Bankruptcy and Foreclosure Attorney Blog

There are certain thresholds a debtor must meet in order to qualify for chapter 13. First, the debtor must have a steady source of income or in the alternative, the debtor's household had a steady source. Unemployment, social security, pensions, disability, etc count as steady income. However, this does not necessarily mean these sources will cover secured claim payments. For example, if debtor has $1000.00 per month coming in from social security but the debtor's mortgage payment is $1100.00, the debtor obviously does not have enough to even cover the mortgage, much less live on. The terms of the mortgage will not be affected though. The only effect the debtor's income will have is on how much, if any, unsecured creditors are paid.

Think of unsecured creditors getting paid on a sliding scale. The more money the debtor makes, the debtor should have more disposable income available for unsecured creditors. If the debtor makes less money, the unsecured creditors may receive less. It depends on the liquidation analysis and whether or not the debtor has many paid off assets. Remember, unsecured creditors would have to receive as much in a 13 as they would in a hypothetical chapter 7 (after all exemptions are exhausted). What is the reasoning behind this rule and what if the debtor does not qualify for chapter 7? The reasoning is because the debtor can use a loophole in the system to save assets but avoid paying off unsecured creditors. If the debtor cannot afford the payments under a 13 because of the liquidation analysis but does not qualify for a 7, then in theory, the debtor could have the 13 dismissed and sell property to help pay down on the debt.

Do I continue to pay my mortgage and car note directly to the lenders? It depends. If you are current on a first mortgage, you may leave that out off the bankruptcy. The Bankruptcy Trustee has a fee of 10%.of whatever the plan payment is. Therefore, if the debtor's plan payment is $1000.00 then really it is $1,100.00 with the Trustee's fee. This cannot be avoided and is paid through the plan. All vehicles with loans against them must be included in the plan even if they are current (at least that is what the Florida Middle District of Florida mandates). Unfortunately, at least in this district, this cannot be avoided and if the debtor wants to keep the vehicle he or she must have it paid off before the end of the bankruptcy.

Logistically, the debtor makes one payment each month due at the same time each month for the plan amount. The debtor may be able to have the income deducted through wages, but the request needs to be submitted by the debtor or the debtor's attorney.

Continue reading "How does a Chapter 13 Florida Bankruptcy Work?" »

One of the newest trends making its way up from south Florida is the notion that modifications have a better chance at being approved through the bankruptcy courts. As mentioned in previous posts, the Florida mandatory foreclosure program for primary residences has been cancelled. The Florida Supreme Court did away with that program in December of 2011. With that being said, debtors/homeowners are distressed over the fact that there is no state law mandating that banks try and work anything out with their customers. Bankruptcy judges in the middle district of Florida are beginning to understand this and are allowing debtors in a chapter 13 to try and force the banks to come to the table and mediate. The banks are by no means required to settle or approve any deal but the bankruptcy judges will be tougher on the banks if they do not come to the negotiations in good faith, a major problem in state court. The bank representatives that were sent over to mediate did not have the settlement authority to approve modifications or principal reductions and so forth. House notes that are owned by trusts need investor approval before a modification or any other decision on the property can be made. Every note is not owned by trusts but most of them are. What the bankruptcy courts are looking to do is force the mediation settlements to mean something. The success rate in state court for homeowners getting modifications were slim to none. Thus far, the bankruptcy courts are having much better success rates. Now, the question will be, "can that success be sustained?"

Now, bankruptcy attorneys are permitted to charge extra fees to handle modifications for debtors. Because this area of law is so new there is probably a wide range of fees which attorneys are charging. Once there is a better understanding of what the procedure is and how long these typically last, the market will set the price and attorneys will have to be competitive with one another. Until then, like most anything new, it will take time to work out the kinks.

There are a number of different federal programs and nonfederal programs that homeowners may or may not qualify for. Some banks have their own in house policies and procedures for giving nonfederal modifications. With the upcoming presidential election, home refinancing and regulation of mortgage lenders will be or should be one of the top priorities for the administration. The mortgage bubble burst effects not only homeowners but contractors, builders, subcontractors, retail stores, and the list goes on and on. The burst had a domino effect on the economy.

The bankruptcy courts may be on to something if more modifications and homeowner relief are reached through the bankruptcy venue. However, I am concerned with the possibility that the court could becomes flooded with these types of cases and issues and the court will lack the resources (just as the state courts experienced) with keeping up with these quasi-bankruptcy related requests. If it becomes successful, then everyone will want in on the action.

Continue reading "Home Modifications and Florida Bankruptcies" »

As a practicing Chapter 13 Bankruptcy attorney in Northeast Florida, this question comes quite often in consultations and in the middle of cases. The answer in almost all circumstances is yes. Chapter 13 plans can be modified if substantial changes occur since the plan's initial confirmation. When a plan is confirmed, it is based on the debtor(s) present income and expenses at that time. If the debtor has a drop in income, the plan be modified as long as secured claims are still being paid what they should be paid every month and only if it is feasible that the debtor can catch up any arrears on secured debt which does not exceed 60 months. However, the plan can work both ways.

Every year (while the debtor is in his or her Chapter 13 plan) the debtor must turn over a copy of the previous year's tax return. At that point the Trustee will be able to tell if there has been an increase in income. If so, the Trustee could request the debtor to pay more to unsecured creditors (assuming its not a 100% paid plan anyway). Remember: all disposable income is expected and required to go towards the chapter 13 plan. So, plans can be modified by both the debtor AND the Trustee. Essentially, the Trustee would file a motion or other court pleading that calls for the debtor to make higher payments. If a substantial or drastic change in income occurs, and the debtor is no longer able to maintain feasible plan payments, the case can either be dismissed for nonpayment, the debtor can modify the plan and surrender certain secured debt, or the debtors may elect to convert to a chapter 7. Please keep in mind that the debtor must still qualify under the "mean's test" and other filing requirements if this is the route chosen.

If the debtor had counsel file their case, he or she most certainly can go to him or her and ask to have the plan modified. However, most attorneys will charge an additional fee to do this. It does take time and additional resources to draft, file and follow up with modifications. The Trustee ultimately have the final say so (approval needed) to modify a plan. If the pay stubs, W2s, or forms of increased expenses or drops in income can show the change, there should not be a problem with having a plan modified. If a debtor originally qualified for a 36 month plan because the debtor's household income was under the state median income level, the debtor can increase the length of the plan to catch up certain arrears if need be. The debtor cannot exceed a time period of 60 months or 5 years from the date of filing.

Continue reading "Can my Chapter 13 Florida Bankruptcy Plan be Modified?" »

Many people have recently turned to bankruptcy procedures to eliminate debt or prevent foreclosure of their homes. When faced with filing for bankruptcy, it is normal to become scared of losing your automobile. However, bankruptcy laws are designed to protect the title of an individual's automobile, as well as aid in eliminating, or clearing, the auto loan debt. Typical bankruptcy procedures provide for an automatic stay upon filing for bankruptcy. This automatic stay will prevent repossession of a petitioner's vehicle. Exemptions under Chapter 7 may protect one's car from forced sale while the provisions under Chapter 13 may allow the petitioner to catch up on the auto loan debt.

The way bankruptcy procedures will protect a petitioner depend on what type of bankruptcy is filed. The two most common consumer bankruptcies are Chapter 7 and Chapter 13. There is also a difference in car loans and car leases under both chapters.

You have 3 options if you file a Chapter 7 and have a car LOAN:
1. Keep your car AND your loan. Through a reaffirmation agreement, you may be allowed to keep you car while you continue to make payments on your loan. If you fail to make the loan payments you risk repossession of your automobile.
2. Pay off your auto loan. If you have the sufficient funds to do so, a borrower is entitled to pay off the auto loan in a single payment and keep his or her automobile. The amount owed is the value of the car, not the full debt amount.
3. Give up possession to your car and car loan. If neither option 1 nor option 2 is feasible, a borrower my give up possession of the car and loan amount to the creditor.

If you have a car LEASE and file under Chapter 7 a borrower can:
1. Continue making monthly lease payments; or
2. Surrender the car back to the creditor. If you choose to surrender your vehicle any obligation to repay the debt is eliminated in your Chapter 7 bankruptcy.

