."

Renovating and reselling houses is only a fraction of what officials aim to do with the incoming money. The administration will work with Congress on HUD's Neighborhood Stabilization Program, with additional dollars for foreclosure prevention counseling. In places like Cleveland and Detroit, Donovan is planning what he called a fundamental rethinking of land use.

"What was encouraging [in Detroit]," says Donovan, reflecting on his trip to the city last month, "was that Mayor Bing is thinking strategically." Outside-the-box initiatives include a commitment to building better public transportation, in particular a new streetcar line and maybe a commitment to rural farming.

If you are a Florida homeowner facing possible foreclosure, contact our Jacksonville, Florida foreclosure law firm.

The new financial reform legislation which was approved by a committee of the House and Senate on Friday includes a provision designed to aid unemployed homeowners threatened with foreclosure. According to the legislation, $1 billion will be allocated to ensure unemployed homeowners do not lapse on their mortgage payments. Qualified homeowners (ie. those who have a reasonable prospect of resuming mortgage payments within 24 months) may be able to borrow up to $50,000 to assist them with mortgage payments.

In the face of rising unemployment rates and a growing number of foreclosure filings, legislators introduced the provision to reduce the likelihood of families being unemployed and homeless at the same time. As unemployment rises, families are more likely to lose their homes in the growing financial crisis.

This particular initiative was modeled after a successful Pennsylvania program that has helped tens of thousands of unemployed workers avoid foreclosure.The provision is part of the financial overhaul legislation which is expected to receive a final vote next week. Legislators have told the President it will be ready for his signature by July 4th.

If you have questions about this program and it's effect in Florida, contact a Florida Foreclosure Defense Attorney.

The recent decline in both residential and commercial property values, spurred by the rapid rise in Jacksonville foreclosures, has led to a drop in taxable property values in Duval County, which means less money for area schools and the City of Jacksonville.

According to the Duval County Property Appraiser, Duval County taxable property values have dropped five percent in 2010 from 2009 values. The estimate for 2010 is $55.4 billion, down from $58.4 billion last year.

While the drop in property value saves taxpayers money in the short term, it leaves local governmental entities with “less to do more,” which increases the likelihood of a property tax rate hike to make up the shortfall.

Last year, the millage rate for Duval County and Jacksonville increased from 16.4954 to 17.3050, according to the Duval County Property Appraiser’s Office.

On a positive note, the Duval County Appraiser’s Office said that the county’s real estate base is more diverse than other areas of the state where the majority of the taxable property base is residential. When foreclosures ease and the market begins to rebound, Duval County is expected to see a quicker restoration to increases in its taxable property base.

If you are a Jacksonville homeowner facing possible foreclosure and need to know about all your options, contact our Jacksonville, Florida foreclosure law firm.

Home sales rose 14 percent last month, and many of those purchases can be attributed to attractive pricing on foreclosed homes.

RealtyTrac, a foreclosure property marketer, says that the best way to buy a foreclosure is from the bank that now owns it. These repossessions, called REOs (real estate owned by the bank), are usually in better shape than other foreclosures because the bank has had a financial interest in maintaining the property.

In addition, the bank may offer more favorable financing terms for those who want to purchase one of their foreclosure properties.

Purchasing a home that is in the foreclosure process through a “short sale” can be a slow and complicated process, requiring the potential buyer to negotiate a deal with both the owner and the lender.

Buying a foreclosure at auction is usually not a good idea for those who want to purchase a home for their primary residence. While prices are usually the lowest for homes sold at a sheriff’s auction, these houses are usually purchased “sight unseen,” which can potentially lead to big repair bills.

For more information on your rights as a homeowner in the Florida foreclosure process, contact our Jacksonville, Florida foreclosure law firm.

Included in the House and Senate versions of the new financial overhaul legislation are measures designed to halt the manipulative lending practices that enticed consumers into getting loans they could not afford and led to the current foreclosure crisis.

The legislation, which is scheduled to be signed by President Obama sometime this summer, has provisions that hold lenders responsible for the loans they approve, change the way loan officers are compensated, require lenders to give mortgages only to those who prove they can repay them, and limit the penalties that lenders can charge for those who pay off their mortgages early.

Analysts say the subprime mortgage crisis was largely brought about by lenders who evaluated only the borrower’s ability to make payments based on a low “teaser” rate. Once those rates ballooned, borrowers could no longer pay their mortgages and their homes fell into foreclosure. The new legislation would make it mandatory for lenders to assess a borrower’s ability to pay for the first five years of the loan term before approving a mortgage application.

In addition, the legislation outlaws the extra compensation for loan officers and mortgage brokers who were rewarded for putting borrowers into loans with a higher interest rate than they qualified for.

If you are a Florida homeowner facing possible foreclosure and need help, contact our Jacksonville, Florida foreclosure law firm.

Foreclosure analysts a RealtyTrac, a leading online marketplace for foreclosures, say that foreclosures will likely peak in 2011 based on improvements in default rates.

