Bankruptcy and Foreclosure Attorney Blog

A new bill has been introduced that would allow Florida courts and banks to move faster on foreclosing on "abandoned" properties. As a practicing foreclosure defense Jacksonville attorney, the new bill will have Constitutional implications, especially as we come closer to trying to define the term "abandoned." Also, the new bill shortens the time for banks to pursue deficiency judgments.

Currently, the banks have 5 years from the date of sale of the property to pursue a deficiency against the borrower. The new bill will require banks to bring these claims within 1 year of the sale date meaning once that time passes, the bank is forever barred from bringing this claim. This will restore confidence in those who have been foreclosed to purchasing another property and alleviate their concerns of not being financially capable or prepared to take on a deficiency judgment. If the bank does decide to pursue the judgment (assuming there are no legitimate defenses to the debt) the borrower could always elect to file bankruptcy to discharge the debt.

There is no doubt that properties currently in foreclosure are bringing down the values of those surrounding them, but does that negate the fact that people's homes are being stripped out from underneath them and in some cases in a most unconstitutional fashion. Society should be concerned that people re losing their homes because of corruption and fraud because it could easily happen to anyone. Most people know someone who has been or is in foreclosure. It is that prevalent. Before you allow your home to be taken over and foreclosed, you should speak with an attorney who deals in foreclosure defense.

Continue reading " New Florida Bill being Introduced to Move Some Foreclosures on much Faster " »

Different studies have different results but many are showing that approximately 5% of all Florida foreclosures are being contested. Therefore, approximately 95% are being uncontested. With these types of statistics, the banks and creditor law firms will continue to be sloppy and ignorant in their filings because they know only 1 out of 15 homeowners are actually going to fight the case. If that number increased, then more than likely the banks and law firms would tighten up their procedures and policies before filing. In most cases, that still will not change the fact that some cases cannot be cured because the note has been destroyed or lost and the rightful owner may never be determined. Those that do not fight, will most likely have their case expedited and closed much faster because the homeowner has failed to respond to the Complaint.

Typically, the homeowner (Defendant) has 20 days to respond from the date the paperwork was served on the defendant. There are a variety of issues when it comes to what constitutes valid service, but that will be saved for a separate blog. Assuming service is valid, defendant may be able to request additional time to respond to the Complaint but the defendant needs to either call up the request for hearing or get consent from the bank's attorney (Plaintiff) to ensure the request is granted. The filing of the extension does not automatically give you more time.

Assuming either a motion to dismiss or an answer with affirmative defenses is filed, both parties are entitled to discovery. All this really means is both parties can ask the other for certain documents, ask each other questions, etc. There are limitations on what can be requested or asked from one another, but that too is also meant for a separate blog. After discovery is concluded, both parties can file motions for summary judgment if no genuine issue of material fact exists. If there is a material issue of fact, the judge must deny the motion and set the case for trial. If the case is set for trial, both parties can present evidence and witnesses.

Continue reading " How many Foreclosures in Florida are Actually Being Contested? " »

Both spouses are not required to file for bankruptcy relief. Many times it is not in one spouse's best interest to file, sometimes it is. As a Jacksonville Bankruptcy Attorney, this comes up quite often. One spouse may not be eligible for whatever reason, one spouse may have all the debt or ASSETS in his or her name, etc. However, if a debtor shares debt with another, the debt will only be discharged to the person filing bankruptcy. The creditor can still pursue the co-signor after the bankruptcy or maybe even before. That needs to be taken into consideration if only one spouse decides to file. If the only reason a couple is looking to file bankruptcy is to catch up the house payments, then one spouse can file and that would be sufficient because the "co-debtor" stay would apply.

The co-debtor stay protects the non filing spouse from creditors in which a joint debt is owed but is usually only reserved in Chapter 13 settings and if the debt is secured by either a house or vehicle. Many times creditors look to just wait until after the bankruptcy to pursue state court remedies.