Under a Chapter 13 bankruptcy the debtor does not have property liquidated because the debtor is making making to either secured or unsecured creditors. However, is should be noted that this is all contingent upon whether or not the debtor is able to use Florida exemptions. Exemptions are available to debtors dependent upon the time a debtor has resided within the state of Florida. In Florida, to qualify for exemptions a debtor must have resided within the state for at least the previous 2 years before filing. If the debtor has not resided within the state for the requisite amount of time, then Florida law requires one to look where the debtor resided the longest 180 days prior to moving to Florida.

Deciding how to handle all of your assets and liabilities during a Florida bankruptcy is difficult and stressful. A wrong decision could cause even more financial dire straights. Speaking with a Florida Bankruptcy Attorney is highly beneficial to anyone seeking filing for bankruptcy. Contact Wood, Atter & Wolf, P.A., to speak with a Florida Bankruptcy and Foreclosure Attorney.

Once a petition for bankruptcy is filed a bankruptcy estate is created pursuant to the Bankruptcy Code. A trustee is then appointed - it is the trustee's duty to liquidate all the property of the bankruptcy estate. The estate is comprised of all the debtor's legal and/or equitable interests in property as of the date the petition for bankruptcy was filed. Thus, the bankruptcy estate can include all real property, crops, livestock, equipment and other machinery, contract rights and leases. Property that the debtor acquires 180 days of filing the bankruptcy petition is also included within the bankruptcy estate - typical property includes inheritances, divorce decrees, life insurance policy, etc.

However, there is certain property considered exempt and is not included within the bankruptcy estate. For example, a debtor's earnings from personal services performed after the filing of a Chapter 7 Bankruptcy, but before termination of the bankruptcy proceedings, are not included within the bankruptcy estate.

Continue reading "What is considered “property of my Chapter 7 Bankruptcy estate?"" »

There are two major types of personal bankruptcy proceedings for consumers – Chapter 7 and Chapter 13. A Chapter 13 Bankruptcy permits a debtor to keep his or her property and repay his/her debt over a period time, usually three to five years. Also known as a “wage earner’s plan,” a Chapter 13 Bankruptcy allows those consumers with a regular income to develop a plan and repay their debt (in whole or in part) in accordance with that plan. A plan may never be longer than five years.

When an individual files a Chapter 13 proceeding, the courts administer an impartial trustee to administer the case. Pursuant to Federal Rules of Bankruptcy Procedure 3015, the debtor must file a repayment plan with his/her petition or within fifteen (15) days after the petition is filed. The repayment plan must receive court approval and provide for payments of a fixed amount. The fixed payments are paid to the trustee, who then distributes the funds to creditors in accordance with the terms of the repayment plan.

Imagine this scenario: You’ve followed all the rules and procedures regarding your Chapter 13 proceeding. You’ve submitted a repayment plan, received court approval of your repayment and have made payments in accordance with your approved repayment plan. Then, some set of circumstances occurs and you are unable to make the payments in accordance with your current repayment plan. Can your previously approved repayment then plan be modified?

A debtor may find him or herself experiencing a change of circumstances that limits his or her ability to make the fixed payments. (Typical situations include: (1) A creditor objects or threatens to object to a plan, or (2) the debtor inadvertently failed to list all his/her creditors). In such situations, the initial repayment plan may be modified before of after confirmation. Requests for modification after confirmation are not limited to the debtor; the trustee or an unsecure creditor may also make these requests.

Modifications, and requests for modifications, occur frequently so they are not as difficult to obtain as they initially appear. However, make sure your request for modification is reasonable. Seek the advice of an experienced Bankruptcy Attorney to provide aid and counsel in your request for modification. Every bankruptcy court has its own set of rules and procedures. A Bankruptcy Attorney in your area will be familiar with the courts’ processes, thereby helping you during a stressful time and providing an easier transition into your modified payment plan. Contact Wood, Atter & Wolf, P.A. if considering filing for bankruptcy or modifying your current repayment plan.

Continue reading "Can my Chapter 13 Bankruptcy Plan be modified after it has been confirmed?" »

Many times debtors pay their Chapter 13 plan payments and forget or do not budget for their condo or homeowner's association fees. The bankruptcy only takes into consideration the past dues assessments. If the debtor falls behind on the post-petition payments, the Association may ask the Court for permission to record a lien and file foreclosure, or in the alternative, for adequate protection payments.

Adequate protection is usually available if their is no equity in the property or it can come in the form of requiring the debtor to keep property insurance on the property or force the debtor to make the regular monthly payment. If the debtor fails to make the payment, they are disobeying a court order.

The debtor may be able convert the post petition arrears into the chapter 13 plan if the Association agrees. The Association may work something our where the debtor can pay the Association directly over a period of time. If you have questions about this, you should consult an experienced attorney.

Continue reading "What Happens if I do Not Pay my Post-Petition Assessments in a Florida Chapter 13 Bankruptcy?" »

With the recent housing collapse, many people are underwater or upside down on their homes. In some instances, a Chapter 13 can give relief on a second mortgage or Home Equity Line of Credit ("HELOC").

However, if the junior lien holder has some security interest in the property, it cannot be "stripped" if the property is their personal residence. If the property is an investment property, the liens may be subjected to "cram down." Cram down essentially means the debtor equates the value of the home with what is owed on the house. However, whatever secured portion the junior lien holder holds, must be paid off during the Chapter 13 plan.

The unsecured portion will receive a pro rata share of whatever the unsecured creditors are receiving and the balance will be discharged at the end of the plan. If the debtor(s) do not complete the plan, then the cram down is ineffective and the lenders will retain their ordinary liens.

Continue reading "Can I cram down my Primary Residence in a Chapter 13 Florida Bankruptcy?" »

During each consult where chapter 13 is a possibility, every client always asks, "What will my plan payments be?" Unfortunately, that is pretty difficult to determine in the initial consultation.

The plan payment is based on the debtor's income and expenses, whether or not there are arrears on secured debt, the interest rates on secured debt, and whether or not strip offs or cram downs will or will not be available.

Please remember, if there are arrears on a mortgage or car loan, you only have 60 months or five (5) years to catch it up. The terms on a first mortgage primary residence cannot be altered unless the bank agrees to a modification while the bankruptcy is pending and active. If the plan payment is too high to catch up the arrears on a particular piece of secured debt, then the debtor should either surrender the property to a chapter 7.

Continue reading "What will determine my Chapter 13 plan payments?" »

If a debtor is under the state median income for the state of Florida, and files for Chapter 13 bankruptcy relief, he or she is able to complete a 36 month plan. However, many times the payments are too high and the debtor cannot afford the payments, especially if there are substantial arrearages.Therefore, it may be in the debtor's best interests to extend the length of the plan.

For example, the plan can run 40, 55 or even 60 months. It just cannot exceed the 60 month mark. The Trustee normally requires motor vehicles to be paid off within the 60 months also.

The idea is you should be coming out of the bankruptcy as debt free as possible. If you cannot afford the plan payments because your vehicle payment is too expensive, you may look to surrendering that particular vehicle. One of the nice features of a 13 bankruptcy is the ability to cram down vehicles. You must have purchased your vehicle over 910 days ago and it only works if you owe more than its worth. Typically, the debtor can cram it down to the Till interest rate which is around 5.75%.

Continue reading "If I qaulify for a 36 month Chapter 13 plan, does it have to be that Short? " »

The answer is normally, no. Once the bankruptcy case is filed, the debtor(s) usually needs to get the Trustee's permission before he or she can incur additional debt. This includes new credit cards, vehicles, homes, and vacations.

The reason being is the idea behind a chapter 13 is that all disposable income should be paid out to secured and unsecured creditors in the form of one payment that is administered by the Chapter 13 Trustee. If the debtor(s) try and incur new debt, that will affect the plan payment being made every month because now there is an additional or, in some cases, a reduction in expenses. If there is a reduction in expenses, the plan payments may go up.

Continue reading "Can I incur new debt in a Chapter 13 Florida Bankruptcy?" »

In Florida banks and mortgage companies will soon be requesting more and more pre-foreclosure mediations. While on the face of things, it may appear that Florida banks and mortgage companies are seeking to work with homeowners as to loan revisions, mortgage modifications and other relief. Florida consumer advocates are concerned that homeowners will unknowingly and in advertently waive important legal rights during the mediation process and sign documents that, in turn, make the defense of a subsequent foreclosure action more difficult for the homeowner. While pre-foreclosure mediation can be helpful in some instances, it is important for the homeowner to understand his or her legal rights and have legal representation at such proceedings. Florida Banks and mortgage companies have their own attorney and homeowners should be adequately represented in pre foreclosure mediation matters as well. Homeowners have a right to representation and should protect their rights of homeowership accordingly. For more on this topic see pre-foreclosure mediation.