From Investor’s Business Daily:

Standard & Poor's this week launched S&P/Experian credit indexes that include mortgage payment lateness. They show "lower proportions of default each month," said David Blitzer, chairman of S&P's index committee. "It's telling me we're really squeezing out some of the worst that's been going on."

The index tracked an average default rate of 3.7% on first mortgages in April, down 6% vs. March and 31% vs. a year ago. The second-mortgage default rate, 2.5%, fell more.

Improvement in defaults "is the first positive sign" in a long while, said Rick Sharga, senior vice president at foreclosure watcher RealtyTrac, on a Thursday conference call.

"We're seeing loans stay in delinquency longer and longer before the first notice of default," he said.

The foreclosure backlog amounts to about 55 months of inventory, Sharga says, and 2011 is apt to be the peak year for foreclosure activity. He adds that lenders appear to be slowing foreclosures while they try to sell off homes they've repossessed.

"Then they will replenish that supply, if you will, by bringing new loans into the foreclosure process and proceeding with them," Sharga said.

If you are a Jacksonville homeowner who needs to know more about the Florida foreclosure laws, contact our Jacksonville, Florida foreclosure law firm.

If your lender has sent you a Notice of Default – the first step in the foreclosure process – you may be wondering what happens next. Will there soon be a knock on the door by someone who is going to throw you and your family out into the street?

Thankfully, the answer is no.

Actually, your lender probably doesn’t want to foreclose on your home and will usually take its time in foreclosing. This is not only because lenders now own way too many foreclosures, but it is also because they must spend money to maintain the property and a home in foreclosure continues to lose value.

This means that your lender may be more willing than they had been previously to negotiate with you for a loan modification, short sale or deed-in-lieu of foreclosure arrangement.

If not, and your home is scheduled for sale at a sheriff’s auction, you may still be able to get your home back since Florida has a right of redemption statue. This means that if you can pay in full the unpaid loan balance plus costs, you can reclaim your home. And even if you cannot, this still buys you some time before you have to vacate your home.

If you are a Florida homeowner facing possible foreclosure and need help, contact our Jacksonville, Florida foreclosure law firm.

A University of Arizona study released earlier this month says that many of the homeowners who are defaulting on their mortgages are doing so out of fear, anger or despair rather than making the decision based on their best financial interests.

From an article at wsj.com:

Though small—covering just 350 people—the study spotted a notable trend. Some of these people have stopped paying because they are anxious about their financial situation; others are furious that banks or the government won't help ease their load while other people are getting assistance. Hopelessness is a factor for others.

Brent White, an associate professor of law at the University of Arizona who ran the study, focused on "strategic defaults" in which a borrower who could afford to keep paying opted not to do so. That phenomenon is frequently described as a rational response by homeowners who are "underwater," owing far more than the current values of their homes.

But that isn't always the case. It depends on the cost of alternative housing and on future home-price movements, which are hard to predict. Also uncertain is how many years a borrower may need to repair a credit rating and whether the lender may try to collect any amount by which foreclosure-sale proceeds fall short of the loan balance.

Strategic defaults are becoming more common, various studies show—a Morgan Stanley report pegged them at 12% of all home-mortgage defaults in February, up from "insignificant levels" three years ago. Lenders fear borrowers who "walk away" will greatly increase the industry's foreclosure-related losses, which already total in the hundreds of billions of dollars.

If you are a Florida homeowner facing possible foreclosure and need to know about all your legal options, contact our Jacksonville, Florida foreclosure law firm.

One of the primary concerns for homeowners who are faced with foreclosure is what happens to their mortgage debt if the bank forgives it. This can happen in a traditional foreclosure or a short sale where the bank sells the property for less than the amount owed on the existing loan. In many cases the bank will issue the borrower a 1099 which tells the IRS that they have imputed income from the forgiveness of mortgage debt.

For those borrowers who are in serious financial debt, this can have a very detrimental effect on their situation. This is where the insolvency exception to imputed income from the cancellation of mortgage debt comes in handy. IRS Publication 908 offers debtors a way out of incurring imputed income for the forgiveness of mortgage debt if at the time the property was either foreclosed on or voluntarily returned to the lender they were financially insolvent (ie. debts exceed assets). Debtors who file for bankruptcy are presumed to be insolvent and the debtor’s responsibility for imputed income for the forgiveness of mortgage debt can be discharged in bankruptcy.

For more information regarding bankruptcy and mortgage debt forgiveness contact a Florida Bankruptcy Attorney in Jacksonville.

As part of the foreclosure process in Florida, all primary residences are automatically sent into mediation.

Florida is currently averaging over 350,000 foreclosures annually. Last December, the state Supreme Court issued an administrative order to all 20 circuit courts to implement a mandatory mediation program in hopes of keeping more foreclosures off the court’s docket.

Unfortunately, the state’s budget has not kept pace with the need for more judicial staff, and Florida foreclosure mediators are just as overburdened with casework as the circuit court judges.

