Bankruptcy and Foreclosure Attorney Blog

Since 2005, the bankruptcy rules have been much more strict. Many debtors find themselves in tough financial situations even after they have filed for bankruptcy not long ago. If a debtor received a discharge in a Chapter 7 case, he or she cannot file a Chapter 7 again for 8 years.

The eight year span is between filing dates, not discharge dates. For example, if debtor filed for Chapter 7 bankruptcy on March 21, 2003 (and received a discharge on debts), debtor cannot file a Chapter 7 again until March 22, 2011.

However, the filing date time span between Chapter 7s and 13s is only four years. Please keep in mind that the debtor must have received a discharge in order for the rule to apply unless the petition was dismissed for fraud or abuse.

Continue reading " I have filed Bankruptcy before: Can I file again? " »

Yes, at least for the time being. Once the bankruptcy petition is filed and the automatic stay is in place, that should stop any repossession action taken by your lender.

The automatic stay is like an imaginary curtain that comes down once the petition is filed. Your creditors have to stop contacting the debtor in trying to collect a debt. The automatic stay works for the debtor and the debtor's family members.

If creditors continue to violate the stay, there may a legal cause of action against them, and the debtor can sue those creditors for monetary and equitable relief for violating federal law.

However, secured creditors can ask the bankruptcy judge for relief from the automatic stay in the form of adequate protection or state law remedies.

Continue reading " Can a bankruptcy save my car? " »

The Florida court system announced a deficit of over $72 million because of a shortfall in foreclosure filing fees. In former posts last fall, we discussed how former Attorney General, Bill McCollum, was probed into investigating the "mill" firms that were filing these foreclosure suits.

There were several allegations against large foreclosure law firms for "robo-signing." The allegations accused account executives of signing affidavits that stating the account executive had done everything in its power to avoid foreclosures, when in reality, they had not.

Now, through the abundance of foreclosure filingsover the last year, the Florida court system is experiencing a huge deficit and is asking Governor Scott for extra funding. In a recent post, we mentioned David J. Sterns foreclosure group is shutting down operations at the end of this month.

To learn more about this article, please visit Florida Court System Facing $72.3 Million Deficit Due to Shortfall in Foreclosure Filing Fees.

Continue reading " Florida Courts Facing Deficit Due to Foreclosure Filing Fees " »

In order to qualify for a Chapter 13 bankruptcy, the Trustee will look to a debtors overall secured and unsecured debts. Secured debts are backed by collateral.(i.e. mortgage, vehicle loan, etc) Unsecured debt is debt not secured by collateral meaning if you default on the debt there is nothing for the lender to repossess in order to satisfy the debt.

The new debt limits, effective April 1, 2011, are $1,081,400 for secured debt and $360,475 in uesecured debt. If a debtor exceeds these limits, he or she will be unable to file for Ch. 13 bankruptcy. An alternative may be Chapter 11 or have the debtor sell off assets to get under the debt limits.

If you choose the latter route, make sure you are upfront and honest with the bankruptcy Trustee about each transaction. The Trustee has the power to dismiss a petition if he or she feels there is abuse or fraudulent activity.

Continue reading " What if my debt limits do not qualify for a Chapter 13? " »

Many Floridians have had to face the dreadful experience of a foreclosure. Just when they they thought it could not get any worse, they get a letter from the IRS stating that the debt forgiven will be considered income to you.

Financial institutions that write off more than $600 are supposed to send the IRS and the defaulting borrower a 1099-c statement. If the property foreclosed upon was your primary residence, the "income" or "deb forgiven" is exluded as income (up to $2 million).

To learn more about this article, please visit http://www.news-leader.com/article/20110313/BUSINESS/103130322/Forgiven-debt-can-trigger-tax-bill?odyssey=mod%7Cnewswell%7Ctext%7CSpecial%20Reports%7Cs.

Continue reading " My house was foreclosed on: Is the forgiven debt "income" to me? " »

You can include all of your debts. You will just have one very large payment to make to the Trustee every month. However, the more you include in the plan, the more that will be allocated to the Trustee and less to your creditors.

Most debtors leave their mortgage, and other secured debt outside of the bankruptcy. If there are any arrearages on secured debt, that will be included in the plan and the debtor will have 5 years to bring the debt current.