In the middle district of Florida, it is becoming more prevalent that debtors must submit a formal appraisal with the motion to strip in order to have the 2nd lien stripped from the property.

As mentioned in recent posts, if the value of the home is worth more than the 1st lien on the property, it is highly unlikely that the debtor will be able to receive the benefit of the strip. Furthermore, a strip will only become effective if the debtor makes all payments and successfully completes the plan.

The middle district of Florida, for the most part, is not accepting property tax appraisals and home valued sites such as Zillow.com and Trulia.

In some instances, it may be acceptable to use these resources but I always tell my clients to prepare hiring an appraiser for a formal appraisal.

Continue reading "Stripping Liens in Chapter 13 Bankruptcy and Home Appraisals " »

This is a very common question. Many times a debtor will experience a drop in income. Sometimes the reduction can be very significant and trying to resume the confirmed plan payments is impossible. The plan may be modified in certain circumstances.

However, if a debtor is only paying unsecured creditors a low percentage rate and there is secured arrearage in the plan also, the plan may not be modified much lower. The arrearage must be paid off within five years through the plan.

If a plan is modified where the arrearage will not be paid off in those five years, then the plan will not be accepted or confirmed by the bankruptcy court or trustee. If this is the case, the debtor may want to converting his or her case to a chapter 7 if eligible.

Continue reading "Can my Chapter 13 plan be modified? " »

The answer depends on a few different factors. As mentioned in prior posts, a chapter 13 plan is a plan devised by the debtor or debtor's attorney that takes into consideration all living expenses and income. The debtor will have to go by IRS guidelines though and will most likely have caps on certain expenses.

After taking everything into consideration, the debtor will come up with a percentage of what to pay pack unsecured creditors and propose a plan to the bankruptcy court and Trustee. If they believe the plan is fair and there are no creditor objections, the plan will be approved and confirmed. If the debtor(s) are over the median income level for the state of Florida, they must propose a 60 month (five year) plan.

If the debtor(s) make less than the median income, they may propose less than a 60 month plan. Usually, the shorter the duration of the plan, the higher the plan payments and vice versa.

Continue reading "How do I know if I will be in a three, four, or five year plan in my Chapter 13 Florida Bankruptcy?" »

A second mortgage can only be stripped in a Chapter 13. The possibility for stripping a mortgage depends on the value of the debtor's home, the 1st mortgage balance, and the 2nd mortgage balance. Stripping mortgages is procedurally unique in each jurisdiction. Different judges have different requirements.

Once the Chapter 13 is filed, it is up to each creditor to file what is commonly referred to as a "proof of claim." Once the proof of claim is filed, the attorney usually has a certain time period to file a motion on behalf of the debtor to strip the mortgge.

The judge may decide to hold a hearing on the matter or, if it is uncontested, simply grant the stripping. What does that mean? It means it will change the treatment from secured to unsecured debt and the lender will get what all the other unsecured creditors are getting. Once the lien is stripped and the debtor is out of the bankruptcy, the debtor will only have to pay one mortgage every month.

Continue reading "How is a 2nd mortgage stripped in a bankruptcy? " »

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? " »

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?" »

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?" »

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 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?" »

Many Florida residents took out 2nd mortgages on their homes before the recent housing crisis deflated home values. These same citizens are now frustrated because most are paying well over the current value of their homes.

Should you file a Chapter 13 just to strip off the 2nd mortgage? No. First, a bankruptcy filing will be on your credit report for 10 years.

Second, even if the 2nd mortgage is stripped, you will be paying on it for 3-5 years in the form of unsecured debt to the Trustee before it is actually stripped.

Third, there is no guarantee that the mortgage will be stripped. It is totally up to the bankruptcy court and the Trustee in determining this issue.

Finally, you probably will be paying an attorney legal fees and court costs just to file the case. If you are thinking about bankruptcy, you should consult with an experienced bankruptcy attorney.

Continue reading "My 2nd Mortgage is Wholly Unsecured: Should I file for a Ch. 13 Florida Bankruptcy? " »

The answer is yes. Many times debtors begin making their monthly payment plans to the Trustee and the costs are just not affordable or sustainable for long periods of time. At that point, debtors may have to start making decisions whether or not to surrender certain properties, including their homes.

Many Floridian homes are underwater and citizens are tired of making mortgage payments towards a property where the value of the home will never exceed the value of the loan. Debtors can surrender their home in a Chapter 13 plan and the remaining balance will become part of the unsecured portion of the overall debt.

By doing this, you will ensure the lender cannot come after you personally as long as you continue to make your plan payments.

Continue reading "Can I surrender my home in a Chapter 13? " »

In order for a debtor to file for Chapter 13, the debtor must have a steady stream of income. Monthly wages/salary are not the only methods of income the bankruptcy court will accept. Chapter 13 plans may be approved if the debtor receives a steady income through unemployment, social security, retirement, or any other source of income.

If the income increases or decreases during the life of the plan, the plan may be modified accordingly. However, the Trustee does not have to approve a plan submitted by the debtor. If the Trustee feels the debtor will not be able to make consistent monthly payments, he may recommend the case be converted to a Chapter 7.

If a debtor is unemployed, he or she will most likely be eligible for a Chapter 7. An approved Chapter 13 plan could last anywhere between 3-5 years. The more income a debtor makes, the longer the plan duration will most likely be.

Continue reading "Do I have to be employed to file a Chapter 13 in Florida? " »

With the recent housing market crisis, many homeowners are finding themselves "underwater" on their homes. Underwater means the homeowner owes more than the house is worth. However, many homeowners had equity in their homes before the values began to plummet.

Many homeowners have taken out 2nd mortgages on their homes. In a chapter 13 bankruptcy, it is possible to have the 2nd mortgage discharged (after a debtor's final plan payment) if the total debt on the home (between 1st and 2nd mortgage) is more than the value of the home.

If the 1st mortgage is more than the home itself, then there is no collateral for the 2nd mortgage to claim. The 2nd mortgage becomes unsecured and is treated just like the rest of the unsecured debt. After the final plan payment in a chapter 13 bankruptcy, the balance owed on unsecured debt is discharged. If the value of the home is worth more than the primary mortgage, then the 2nd mortgage lender would have secured status up to the value of the home. Any remaining balance would most likely be unsecured. You should consult with an experienced bankruptcy attorney if you have additional questions.

Continue reading "Can a 2nd Mortgage be discharged in a Chapter 13 Florida Bankruptcy?" »

For Chapter 13 debtors who want to keep their home and have sufficient income (at least 31 percent of net income) to commit to a modified mortgage, Florida offers a mortgage modification mediation program.

Florida Chapter 13 debtors can request mortgage modification mediation by filing a motion with the bankruptcy court. Your Chapter 13 bankruptcy attorney can assist you with this.

In the Florida mortgage modification mediation process, you and your lender will choose a mediator, who is a neutral third party, to help you reach an agreement. Mediation is an informal process, and is not held in a courtroom but usually in a mutually agreeable meeting place. The mediator works with you and your lender to come to an agreement on a reasonable modification of your mortgage loan. The mediator cannot force a lender to modify a mortgage.

The cost for Florida’s mortgage modification mediation program for Chapter 13 debtors is a $275 fee that must be paid to your Chapter 13 trustee prior to beginning the mediation process.

After a motion has been filed, the court has entered an order requiring mediation and the fee has been paid, you may need to provide your lender with more financial information that will help facilitate a decision to modify your mortgage.

If you are a Chapter 13 debtor and are interested in the Florida mortgage modification mediation program, consult with your Florida bankruptcy attorney.

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.

Rapper Young Buck has filed Chapter 13 bankruptcy after the Internal Revenue Service raided his Nashville area home. According to news reports, Young Buck owes the IRS over $300,000 in back taxes.

A story in the Wall Street Journal profiled the rapper’s Chapter 13 bankruptcy filing, quoting David Darnell Brown (his real name) as saying that he wants his property back and plans to sue rapper 50 Cent, whose record label signed Young Buck a few years ago.