What about marital assets? Those are typically off limits from creditor and Trustee attachment. The filing spouse does have a 50% interest in the joint marital asset but the Trustee usually steers clear of an asset that is held by a married couple where only spouse is filing. If the debtor is required to purchase back these assets he or she should only be required to buy back 50% of the equity in the asset instead of the full equity amount.

Assets solely in a non filing spouse's name is fully protected from the bankruptcy trustee as long as the filing spouse did not recently transfer the item out of his or her name into the spouse's name only.

Continue reading " Can only One Spouse File a Florida Bankruptcy? " »

This does not come up often but if and when it does, its important to understand what rights a debtor has and does not have if bankruptcy is pending . As a practicing North Florida bankruptcy attorney, it is imperative that the debtor be truthful and honest with the attorney if he or she is expecting an inheritance or any large sum of money or property prior to filing bankruptcy.They need to be truthful if relatives are sick and they are designated beneficiaries under a will or trust. Typically, the look forward and back period is around six months or 180 days. This means that if you receive large sums of money or property within six months of the bankruptcy filing date, it is part of your bankruptcy estate and the trustee may assert his or her authority and liquidate those assets to help pay back creditors. If the amount is received so substantial, you may not even need a bankruptcy. You may be able to have all your debts paid, again, depending on the amount received. If that were the case, the debtor may be able to save some time and money before going through with bankruptcy. At the very least, it would help preserve your credit score.

What about annuities? Annuities are treated a bit differently under Florida law. If the debtor is permitted to use Florida exemptions, annuities are 100% exempt from Trustee or creditor attachment. Therefore, you can see why it would beneficial to have an annuity setup as opposed to receiving some sort of settlement or inheritance in lump sum. What about life insurance policies?

Life insurance benefits are exempt from the deceased's creditors. However, they are not exempt from a beneficiaries creditors. There have been instances where debtors have been forced to turn over life insurance checks at the meeting of creditors. It is very sad and unfortunate but that is why any good attorney will need to make those types of disclosures in the initial consultation.

What happens if I receive an inheritance before I file for bankruptcy? The Trustee will generally ask this question and because the debtor(s) are under penalty of perjury, they must answer truthfully. Many times debtors receive these large chunks of money and legitimately try and workout payments with creditors but it just becomes overwhelming and unaffordable. Therefore, their intent would be much better received by the Trustee as opposed to using that money for a vacation or paying down a mortgage, etc.

Continue reading " What happens if I receive an Inheritance or win the Lottery during my Florida bankruptcy? " »

Many Florida homeowners are surprised to hear that their homeowners or condo association can put a lien on the property and foreclose on that lien. As a Florida foreclosure defense attorney, it can be difficult to fight a homeowner or condo association if they have their "ducks in a row." However, many times the Association can be caught overreaching or overcharging. When a homeowner signs to buy a property where there is an association, the buyer must purchase with the understanding that he or she is doing so under the covenants and restrictions set forth by the Association. Failure to pay assessments that come due is a breach of those covenants and an allowable remedy under Florida law is for that entity to file a lien against the property and if that lien is not satisfied, then to foreclose on the property.

Can a homeowner or condo association require me to pay attorneys fees and foreclosure costs to release or satisfy the lien? The answer is yes as long as it is reasonable. Many times the Association will have a small or minimal assessment but the attorney's fee will be 3 or maybe even 4x that fee. This could be deemed as reasonable based on the case circumstances but it could also be deemed outrageous. However, attorneys fees and costs are not supposed to be added on to the "lien" being filed, only past due assessments. Florida statute 720 governs homeowner's associations and their ability or inability to charge certain fees.

What happens if foreclosure is filed? If the bank files the foreclosure, the homeowner will still want to stay current on assessments that come due. If not, the association can file the lien and look to foreclose if the bank is drawing the time out. If the association is the party filing suit, then they will typically suspend the foreclosure case if the homeowner agrees to workout a payment arrangement. Some will suspend interest during the payback period and some will charge "attorney monitoring" fees which seem a bit outrageous. It just depends on each association.

