Bankruptcy and Foreclosure Attorney Blog

This is a hot topic right now and as a practicing bankruptcy attorney in Northeast Florida, this part of bankruptcy law is always changing. Recently, the 11th Circuit Court of Appeals handed down a decision that allows chapter 7 debtors to strip 2nd mortgages and liens on their primary residences. It is unclear whether or not this case will apply to investment properties. Until this case was handed down, this feature was only available in chapter 13 cases. This issue will more than likely be heard by the United States Supreme Court and they will be the ones to decide and interpret the bankruptcy code. It may take a revision to the code before they render a decision that conflicts with the code verbage. If the ruling stands, it will be a great benefit for debtors thinking about filing for chapter 7 bankruptcy.

For those currently in chapter 13s, who have had a lien stripped off or crammed down, typically those court orders only allow the stripping of the lien if the debtor gets the discharge in a chapter 7. Now, with this recent decision, it will be interesting to see if these debtors will be able to convert to a 7 but have the lien stripping remain in effect. Apparently, this decision does not apply to loans that are partially secured. What does that mean? It means if the home value is more than the balance owed on the first mortgage, the 2nd mortgage cannot be stripped.

To be honest, I find that most of my clients who have home equity lines or 2nd mortgages tend to make more money and would not qualify for chapter 7 anyway. However, there are a few that they only file chapter 13 to strip off a second mortgage. Whether or not this decision will stand, I think it is a good practice and will help debtors have a chance to actually stay and afford their homes. It should help bring down the number of foreclosures in the area and cut down on chapter 13 filings.

Continue reading "Can I strip a 2nd Mortgage in a Chapter 7?" »

This question can become complicated but it happens all the time. What joint property is exempt under Florida law if only one spouse files for bankruptcy relief? As a Northeast Florida Bankruptcy attorney, it is important to properly apply exemptions and know the law on this issue if you are going to be able to zealously advocate and serve your client's best interests. Property categorized as being held "tenancy by the entirety" (only available to married couples) is protected from attachment by the bankruptcy Trustee and most other creditors as well.

What does that mean? It means the property was acquired during the marriage and is usually specified on the property that is being held by the entirety. If there is no specific label, there is a presumption that the property is held tenancy by the entirety (assuming it was acquired during the marriage). What are the most common types of property where this is an issue? The most common property are joint bank accounts with money sitting in those accounts and where there are contributions from both spouses. Sometimes real property with and without structures is held as tenants by the entirety. Vehicles and household items are also common properties held by the entirety. These properties should be exempt from Trustee attachment in a Florida bankruptcy.

Are there other ways property can be held by a married couple? Yes. Property can be held or specifically identified as being held as joint tenancies. If property is held by a married couple, but it is specifically designated as being held as a joint tenancy, Trustee and creditor attachment is possible at least for the debtor's interest. So, this is something to really watch for before filing for bankruptcy if a married couple owns property together. Check and doublecheck that it is being held as tenants by the entirety or else be prepared to explain to the debtor that he or she could lose their interest in the property by filing for chapter 7 bankruptcy relief.

Continue reading "If only One Spouse files for Bankruptcy, what property is Protected from the Trustee?" »

Many times, creditors file motions for relief from stay in chapter 7 and chapter 13 bankruptcy cases. What they are essentially asking for is permission from the bankruptcy court to move forward with state court remedies to foreclose on property. Therefore, secured lenders are the creditors permitted to do this. Homeowners Associations are even allowed to file the motion because when the debtor signed to purchase the home, the covenants and restrictions of the homeowner's association permit the association to foreclose if payment assessments are not paid on time.

Creditors are not entitled to this type of relief if the debtor is current on the payments, the chapter 13 plan provides for payment to the creditor, or if the property has equity. Many times, the bankruptcy court will makde the debtor show proof that the collateral is properly insured or it can grant the creditor adequate protection payments in the interim until discharge or the 13 plan is confirmed.

Adequate protection payments usually involve the debtor making the same payments to the creditor had the bankruptcy not been filed. If the creditor receives relief from the automatic stay, the creditor can look to record liens on the property or foreclose on the collateral if the payments are not current. Many times, this may be a non-issue especially if the debtor is looking to surrender the collateral anyway.

Continue reading "What is a Motion for Relief from Stay in a Florida Bankruptcy Case" »

One of the many changes to the 2005 Bankruptcy laws were the added restrictions to the frequency of bankruptcy filings. If a debtor receives a discharge in a chapter 7, that debtor must wait 8 years between filing dates before the debtor can file again. Is there are a restriction on the number of times one can file in a lifetime? The only restriction is the 8 year waiting period between chapter 7 filings. Again, this waiting period is only relevant if the debtor received a discharge. If the debtor did no receive a discharge, and assuming the case was not dismissed for fraud or because the debtor did not qualify for any other reason, the debtor should be able to refile.

What about the wait time between chapter 7 and chapter 13 filings? The debtor has to wait 4 years between a chapter 7 and 13 filing dates. Again this is assuming a discharge is reached. Many times, chapter 13 cases are dismissed because the debtor fails to make payments or the debtors failed to cooperate in getting the Trustee everything that was needed to compete the bankruptcy (i.e. tax returns, pay stubs, etc). Are the debtors prohibited from now filing a chapter 7. It depends on the order dismissing the case and if they are otherwise eligible from a mean's test and eight year eligibility standpoint.

Do married couples of have to file together? No, they do not. One spouse may file separate and not include the other spouse. One spouses ineligibility does not necessarily preclude the other spouse from filing. Can engaged or dating couples file bankruptcy together? No, they may not. It has to be two separate filings or wait until they are married. There are many nuances to filing for bankruptcy.If you are thinking about bankruptcy you should consult with an experienced attorney.