Young Buck has been feuding with 50 Cent (real name: Curtis Jackson) for over two years about the management of his career. The Nashville rapper was originally a part of 50 Cent’s G-Unit crew of rappers, but was fired by 50 Cent in 2008. Young Buck remained on the G-Unit record label, which he has been fighting to be release from ever since.

According to the WSJ report, Young Buck filed a payment plan last month that calls for him to repay $750,000 to creditors that are owed over $1 million. His other debts include $700,000 on two mortgages and over $33,000 owed on a Cadillac Escalade.

The IRS seized over $160,000 in assets from his home last month, including computers, jewelry and home studio equipment. Young Buck said the IRS situation happened because he trusted others to handle his business for him, but “from now on, I am going to stay on top of my own business.”

A Chapter 13 bankruptcy is also known as reorganization and allows you to set up a 3-5 year payment plan. In this plan you will pay your debts to your court appoint trustee who collects the money and pays an agreed upon percentage of that money to your creditors.

Here is what most consumers may not know: You do not have repay all your debts! And, the debts you do pay back receive only a portion of what you owe them.

Your payments will be based on how much you can afford to pay each month.

Another secret many people do not know about Chapter 13 is that you can change your interest rates on your car loans. For example, say you own a lot of money on your car so you go to a title-loan company. They charge you over a 100% a year interest (yes, this actually happened). Now, instead of making a few hundred dollar per month car payment, you accrue a monthly payment of $1,000 - an amount you simply cannot afford. In a Chapter 13 bankruptcy, you may be able to change the interest rate on loans similar to this and decrease the interest rate to somewhere around 4.25%! This low interest rate combined with the 3-5 year payment plan will provide you plenty of cushion, keep the payments small and affordable and keep your car.

Continue reading "Secrets about a Chapter 13 Bankruptcy in the State of Florida" »

Teresa Giudice , who stars on Bravo TV’s “Real Housewives of New Jersey,” recently told People Magazine that she and her husband filed bankruptcy last October to get a fresh start after investing in “real estate deals gone bad in a bad economy”.

However, the bankruptcy trustee in her case has accused the Giudices of misleading the court about the value of their assets and is proceeding with a scheduled auction on Aug. 22 to sell many of their possessions at their Towaco, N.J. mansion.

The Giudices’ attorney says that the couple has not misled the court, and that he is appealing the decision and hopes the auction will not take place. In his appeal, he said that many of the items listed for sale were purchased after the bankruptcy filing, with money earned post-petition. He has argued that those items purchased after the filing should not be included as part of the bankruptcy assets.

In a blog on Bravo’s web site, Giudice wrote about the bankruptcy filing: “The economy crash trickled down to everyone. We worked so hard for so many years and it was heartbreaking to file, and not something we took lightly. Of course you can't sit in your bed and just cry all day, so we moved forward, got new jobs, and are working hard once again. The point is to get a fresh start so you can move forward.”

Luckily for most Americans, you don’t need to be a reality TV star to get a fresh start by filing bankruptcy. If the economic downturn has affected your family adversely and you have more debt than you can handle, contact a Florida bankruptcy attorney to learn about your options for getting a fresh start.

The Middle District of Florida U.S. Bankruptcy Court – with divisions in Jacksonville, Orlando, Tampa and Fort Myers – is the second busiest bankruptcy court in the nation with more than 64,000 bankruptcy cases filed there in the past year. Only the Los Angeles district ranks higher for bankruptcy filings.

At a recent meeting of the Jacksonville Bankruptcy Bar Association, Jacksonville Division Chief Bankruptcy Court Judge Paul Glenn said that while the economy is recovering slowly, bankruptcy filings in Florida could still grow because of the Gulf oil spill and the impact the current European economic downturn might have on the state’s international and trade-related businesses.

The judge said that total business bankruptcy filings – including Chapter 7 liquidation and Chapter 11 reorganization – totaled 3,210 in the Middle District of Florida courts in the past year. He also noted that 23 percent of Florida mortgages are currently in the process of foreclosure.

Approximately 10 million Florida residents are served by the Middle District of Florida U.S. Bankruptcy Court, which covers 35 Florida counties. The four divisions have a total of nine judges; at the current rate of 64,000 cases per year, the average caseload per judge is a staggering 7,000.

According to the American Bankruptcy Institute, consumer bankruptcy filings in the first six months of 2010 rose 14 percent from the same period one year ago, and are now the highest on record since the bankruptcy laws were revised in 2005 when Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act.

From January 1 through June 20, 2010, consumer bankruptcy filings in the U.S. stood at a total of 770,117. For the month of June, bankruptcy filings totaled 126,270, up 8.5 percent from June of 2009. A small silver lining: the total number of filings for June was down 7.8 percent from last month.

The ABI website provided quarterly bankruptcy filing statistics by state only through the first quarter of 2010; Florida bankruptcy filings stood at 26,404 for the first quarter of 2010, up 22 percent from the same period one year ago, when filings totaled 20,701. Florida is second only to California for the highest number of combined consumer and business bankruptcy filings.

In a press announcement on the latest bankruptcy filing statistics, ABI Executive Director Samuel J. Gerdano said that his organization anticipates there will be over 1.6 million new bankruptcy filings by the end of 2010.

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.

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.

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.

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.

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.

As advances in medical care continue to add years to the lives of many Americans, could the failure to plan for that longer life lead to bankruptcy?

It is currently estimated that nearly half of all Americans fail to plan properly for retirement.  Add to that a bruising economy that has seen the savings and retirement accounts of many older Americans drop as much as 40 percent, and the necessity for many of those to live off credit cards and you have the equivalent of the perfect storm.

The old paradigm of being able to retire at age 65 after a long career at one company with a comfortable pension and ample savings – with the house paid off and the kids long gone – has disappeared from the American landscape.

More older Americans are now saddled with debt, mortgages and may already have been drawing from their savings because they were laid off from their jobs.  The nest egg has turned rotten.

And even though it may go against some ingrained older attitudes, filing bankruptcy can be a great help to seniors, allowing them to shed the debt and reinvest freed income into savings and retirement accounts.  Bankruptcy may also prove to be an effective way to allow retirees to hold on to their homes.

Bankruptcy protects retirement accounts from creditors and will also discharge debt from medical bills, which is a higher percentage of the debt load for seniors.

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

A Jacksonville bankruptcy attorney says a recent audit of individual Chapter 7 and Chapter 13 bankruptcy cases in the U.S. by the Executive Office of the U.S. Trustee has found that nearly one-fourth of those cases contained “material misstatements”.

What is a “material misstatement?”

The EOUST said “a material misstatement indicates the audit produced information that challenged the accuracy, veracity, or completeness of a debtor’s petition, schedules, or other filed bankruptcy documentation.  Inaccurate or incomplete information deprives the court, the United States Trustee, the private trustee, and creditors of adequate information to decide whether to conduct further investigation, recover assets, or seek or impose relief against the debtor.”

The EOUST is currently auditing one in 1,000 bankruptcy cases.  When a material misstatement is identified, the bankruptcy court and the creditors are notified.  So is there a growing trend of bankruptcy fraud?

It is hard to say, because the EOUST does not specifically define what constitutes a material misstatement.  It could be deliberate fraudulent behavior by debtors, or it could be a clerical error in filling out the proper forms.

If you are considering filing bankruptcy in Florida, consulting with a Florida bankruptcy attorney will ensure that all your documentation is prepared properly and that your case will stand up to any audit scrutiny.  Going it alone may cost you in the long term.

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

Personal bankruptcy filings were at an all-time high in the Jacksonville area last month, and one Jacksonville bankruptcy attorney says it is no surprise due to the high consumer debt average carried by Jacksonville residents.

Data recently released by credit reporting company Experian Information Solutions, Inc., showed that the average credit card and auto loan debt per consumer in Jacksonville is $25,696.

On a list of the Top 20 major metropolitan areas, that would place Jacksonville at #6.  Seattle was at #1 with $26,646 average debt per consumer; other Florida cities included Tampa (#8), Orlando (#10) and Miami (#19).

Credit card debt is one of the leading contributors to filing a Chapter 7 or Chapter 13 bankruptcy, both of which wipe out credit card debt.  Since auto loan debt is secured debt – which means it is backed up by an asset (in this case, the car) – it is not dischargeable in bankruptcy.  However, if you can work out a way to keep making payments – which consumers can usually do once other debt is eliminated – you can continue to keep your car.