However, the good thing about Florida’s foreclosure mediation mandate is that it forces lenders to the table to negotiate in good faith with borrowers. The lender must bring all the relevant documents to the mediation session, including an itemization of what must be paid to catch up and pay off the loan.

According to a recent article in USA Today, the 18^th Circuit Court in Brevard County has sent 317 cases to mediation and 59 of those have received a modified loan payment plan, thus staving off foreclosure.

If you are a Jacksonville homeowner who needs to know more about the Florida foreclosure laws, contact our Jacksonville, Florida foreclosure law firm.

The new U.S. Attorney General for the Southern District of Florida says that one of his top priorities will be fighting mortgage fraud.

U.S. Attorney Wilfredo Ferrer said, "There is rampant fraud in South Florida. I think that's unfortunate. It is embarrassing that we are known in some circles as the fraud capital of the country. I don't like that title."

From therealdeal.com:

Ferrer announced that Joan Silverstein has been named the chief of the division of economic and environmental crimes, which includes mortgage fraud cases.

"Lucky for me, we've got a great economic crimes section here to handle our fraud prosecutions. When it comes to real estate, housing discrimination, mortgage fraud cases, we're leading the nation [in prosecutions]. That's a good thing but it's also a bad thing because it shows we have a lot of fraud here."

Just last month, Homestead mortgage broker Yvette Valdes was indicted by a federal grand jury, charged with falsifying loan documents on two properties in Southwest Miami-Dade County. She faces up to 30 years in prison.

For more information on how to protect yourself against possible foreclosure, contact our Jacksonville, Florida foreclosure law firm.

The University of Florida’s Bergstrom Center for Real Estate Studies has released its Survey of Emerging Market Conditions for the first quarter of 2010 that indicates, “the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types.”

The quarterly survey participants include Florida professional real estate analysts and investors representing 13 urban regions and up to 15 property types across the state.

With a heavy use of weather analogy, the survey characterizes the Florida real estate market as “still mostly cloudy with a few breaks in the clouds”. High unemployment and the lack of debt capital are mentioned as two current realities that cloud the state’s real estate outlook; however, respondents did note a rise in private capital from both foreign and domestic sources that continue to enter the state in search of good deals.

The survey also noted that, “life companies have increased their appetite for Florida real estate and newly formed or previously conservative community banks are being aggressive in providing capital.”

If you are a Florida homeowner facing possible foreclosure and need to know about all your legal options, contact our Jacksonville, Florida foreclosure law firm.

May bankruptcy filings across the U.S. were up 10 percent from the same month one year ago, according to data released earlier this month by Automated Access to Court Electronic Records (AACER).

Florida accounted for seven percent of the 133,459 U.S. bankruptcy petitions filed in May, second only to California with 16 percent. Average filings per day also increased over April 2010, from 6,646 to 6,673 in May.

For the first five months of 2010, U.S. bankruptcy filings total 659,516, up 15 percent from the same period in 2009. This includes 622,798 consumer bankruptcy filings, 36,718 business filings and 6,048 filings to reorganize under Chapter 11 bankruptcy protection.

Financial experts note that bankruptcies usually peak between six and 18 months after an economy hits bottom, because consumers typically try to work their way out of debt for a period of time before filing bankruptcy.

Consumers who find themselves dedicating more than 30 percent of their net income to repaying debt, with no savings for retirement or emergencies may want to consider a Chapter 7 or Chapter 13 bankruptcy filing.

If you need to information on filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A means test, provided by federal bankruptcy law, determines whether or not you are eligible for Chapter 7 bankruptcy. The test is used to limit Chapter 7 bankruptcy to those people who truly can't repay their debts. In order to qualify, your income must be below the median income for families in your state. As a consumer, if you do not qualify for a Chapter 7 bankruptcy your only option will be to file a Chapter 13 bankruptcy. Click here to see a chart of the state median incomes.

The means test is a two-part test. The first part of the test is a formula that exempts all survival expenses (food and rent) in order to determine whether the debtor can afford to pay 25% of his non-priority unsecured debts (e.g., credit cards). If the debtor can afford to pay this debt he or she will not be eligible for a Chapter 7 bankruptcy. Under the second part of the test the debtor's income is compared to his state's median income. Usually if the debtor's income or his family's combined gross income is greater than the state's median income he or she will not be eligible for a Chapter 7 bankruptcy. To read more about this topic see Means Test.

A Florida Bankruptcy Attorney should be contacted to discuss whether you will qualify for a Chapter 7 or Chapter 13 bankruptcy.

If you are seriously underwater on your mortgage and make a strategic financial decision to just walk away and let your home fall into foreclosure, chances are that you will not be able to own another home for almost a decade, according to Jay Brinkmann, an economist with the Mortgage Bankers Association.

Lending experts say that unless there was a solid financial reason for you to walk away – say, a job loss or a sudden spate of medical bills – the repaired credit score you may gain from being able to pay your other bills since you walked away from your mortgage will not help you when it comes time to qualify for a new home loan.

In an article on CNNMoney.com, Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters said, “If you made a strategic decision to default on paying your mortgage, it will work against you.”