Continue reading " Can a Homeowner's Association Foreclose on my Florida Home? " »

Many times, clients come to me asking if they should file bankruptcy to stop a garnishment? This depends on many factors. What kind of creditor is garnishing your income? Are your wages being garnished or is it a bank account? How long has the garnishment lasted? How much do you have left before the debt is paid? Is the debtor a Florida resident and if so was the where was judgment entered against the debtor? Does the debtor financially support others? These are just a few of the questions an experienced attorney should be asking if they are capable of handling the debt.Lets start with the creditor. Is the creditor a government entity like the IRS or s student loan company? If so, filing bankruptcy is really not the solution to the problem. If it gets to that point, it is normally too late to do much about it unless the entity is willing to setup a payment plan.

If the creditor is a credit card or collection agency, the debtor can file bankruptcy to stop the garnishment. However, the debtor may or may not qualify for a chapter 7. If the debtor does not qualify, it may not be in the debtor's best interests, but there may be alternatives to bankruptcy. For example, if the debtor makes less than $750.00 per week (gross) and provides more than 50% of financial support for another human being and is a Florida resident, he or she may be able to stop the garnishment without a bankruptcy. The debtor could file a claim of exemption for "head of household" in the county in which the judgment was entered. Once the claim of exemption is filed, the debtor could then request a hearing. At the hearing, the debtor would need to prove that he or she does provide more than 50% of financial support for another.

If a joint/marital bank account is being levied against, was the debt incurred by only one spouse? If so, there may be protections against having that particular bank account levied. If both spouses incurred the debt, then the account can be levied. If not, then the legal doctrine "tenancies by the entirety" may apply. This protects marital assets where only one spouse incurred the debt. Lets assume the lien will stay in place on whatever property is being garnished or levied. How much of the debt remains? If the debt was once a $50k debt and it is now down to say $5k or even $10k, do you really want to file bankruptcy on it now after? The consequences of you filing bankruptcy at this point may outweigh the drawbacks of finishing paying the debt.

Continue reading " Should I File a Florida Bankruptcy to Stop a Garnishment? " »

Many times, I have consults with clients who are very dissatisfied with their attorneys. Fighting for one's home is and should be of great importance to any attorney agreeing and willing to take on the case. As a North Florida consumer defense attorney, the volume of struggling homeowners does continue to grow unfortunately. However, as mentioned in previous posts, these cases take time and most of them will not be won, accomplished or lost within the first week, month or even year. It can take months before a hearing is scheduled in your case. Most times, it is not the attorney's fault a hearing takes so long before it can be heard. The court's calendar is the most important factor and the courts are overworked/understaffed as it is. There are times when loads of work is performed on any given month on a case, but then there are months where there is not as much work or correspondence going on.

Even so, communication is still very important in meeting a client's needs. It is not too much to ask to contact a client from time to time to update them on their case. There have been times where a client has been dissatisfied with their attorney but feel they cannot do anything about it and that they are stuck. Attorneys can be fired just as they can fire clients but you as the client, need to be aware if you are the one firing, whether or not you will be held responsible for subsequent attorney's fees. Read your contract/engagement letter with your attorney with a fine tooth comb. Different attorneys and offices have different styles. Sometimes an attorney/office's style does not mesh or fit with clients and that is okay. But the attorney's style should be disclosed before he or she is hired.

Sometimes when a new attorney steps into the case, he or she is forced to unravel or undo certain filings made by previous counsel. Some times the new attorney can go argue on motions filed by previous counsel. Many times, certain strategies and defenses are waived because they were not timely brought. If the issues are too complex and complicated, you should maybe seek the advice of an attorney who has more experience and expertise. The former attorney must still formally withdraw from the case and it is up to the judge to sign off on the withdrawl. In fact, if the judge does not feel the attorney has any basis for firing a client, the judge can force the attorney to stay in the case. That may or may not be in the client's best interests at that point.