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

A comment made in response to a recent Florida Times-Union article on the record number of bankruptcy filings in Jacksonville shows that some consumers are embracing bankruptcy as a viable solution to resolving their personal debt crises:

I filed back in October. I dumped my upside down house and $20k worth of credit cards. If I was going to do it, I was going to do it right. All in all I'm saving about $400,000 over the 12 years it would have taken to recoup the value of my house and get the cards paid off.

It was a financial move, and a good one at that. With all of the free cash I have now I've maxed out my 401k and HSA savings ($19,500 a year), looking towards the future. The only loan I kept was my car loan, which I'm paying extra on now and will have paid off a few years earlier, then all of that cash will go straight to savings too until the car blows up and I need a new (used) one.

This economy is very unstable and its best to have as much cold hard cash as you can have on hand. Bankruptcy can be a very good eye opener and valuable tool. You just have to use it right and then learn to live within your means.

Credit card offers come 6 months after discharge, mortgage offers come 2 years after discharge. If it concerns you that much, and if you can play the game right you can have a 700+ score a year or so after discharge.

Me, I've learned my credit lesson. No more getting suckered by the Credit Industry, I can do without. Now I have a rented condo at the beach and enough disposable income to plan for the future and live comfortably & humbly in the present.

If you need to information on how bankruptcy can help you get out of debt, contact our Jacksonville, Florida bankruptcy law firm.

Personal bankruptcies continue to rise in the Jacksonville area and one Jacksonville bankruptcy lawyer says there are common behaviors that are signposts on the road to bankruptcy:

Poor Financial Planning – failing to track monthly expenses and operate without a budget leaves many people strapped for cash every month.  They eventually fall prey to insolvency.

Too Much House – many Floridians are feeling the pain of their decision to take advantage of the easy credit that was available several years ago to buy more home than they could afford.  Mortgage payments that are too large are one of the major factors in personal bankruptcy filings.

Too Much Credit Card Debt – ditto here for the easy credit trap.  Add to that the fact that many consumers finance their lifestyle with credit cards and you have a recipe for financial disaster.

No Emergency Fund – another leading cause of bankruptcies is unplanned expenses.  Coping with a job loss, medical bills or major home repairs without an emergency fund to fall back on often pushes consumers into bankruptcy.

Tax Problems – failing to pay personal or business taxes also forces some people into filing bankruptcy.  And unfortunately, most taxes are not dischargeable in bankruptcy.

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

Jacksonville area bankruptcy filings rose 18 percent for the first four months of 2010 compared to last year with Chapter 7 liquidation filings dominating the docket, according to a report from the Jacksonville Daily Record:

In the U.S. Middle District of Florida, Chapter 7 liquidations dominate the docket, accounting for 75 percent of all bankruptcy filings in the district, which covers the major metro areas of Jacksonville, Orlando and Tampa.

Chapter 7 is a liquidation of assets. Debtors can keep some exempt property, while the remainder is liquidated and distributed to creditors.

With Northeast Florida’s unemployment rate hovering at 12 percent and job creation remaining slow, bankruptcies are expected to continue.

The U.S. Bankruptcy Court for Florida’s Middle District contains about 10 million of Florida’s 18 million residents, according to the court.

It contains 35 of the state’s 67 counties, including several of the state’s largest metro areas, including Jacksonville, Tampa Bay, Orlando, Ocala, Daytona and Fort Myers.

Districtwide:

• Total bankruptcy filings spiked 18 percent during the first four months, compared to last year, and were five times the pace of 2006.

• Chapter 7 liquidation filings rose 21 percent over the year to 16,659, seven times the rate of 2006.

• Chapter 13 individual repayment plans rose 7 percent to 5,293, three times the rate of 2006.

• Chapter 11 corporate reorganizations almost doubled over the year to 316 and were nine times the rate of 2006.

In the district’s Jacksonville division, overall bankruptcy filings, including all chapters, rose almost 8 percent over last year, following a first-quarter rise of 10 percent.

Filings in the Jacksonville division rose to 3,822 in the first four months, the highest since 2005, before bankruptcy laws were changed to make it harder to file.

The filings were three times the pace of the same period in 2006, before the recession began.

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

Under Florida bankruptcy law, there are certain assets that a debtor can keep.  These assets are known as exempt – or excluded – property, and are determined based upon a debtor’s personal income and circumstances.

Qualifying exemptions for Florida include:

Homestead – real or personal property including a primary residence, mobile home, modular home or condominium.

Personal Property – includes a motor vehicle to $1,000, any personal property to $1,000 ($2,000 for married couple), federal income tax refunds or tax credits, health aids, prepaid medical savings account deposits, prepaid college education trust deposits and prepaid hurricane savings accounts.

Pensions – includes tax-exempt retirement accounts, tradition and ROTH IRAs to $1 million per person, public benefits, veterans’ benefits, workers’ compensation and more.

Wages – includes all wages for heads of family up to $500 per week, deposited into a bank account for up to six months.

Insurance – includes disability or illness benefits, death benefits payable to a designated beneficiary, life insurance cash surrender value, annuities and fraternal society benefits.

To fully understand what you may or may not be able to keep if you file Chapter 7 or Chapter 13 bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

According to a report out earlier this month by the American Bankruptcy Institute, there were almost 150,000 personal bankruptcies filed in March 2010 – the highest consumer filing total since 2005, when Congress overhauled the Bankruptcy Code.

The ABI noted that the March filing is a 34 percent increase from February 2010, and a 23 percent increase from the same month one year ago.  Chapter 7 bankruptcy filings made up the majority of the March number; Chapter 13 bankruptcy filings accounted for 25 percent of the total.

From a report on bankruptcycorner.com:

Katherine M. Porter, a bankruptcy expert at the University of Iowa and the University of California, Berkeley’s Boalt Hall Law School, says people typically ’seriously struggle’ with their debt for two years before turning to bankruptcy.

“The statistics show that Chapter 7 bankruptcy filings are rising faster than the more complex Chapter 13 filings. While the latter requires individuals to repay a substantial portion of their debt and prevents banks from foreclosing on their homes, Chapter 7 bankruptcy allows a debtor to wipe out his or her debts entirely and get a fresh start. ‘It is very fast and very deep debt restructuring,’ says Porter. Since 2005, Chapter 13 filings have dropped from about 35% of all personal bankruptcy filings to 25%, she says. ‘Systemically, that’s a big change.’ ”

If you have questions about filing bankruptcy in Florida, contact our Jacksonville, Florida bankruptcy law firm.

According to a Jacksonville bankruptcy lawyer, a recent article at NakedLaw.com pointed out five surprising facts about bankruptcy in America – surprising from the standpoint that they debunk some of the preconceived notions Americans have about bankruptcy:

1.  Bankruptcy filings increased by 30% in 2009 – so if you are thinking about filing bankruptcy, you are certainly not alone.

2.  1 in every 70 American households files for bankruptcy – so there is a pretty good chance that someone you know has recently filed bankruptcy.

3.  Almost half of American families spend more than they earn – so the debt your family has piled up is hardly unusual in today’s economy.

4.  There are over 100,000 bankruptcy filings each month in America – so, again, if you are facing bankruptcy, you have lots of company, especially in the hard-hit states of Florida, California and Nevada.

5.  No one is immune to bankruptcy – so whether you have a college degree or not, in a tough economy, everyone suffers.

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

Florida residents who are considering filing Chapter 7 or Chapter 13 bankruptcy may be concerned that a bankruptcy filing will wipe out their retirement plan funds, says one Jacksonville bankruptcy lawyer.

Fortunately, retirement accounts are considered exempt property in a bankruptcy filing.  And, with a few exceptions, the amount of the exemption is unlimited, protecting the entire amount of the retirement account.

Retirement plans that qualify for this exemption include any ERISA-qualified pension plan:

• 401(k) plans


• 403(b) plans


• Roth, SEP and SIMPLE IRAs


• Profit-sharing plans


• Keoghs


• Defined benefit plans


• Money purchase plans

For traditional and Roth IRAs, there is an exemption limit of $1,095,000 per person; if your plan’s value is more than this, the bankruptcy court can use the excess to repay your creditors.