Merrell said that banks will be far more lenient if the default resulted from circumstances beyond the borrower’s control.  And if borrowers with a default in their past do get approved, it will likely be at a much higher interest rate.

If you are a Florida homeowner facing possible foreclosure and need to know about all your options, contact our Jacksonville, Florida foreclosure law firm.

The mortgage mediation program initiated by the Florida bankruptcy court went into effect on June 1, which means that Florida residents who file Chapter 13 bankruptcy can now request that their mortgage lender be required to meet with them for mortgage modification mediation.

However, there are some requirements that those filing Chapter 13 bankruptcy in Florida must meet to qualify for the Mortgage Modification Mediation program:

• You must want to keep your home


• The home must be your primary residence


• You must be unable to afford your current mortgage payments


• You must be able to commit at least 31 percent of your net income to a modified mortgage


• You must pay a $275 mediation fee to the Chapter 13 Trustee

The objective of this new program is to help Florida homeowners avoid foreclosure – this is not a program aimed at avoiding bankruptcy, as it is part of a Chapter 13 bankruptcy filing.  You can ask your bankruptcy attorney to file a Motion for Referral to Mortgage Modification Mediation, pay the $275 fee, and then meet with your lender and a neutral mediator (agreed upon by you and your lender) to see if you can work out a modified mortgage plan.

If you need information on the Florida Chapter 13 Mortgage Modification Mediation program and the Florida Chapter 13 bankruptcy process, contact our Jacksonville, Florida bankruptcy law firm.

Bankruptcy filings in Jacksonville for the first five months of 2010 are up 7 percent from the same period one year ago, according to statistics from the U.S. Bankruptcy Court of the Middle District of Florida.

2009 was a record year for bankruptcy filings in the Middle District, and at the current pace of 5,611 per month, the district is on track to hit a new record of over 67,000 bankruptcy filings for 2010.

In the Jacksonville division, there were 4,819 bankruptcy petitions filed in the first five months of this year, an increase of 7 percent over 2009.  At the current rate, Jacksonville could reach over 11,500 filings for the year, up 4 percent from 2009.

A Jacksonville Bankruptcy Bar Association spokesman says he expects to see a large number of filings over the next two years; he noted that early bankruptcy filings by construction companies and contractors has abated, but filings by higher income individuals and professionals is on the rise in Jacksonville.

Expectations are that the weakening commercial real estate market will send more businesses into bankruptcy, and that ongoing unemployment will continue to feed consumer bankruptcy filings.

If you need to information on filing Jacksonville bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville foreclosure attorney noted that a recent report on home prices in 375 U.S. markets show that home prices in Jacksonville will not recover to 2006 peak price levels until 2020.

The Fiserv Case-Shiller Home Price Insights report, compiled by financial services technology provider Fiserv Inc., said that Jacksonville home prices have declined almost 40% since the second quarter of 2006.  In addition, the report noted that home prices in Orlando are down almost 60%, and are not projected to recover to 2006 levels until after 2039.

The Fiserv report said that the current home pricing trend in these Florida markets “represents an unprecedented market cycle that will last a full generation from the top of the market in 2006-2007...We see several powerful forces in the market that will severely hinder the housing recoveries of many metro areas, particularly in the hard-hit states of California, Florida, Arizona and Nevada. It will take these markets 15 or more years before home prices climb back to their peaks."

The median home price in Jacksonville as of the third quarter of 2009 was $176,000, down almost 10 percent from 2008.

If you are a Jacksonville homeowner facing possible foreclosure and need to know about all your options, contact our Jacksonville, Florida foreclosure law firm.

According to online foreclosures marketer RealtyTrac, bank repossessions of foreclosed homes hit a record monthly high in May and are up 44 percent over the same period one year ago.

Even though foreclosure filings fell 3 percent in May nationwide and the number of people falling behind on their mortgages also declined, banks have ramped up their foreclosure activity.

Florida, Arizona and Nevada continue to be the top three foreclosure states.  One in every 174 properties in Florida got a foreclosure filing in May, which is up almost 5 percent from last month but down 14 percent from May of 2009.

Experts say that as the housing market begins to stabilize, banks are focusing more on foreclosures.  In the past couple of years, banks have been slow to foreclose because of all the properties already on their books.

In addition, more homeowners are voluntarily surrendering their homes to banks because they owe much more than their properties are worth.  Called “strategic defaults,” these properties now account for almost one-third of all foreclosures.

If you need information on how filing a Florida bankruptcy can help you avoid foreclosure, contact our Jacksonville, Florida bankruptcy law firm.

Bankruptcy, a federal law enacted by Congress, provides a method for individuals to handle their debts when they can no longer pay for them.  Individual consumers typically file Chapter 7 or Chapter 13 Bankruptcy

Chapter 7

A Chapter 7 Bankruptcy can only be filed once every 8 years.  This type of bankruptcy will allow you to keep most of your property and discharge most of your debt.  At the conclusion of your Chapter 7 case, you will receive a “DISCHARGE,” which is a statement declaring that you no longer owe money to creditors listed in you Bankruptcy Petition.

