Bankruptcy and Foreclosure Attorney Blog

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 income limits and qualifications for chapter 7 bankruptcy. The income limits are set by each particular state median incomes. However, not all "income" is considered or used in calculating the total household income.

For example, social security, unemployment, and VA military income is not considered "income" for mean's test and qualification purposes. If your income level is over the state median income, then the debtor must pass what is called the "mean's test."

The mean's test looks at the debtors income, expenses, and disposable income. If the disposable income is too high (and their are guidelines for this) then a presumption of abue arises if that particular debtor wants to file for bankruptcy. If the majority of a debtor's debt is business related, the debtor does not have to pass the mean's test.

The legislative purpose behind this theory is that we do not want to discourage small business owners from trying to open or start a business. If debtors were not able to discharge debts connected with trying to run and operate businesses, it would deter people from trying.

Continue reading "What income is Considered for Chapter 7 Qualification Purposes?" »

Whether you file a 7 or a 13, a bankruptcy will last on the debtor's credit for ten years. The debts that have been discharged should be reported on the debtor's credit report with a zero balance. If not, there may be Fair Credit Reporting violations on both the state and federal levels.

There may also be discharge injunction violations where moetary damages may be awarded if you were denied financing because of a particular debt remaining on your credit report when it should have been discharged and reported as a zero balance.

You should contact an experienced bankruptcy attorney if you are contemplating bankruptcy or if you are not sure about bankruptcy consequences and procedures

Continue reading "How long does a Florida bankruptcy stay on my credit? " »

Unfortunately, no. Fines for tolls, tickets, and restitution cannot be discharged in a chapter 7 or 13 bankruptcy. The reason being is the bankruptcy code is not meant to discharge all debts in which the debtor incurred.

These fines are supposed to act as a deterrent against committing that particular action again in the future. If a debtor was able to include these types of debts in a bankruptcy, that would take away the deterrent factor and that is not what the federal government is wanting to do.

Many times, clients ask if dui fines and penalties be discharged in bankruptcy. Again, the same answer applies. Unfortunately, no. Most IRS federal tax debt is nondischargeable also.

Continue reading "Can I get a Bankruptcy Discharge on Government Fines? " »

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.

Many times, clients ask if a bankruptcy will stop a wage garnishment for child support obligations. The answer is most likely, no. It may temporariily suspend the garnishment at best, but it will not stop it completely. A debtor certainly should not file bankruptcy just to stop this type of action.

Back child support owed cannot be discharged either. In fact, the payor can be put in jail if he or she continue to miss child support payments where there is a court order mandating that that person do so. Property settlement distributions with an ex-spouse can possibly be discharged but if the settlement is in the form of "support" the court will not discharge those obligations.

If you have questions about domestic support obligations and bankruptcy, you should contact my office.

Continue reading "Bankruptcy and Child Support Obligations " »

Many people are under the misconception that bankruptcy attorneys work for the state and/or local government. The standing Trustees are appointed and work for the government. They usually contract out services to other attorneys to help them with hearings and the gathering of data.

However, these attorneys are not government employees. Bankruptcy trustees are representatives of debtor creditors. Most debtor attorneys work in the private sector unless they are employed by the state for legal aid purposes. Debtor attorneys should be keeping the best interests of the debtor(s) in mind at all times.

Debtor attorneys should help te debtor protect assets, provide sound legal advice about the bankruptcy process and the dischargeability of all types of debts.

Continue reading "Who are the Parties in a Florida Bankruptcy? " »

Recently Chief Bankruptcy Judge Glenn ordered that debtors who did not claim their homestead exemption in a chapter 7 bankruptcy could keep their home. In this particular case the debtors lived in a homestead property in which they had no equity. On their bankruptcy schedules they did not exempt the property and instead used their wildcard exemptions totaling $8,000 ($4,000 per debtor). The trustee objected to their use of the wildcard exemption while retaining their homestead property, arguing that the debtors were receiving the benefit of the homestead exemption and therefore were not entitled to use the wildcard exemption.

Under Florida Statute §222.25(4) a debtor may claim personal property up to the value of $4,000 as exempt unless the debtor either “claims” a homestead exemption or “receives the benefits of” a homestead exemption under Art. X, § 4 of the Florida Constitution. In re Kent, 411 B.R. 743, 749 (Bankr. M.D. Fla. 2009)(citing In re Gatto, 380 B.R. 88, 91 (Bankr. M.D. Fla. 2007). The Florida Supreme Court has held that whether the debtor in a bankruptcy is receiving the benefit of the homestead exemption is a determination that should be made based on the particular facts of the case. Osborne v. Dumoulin, 2011 WL 1772160 (11th Cir.)

Continue reading "Can I Keep My Home and Use The Wildcard Exemption In Florida?" »

If you are behind on your mortgage payments and file for chapter 7 bankruptcy relief, your lender will most likely pursue foreclosure actions against you either during or after the bankruptcy. If you plan to keep your home, chapter 7 is not the proper course of action to take.