If you have taken a loan from your retirement account, that debt cannot be discharged in a Chapter 7 bankruptcy.  If you file Chapter 13 bankruptcy, any remaining debt from your retirement account loan can be discharged at the end of the Chapter 13 bankruptcy (usually three to five years).

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

In a Florida Chapter 13 bankruptcy, you make payments each month to a court appointed trustee, who then pays your creditors according to the requirements of your Chapter 13 bankruptcy plan.

Upon the successful completion of your plan – usually in three to five years – any remaining debt is discharged.

A typical Chapter 13 bankruptcy plan will include these debt classifications:

Administrative claims – includes attorney’s fees, the bankruptcy filing fee and the trustee’s commission.  All these must be paid in full.

Priority debts – includes back alimony and child support, state and federal income tax debt, contributions to an employee benefit fund and any wages or commissions you owe to employees.  These must be paid in full.

Secured debts – includes mortgage debt, car loans and other debt secured by property.  These must be paid in full to retain ownership of the property.

Unsecured debts – includes credit card debt, medical bills and any other debt not secured by property.  These are the debts that receive a percentage payoff, depending on the amount of disposable income you have to satisfy your monthly debt payments, the value of the nonexempt property, and the length of your bankruptcy plan.

If you need more information on how a Chapter 13 bankruptcy filing might help you, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy lawyer notes that there are certain circumstances when it may make sense for those who are in Chapter 13 bankruptcy to convert to Chapter 7 bankruptcy.

Florida bankruptcy law allows debtors to convert from Chapter 13 bankruptcy to Chapter 7 bankruptcy at any time during the repayment period.

This can be a useful provision if:

• Your financial condition has changed dramatically and you are no longer able to make your scheduled payments according to your Chapter 13 bankruptcy plan.  The most common reason for this is the loss of a job.


• The size of your household has changed and you have increased expenses to support those people.  This can occur if you must take in an elderly relative, or if you have a child.


• You incur significant medical debt because of an illness or accident and cannot afford to pay your medical bills.

You should first consult with a Florida bankruptcy lawyer to determine if you qualify for a conversion from Chapter 13 to Chapter 7 bankruptcy.

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

While bankruptcy helps millions of Americans get a fresh financial start every year, it does not necessarily cure every financial ill.

Here is what bankruptcy cannot do for consumers:

Bankruptcy cannot discharge certain types of debts that have been singled out by bankruptcy law.  These include child support, alimony, most types of student loans, most taxes, court restitution orders and criminal fines.

Bankruptcy does not eliminate certain rights of secured creditors, which include those who have taken a mortgage or other lien on property used as collateral for a loan.  Under Chapter 13 bankruptcy, secured creditors can be forced to take payments over time as part of the bankruptcy plan.  Bankruptcy can eliminate an obligation to make additional payments if a debtor returns the property to the secured creditor.  Generally, a debtor cannot keep secured property unless payment continues.

Bankruptcy will not protect cosigners, so if a debtor has a loan that has been cosigned by a friend or relative and that loan is discharged in bankruptcy, the cosigner may still have to repay part or the entire loan.

Bankruptcy will not discharge any new debts that are accrued after bankruptcy has been filed.

For more information on Florida bankruptcy laws, contact our Jacksonville, Florida bankruptcy law firm.

Of the one million Americans who filed bankruptcy last year, over 25 percent of those were over the age of 55.  Statistics have shown that one of the fastest growing segments in bankruptcy filing demographics are those over the age of 75.

It wasn’t that long ago that seniors were the least likely demographic group to file bankruptcy.  Many carried no credit card debt and enjoyed healthy retirement accounts.  The economic crisis of the past few years has caused a dramatic shift in the financial lives of seniors, draining their savings and retirement accounts and, in many cases, forcing them back to work.

In addition, credit card companies have stepped up their marketing efforts to baby boomers and seniors, who often carry the best credit scores and are emotionally invested in repaying their debts.

Retired seniors have found it almost impossible to live on a fixed income, and consequently carry more credit card debt and second or third mortgages than previous generations.  Much of their financial security has been demolished by falling stocks that they no longer have the time to rebuild.

And this is exactly why bankruptcy exists – to help those who can no longer help themselves eliminate burdensome debt and get on with their lives.

If you need help with making difficult financial and legal decisions, contact our Jacksonville, Florida bankruptcy law firm.

One Jacksonville bankruptcy attorney notes with interest a recent St. Petersburg Times article about a Pinellas man who has been able to stay in his home for seven years despite the fact he has not made a mortgage payment since 2003.

The Times’ article reports:

“...in 2004, the DeMauros filed their first Chapter 13 petition just before the house was to be sold at public auction. A judge soon dismissed the case, but the sale already had been stopped.

Over the next few years, the DeMauros were in and out of bankruptcy as new sale dates were scheduled. Their 11th and most recent filing came Jan. 25 — a day before the house again was to go on the block.

Bankruptcy officials have a name for debtors like the DeMauros: "serial filers.''

"We are sensitive to serial filers and our system was set up so we could catch them right away,'' says Catherine Peek McEwen, a Tampa bankruptcy judge.

Under a "three-strikes and you're out'' rule, debtors on a third filing get no relief from foreclosure if they had two cases pending in the previous year. In addition, judges are giving banks and other creditors more opportunity to request a one- or two-year ban on filings by those who seem to be abusing the system. And judges can order serial filers to appear in person and show cause why their case should not be dismissed."

If you are facing potential foreclosure and need information on all your options, contact our Jacksonville, Florida bankruptcy law firm.

Jacksonville bankruptcy filings for the first three months of 2010 were up 10% over the same period one year ago, and are on track to surpass 2009 levels.

There were a total of 2,799 Jacksonville bankruptcy filings in the first quarter, 250 more than the first quarter of 2009.  In addition, bankruptcy filings are up 21 percent in the U.S. Bankruptcy Court Middle District of Florida, which includes Jacksonville, Tampa and Orlando.

Throughout the district, Chapter 7 filings increased by 24 percent, Chapter 11 reorganizations nearly doubled, and Chapter 13 filings rose 10 percent.

Economists are predicting an increase in bankruptcy filings as a result of continued high unemployment, housing foreclosures and tight credit markets that continue to plague Florida residents.

The increase in Chapter 11 bankruptcy filings is particularly troubling, since business bankruptcies usually create a ripple effect, with employees being laid off and a number of local creditors going unpaid.

One of the largest Jacksonville business bankruptcy filings during the first quarter was by the Sawgrass Marriott Golf Resort & Spa.  Creditor Goldman Sachs Mortgage Co. is continuing to press foreclosure proceedings, saying the resort owners will be unable to pay off its debt.

For more information on Jacksonville bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy attorney notes that, while most Florida residents filing bankruptcy may wish to qualify for Chapter 7, they must pass a bankruptcy “means test” in order to do so.

Chapter 7 bankruptcy is often the chapter of choice for many consumers, because it allows you to walk away from all your consumer debt.  However, there is a detailed “means test” used by the court system to determine exactly who qualifies, and while you need not be destitute to qualify, there are income limitations.

Currently, you can qualify for Chapter 7 bankruptcy in Florida if you meet the following annual median income guidelines:

• One-person household: $41,079


• Two-person household: $52,073


• Three-person household: $58,366


• Four-person household:  $68,763

If you do not qualify for Chapter 7 bankruptcy under the median income guidelines, then you must determine if you have enough disposable income to pay off a portion of your consumer debt.  If your disposable income is more than the allotted amount, you cannot file for Chapter 7 bankruptcy.

A Jacksonville bankruptcy lawyer can take you through the necessary steps to help you determine if you qualify for Chapter 7 bankruptcy, or if Chapter 13 bankruptcy is your only option.

For help with Chapter 7 or Chapter 13 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Under certain circumstances, it is better to file for Chapter 13 bankruptcy instead of Chapter 7 bankruptcy, according to a Jacksonville bankruptcy lawyer.

First, you may not have a choice.  Those who file Chapter 7 bankruptcy must pass a means test to qualify, and if you are in a high income bracket, you will likely not qualify.

If you have a home or car you want to keep, then Chapter 13 bankruptcy is also a better alternative for you.  If you’re delinquent in your payments but can make those up over time, a Chapter 13 filing will allow you to do this, while a Chapter 7 filing will not.