Chapter 13

A Chapter 13 Bankruptcy reorganizes your financial affairs and proposes a bankruptcy plan to repay your all creditors all or part of what you owe them over a 3-5 year period. In order to file under chapter 13, you must have a regular source of income that will be sufficient to make the payments over the 3-5 year period.  The Bankruptcy Court must approve the plan and payments are administered to a Trustee who distributes the payments to the creditors. After all the payments from the approved plan are made, you will receive a discharge from liability for most debts.

One major oversight in a number of the bankruptcy cases I deal with is the disposition of Homeowner’s Association Fees after a bankruptcy is discharged. In the typical chapter 7 bankruptcy the debtor who owns a home with a loan on it either surrenders their home and discharges the debt, or keeps the home and signs a reaffirmation agreement that takes the debt out of the bankruptcy and keeps the debtor liable for the full amount of the loan.

In a case where the debtor decides to surrender their home, they can discharge the loan amount in bankruptcy and return the home to the lender. The confusion in this process arises in the premise of the surrender. The house does not transfer out of the debtor’s name at the time of the bankruptcy discharge. The house transfers out of the debtors name once the bank/lender sells the property at a foreclosure sale and the deed is transferred out of the debtor’s name and into the buyer’s name.

Under the newly enacted 11 USC 523 (a)16 the debtor is still liable for HOA association fees that accrue after a discharge if the property is still in the debtor’s name. If you have further questions regarding a bankruptcy, contact one of our attorneys to help you with the process.

A potential new owner has been found for Amelia Island Plantation, the upscale Northeast Florida resort that was forced into Chapter 11 bankruptcy last fall as the result of lack of financing and a weak economy.

The Amelia Island Co. Chapter 11 reorganization plan calls for a $46 million buyout by Atlanta-based Noble Investment Group, which invests primarily in resort and hospitality properties.  Noble says it is “cautiously optimistic” that the U.S. Bankruptcy Court will accept its plan.

Amelia Island is one of two large Northeast Florida resorts that filed Chapter 11 bankruptcy recently; the other is the Sawgrass Marriott Golf Resort & Spa, which has yet to file a reorganization plan with the U.S. Bankruptcy Court.

The Amelia Island Co.’s reorganization plan calls for separating the golf club facilities from the resort.  The golf facilities include four golf courses and a clubhouse; as part of the Chapter 11 reorganization, club members would have equity ownership of those facilities.

Developed in 1971 by the Sea Pines Co., Amelia Island Co. was purchased by Ohio businessman Richard L. Cooper and two partners in 1978.  The family filed Chapter 11 bankruptcy last November when efforts to secure additional private investors for the resort were unsuccessful.

If you need information on the Florida Chapter 11 bankruptcy process, contact our Jacksonville, Florida bankruptcy law firm.

If you are considering filing bankruptcy in Florida to ease your debt burden, there are certain requirements you must meet in listing creditors on your Chapter 7 or Chapter 13 bankruptcy petition.

You must list any payments of $600 or more that were made to creditors during the 90 days prior to your bankruptcy filing.  This includes payments made for:

• Mortgage loans


• Car loans


• Credit card payments


• Student loans


• Tax payments


• Child support or alimony payments


• Medical bills


• Utility bills

You must also list any loan payments you make to creditors that are friends or family, no matter what the amount.  If you pay off a family or friend loan prior to filing bankruptcy, the court may conclude that you favored this creditor and take the money back to satisfy other creditors.  Courts usually look at the last year of history on these types of loans.

In addition, if you paid a disproportionate amount to one creditor prior to filing bankruptcy while making only the minimum payments on your other debts, the court may find that you favored one creditor over the others and order the return of the larger payments so all creditors can be treated equally.

If you need more information on filing Chapter 7 or Chapter 13 bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

U.S. bankruptcy law requires that if a debtor receives an inheritance within 180 days of filing bankruptcy, that inheritance becomes part of their bankruptcy estate and must be disclosed to the trustee.  The 180-day period is calculated from the date of death of the person leaving the inheritance, not from the time the debtor receives it.

In addition, inheritances are treated differently depending on whether you are filing a Chapter 7 or a Chapter 13 bankruptcy.

In Chapter 7 bankruptcy filings, any inheritance received within 180 days after you file will go to the bankruptcy trustee to be used to repay creditors.  If an inheritance is received after the 180-day period, the bankruptcy trustee will have no claim to it.

In Chapter 13 bankruptcy filings, any inheritance received before or after the bankruptcy filing will become part of your bankruptcy estate and used to determine how much you should pay creditors.

If you are filing bankruptcy and anticipating an inheritance, you should consult with an estate planning attorney – there are trust account vehicles available to help protect inherited assets from a bankruptcy filing.

If you are considering filing a Florida bankruptcy and have questions about how an inheritance or any other asset will be treated, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy lawyer says it is important for Florida residents to know that they need to make a full disclosure when filing Chapter 7 or Chapter 13 bankruptcy, or risk having their bankruptcy case dismissed and facing fraud charges.