Chapter 13 allows a debtor to pay mortgage arrears for a period not to exceed 5 years in order to catch up. Please keep in mind the debtor will have to make regular monthly payments in addition to making payments towards the arrears every month. You cannot alter mortgage terms on a first mortgage in a chapter 13.

If you plan to surrender the house and are able to qualify for a chapter 7, you may discharge your mortgage obligations through a chapter 7.

Continue reading "What Bankruptcy chapter should I file if I am behind on my mortgage payments?" »

Whether you file for Chapter 7 or 13 bankruptcy relief, they will both be on your credit for 10 years. However, many debtors find that they are receiving credit offers within months of filing. Now, these offers are usually for smaller lines of credit, but this is the way you begin to rebuild your credit.

One of the reasons for this has to do with the fact that future creditors know debtors are going to have debts discharged and will have extra cash available to pay them. This is especially true in a Chapter 7.

Another reason creditors will lend to those coming out of bankruptcy is because they know the debtor cannot file again for at least 4 years, maybe longer. So, whatever debt they incur post-petition, the debtor will be personally liable for.

Continue reading "How bad will a bankruptcy affect my credit?" »

Once a debtor files a bankruptcy petition, the petition counts only those debts that are mentioned in the schedules. Therefore, any new debt a debtor incurs after the bankruptcy petition has been filed, they are on the hook for.

Property of the estate is also determined at the date of filing. Postpetition wages are not considered property of the estate in a Chapter 7. The debtor's property of the estate will be the property subject to liquidation if there is no exemption to protect it. In addition, a bankruptcy Trustee will keep in mind inheritances received up to six months after the petition has been filed.

If the debtor is not upfront and honest with the Trustee in disclosing these types of things, he or she could subject the bankruptcy petition to being dismissed or even worse the debtor could face purjury charges.

Continue reading "What about the debts I incur after I file bankruptcy? Are they included as well?" »

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

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

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

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

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

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

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

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

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

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

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

Bankruptcy is always an option of last resort. You may not even need to file for bankruptcy if you do not have wages that can be garnished or assets that can have liens filed against it.You may be considered "judgment proof."

Many times the only source of income a debtor has coming in is some sort of public assistance. These sources of income are generally protected in a bankruptcy from the Trustee. The advantage to filing for bankruptcy when you are unemployed is you do not have to worry about passing the "mean's test." Also, if you do not own a lot of property you do not have to worry about having it liquidated to pay off your creditors.

Most judgments can only last on your credit report up to 7 years as opposed to 10 in a bankruptcy. However, if you are expecting to find a job, want to avoid garnishments, and stop creditor phone calls, you may want to wipe out your debt in order to get a fresh financial start.

Continue reading "I have no Job or Assets: Should I file a Florida Bankruptcy?" »

The answer really depends on whether or not you have equity in those properties. In Florida, there is an unlimited homestead exemption as long as you bought your home over 3 1/2 years ago from the date of filing your bankruptcy petition. This means the Trustee cannot liquidate your home to pay back your creditors.

If you bought your home within the last 3 1/2 years, your protection is capped at $125,000 equity. If you have more than $125,000, than you will either have to surrender the home or buy back the equity.

However, there is not unlimited protection in investment properties. The moment you have equity in a property, it becomes an asset and may be subject to liquidation by the bankruptcy Trustee.

In that instance, assuming you were wanting to keep the properties, it may be wise to file under Chapter 13 bankruptcy protection. In a Chapter 13, you keep all of your property as long as you are able to keep up with your monthly plan payments.

Continue reading "Can I keep my investment properties in a Chapter 7 Florida Bankruptcy? " »

Chapter 7 is often referred to as a "straight liquidation." The Trustee is the repesentative of the creditors and he/she is looking to liquidate property of the debtor(s) in order to pay back the unsecured creditors.

Once the debtor files the bankruptcy petition, the 341 meeting will be held about 30 days after the petition is filed. The 341 meeting of creditors usually involves the Trustee asking a series of questions to the debtor. After the 341 meeting, it usually takes between 60-90 days to get a discharge on the unsecured debt portions.

Once the bankruptcy court issues an order for the discharge, that debt is wiped out and those creditors are forever barred from collecting on those past debts.

Continue reading "How long does a chapter 7 take before I get my discharge? " »

This answer really depends on several factors. First, have you filed for bankruptcy before? If so, did you get a discharge on your debts? A debtor must wait 8 years between filings in order to qualify for a Chapter 7.

The important dates are the filing dates not the discharge dates. A debtor would qualify for a Chapter 13 if 4 years have lapsed since the debtor first filed for Chapter 7.

Second, a debtor must have had an intent to pay back debt incurred. If the Trustee suspects a debtor made purchase after
purchase and never made a payment on the debt, it does not look good.

Next, the debtor must qualify from an income standpoint. An average income will be caluclated going back six months from the date of filing the bankruptcy petition. In addition, the Trustee will look to the size of the household and all generated income within the household. We look to the Florida state median for the appropriate levels of income and if a debtor(s) is over that limit, the debtor must pass the means test. Ask an experienced bankruptcy attorney about the "mean's test" and whether or not you would qualify to file a chapter 7 bankruptcy.