If you have other property you want to keep – say, a valuable art collection or family heirlooms – only Chapter 13 bankruptcy will allow you to keep this nonexempt property, since you repay your debts over time out of your income.

If someone has co-signed a loan for you and you wish to protect them, a Chapter 13 bankruptcy will keep creditors from going after your co-signer.

If you have debts that would not be discharged in a Chapter 7 filing – student loans, child support, back taxes – then filing Chapter 13 will allow you to repay these over time as well.

If you need help with deciding on the best option for you, contact our Jacksonville, Florida bankruptcy law firm.

One Jacksonville bankruptcy attorney says homeowners who are having difficulty making their mortgage payments should seriously examine if it is in their best financial interest to keep their home.

The first step, he says, is to try to keep the emotion out of what is essentially a financial decision.  Like thousands of Florida homeowners, you may be living a different financial life than you were several years ago when you purchased your home.  Unemployment and declining property values may have made it impossible for you to keep up with your payments, so should you sell or even walk away?

Having a large amount of equity in your home is probably a good reason to try to hold on to it.  You may be able to renegotiate your loan or restructure it – either through negotiation with your lender or through Chapter 13 bankruptcy.

If you have negative equity – which means the value of your home is much less than you paid for it – and the monthly mortgage payments are too high, then it probably makes economic sense to let go of your home.

If you need assistance with making difficult financial and legal decisions, contact our Jacksonville, Florida bankruptcy law firm.

While Chapter 13 bankruptcy may be a good option for some, it is not available to everyone and there are eligibility requirements, explains a Jacksonville bankruptcy lawyer.

For example, Chapter 13 bankruptcy is not available to businesses – but if you are a business owner, you can file for Chapter 13 bankruptcy as an individual (unless you are a stockbroker or commodities broker) to discharge nonbusiness debts.

Other eligibility requirements for filing Chapter 13 bankruptcy include:

Debt limits – your secured debt cannot exceed $1,081,400 and your unsecured debt cannot exceed $360,475.

Taxes current – you must be current on your state and federal tax filings for the four years prior to Chapter 13 bankruptcy filing.

Sufficient disposable income – you must prove that you have sufficient income to fund the repayment of your debts under a Chapter 13 bankruptcy plan.  This can include income from a spouse as well as your salary if you have a job or unemployment benefits if you do not, pension payments, Social Security benefits, workers’ compensation or disability benefits, child support or alimony you receive, rent, royalty income or proceeds from selling property.

For more information on qualifying for Chapter 13 bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

If you are one of thousands of Florida residents with delinquent payments on your debt, a Jacksonville bankruptcy lawyer warns that your creditors could gain access to your bank account and garnish your wages before you even know it.

With the rising rate of delinquent debtors across the country, creditors are becoming more aggressive in collecting, often by filing suit to seize part of a debtor’s paycheck or bank account funds.  By law, a creditor can garnish up to 25 percent of a debtor’s weekly take-home pay.

Many consumers don’t even offer a defense, and creditors are winning lawsuits by default -- without even having to prove what amounts are owed.  Creditors are also obtaining judgments for late fees, interest and court costs that can double or even triple the amount owed.

The best defense against this happening to you is to educate and defend yourself against creditor lawsuits.  Often, creditors do not have the proper documentation to prove they even own the debt, because they have simply purchased a list of names and balances due from a lending institution.

Another option is to file Chapter 7 or Chapter 13 bankruptcy, which will stop all collection activity and clear away most of your old debt.

If you are experiencing problems with creditors and want to know about all your options, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy attorney says that Florida residents who are weighing the decision on whether or not to file bankruptcy in Florida should weigh all the implications – financial and emotional – before proceeding.

To fully understand all the consequences of a Chapter 7 or Chapter 13 bankruptcy filing in Florida, you should consult a Florida bankruptcy attorney.  Many times the initial consultation is free, and will help you understand exactly what the bankruptcy filing process entails and what it will mean for you and your family in both the short- and long-term.

If you have not already done so, you should seek credit counseling to have a realistic picture of your financial situation – what you owe and all the alternatives for dealing with your debt.  There are many credit counseling resources available to consumers; for a list of approved credit counseling agencies by state, visit the U.S. Dept. of Justice website here.

You should also consider the emotional aspects, including how much you worry about your debt burden and if calls from creditors are disruptive to your daily life.

A Florida bankruptcy attorney can explain the legal ramifications of filing Florida bankruptcy to you in a way you can understand.  If you are interested in receiving this kind of information, contact our Jacksonville, Florida bankruptcy law firm.

Last year, over 61,000 Florida residents in the Jacksonville, Orlando and Tampa areas filed for either Chapter 7 or Chapter 13 bankruptcy.  One of the biggest concerns of individuals filing for Florida bankruptcy is how to restore their good credit.

One Jacksonville bankruptcy law firm helps clients understand that re-establishing good credit takes time and discipline, and provides some guidelines:

Create a realistic budget – track your expenses for a few months, then create a realistic budget that fits your income.

Pay all bills on time – if you bank online, utilize the auto-pay function as much as possible so you don’t miss a due date.  Make sure you don’t have any overdrafts because those show up on your credit report as well.

Pay with cash – Discipline yourself to buy only what you really need, and pay with cash.

Monitor your credit report – look for any mistakes and have them corrected as soon as possible.

Put off big-ticket purchases – while you may be able to find a lender, the interest rates will likely be so high that waiting a year or two will be well worth the savings you will realize in interest payments.

Avoid credit “quick fix” schemes – the only person who can fix your credit is you, and it is not a quick process.  Don’t fall for pitches by companies promising to fix your credit overnight.

If you need information about the Florida bankruptcy options available to you, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville, Florida bankruptcy lawyer explains that, in difficult economic times, bankruptcy can be a good vehicle for leaving financial worries behind.  Here are some scenarios where a Florida bankruptcy can make sense:

Job Loss – One of the largest factors in the increase in recent Jacksonville bankruptcy filings has been unemployment.  Finding a new job often requires many months of searching, and in that time, bills can pile up.  Consolidating debt under a Chapter 13 bankruptcy filing can stop creditor harassment and provide you with a solid plan for dealing with your debt until you are back on the job.

Illness or Injury – If you have a number of medical bills that you cannot afford to pay, Chapter 7 bankruptcy may be an option for you since medical bills are considered unsecured debts.

Foreclosure – Florida foreclosure rates rank second only to California nationally, up 48% from 2008.  In some cases, filing bankruptcy in Florida can help stop foreclosure proceedings and keep you in your home.

Divorce – A Florida divorce can mean that debts as well as assets are evenly divided between two spouses – and sometimes, one spouse cannot afford to shoulder the burden of their debt share alone.  Getting some “breathing room” by filing bankruptcy can be a logical choice.  And even though alimony and child support obligations are not dischargeable in bankruptcy, arrears can usually be repaid via a Chapter 13 bankruptcy.

Debt – Whether you have excessive consumer debt because of a job loss or other income reduction, filing for Florida bankruptcy can help you manage your debt.

If you need help to determine if filing for bankruptcy protection is a good option for you, contact our Jacksonville, Florida bankruptcy law firm.

Even with all the Jacksonville, Florida bankruptcy filings in recent years, many individuals are still unclear about the different types of bankruptcy options available.  One Jacksonville bankruptcy attorney recently outlined the five most common types of bankruptcy for Florida residents and businesses:

Chapter 7: Also known as “straight bankruptcy” or “liquidation,” Chapter 7 bankruptcy allows individuals or businesses to surrender non-exempt assets to discharge their debts.  To qualify, you must pass a “means test” – or your income must also be less than the median income in Florida, depending on the number of people and wage earners in your household.

Chapter 9: Chapter 9 bankruptcy allows for municipalities to reorganize debt, and operates the same as Chapter 11 bankruptcy.

Chapter 11: Frequently referred to as “reorganization,” Chapter 11 bankruptcy is available to individuals but because it is more complicated and expensive, it is mostly used by businesses to restructure debt while retaining certain assets.

Chapter 12: Chapter 12 bankruptcy allows family farmers and fishermen to reorganize their debt, and operates very much like Chapter 13 bankruptcy.

Chapter 13: Also known as “reorganization,” Chapter 13 bankruptcy is most often used by individuals who do not pass the “means test” for Chapter 7 bankruptcy.  It allows individuals to restructure their debt, usually paying off a percentage or all of their debt over three to five years.