When you file Chapter 7 or Chapter 13 bankruptcy in Florida, you are required to provide a complete list of your assets – property, pensions, IRAs, 401(k)s, investment accounts, annuities, life insurance policies, etc.  You must also include any money or property that may be coming to you, such as an inheritance, tax refund, stock options, trust fund, lawsuit judgment or other sources of income.

You must also list every creditor in your bankruptcy filing, even a relative who has provided you with a loan.   If there is a debt that is currently in dispute, you must list that as well, and clarify that it is in dispute.

Filing bankruptcy was intended to provide U. S. citizens with a legal remedy to personal financial calamity.  Being deliberately untruthful in a bankruptcy filing or trying to hide property or other assets is considered a serious matter; some people have even been sentenced to jail for fraud when intentionally hiding assets from the court.

If you need help navigating the intricacies of filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Bankruptcy filings in Jacksonville spiked to 1,216 in March, reversing a five-month trend of declines since September of 2009, according to U.S. Bankruptcy Court records for the Middle District of Florida.

Jacksonville bankruptcy filings were up over 11 percent in March from the same month one year ago.  For the first quarter of 2010, bankruptcy filings in Jacksonville totaled 2,799 – up almost 10 percent from the same period in 2009.

The U.S. Bankruptcy Court Middle District of Florida – which covers Baker, Bradford, Citrus, Clay, Columbia, Duval, Flagler, Hamilton, Marion, Nassau, Putnam, St. Johns, Sumter, Suwannee, Union and Volusia counties – had over 63,000 cases pending at the end of March.  Based on the current rate of closure for the court of 5,500 cases for the month of March, this represents a backlog of almost one year.

Most Jacksonville legal advisors expect this trend to continue since bankruptcies are a lagging economic indicator, and filings are not expected to slow down until other indicators improve.

According to a Florida Times-Union article on the record Jacksonville bankruptcy filings:

People file for different types of bankruptcies depending on their financial condition. People unable to pay 25 percent of their credit debt with their disposable income may opt for Chapter 7 bankruptcy, which liquidates certain assets and wipes out debt. People who have too much disposable income to qualify for Chapter 7 can opt for Chapter 13, in which they pay a trustee who pays debts on a plan. People with more than $1 million in home mortgages and rental properties can’t qualify for Chapter 13, so many are opting for Chapter 11, a reorganization plan typically favored by companies that seek bankruptcy but want to stay in business.

To fully understand what you need to know about filing bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

Moody’s Investors Service has released a study that shows a number of companies that completed distressed exchanges in 2009 – thus avoiding bankruptcy – could default or fall into bankruptcy this year.

The study examined 100 non-financial companies that participated in a distressed exchange – where a company offers new or restructured debt, cash or other assets to creditors in return for a reduction of its debt – and found that while exchanges have historically been successful in allowing a troubled business to get back on its financial feet, a majority of the companies that completed exchanges last year continue to carry very low credit ratings and a third are at high risk for default.

According to a Wall Street Journal article on the study:

Moody's said the spike in distressed exchanges last year was a key contributor to the corresponding surge in speculative-grade defaults, comprising 34.9% of all defaults last year versus 23.5% in 2008 and 11% between 1983 and 2007.

Juliet M. Moringiello, resident scholar with the American Bankruptcy Institute, attributed the rise in distressed exchanges and other defaults to the collapse of the credit markets that shut off the spigots of cash that had flowed freely to companies just a few years ago.

"We saw a period of time during which credit was really, really tight," said Ms. Moringiello, also a professor at Widener University's law school. "If a company can't go outside to get money, then there's going to be either a bankruptcy filing or a distressed exchange."

While Moody's expects to see "far fewer" distressed exchanges this year, the agency noted that another wave is on the horizon, thanks to a "huge peak" in debt maturities between 2012 and 2014 and low-rated companies' heavy debt burdens.

If you need information on the Florida business bankruptcy process, contact our Jacksonville, Florida bankruptcy law firm.

The court-appointed bankruptcy trustee in the BearingPoint Chapter 11 bankruptcy has filed suit against Yale University, seeking the return of more than $8 million in donations the consulting firm made to endow a chair in management and name university facilities.

From a Reuters report on the suit:

The liquidating trustee, John DeGroote Services LLC, contends in a lawsuit that BearingPoint has gained no tangible benefit from committing to pay $30 million to name buildings and endow a professorship at the Ivy League school.

The money was to have been paid over seven years starting in the first quarter 2007. BearingPoint filed for bankruptcy in February 2009.

"No material consideration flowed to BearingPoint, and no benefit to its business or assets was derived from the endowing of chairs or the naming of buildings at Yale," according to the suit filed on Friday in U.S. Bankruptcy Court in Manhattan.

A Yale University spokesman declined to comment.

According to the lawsuit, BearingPoint paid $2 million to fully fund in perpetuity an endowed chair: a professorship at the Yale School of Management.