Continue reading "Do I qualify for a Chapter 7 Florida Bankruptcy?" »

There are many exceptions to discharge. If a debtor is ever dishonest or tries to defraud the Trustee, the entire petition can be dismissed. Most student loans, IRS debt, and domestic support obligations will not be discharged.

There are exceptions to the exceptions, but a general rule of thumb is these debts are nondischargeable. Cash advances, balance transfers, or convenience checks over $750 within 90 days prior to filing will not be discharged either.

If the Trustee believes a debtor incurs a debt with the intent never to repay, that too would not be dischargeable. All dischargeable means is the debt would be wiped out and those creditors legally prohibited from coming back after you once the bankruptcy ends.

Continue reading "What debts are not dischargeable in a Florida bankruptcy? " »

Exemptions are considered in both bankruptcy consumer chapters, but non-exempt property in a Chapter 7 is liquidated and distributed to the debtor's unsecured creditors. A debtor has allowed exemptions in Florida. Each state's allowance may be different.

If a Florida debtor has property over the exemption amount allowed, then the Trustee may liquidate that property, allow the debtor to buyback the equity in the property, or if the property has no value, do nothing. If the debtor is able to buy back the equity in the property, he or she will have no longer than 12 months to pay it off to the Trustee.

Should you have questions, you should contact an experienced bankruptcy attorney to discuss Florida's exemption allowances.

Continue reading "Non-exempt Property and my Florida Bankruptcy" »

When a debtor files for chapter 7 bankruptcy, she/he will be allowed exemptions to protect certain property from the reach of the trustee on behalf of creditors. For example, in Florida, there is an unlimited homestead exemption (with a few exceptions). This means the Trustee cannot seize and liquidate a debtor's home in order to pay back creditors. Most states do not have an unlimited homestead exemption. Most states cap the exemption and if the debtor wants to keep the property, then she/he will have to buy back the equity.

Since the amendments to the 2005 Bankruptcy laws, it has become tougher to use certain state exemptions.

For example, in order for a debtor to use Florida exemptions, the debtor must have lived in the state of Florida for at least 730 days ( 2 years) leading up to the filing of the petition. If the debtor has not lived in the state for 730 days right before filing, the Trustee will look to where the debtor resided 180 days prior to the 730 days.

If the debtor lived in more than one location during the 180 day period, the state where the debtor lived the longest during that 180 day period will be the state in which the debtor can use that state's exemptions. However, many states require that the debtor be a current resident in order to use its state exemption.

If the debtor is unable to use the state exemptions because she/he is not a resident of that state, then the debtor would default into using the federal exemptions outlined in the bankruptcy code.

Continue reading "Can I Use Florida Exemptions In My Chapter 7 Bankruptcy?" »

The short answer is no. Not all personal judgments against a debtor are dischargeable in a chapter 7 bankruptcy. The type of judgment against the debtor is important.

Debtors who have civil judgments for fraud or other intentional torts entered against them are not going to be able to have those debts discharged in bankruptcy. Public policy plays a role in the dischargeability of certain debts. If people intentionally do bad things but can escape their actions by filing bankruptcy, that does not send a positive message about the bankruptcy system. There would be no deterrent in committing those actions in the future. However, judgments for negligence or breach of contract are more than likely going to be discharged in a chapter 7 bankruptcy.

If you have questions about what debts can be discharged by filing for bankruptcy, you should contact an experienced attorney.

Continue reading "Are All Personal Judgments Dischargeable in a Florida Bankruptcy?" »

Many times debtors file for Chapter 7 bankruptcy but either have their cases dismissed or do not wish to continue. If a Chapter 7 bankruptcy petition is filed, you must get the court's permission to have the case dismissed.

The reason for having this rule has to do with court efficiency and debtor awareness. It is very time consuming and expensive to put a petition together, have the clerk's office review it, and enter a case on a court docket.

Courts are wanting to make sure debtors are not being taken advantage of or maniupulated by attorneys and creditors. A bankruptcy judge is going to want to hear why you all of a sudden want to dismiss your case.

Unless your financial situation has changed dramatically and you are able to repay your debts, why would anybody want their case dismissed and dropped back to square one?

Another option available may be to convert your chapter 7 case to a chapter 13. This is often done when a debtor does not meet the "means test" or if they have property in excess of the allowed exemptions and wish to keep it.

Continue reading "I Filed A Chapter 7 Bankruptcy And Changed My Mind: What Are My Options?" »

A Chapter 7 Bankruptcy may be filed once every 6 years. Filing under Chapter 7 will allow you to keep most of property and discharge most of your debt. Below is a step-by-step guide that will explain to you the things you need to do in order to file your Bankruptcy Petition and related papers as well as what you can expect to happen after your bankruptcy case is filed.

1. Gather the following information:
a. A credit report. - You can get your credit report from any credit reporting agency such as Experian and Equifax.
b. Statements that include the addresses of all your creditors as well as the balances owed.
c. All contracts signed by you relating to your debts.
d. All court and paper documents received.
e. All letters and correspondences from attorneys and collections agencies.
f. Your Tax Returns from the previous two years.
g. Proof of income (last 4 pay stubs)
h. Any other papers relating to your debt.
i. Check the public records division in your county for any public records concerning your debt.