If the debtor has a vehicle or multiple vehicles that qualify for "cram down," then the debtor may want to include those vehicles in the plan. Cram down just refers to the ability to make the value of the loan equal to the value of the car.

Continue reading " What debts can I include in my Chapter 13 Florida Bankruptcy? " »

The short answer is possibly. Although small business administration loans are issued by the federal government, they are not specifically mentioned in the bankruptcy code as being an exception to discharge.

Unlike federally issued student loans, SBA loans are nowhere to be found in the bankruptcy code. Student loans are for the most part nondischargeable. It is a common misconception that all government debt is nondischargeable. In fact, recent IRS debt and student loans are kind of the exceptions to dischargeability. You should contact an experienced bankruptcy attorney

Continue reading " Are SBA loans dischargeable in a Florida Bankruptcy? " »

Many of our clients ask what their chapter 13 plan payments will be during the initial consultation. There is no way to tell a client what their payments will be based on the initial consultation. More paperwork and information is needed to fulfill that request. In addition, many attorneys use bankruptcy software to determine plan payment amounts.

The software is more accurate and less time consuming. However, if the data is inputed incorrectly, the plan payments will be wrong. Furthermore, a debtor's attorney can only propose what a plan payment can and should be.

The bankruptcy court and Trustee ultimately have the final decision. If the Trustee believes the plan to be fair and adequate, then he or she should approve the plan. If not, the debtor's attorney will have to go back to the drawing board. A debtor can expect their will not be ver much if any discretionary income after all living expenses and monthly plan payments are made.

Continue reading " What will be my Chapter 13 plan payments for my Florida bankruptcy? " »

In Florida, homeowners enjoy unlimited homestead protection. What does that mean? It means if you bought your home more than 3 1/2 years, and you have less than 1/2 acre within the city limits or no more than 160 contigious acres outside the city limits, and you have equity in the home, it cannot be levied upon or liquidated to satisfy your creditors.

If you bought your home within 3 1/2 years, the equity is capped at $125,000. ($250,000 for married couple) However, this rule does not apply to lenders who have mortgaged the property or agencies you owe taxes to.

Florida is unique in that it does offer unlimited homestead protection. Many states offer relatively small caps and are less protective of resident homes. Homestead protection can only be applied to your primary residence. Investment properties or second homes do not qualify under the statute or the Florida Constitution.

Continue reading " What does unlimited homestead protection mean in Florida? " »

Many times debtors want out of their Chapter 13 plan payments. In order to do so, the debtor must pay its unsecured creditors 100% in full or ask permission from the court. any times, it is in the debtor's best interest to convert the case over to a Chapter 7 if the plan payments are not affordable.

However, if the case is dimissed for lack of payment, then the debtor may reinstate the case (if time permits) or file a new Chapter 7 or 13 case. Also, the Chapter 13 plan may be modified to account for a change of income, but you must inform the Trustee or your attorney in a timely fashion Please keep in mind that if the case is dimissed, the automatic stay terminates and your creditors can pursue state law remedies against you.

Continue reading " What if I want out of my Chapter 13 Florida Bankruptcy? " »

If a debtor has more than $360,475 in unsecured debt and over $1,081,400 in secured debt, the debtor will not qualify for a Chapter 13. The debtor may have to resort to a Chapter 11 or 7. There are no debt limits for a Chapter 7.

These figures are based on the Consumer Price Index and are adjusted every couple of years. The theory behind setting debt limits in a Chapter 13 is to protect creditor interests.

If the bankruptcy code did not set these limits, a debtor could essentially have an unlimited amount of debt and keep all of his or her property while paying its unsecured creditors pennies on the dollar for only a period of 3-5 years. The debt limits behind the bankruptcy code, as most 2005 BAPCA provisions, had creditor influence. To determine if you qualify for a Chapter 7 or a chapter 13, you should contact an experienced bankruptcy attorney.

Continue reading " Can any individual qualify for a Chapter 13, Florida Bankruptcy? " »

The law offices of David J. Stern will be ceasing operations on March 31, 2011. The announcement was communicated with the Securities Exchange Commission recently.