The case is In re BearingPoint, Inc., et al, 09-10691, U.S. Bankruptcy Court, Southern District of New York.

BearingPoint originally planned to reorganize under Chapter 11 bankruptcy rules, but later abandoned that plan and liquidated its assets.

If you need to information on filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville foreclosure lawyer observed that Florida lags only two states – Nevada and Arizona – in foreclosure activity for the first quarter of 2010, according to a U.S. Foreclosure Market Report released last week by RealtyTrac.

The report said that, “With one in every 57 Florida properties receiving a foreclosure filing during the quarter, the state posted the nation’s third highest state foreclosure rate for the second straight quarter. Florida’s Q1 foreclosure activity increased on a quarterly and annual basis.”

Nationally, the 2010 first quarter foreclosure rate increased 7 percent from the previous quarter and 16 percent from the same period one year ago.  A total of 153,540 Florida properties received a foreclosing filing – which includes default notices, scheduled auctions or bank repossessions – during the first three months of 2010.

Florida’s first quarter foreclosure filings account for over 16 percent of the nation’s total – second only to California at 23 percent.

Currently in Duval County, Florida, there are 14,538 properties with a foreclosure filing, including 5,753 properties in default, 2,697 bank repossessions and 1,933 auction properties.

If you are a Florida homeowner facing possible foreclosure and need to know about all your legal options, contact our Jacksonville, Florida foreclosure law firm.

A Jacksonville bankruptcy attorney says a new report from the National Bureau of Economic Research (NBER) shows that the 2005 changes in U.S. bankruptcy laws had an “unintended consequence” of causing mortgage default rates to rise.

According to a summary of the NBER research paper:

The U.S. bankruptcy reform of 2005 played an important role in the mortgage crisis and the current recession. When debtors file for bankruptcy, credit card debt and other types of debt are discharged—thus loosening debtors’ budget constraints. Homeowners in financial distress can therefore use bankruptcy to avoid losing their homes, since filing allows them to shift funds from paying other debts to paying their mortgages. But a major reform of U.S. bankruptcy law in 2005 raised the cost of filing and reduced the amount of debt that is discharged. We argue that an unintended consequence of the reform was to cause mortgage default rates to rise.

We estimate a hazard model to test whether the 2005 bankruptcy reform caused mortgage defaults to rise, using a large dataset of individual mortgages. Our major result is that prime and subprime mortgage default rates rose by 14% and 16%, respectively, after bankruptcy reform. We also use difference-in-difference to examine the effects of three provisions of bankruptcy reform that particularly harmed homeowners with high incomes and/or high assets and find that the default rates of affected homeowners rose even more. We find that bankruptcy reform caused the number of mortgage defaults to increase by around 200,000 per year even before the start of the financial crisis, suggesting that the reform increased the severity of the crisis when it came.

To fully understand what you need to know about filing bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

A Chapter 7 bankruptcy filing – also known as “liquidation” or “straight” bankruptcy – is used to cancel an individual’s debts.  Typically, the bankruptcy court will order some of the individual’s assets to be sold to satisfy creditors.  The main benefit to an individual is that they walk away debt-free.

But are there some debts that can survive Chapter 7 bankruptcy?  If discharging existing consumer debt like credit card and medical bills will free up enough income for you to keep making payments on your mortgage or car loan, can you protect these debts from being discharged in Chapter 7 bankruptcy?

The answer is yes, with a legal instrument called a reaffirmation agreement.

A reaffirmation agreement is a legally binding contract between you and your lender that re-commits you to repaying the loan.  It must be approved and signed by both you and your creditor, and then submitted to the court for approval as part of your Chapter 7 bankruptcy filing.

The court can either approve or reject the reaffirmation agreement; rejections are usually because a judge does not believe that retaining the debt would be in your best financial interest.

To fully understand what you need to know about filing Chapter 7 bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

When an individual files for Chapter 13 bankruptcy, all debts must be disclosed and dealt with, including any loans owed to family members of friends.

Since most of these personal loans are unsecured, they are usually discharged in bankruptcy, which leaves the debtor free of the debt, but not free of any damage this may have done to family relationships.

Many debtors wonder if they can repay a discharged debt after their bankruptcy case is over.  The answer is yes – if you have filed for personal bankruptcy and had a debt discharged that you wish to repay for whatever reason, you may voluntarily repay that debt, even though you are under no legal obligation any more to do so.

However, a creditor for a discharged debt may not make an effort to collect.  If they try to do so, the debtor can file a motion with the court for a violation of the discharge.  A discharge is a legal injunction that prohibits creditors from taking any action designed to collect a discharged debt, punishable by a fine.

If you are considering filing a Florida bankruptcy and have questions about the discharge of unsecured debt, contact our Jacksonville, Florida bankruptcy law firm.

Last month, the MLB franchise Texas Rangers filed for Chapter 11 bankruptcy in an effort to force a sale of the team that has been road blocked by creditors.