Continue reading " Can I Hire a New Attorney for my Florida Foreclosure Case? " »

Whether a debtor is eligible to use Florida exemptions is important and should not be overlooked. Let us assume that the debtor is eligible to use Florida exemptions. What are those exemptions and how does that compare to other state exemptions? Federal? As a practicing bankruptcy attorney in Northeast Florida, I am asked all the time "what is an exemption?" Think of an exemption as a shield from creditors, but think of it in monetary terms. Florida exemptions are very generous when we discuss homestead protection. If the debtor's property is less than 1/2 acre (in city limits) 160 contagious acres (outside city limits), and the property was purchased more than three and half years ago, the equity is fully exempt from creditor or Trustee attachment. This means the Trustee cannot force the sale of the debtor's home in order to pay back creditors. That protection is not available in a majority of states (jurisdictions). If the homestead was purchased less than three and half years ago, the equity exemption is capped at around $147k. This is in place to prevent debtors from moving to Florida just and buying a lucrative house just to file bankruptcy and impose the unlimited homestead protection. Retirement accounts such as 401(k)s and IRAs are also 100% protected from creditor attachment. What about investment property? Equity in investment properties is not protected and could be subject to liquidation should the Trustee wish to do so. If the investment property is "underwater" the debt will be discharged unless the debtor chooses to reaffirm. If the property is underwater the Trustee most likely will not want to have anything to do with it.

What about personal property? If the debtor claims the homestead exemption, the debtor is only allowed $1,000.00 for one motor vehicle and $1,000.00 for other personal property. This would include furniture, appliances, cash in accounts/on hand, clothing, household items, jewelry, equity in vehicles over $1,000.00, etc. As you can see, it does not go a long way. If the debtor does not claim the homestead exemption, the debtor gets the exemptions mentioned above plus $4,000.00 wild card exemption to go towards personal property. This helps cover some of the left over equity in the debtor's personal property. However, any equity in personal property that is not covered by exemptions is subject to turnover or the Trustee may allow the debtor to buyback the equity over a period of time not to exceed 12 months.

Although Florida is great for the homestead exemption, the state is rather stingy on personal property protection. Other states afford more protection for personal property. This is why it is imperative to have an experienced bankruptcy attorney advise you of your exemption rights

Continue reading " What are Exempt Assets in a Florida Bankruptcy? " »

Many times debtors are concerned, sometimes overly concerned, that if they file bankruptcy, the bankruptcy Trustee will make them turnover some or all of their refund. As a Jacksonville bankruptcy attorney, this can be a very tricky answer. It depends. It depends on a whole host of factors. What chapter did the debtor file? When was the bankruptcy filed? Was the refund already dispersed and used? Do you have an extraordinary financial circumstance that requires the refund proceeds? Lets take it one step at a time.

First, what chapter did the debtor file? If the debtor filed for chapter 7bankruptcy relief, when was the case filed? The later in the year the case was filed, the more likely the debtor will be forced to turnover more of the following year's return. Was any of the refund Earned Income Credit? If so, that entire amount is off limits to the bankruptcy trustee. The Trustee divides however many days into the year the debtor was when he or she filed by 365 to determine the percentage owed or available to the Trustee for turnover. If the debtor fails to cooperate by providing a copy of the return to the Trustee, the Trustee can have the discharge revoked for noncompliance. Another way to protect the tax refund is if the debtor has any more exemptions available that were not exhausted in the bankruptcy for personal property. If so, the debtor may be able to protect some or all of the refund the Trustee believed he or she was entitled to. If the debtor filed a chapter 13, each year he or she is in the bankruptcy, the debtor must turn over tax returns including any refund owed unless the debtor gets permission from the bankruptcy trustee to keep the refund for an extraordinary expense. The reason the refund must be turned over is because it is considered disposable (additional) income and all disposable income is expected to go towards unsecured creditor debt.