Mr. Stern's offices focused primarily on foreclosure filings and was heavily criticized in recent months. Former Florida State Attorney General, Bill McCollum, took the lead in investigating several law firms last fall who allegedly participated in the practice of "robo-signing." Stern's firm was arguably the largest foreclosure law firm in the state of Florida.

In fact, it is reported that over 750 cases in St. John's County were released by the firm.

To learn more about this article, please visit Foreclosure lawyer Stern to shutter firm.

Continue reading " Foreclosure Powerhouse David J. Stern is Closing Down " »

No. Debtors cannot go to jail for not paying most debts. However, if a debtor does not pay domestic support obligations that are court ordered such as child support and alimony, then he or she can be incarcerated in the state of Florida.

In many instances, creditors will try and get liens against a debtor's property, but even then, Florida provides exemptions for property that is off limits to creditors.

Creditors can report debts to the credit bureaus, but cannot threaten or intimidate you to pay your debts. Florida has adopted and enacted the Florida Consumer Protection Practices Act. These are a series of laws that govern when and how a creditor can contact a debtor.

Continue reading " Can debtor's go to jail for not paying their Florida debts? " »

Many debtors feel bankruptcy will do nothing for them and are discouraged because it will stay on their credit history for 10 years. There are also those with mentalities that, "what's the worst that can happen to me?"

If you do not be proactive in resolving your financial debt, there may longlasting effects. For example, your creditors are going to continue to contact you via phone calls, letters, etc. until you settle the debt or disconnect your phone.

Second, if you have a job that pays wages, you leave yourself open to wage garnishment.

Third, if you have a lot of property, you subject it to creditor liens and so forth.

Furthermore, if you do not file for bankruptcy relief, your creditors may stagger the reporting of your past debts. Your credit will never recover that way. A bankruptcy petition will list all actual and potential creditors and make sure they are all wiped out at once.

Continue reading " If I choose not to file a Florida Bankruptcy: What is the Worst that can Happen? " »

It really depends on how the distributions are made. If the proceeds are paid in one lump sum, then it is much harder to protect as opposed to periodic payments.

Although the proceeds may not be taxable, if the debtor receives them 6 months before or after the bankruptcy, they can still be captued by the Bankruptcy Trustee. However, Florida law provides an exemption for "annuity proceeds" which protect this property from the debtor's creditors and the bankruptcy trustee.

Many times, defendants (or their insurance carriers) in a lawsuit have to purchase annuities to pay off judgments because they cannot afford to pay lump sum payments. In that instance, the 11th Circuit Court of Appeals has said that these "periodic payments" in the form of annuities are protected.

Continue reading " Wrongful Death Proceeds: Are they exempt from the Bankruptcy Trustee in Florida? " »

Many debtors have taken out 2nd mortgages on their homes. If the value of the home is less than the entire 1st mortgage, that makes the total 2nd mortgage balance undersecured.

However, if the balance is not brought current before you file for bankruptcy relief, the 2nd mortgage lender will most likely foreclose on the property after your Chapter 7 bankruptcy. Chapter 7 discharges unsecured debt and you cannot choose which debts you want wiped out. The entire 2nd mortgage balance would be wiped out in the above scenario and the lender could legally foreclose on the property after a Ch. 7 bankruptcy.

In a Ch. 13, you can take the arrearage and put it into one "big pot" along with the rest of your unsecured debt and make monthly plan payments in order to cath up the arrears. You will be paying on this debt for 3-5 years and whatever balance of unsecured debt is left over, it is discharged. At that point, you should be caught up on your mortgage and in some instances you can have the 2nd lien stripped off altogether.

Continue reading " Chapter 7s and My Delinquent 2nd Mortgage " »

The answer really depends on the circumstances. Factors to be considered are: (1) the amount of the advance; (2) the time proximity between the advance and the filing of the bankruptcy petition; (3) the number of payments, if any, made to the cash advance lender; (4) whether or not the advance was secured by any collateral; and (5) whether or not the creditor files an objection to its debt being discharged.

Cash advances made over $750 within 70 days of filing the bankruptcy petition are presumed to be nondischargeable. You should consult with an experienced bankruptcy attorney on which debts are and are not dischargeable.

Continue reading " Can I discharge cash advances in my Florida Bankruptcy? " »

Florida provides exemptions from creditors in certain circumstances and limits them to what they can and cannot garnish. The most common is the "head of houeshold exemption." This is available to those that provide over 50% of financial support to another.