Among those creditors is slugger superstar Alex Rodriguez, who is owed $24.9 million in deferred compensation by his old team and is the largest unsecured creditor in the Rangers’ bankruptcy case (In re: Texas Rangers Baseball Partners, U.S. Bankruptcy Court, Northern District of Texas, No. 10-43400).

The U.S. Trustee recently named Rodriguez as one of three people who will serve on the unsecured creditors committee.  The other two members include the president of a Little Rock construction company and an executive with an architecture and engineering firm.

Creditors' committees can play a major role in chapter 11 cases, and usually consists of unsecured creditors who hold the largest unsecured claims against the debtor.  The duties of the committee include consulting with the debtor in possession on administration of the case; investigating the debtor's conduct and operation of the business; and participation in formulating a plan.

If you have a business that needs protection from creditors and want more information about filing Florida Chapter 11 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Florida Attorney General Bill McCollum recently hosted a foreclosure forum at Miami Dade College’s downtown campus to bring banking representatives and distressed homeowners together as part of the AG office’s efforts to protect Florida homeowners.

The Miami Herald reported on the forum:

Hundreds of residents from throughout Florida visited Miami Dade College's downtown campus on Saturday morning to hear Florida Attorney General Bill McCollum talk about the home foreclosure crisis.

More than 26,000 Miami homes are in foreclosure -- or one in every 117 -- according to RealtyTrac's March 2010 figures.

``A big part of the problem is that a lot of the people you call for help are located out of state,'' said McCollum. ``Today we brought the banks to you, and you'll have an opportunity to sit down with a human being to get some kind of relief.''

McCollum was joined by an Interagency Task Force, a panel that included representatives from U.S. Housing and Urban Development, the state Office of Financial Regulation, and the Florida Bar, who took turns addressing ways to fight mortgage fraud.

As numbers were called, small groups were escorted from the auditorium. Dozens of agents from Bank of America, JP Morgan Chase, SunTrust and Wells Fargo set up in adjacent rooms to discuss on-the-spot loan modifications with those facing foreclosure.

Read the full article here.

If you are a Florida homeowner facing possible foreclosure and need to know about all your options, contact our Jacksonville, Florida foreclosure law firm.

The American Bankruptcy Institute reported last week that U.S. consumer bankruptcy filings rose 17.5 percent for the first three months of 2010 over the same period one year ago:

The total number of U.S. bankruptcy cases filed during the first three months of 2010 increased 17.5 percent over the same period in 2009, according to data released today by the Administrative Office of the U.S. Courts. As total filings reached 388,148 during the first calendar year quarter of 2010 (Jan. 1-March 31), the total surpassed the 330,394 new cases that were filed over the same period in 2009. The total filings in the 2010 first quarter also represent a 4.3 percent increase from the 372,203 bankruptcies filed during the fourth quarter of 2009 (Oct. 1 – Dec. 31).

“As Congress continues to consider financial regulatory reforms to address the causes of the economic downturn, consumers and business are still turning to bankruptcy to find relief from financial distress,” said Samuel J. Gerdano, ABI Executive Director.  “We expect filings to surge past 1.5 million cases by year-end.”

Consumer filings increased 18.2 percent to 373,541 for the three-month period ending March 31, 2010, from the 2009 first quarter total of 316,158. They also represent a 4.6 percent increase from the fourth quarter of 2009, which recorded a total of 357,183 nonbusiness filings. The percentage of consumers filing for chapter 13 protection fell slightly from 29.2 percent during the first quarter of 2009 (January 1-March 31) to 27.1 percent over the same period in 2010. The number of consumers filing for chapter 7 protection increased to 72.8 percent during the first three months of 2010, the largest percentage of consumer chapter 7 filers since the implementation of BAPCPA in 2005.

If you have recently suffered a job loss or are having problems paying your bills and need more information about filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Personal bankruptcies in the Orlando area hit a record high in 2009 at 20,305 filings, which was a jump of 60 percent over the previous year.  And so far this year, more than 7.700 bankruptcy cases have been filed in Orlando as of April 30 – up 26 percent from last year’s record pace.

From the Orlando Sentinel:

Orlando's bankruptcy caseload grew at a faster pace last year than Tampa's (up 42 percent) or Jacksonville's (up 32 percent). All three regions are part of the U.S. Bankruptcy Court for the Middle District of Florida.

Almost 97 percent of the region's bankruptcies these days are filed by individuals, rather than businesses, as the sour economy continues to wear on local households.

Lynn Jones and her husband filed a Chapter 13 bankruptcy, which enabled them to restructure their personal debt and their delinquent mortgage so that they matched their current income.

That made it worth dealing with the stigma of a bankruptcy filing and the knowledge their credit will be damaged for years, Jones said.

"I figured that, yes, it'll affect our credit for a while, but so what? We will be hanging on to our house and having a roof over my family's head," she said. "It's also relieved the stress of all the harassing calls that come with being in debt. I feel much more stable now financially. We're getting better at managing our budget. Things are getting better."

If you are considering filing a Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.