What if the debtor already spent the refund? Then it depends on the length of time between receiving the refund and the filing of the bankruptcy. Typically, the Trustee does not have recourse for recouping these spent refunds. If they tried to pursue these funds, they would spend more money trying to recoup instead of just letting it be or they would revoke many, many discharges because the debtor is not able to payback the debt in a timely manner.

Continue reading " Do I get to keep my tax refund in a Florida Bankruptcy? " »

A Missouri grand jury indicted DocX a former subsidiary of Jacksonville's Lender Processing Services. The indictment lists 136 counts of forgery and DocX president has also been indicted. The grand jury report states that mortgage documents were being signed by individuals who the bank claims worked as assistant vice presidents when no such person worked in those roles. Accusations of forgery and fabrication were mentioned throughout the report. This is very troubling but has been going on for quite some time.

"Robo signers" have been called out all over the country and notably in Florida. Major banks have been and continue to be investigated heavily for mortgage fraud because the volume of these cases reaches into the hundreds of thousands. What does this mean for homeowners? It could mean several different things. If the homeowner was damaged from the fraud, there may be possible counterclaims and the dismissal of the foreclosure action. It could mean the mortgage was a fraud and should not be allowed to continue encumbering the property. At this point, the homeowner can file a quiet title action to have the particular lien removed if it has not been already. This could result in a free house! In addition, the homeowner may be entitled to monetary damages. Courts can be and should be extremely harsh on creditors who try and perpetrate a fraud on the court.

Dismissing a case with prejudice is one of the most penalizing consequences the judge could impose. If a case is dismissed with prejudice, that means that particular Plaintiff is barred and cannot bring the foreclosure action ever again. If a case is dismissed without prejudice, the Plaintiff can still bring the action as long as it is within the statute of limitations. Attorneys fees, sanctions, and other court imposed penalties may be imposed but these are the most common.

Continue reading " Former Jacksonville Based Company Indicted for Mortgage Fraud " »

As a Jacksonville consumer attorney, I see many lawsuits filed by credit card companies or collection agencies against card holders. What recourse do these companies have in trying to collect a debt? First of all, these companies need to make sure they are in compliance with the Florida Debt Collection Practices Act. They are certain disclosures and transparencies that must be made in order to collect a debt against a debtor. In any event, credit card companies and collection agencies can report nonpayments and past due balances on the debtor's credit reports. They can file lawsuits against anyone who is the primary or co-signor for the account.

There can be many defenses to a credit card debt lawsuit. The party suing must show that they are the rightful owner of the debt. Furthermore, they must provide documents to the Court proving that such an account was open and maintained. The correct causes of action must be stated also. If the Plaintiff (card company) does what they are supposed to do and the debtor truly owns the debt, a judgment is imminent unless the card company and the debtor agree to work out some sort of payback plan. That will still be beneficial to the debtor because it avoids a judgment being reported on a credit report. However, if the debtor misses payments according to the stipulation/payback plan, the Plaintiff will most likely not give a second chance and will go straight for the judgment. Once a judgment is obtained, the Plaintiff creditor can then conduct post-judgment discovery. This is where they are permitted by the Court to ask the debtor for information including, but not limited to, bank accounts, employment information and other financial accounts.

Once this information is obtained, which in most cases the debtor must comply because it is court ordered, the creditor can then begin to put liens on bank accounts, vehicles, etc. Wages could possibly be garnished also. Once the garnishment is in place, there are defenses and exemptions to the garnishment but it is a very narrow list. Liens will stay in place until they are satisfied either through being paid or through bankruptcy. Can they put a lien against your homestead? They can try but it is not valid in Florida. They cannot foreclose on the lien and a bankruptcy would also eliminate the debt. Florida enjoys unlimited homestead exemption with some limitations. Mortgage companies who secured the property with the mortgage can foreclose in addition to mechanics or construction lienholders. These are creditors who performed some sort of work or improvement on your property, but were not paid.