2. Make a list of all your creditors. - this list shall include the creditor's full name, address and amount owed. You MUST list all your debts.

3. Fill out a Bankruptcy Form as a draft, then have it reviewed by a Jacksonville Bankruptcy Attorney.

4. Complete the Bankruptcy Forms after they have been reviewed by a Bankruptcy Attorney. - Make sure the forms are legible.

5. File your Bankruptcy Petition with the Bankruptcy Court. - When you file your petition with the court you must:
a. File the original and 2 copies.
b. Pay the filing fee ($299.00). Or, request to pay the fee in four installments - $80.00 must be paid initially.
c. Get your Case Number.

6. Notify your Creditors.

7. Carefully read your Notice of Meeting of Creditors. - Approximately 2 weeks after your file, the Court will sent you a "Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors, and Deadlines." Carefully read this notice and be sure you know the date and time of your meeting of creditor - if you fail to appear you run the risk of having your case dismissed.

8. Attend the Meeting of Creditors.

9. Objections by Creditors. - After the Meeting of Creditors, creditors have 30 days to file objections to your petition. If a creditor does file an objection and you do not already have legal representation, now would be the time to contact a Jacksonville Bankruptcy Attorney.

10. Order of Discharge. - If no creditors file objections to your discharge, you will receive an "Order of Discharge" approximately 4-6 months after you file for bankruptcy.

Making the decision to file for bankruptcy is never easy. Filing for bankruptcy will affect your credit score and may result in you losing some of your property. However, creditworthiness may sometimes be overemphasized because by the time most people are thinking about filing for bankruptcy their credit score is already damaged. Aside from these disadvantages, bankruptcy can discharge most debts, eliminating your personal liability for debts incurred before the bankruptcy and petitioners will get what is known as an Automatic Stay.

The Automatic Stay goes into effect the moment a petition is filed with the Bankruptcy Court. This prevents creditors from taking any action against you, unless the Bankruptcy Court gives the creditor permission. Creditors are prevented from continuing any lawsuits they have filed against you, garnishing your wages, repossessing or selling any of your property or attaching your bank accounts.

One exception to the Automatic Stay is that it does not apply to criminal proceedings or to the collection of alimony and child support.

The Bankruptcy Court will send notice of your filing to your creditors 2 weeks after you filed your petition. However, if you believe that creditors have already taken action against you, you should notify your creditors immediately after your file your petition. Call your creditors and give them your bankruptcy case number as well as notify them by letter.

Continue reading "Advantages to Filing a Chapter 7 Bankruptcy in Florida" »

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

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

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

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

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

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

A reaffirmation agreement is a legally binding agreement between a debtor and a secured creditor that says the debtor will be financially responsible for the debt now and in the future. It is usually executed to protect a home or a car. However, is it a good idea? Usually not.

Many people who file Chapter 7 bankruptcy want to eliminate their unsecured debt but keep their home or vehicle. They may think a reaffirmation agreement will enable them to do so. However, they are giving up the protection that bankruptcy provides when it is not usually necessary to do so, especially in this economy.

Secured lenders do not want your property, they want your payments. So they will in most cases agree to voluntary repayment without having to sign a reaffirmation agreement. If you do sign a reaffirmation agreement, you are obligating yourself to be financially liable for the property – if you are late on payments, you can still lose your property and be financially liable. If the lender repossesses the property and sells it, they can still sue you for any outstanding balance.

A Florida bankruptcy lawyer can help you understand the pros and cons of a reaffirmation agreement as it pertains to your Chapter 7 bankruptcy filing.

Undoubtedly to the surprise of no one who watches Bravo TV’s The Real Housewives of Washington, D.C., the company run by Tareq and Michaele Salahi – America’s Polo Cup Inc. – has filed for Chapter 7 bankruptcy protection.

If you’re not a Housewives fan, you’ll probably remember the Salahis as the couple that famously crashed a White House State Dinner last November. One of the results of that scandal was a probe into America’s Polo Cup, a business the Salahis say raises money for charitable organizations, by the Virginia Department of Agriculture and Consumer Services.

The Chapter 7 bankruptcy filing listed $329,850 in debt – including over $300,000 owed to a catering service -- and $67,000 in assets.

According to a 2009 Washington Post story, the Salahis are the only principals listed for America’s Polo Cup, which has held an annual fundraising event each year since 2007 to raise money for the Journey for the Cure, a nonprofit foundation that also lists the Salahis as its sole directors. Virginia regulators have said that the foundation never registered to raise money in the state, and had not filed any financial statements until requested to do so late last year. The financial information provided was for 2007 only, and consisted of “a few typed lines” that listed $18,000 in contributions and $15,000 in donations.

The Salahis have said America’s Polo Cup is sanctioned by the “National Polo League;” however, the United States Polo Association – America’s governing body for the sport -- says no such organization exists.