Basically, if another human being is relying on your income for support, then the exemption probably applies. However, if the garnishee makes more than $500 a week in net pay and agreed to the garnishment in writing, than his or her wages can be garnished up to a certain limit despite claiming the head of household exemption. If the garnishee makes less than $500 per week in net pay, than the wages are protected.

Please keep in mind that this is state law. For the most part, federal creditors trump state law and the Florida exemptions would not be applicable.

Continue reading " I agreed to my wages being Garnished: Can I still have the Garnishment removed if I claim Head of Household? " »

The short answer is no. Chapter 13 is reserved only for individuals, not business entities. If an incorporated business is failing, it can either file for relief under chapter 7 or 11 of the bankruptcy code.

If an individual is also a sole proprietor of a busines, then that is different. There is no legal separation between personal and business debts. If you get a discharge on the debt individiually, it is also discharged as to the business.

Chapter 11s are for businesses and high net worth individual reorganizations. They are very expensive and attorney fees and court costs are usually much higher than your typical consumer bankruptcy.

Continue reading " Can my LLC file a Chapter 13 Florida Bankruptcy? " »

The Credit Card Accountability, Responsibility and Disclosure Act (CARD act) is coming into effect and credit card late fees are falling. Late fee totals are down 50% from just a year ago. (almost $500 million) Also, there is a new Consumer agency Bureau that will help regulate the consumer industry.

The Federal Act provides several new safeguards to protect consumers against card issuers hiking rates, penalty/ late fees, penalties exceeding their credit limits, etc. A meeting based on this data is set to happen very soon.

There may be more significant facts revealed after this meeting and how the new laws are impacting the consumer industry as a whole.

To learn more about this article, please visit Fewer credit card rate hikes after regulations.

Continue reading " Credit Card late fees fall as new Regulations take effect " »

Many Chapter 7 debtors are concerned with whether or not their LLC interests will be effected by filing a personal bankruptcy. The answer is possibly, yes, if it is a single member LLC. A recent Florida court decision permits the Bankruptcy Trustee to consider single member LLC assets when the member files for individual bankruptcy.

The assets will most likely be considered property of the individual debtor's estate and could be subject to liquidation. However, in a Chapter 13, single member LLC property is not liquidated and is therefore safe from Trustee protection.

Please keep in mind that in a Chapter 13 bankruptcy, the unsecured creditors must receive at least what they would have received in a Chapter 7 bankruptcy. You should contact an experienced bankruptcy attorney at your earliest convenience if you have questions about your LLC and filing for bankruptcy.

Continue reading " Florida Bankruptcy and my Single Member LLC " »

Federal government officials believe the economy is growing again, but that the housing market is going to continue to suffer at least through 2011. It is estimated residential home values will continue to decline by 5-10% over the next year. The U.S. gross national product (GDP) showed signs of growth this past quarter. The "cash for clunker" and "first time homebuyer" programs stimulated some growth, but not as much as expected or hoped.

To date, the unemployment rate is not getting better. Many of those on unemployed have been unemployed for over 27 weeks and the number is twice as big as those that have only been unemployed for 5 weeks.

To learn more about this article, please visit Fed official feels optimism for economy, along with the bad and the ugly.

Continue reading " Signs show economic growth, but housing market still in bad shape " »

January 2011 initial foreclosure notices were down in the Jacksonville area about 50% from January 2010. Florida still has the second highest foreclosure rate in the country and although filings were down, the number of seized properties increased. These properties probably received notices of foreclosure many, many months ago.

Once a debtor receives the initial foreclosure notice there will usually be a hearing set where the debtor gets a chance to explain why he or she is behind on their payments. Generally, after that hearing, a sale date will be set for the property anywhere between 2-6 weeks.

Once the sale date comes and goes, the debtor cannot stop the foreclosure action through any type of channel, even bankruptcy.

If you receive a foreclosure notice, you should contact an experienced foreclosure defense attorney or bankruptcy attorney to discuss your options.

To learn more about this article, please visit Jacksonville initial foreclosure notices drop sharply in Jan. compared to 2010.

Continue reading " Initial Foreclosure notices down from a year ago in Jacksonville area " »