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

Every state has a statue of limitations – the period of time that creditors have to file a lawsuit against you -- for old debts, and one Jacksonville bankruptcy lawyer notes that it may be better to file bankruptcy than try to wait out your old debt in hopes that it will go away.

In Florida, the statue of limitations on open accounts, which include credit cards, is four years.  The period begins on the date you made your last payment or the date you last used the credit card.  For written contracts and promissory notes, the statue of limitations is five years, and for oral contracts it is four years.

Most consumers who have a large amount of credit card debt and cannot make payments believe that creditors are not likely to sue them.  This is not necessarily true.  Creditors take various factors into account when deciding whether or not to sue, including your age, employment status, property and marital status.  If you are still earning income or own property, and still have years of earning potential in front of you, that means that you could eventually pay off the debt – which would make a creditor more likely to sue you.

If you are eligible to file for Chapter 7 bankruptcy, your legal liability for these bills would be wiped out.  If you are not eligible, you can consider filing for Chapter 13 bankruptcy, which would allow you to restructure your debt and pay it off over a period of time, usually three to five years.

If you have a large amount of consumer debt and need help in making a good decision about your financial future, contact our Jacksonville, Florida bankruptcy law firm.

With the proliferation of Jacksonville bankruptcy filings in recent years, it has become more important than ever for consumers to understand the important criteria in choosing a good Jacksonville bankruptcy attorney.

Choosing a Jacksonville bankruptcy attorney is not just about price – it’s about value.  Selecting the right bankruptcy lawyer will help ease the pain of the bankruptcy process, and contribute to a faster economic recovery for you and your family.

Think Value, Not Price – While most people considering bankruptcy naturally wish to save money, choosing a bankruptcy attorney based on price alone is a mistake.  In fact, bankruptcy attorneys who advertise low prices are usually not well versed in bankruptcy law, or will cut corners when representing you.  Be sure that you discuss all the services provided by the bankruptcy lawyers you interview, as well as their fee structures and payment plan options.

Real Bankruptcy Experience – Any attorney can handle a bankruptcy, but you will be better served by a law firm that has good bankruptcy experience and is completely up to date on the latest bankruptcy code changes.

Empathy for Clients – No one wants to file bankruptcy, but many times it’s the right choice for your financial future.  Still, it is an emotional decision.  Be sure you choose a bankruptcy attorney who will treat you as an individual, not just a case, and who takes the time to answer your questions and who will be an understanding advocate for you throughout the bankruptcy process.

If you are looking for a Jacksonville bankruptcy attorney, contact our Jacksonville, Florida bankruptcy law firm.

A Jacksonville bankruptcy attorney is helping Florida residents better understand the bankruptcy process by spelling out exactly which debts can – or cannot – be discharged through a Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Florida bankruptcy can:

Eliminate credit card debt – Credit card debt is “unsecured” debt – which means it is not secured by a lien, like a house or car.  Bankruptcy was specifically designed to eliminate unsecured debt; however, if you file for Chapter 13 bankruptcy, you may have to pay off a portion of your credit card debt over a three to five year period.

Eradicate unsecured debt – In addition to credit card debt, you may have other unsecured debt like medical bills that is eligible for discharge by filing Florida bankruptcy.

Remove some liens – In some instances, you can invoke certain procedures during bankruptcy to eliminate certain liens.  Your Florida bankruptcy attorney can best advise you on this.

Stop credit collection activities – Probably one of the most welcome benefits for Florida bankruptcy filers is that a bankruptcy filing stops creditor harassment.  In fact, creditors must cease all collection activities once bankruptcy is filed.

Stop foreclosure – A Chapter 13 bankruptcy can prevent foreclosure by forcing a lender to accept a repayment plan, but only if you can show you have enough income to adhere to that plan.

In general, Florida bankruptcy cannot eliminate tax debt, student loan debt, child support and alimony, or prevent a creditor from repossessing secured property.  However, there are a few exceptions to these rules, so your best bet is to consult with a Florida bankruptcy attorney.

If you need more information about what filing Florida bankruptcy can –or cannot -- do for you, contact our Jacksonville, Florida bankruptcy law firm.

Currently, over four million Florida homeowners are “underwater” on their mortgages – meaning they owe more than their home is worth.  In addition, many of these Florida mortgage holders hold more than just one mortgage, and wonder what their obligations might be to repaying a second or third mortgage if they file for Chapter 7 or Chapter 13 bankruptcy.

Filing Florida Chapter 13 bankruptcy may help you eliminate payments on a second or third mortgage since the first mortgage is more than likely secured by the entire value of the home and will be paid first.  While you still owe the money, if your Florida home has been appraised for less than what you owe on the first mortgage, there will be no money for the second mortgage lender.  This allows the court to strip away the second mortgage as unsecured debt, which takes last priority in a repayment plan under Chapter 13 bankruptcy and often does not have to be paid back at all.

Filing for Chapter 13 bankruptcy in Florida makes it easier for a homeowner to keep their home if you are able to make payments under a court-approved plan, which usually lasts for three to five years.

If you are a Florida resident who is underwater on your mortgage and considering filing bankruptcy, you should consult with a Florida bankruptcy attorney to understand all your options.  For more information, contact our Jacksonville, Florida bankruptcy law firm.

Data from the National Bankruptcy Research Center showed that consumer bankruptcies rose 14 percent in February 2010 compared to the same month in 2009.  And according to one Jacksonville bankruptcy lawyer, one key advantage of filing for Florida bankruptcy is getting the opportunity to make a fresh, debt-free start.

If you have filed for Chapter 7 or Chapter 13 bankruptcy in Florida, you should know that there is life after bankruptcy, and prepare yourself for it.

If you have filed a Chapter 13 bankruptcy, you will be living with a court-ordered repayment plan for a period of three to five years.  A court-appointed trustee will oversee the implementation of this plan, including the distribution of payments to your creditors and your living expenses.  This often means adapting to a new financial lifestyle and spending only on the basics.  How you approach this new reality will determine how quickly you can recover; a positive attitude helps immensely in learning to live a debt-free life.

If you have filed a Chapter 7 bankruptcy, most of your old debt is gone.  But the bankruptcy will stay on your credit report for up to 10 years, so you need to adapt to living on cash and building a savings account to cushion any emergency expense.

Bankruptcy is not an end, but a beginning to a better financial future.  If you need more information on all the ramifications to filing Florida bankruptcy, contact our Jacksonville, Florida bankruptcy law firm.

Jacksonville, Florida bankruptcy attorneys are three times as busy today as they were four years ago.  According to statistics from the U.S. Bankruptcy Court, Middle District of Florida – which includes Jacksonville, Orlando and Tampa – Jacksonville bankruptcy filings have tripled, from 4,184 in 2006 to 11,144 in 2009.  This trend has continued into 2010; in January and February there were 1,583 Jacksonville bankruptcy filings, triple the number from the first two months of 2006.

The economic downturn, coupled with record Florida foreclosure rates and high unemployment has contributed to the rise in Jacksonville bankruptcy filings.  A majority of the Middle District of Florida bankruptcy filings were by individuals seeking Chapter 7 bankruptcy and Chapter 13 bankruptcy protection.

Chapter 7 bankruptcy enables individuals to petition the court for a discharge of their debts.  In Jacksonville, Chapter 7 bankruptcy allows for the discharge of personal debt in exchange for selling property that is not exempt to pay creditors.  In some cases, all property is exempt; however, a Chapter 7 bankruptcy does not eliminate the right of mortgage holders or auto loan creditors to repossess your property if you do not continue making payments on those debts. Under the new bankruptcy you must meet certain requirements to be eligible for Chapter 7 bankruptcy protection. Although the new standard is slightly more restrictive than the previous law, it is not difficult to fall within the new eligibility requirements.

Chapter 13 bankruptcy allows individuals to submit a repayment plan to the court for approval that outlines how you will pay off some or all of your debts over three to five years.  Chapter 13 bankruptcy was designed to allow individuals to keep valuable property, like a home or a car, if you have sufficient income to make payments over time.  At the termination of your payment plan, the remainder of your unsecured debts will be discharged.

If you need information about the Florida bankruptcy options available to you, contact our Jacksonville, Florida bankruptcy law firm.