Real Housewives of New Jersey star Teresa Guidice has run into real trouble with the U.S. Bankruptcy Court. On Sept. 2, the bankruptcy trustee in her Chapter 7 bankruptcy case filed a Complaint Objecting to Discharge, accusing Teresa and her husband Joe of perjury and fraud.

The trustee believes the couple failed to disclose pertinent financial information and lied about their assets. In the court filing, U.S. Bankruptcy Trustee Roberta A. DeAngelis said that the couple did not include earnings from Teresa’s best-selling cookbook, “Skinny Italian,” or from her popular website, two significant sources of income.

DeAngelis claims that Teresa received an initial advance on her cookbook of $250,000, another $30,000 advance and royalties, none of which were reported in the initial bankruptcy filing last November. Teresa’s TGFabulicious.com website provided another $100,000 in earnings during the six months after the filing.

According to a story at CBSNews.com, the complaint alleges that the Guidices “have concealed, destroyed, mutilated, falsified, or failed to keep or preserve recorded information from which their financial condition or business transactions might be ascertained."

DeAngelis has requested that the couple’s bankruptcy petition be denied because of their alleged failure to disclose financial information and various falsehoods contained within their Chapter 7 bankruptcy filing.

As this story illustrates, failing to properly disclose all assets can have serious consequences when filing for bankruptcy protection. Our Jacksonville bankruptcy law firm can help you understand and following the proper procedures for filing bankruptcy in Florida.

A Chapter 7 Bankruptcy is also known as a straight liquidation bankruptcy. Because of the Chapter 7 Bankruptcy's other title many people believe they will have to liquidate or get rid of all their assets, like their house or their car. However, what a Chapter 7 Bankruptcy actually does is liquidate or wipe away all of your debts, thus its a straight liquidation bankruptcy. It is also the most preferred type of bankruptcy by consumers. After you have discharged all of your debts, you essentially get a free start.

Continue reading "A Jacksonville, Florida Bankruptcy Attorney Tells You the Secrets about a Chapter 7 Bankruptcy" »

When Long Island resident Michael Fleming declared bankruptcy in April, a bankruptcy court ordered that his property be sold to satisfy his debts. And his half-interest ownership in the home where his 81-year-old mother lives is to be part of that asset sale in October – under the condition that she be allowed to live there until her death.

When Joan Fleming transferred the title to her home to a son and daughter as part of her estate plan, this was undoubtedly not a scenario she had in mind. According to a story in the New York Post, a buyer would not be able to move in until she dies, and even then the buyer would still need to negotiate with the daughter on payment of an outstanding mortgage debt of $66,000.

Fleming’s bankruptcy attorney was quoted as saying that, “Whoever buys this, buys a lawsuit.” The auctioneer for the property said it will likely be difficult to sell for another reason as well: he is not allowed into the house to see exactly what he will be selling. And, he noted, if a buyer is found, the longer she lives, the lower the return on the investment.

Need to know more about the intricacies of filing for bankruptcy in Florida? Contact our Jacksonville bankruptcy law firm.

On July 28, U.S. Bankruptcy Court Judge Karen Jenneman ruled in In re Hoffman -- a case involving 10 Orlando area debtors seeking to discharge junior liens as part of their Chapter 7 bankruptcy filings – that junior liens cannot be discharged as part of a Chapter 7 bankruptcy, as they can in a Chapter 13 bankruptcy filing.

The judge cited Supreme Court case Dewsnup v. Timm, 502 U.S. 410, 417 (1992) as the basis for her ruling that Chapter 7 debtors cannot avoid wholly unsecured junior liens under Bankruptcy Code Section 506(d).

Declining to depart from the Supreme Court ruling in Dewsnap, Judge Jenneman wrote:

In sum, Dewsnup compels the Court to hold that Chapter 7 debtors, including those in these cases, may not “strip off” their respective wholly unsecured junior mortgage liens under § 506(d). Although the junior liens encumbering the debtors’ homes are entirely valueless (at least today), they, according to the Supreme Court, are still allowed claims under § 502 that are secured by a mortgage lien. Therefore, they are “allowed secured claims” and are not subject to avoidance under § 506(d).

The relevance to Florida residents who file bankruptcy hoping to discharge junior liens is significant, because the ability to do so will depend on the debtor’s ability to qualify for Chapter 13 bankruptcy. Debtors do not have to pass a means test in order to file Chapter 7 bankruptcy.

For this and many other reasons, be sure to consult a Florida bankruptcy attorney if you are considering filing bankruptcy.

For small businesses that are unincorporated, the business owner is responsible for the debts of the business, which can make filing Chapter 7 bankruptcy a desirable choice if you are the sole proprietor of a troubled Florida business.

For small business owners who file Florida Chapter 7 bankruptcy, there are several benefits. First, your future assets are protected from satisfying any pre-bankruptcy debt, which means that you can start a new business or take another job without the worry of having future assets seized to satisfy old debts.

Second, Florida has a number of bankruptcy exemptions, including an unlimited homestead exemption for those who have been a Florida resident for at least two years. This means that any real or personal property that does not exceed a half-acre within a municipality or 160 acres elsewhere is exempt from the bankruptcy filing.