Continue reading " Can Credit Card Companies Sue Me? Collect? " »

There are many rumors going around that President Obama will be or plans to implement a new home relief program in the upcoming months. Whether it is a ploy to gain political gain or if the program will have teeth, only time will tell. The jist of the plan looks to allow struggling homeowner's the opportunity to refinance the home at lower interest rates. This will in turn lower mortgage payments. The specifics of the policy have not been released, but its anyone's guess how the program will be funded and carried out. Surely, the program will have limitations and qualifications before anyone could participate in such a program. The major banks have yet to comment on the program and how it will affect their "bottom line."

What is the difference between a "refinance" and a "loan modification?" A refinance allows the homeowner through either the current lender or through a separate lender to basically have the prior loan bought out and a new loan issued. Typically the new loan is more than the old loan but it could be at a lower interest rate which in turn may reduce the payments significantly. However, typically there are closing costs and fees associated with a refinance just as if you were buying the home for the first time. You need to make sure that the long term benefits outweigh the costs. Many times the homeowner/borrower still loses money even if the interest rate is better. Refinancing requires new Truth in Lending Act (TILA) disclosures of how fees and assessments are calculated. A three day notice of rescission is also required to be provided.

What is a loan modification? Many times homeowners fall behind on their mortgages and need relief. Loan modifications are a common method to get such relief. However, loan modifications are very difficult to come by and usually require several attempts of providing certain information before the bank decides to approve or deny the request. A modification can allow the homeowner a better interest rate, it can take the arrears and add them to the back of the loan, it may involve a temporary reduced payment such as a trial period, it may involve an overall principal reduction. Loan modifications should be recorded in the public records but do not typically require TILA disclosures.

Continue reading " Obama's New Home Mortgage Relief Plan " »

This is a common problem in many bankruptcies. Clients tend to transfer things before they file bankruptcy in hopes of not losing that particular piece of property. Transferring property out of your name shortly before filing bankruptcy is a quick and easy way to have your bankruptcy discharge revoked and you could still potentially lose the property. The entire look-back period for fraudulent transfers is 2 years. There is a 90 day period before the petition is filed where the Trustee can assert his or her will and void any transaction made within that time if the transaction did not involve a family member or friend. The Trustee can look back a year for a non fraudulent transfer to a family member. Intent is key. The look back period moves to two years on any transaction if there was a "fraudulent scheme" in place. This can be very hard and difficult to prove because it all comes down to intent. Two years is a lot of time to pass if something like voiding a fraudulent transfer has been made. Witnesses can forget things , data can be lost or destroyed, it becomes difficult for the Trustee to prove his or her case. That is not to say the Trustee cannot be successful because they can be. In fact, they can void the transaction and sue recipients of the transaction.

What happens if I am sued or someone I know is sued by the Trustee? If a judgment is entered against you, you will be responsible for the relief that the moving party is asking for. That can be monetary or equitable relief. Refusing to pay could lead to you becoming in contempt of court. If you are still in possession of the property you received you could always return it. However, I would seek legal counsel before you just forfeit your rights and give in. You may have legitimate defenses to the accusations and the Trustee may not be entitled to a dime. Many times, the Trustees do not know someone's intent when a transfer like this is made that is why we have 2004 examinations and they have the ability to sue and find out whats going on. The Trustee also has the ability to revoke a discharge AND recover the property. That is a lose, lose situation. It is meant as a deterrent for filing a bankruptcy in "bad faith." My argument is always "they are not lawyers." They do not know the law. Debtors should be up front and honest with their attorney so these types of disclosure can be made on the bankruptcy petition and schedules.

Being served with this type of action is not something you should ignore. You should speak with an experienced bankruptcy attorney who litigates these types of cases.

Continue reading " What is a Fradulent Transfer in a Bankruptcy? " »