In addition, other Florida exemptions include:

Insurance – including annuity contract proceeds, death benefits, disability benefits, illness benefits, fraternal society benefits (if received prior to 10/1/96) and the cash surrender value of a life insurance policy.

Pensions – ERISA-qualified benefits, state officers and employees, county officers and employees, firefighters, police officers, highway patrol officers, teachers.

Wages -- $100 of wages for heads of family up to $500 per week and deposited into bank account for up to six months.

Personal property – any personal property up to $1,000 for one person or $2,000 for a married couple, health aids, motor vehicle up to $1,000.

Public benefits – Social Security payments, unemployment compensation, veterans’ benefits, workers’ compensation, public assistance, crime victims’ compensation, hazardous occupation injury damages.

Other – alimony, child support, property of business partnership, pre-planned funeral contract deposits.

Eligibility:
Any individual residing domiciled or having property in the United States may file a Chapter 7 Bankruptcy. To file for bankruptcy in Florida, you must have lived in the state for 180 days (6 months) prior to filing the bankruptcy petition.

Should You File?:
The decision to file for bankruptcy is not easy. It would be wise to contact a Florida Bankruptcy Attorney to discuss whether or not bankruptcy is the best option for you. Before deciding to file, you and your attorney should carefully weigh the pros and cons of filing.

Here are some things to consider in your decision making process:

1. Do you owe a small amount of debt?- If you only owe a small amount of debt bankruptcy is probably not the best option for you. Try working out a payment plan or arrangement with your creditors.
2. Are you considered "collection proof?"- An individual who is considered "collection proof" is a person who does not own any property that a creditor can take to satisfy the debt, does not have any wages that can be garnished, or has wages that are exempt from garnishment.
3. Do you foresee any continuing debts?- Because you cannot discharge debts incurred during bankruptcy and if you anticipate going into debt in the future, you may want to delay filing for bankruptcy. This does not mean to commit fraud by obtaining goods or services on credit without the intent to pay.
4. Your credit score will be affected.- A Chapter 7 Bankruptcy stays on your credit history for 10 years. The debts discharged as a result of the bankruptcy will be noted on your credit record as discharged.
5. Know your non-dischargeable debts.- Some debts are non-dischargeable, meaning that your obligation to pay is not removed by the bankruptcy. If most of your debts are non-dischargeable bankruptcy may not be the best option for you.
6. Non-exempt Property.- Limits exists as to how much property you can exempt from the bankruptcy. If you own valuable property that cannot be exempt because you are over the exemption limits, you risk losing that property in your bankruptcy.
7. Last Resort.- The decision to file for Chapter 7 bankruptcy should be discussed with a Jacksonville Bankruptcy Attorney prior to filing.

Continue reading "Simple Questions, Tough Decision: Are You Eligible to File for Bankruptcy in Florida? And, if so, Should You?" »

A Palm Beach County developer whose construction of a new home in Riviera Beach for a single father suffering from cancer was featured on the popular ABC-TV series Extreme Makeover: Home Edition has filed for Chapter 7 bankruptcy.

In February of 2006, Majestic Custom Homes built a 2,300 sq. ft. home for Dunstan Rainford, a 43-year-old single father with lymphatic cancer whose roof had been ripped away by Hurricane Wilma. The building of the home was featured on Extreme Makeover: Home Edition during the 2006 season.

Rainford died seven months after the completion of the home, which is now owned by his relatives.

JPG Enterprises, Inc., doing business as Majestic Custom Homes, filed for Chapter 7 bankruptcy, listing more than $7 million in liabilities and $1.6 million in assets. The company, headed by president John Paul George, was incorporated in 1984 and built custom homes in Indian River, Palm Beach, Sarasota and St. Lucie counties.

Majestic’s bankruptcy filing showed that among the company’s liabilities are significant sums due for unfulfilled home construction contracts, including some on homes that have already been foreclosed on by lenders.

The Florida housing market meltdown has caused a number of construction-related businesses to file Chapter 7 or Chapter 11 bankruptcy in Florida. If you are the owner of a financially troubled Florida business and want more information about the business bankruptcy process in Florida, consult a Florida bankruptcy attorney.

Continue reading "Palm Beach County Developer Featured on Extreme Makeover: Home Edition Files Chapter 7 Bankruptcy" »

Former Pittsburgh Steelers offensive lineman Dermontti Dawson joined former Jacksonville Jaguars quarterback Mark Brunell in filing for bankruptcy this month.

And even though the bankruptcy routes they are taking are different – Brunell filed for Chapter 11 business bankruptcy and Dermontti has filed Chapter 7 liquidation bankruptcy – they got there the same way: by personally guaranteeing loans on real estate deals that went bad.

Dermontti filed Chapter 7 bankruptcy in Lexington, Kentucky, where court documents showed he has assets of $1.42 million and debts of $69.66 million. Dermontti retired from the NFL in 2001, after playing his entire 13-year career with the Steelers, where he was the team’s highest paid offensive lineman at $4.2 million per year.

Dermontti’s largest debt claims include several million dollars owed to Fifth Third Bank of Lexington as a result of his ownership interest in several real estate development businesses. The bank had recently won a judgment against one of the businesses for defaulting on a $3.4 million loan.

Brunell’s Chapter 11 bankruptcy documents list assets of $5.5 million and debts of $24.7 million, most of which are personal loan guarantees he provided on commercial loans to several limited liability companies in which he had an ownership interest.

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.

When filing a Chapter 7 Bankruptcy in the Middle District of Florida, debtors are entitled to several exemptions that allow them to keep assets out of the reach of the trustee. One of those exemptions is the Homestead exemption under Article X, Section 4(a) of the Florida Constitution which allows debtors to exempt the full amount of their homestead property from the bankruptcy estate. Under one of the newer additions to the bankruptcy law, referred to as the “wildcard exemption”, debtors are able to exempt up to $4,000 of personal property from the bankruptcy estate.

The relationship of these two exemptions to each other is important for debtors to understand. The reason is that if you use one of them you are not entitled to use the other at the same time. For instance, if you own your home and it is your homestead you must claim the homestead exemption when you file for a Chapter 7 bankruptcy in the Middle District of Florida if you wish to exempt your property from the bankruptcy estate and creditors. To that end, you will only be entitled to $1,000 in personal property exemptions under the Florida Constitution Article X, Section 4(b). However, if you are behind on your home mortgage, have no hope of reinstating your mortgage or do not wish to, you can surrender your house, discharge your mortgage, and take advantage of the “wildcard exemption” to protect up to $4,000 of your personal property, including a vehicle.

An important aspect of this exemption interplay to remember in the Middle District of Florida, Jacksonville Division, is that the Court has decided once you claim the Homestead Exemption you cannot amend your petition prior to the discharge and claim the “wildcard exemption”. You must make up your mind prior to filing the petition which exemption you wish to use. This is where the advice of a Jacksonville Bankruptcy Attorney can prove invaluable. If you wish to discuss filing for Bankruptcy in Florida contact us at Wood, Atter, & Wolf, P.A.

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.

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

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

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

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

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

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

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

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

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

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.

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.

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

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

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

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.

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

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

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

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

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

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

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.

This is a question that many Florida residents have when filing bankruptcy or when faced with a former spouse that is filing bankruptcy. Generally the answer is no. According to the Bankruptcy Code 11 U.S.C. §523(a)(5), a discharge does not relieve the debtor of a domestic support obligation. This prevents former spouse debtors from discharging their obligations to pay things such as child support, alimony, and maintenance to the other spouse.

However, the debts that qualify under the definition of support for purposes of the bankruptcy code may not be easily identifiable. Under Florida law the courts require a divorcing couple to equitably distribute all of their assets and debts amongst each other. What happens when one spouse is ordered to pay a lump sum to the other spouse as part of an equitable distribution? Can a former spouse discharge their obligation to pay a divorce award to the other spouse?

The answer depends on nature of the obligation and the intent at the time of its creation according to the court in Cummings v. Cummings 244 F.3d 1263. In that case the court stated that a domestic obligation can be deemed “actually in the nature of support” even if it is not considered “support” under state law. The important thing to take away from this case is that a portion of an equitable distribution or all of it may be considered “in the nature of support” and non-dischargeable depending on the intention of the court at the time the award was made. On the other hand, you may be able to discharge a divorce award if it was not intended as support to the other spouse.

If you have questions about Bankruptcy call a Jacksonville Bankruptcy Attorney for guidance.

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.

While the airwaves continue to be full of promises of tax debt relief through bankruptcy, one Jacksonville bankruptcy attorney says that while some taxes can be eliminated, most cannot.

If you file Chapter 7 bankruptcy, your tax debts can be discharged, but only if you qualify.

In order to qualify, you must meet all of the following conditions:

• Your taxes are income taxes


• You did not commit fraud or willful evasion


• The tax debt is at least three years old


• You filed a tax return for the debt you wish to discharge at least two years before filing bankruptcy


• The IRS must have assessed your income tax debt at least 240 days before you filed bankruptcy, or it must not have been assessed yet.

Under Chapter 7, a federal tax lien cannot be discharged, so if the IRS has recorded a tax lien on your property, you will have to pay it off prior to selling the property.

If you file Chapter 13 bankruptcy, you will still have to repay your taxes in full as part of a court-appointment payment plan.

If you have questions about filing bankruptcy in Florida, 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.

The first decade of the 21^st century is already in the books as “the business bankruptcy decade”, in the opinion of one Jacksonville bankruptcy attorney.

According to BankruptcyData.com, 17 of the 20 largest business bankruptcies of all time happened between 2001-2009.  The majority (9) were in the financial services sector, followed by energy (3), automotive (2), telecommunications (2) and industrial (1).

From largest on down, the seventeen 21^st century business bankruptcies include:

1. Lehman Brothers


2. Washington Mutual


3. WorldCom


4. General Motors Corp.


5. CIT Group Inc.


6. Enron Corp.


7. Conseco, Inc.


8. Chrysler LLC


9. Thornburg Mortgage, Inc.


10. Pacific Gas and Electric Co.


11. Refco, Inc.


12. IndyMac Bancorp, Inc.


13. Global Crossing Ltd.


14. General Growth Properties, Inc.


15. Lyondell Chemical Co.


16. Calpine Corp.


17. New Century Financial Corp.

Consequently, the first decade of the 21^st century was also the most lucrative for bankruptcy attorneys and consultants.  According to a recent New York Times article:

The lawyers, accountants and restructuring experts overseeing the remains of Lehman Brothers have already racked up more than $730 million in fees and expenses, with no end in sight.

These megacases — Lehman, General Motors, Chrysler and Washington Mutual, to name a few — are orders of magnitude larger than most bankruptcies in the past, and their size and complexity have created a feeding frenzy of sorts for those asked to sort them out. To date, Weil, the lead law firm representing Lehman, has billed the Lehman estate for more than $164 million.

Think the lawyers are expensive? Meet the consultants. Alvarez & Marsal, a turnaround firm that is essentially running what remains of Lehman, has billed more than $262.1 million.

Many people in the industry agree that Lehman, in particular, is a huge case that tests even the most experienced lawyers. “Lehman is a sufficiently complicated company that it would be safe to assume that if it weren’t for equally sophisticated professionals running the Chapter 11 case, that the creditors would essentially receive nothing,” says Stephen J. Lubben, a professor at the Seton Hall University School of Law. “In those situations, it makes sense for sophisticated professionals to handle the case.”

If you need information on the Florida business bankruptcy process, 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.

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.

A Jacksonville bankruptcy lawyer says that small business owners may be able to discharge business debts by filing Chapter 7 consumer bankruptcy.

High unemployment rates have created a lot of sometimes-reluctant entrepreneurs.  Add that to the fact that most small businesses suffer from a fairly large failure rate, and you wind up with a fairly large number of small business owners in big financial trouble.

Generally, by filing a Chapter 7 bankruptcy, a small business owner can discharge his obligation on his business debts.  This is because a Chapter 7 bankruptcy allows you to discharge your personal obligation to pay the business debt.  And since most of your business debt was probably secured by a personal guarantee, this qualifies that business debt as one that can be discharged in Chapter 7 bankruptcy.

Other Chapter 7 dischargeable debts include leases, guaranties, negligence claims, tax penalties over three years old, personal loans, credit card debt, repossession deficiencies, auto accident claims, medical bills and judgments.

If you are a small business owner and need more information on how a Chapter 7 bankruptcy filing might help you, 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.

If you are getting ready to file Chapter 7 or Chapter 13 bankruptcy in Florida, you have likely secured the advice of a Florida bankruptcy attorney – advice that should cover not only what to do before filing bankruptcy, but what NOT to do:

Credit Card Use. If you are filing for bankruptcy, you need to know that any debt over $500 that is incurred 90 days prior to your bankruptcy filing are presumed to be non-dischargeable.  In addition, any cash advances over $750 that are made 70 days prior to filing also fall into the non-dischargeable category.

Retirement Accounts. You may be thinking of cashing out your retirement accounts prior to filing bankruptcy.  Big mistake.  Retirement accounts are usually exempt from a bankruptcy filing, which means you will only be hurting yourself.

Property Ownership. Transferring the ownership of property will not protect it from bankruptcy, and will probably get you in hot water with the bankruptcy trustee to boot.  The trustee can undo any property transfer that occurred during the two years prior to filing bankruptcy.

Family Loans. You cannot pay off any loans made to you by family members prior to filing for bankruptcy.  If you do so within one year prior to your filing, the money will be reclaimed and added to the bankruptcy estate.

If you need help navigating the intricacies of filing Florida bankruptcy, 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.

If you can qualify, Chapter 7 bankruptcy may provide more advantages to you than Chapter 13 bankruptcy, says one Jacksonville bankruptcy attorney.  But everyone’s circumstance is different, so you will need to know the advantages and disadvantages to Chapter 7 bankruptcy to determine if it is the best solution for you.

The key advantage of a Chapter 7 bankruptcy is that it allows you to emerge virtually debt-free within three to six months.  Your unsecured debt – which is debt not secured by collateral and typically includes credit card debt and medical debt – will be wiped out.

However, there are debts that do survive Chapter 7 bankruptcy, including mortgage and car payments and any other “nondischargeable” debts like student loans, child support or recent taxes.

In addition, the chances are greater that you will lose your home in Chapter 7 bankruptcy since it is a secured debt.  However, this is not always the case.  You can typically keep:

• Your car, depending on its value


• Your clothing


• Necessary household furnishings and appliances


• Personal effects


• Jewelry, up to a certain value


• Pensions


• Life insurance proceeds, up to a certain value


• Work-related tools or equipment

You will probably have to give up:

• A second or vacation home


• A second car


• Stocks, bonds and other investments


• Cash and bank accounts


• Valuable collectibles or family heirlooms

For help in reaching the best decision for your circumstance, 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.