Continue reading "How many times can I file for Bankruptcy in My Lifetime? " »

I realize I have blogged on this before but it is so important for debtors to understand this. Whether a debt is or is not dischargeable could be the deciding factor on whether or not to file bankruptcy or at least file it with someone who knows what they are doing. As a practicing bankruptcy attorney in Northeast Florida this is key information one needs to give when consulting someone about bankruptcy.

What debts are not dischargeable? Surprisingly, most debts are dischargeble. There are actually very few that are not. If a creditor believes they are not dischargeable, they should file an objection or an adversary proceeding. Some creditors are not required to do this under the bankruptcy code, but some are. If a creditor fails to file an objection to the discharge, it may be waived. If a creditor fails to file a proof of claim, the creditor will not be paid. Recent tax debt, sales taxes, employee taxes, student loans (in most cases), driving under the influence charges, criminal and traffic fines, claims for fraud or will and malicious injury, and domestic support obligations are the primary and most common debts that are not dischargeable.

Is that all? No, there are a few others such as recent incurred debt, post filing debts, debts where the debtor has no intention of ever repaying the debt, and personal injury claims where there is a willful intent to hurt the victim. It is important to note that student loans are not dischargeable unless the debtor files an adversary complaint and shows there is a substantial hardship. This can rarely be done and is usually reserved for people who are permanently disabled and can no longer work.

Continue reading "What debts are not dischargeable in a chapter 7? " »

Many bankruptcy cases are filed pro se (without an attorney; or representing oneself). Many choose to go this route because they feel they can do just as good a job or they lack the financial resources to hire an attorney and do not qualify for legal aid. Filing for bankruptcy can be expensive. However, filing a bankruptcy and not getting the job done correctly can be even more expensive especially when you have to start over. I have had many clients try and file themselves and they schedule a consultation with me a few months later and have to start over. There are many documents that the trustee requires, the forms are very complex and the average layman does not know bankruptcy law. It is more than filling in blanks and showing up for court. Lawyers do not attend that extra schooling and are forced to pass very difficult exam because the law is easy.

Is one chapter more complicated than the other? First and foremost, the average layman does not need to try and file chapter 11 bankruptcy, ever. It is very difficult and there is a reason why attorneys who handle these cases charge higher fees. Chapter 7 may be the lesser of the complex chapters to file, but again there can be very complex chapter 7 cases. Chapter 13 is and can be very difficult even for attorneys. The chapter 13 plans, nuances of the trustees, and procedure can be very complex. Tracking proof of claims, incorporating those into plans, amending and modifying plans, calculating disposable income, determining exemptions, etc. are just a few of the complex duties in filing and sustaining a chapter 13 plan.

If you are not a good organizer or planner, trying to file bankruptcy on your own will be near impossible. The paperwork is tedious and requires a good bit of effort to have the case filed correctly. There is a reason why their are professionals available to do this. If it is something the professional does everyday, then why wouldn't you trust someone with that experience and knowledge?

Continue reading "Do I need a Florida Bankruptcy Attorney to File my Case?" »

Many times, debtors are concerned with what they should be doing after their bankruptcy. Debtors should do whatever they can to get bills in their name in order to rebuild credit. This must be done in a reasonable capacity, but it will help the debtor get financing and other lines of credit in the future.

Debtors should frequently check their credit report to ensure that past debts that were included in the bankruptcy and discharged are not being reported inaccurately on the report. If this does happen, this may be a discharge injunction violation and the debtor may have legal remedies. Another post-filing tip: read every document you sign for! Many times, debtors are forced into a bankruptcy because they signed bad deals and were forced into the bankruptcy. Read and comprehend everything you sign for.

If your creditors are continuing to contact you after a debt has been properly discharged or if something is showing on your credit report wrongfully, you should consult with an experienced bankruptcy attorney.

Continue reading "Post-Bankruptcy: What should I be doing? " »

This question does come up quite often especially in the state of Florida where the volume of delinquent borrowers on home loans is near the highest in the country. As a practicing Northeast Florida bankruptcy attorney, I can only share my experiences and personal knowledge of what happens with my clients. Many times, borrowers are forced into bankruptcy because the bank denied the borrower's modification requests in the first place. Again, chapter 13 is the consumer chapter reserved for debtors who do not qualify for chapter 7, who may have several paid off assets they do not want to lose, or they are trying to catch up payments on their home. With the new mortgage modification mediation program in the Middle District of Florida Bankruptcy Court, this obviously increases a debtor's chances in trying to secure a modification, or principal/interest rate reduction. Of course, there are no guarantees with this program, but it seems to give some a fighting, realistic chance at assisting struggling homeowner.

What about chapter 7 debtors? In the debtor's bankruptcy petition and schedules, the debtor is asked whether he or she plans to keep the property or surrender his or her interest. In both instances, I have seen banks contact me and ask if my client is interested in a modification or a loss mitigation package. A loss mitigation package may allow a debtor to short sale the property or sign over the deed in lieu of foreclosure. You may be wondering what benefits could possible come from these options. Well, if the debtor has a homeowner's or condo association, the post petition arrears on assessments could be relinquished and the debtor avoid further liability as soon as title is transferred from the debtor's name. It may be quicker than waiting on the bank to foreclose (which could take years) and getting this property out of the way and moving on with your life. Modifications and loss mitigation packages are not offered in every case so filing the bankruptcy may have no effect on your account status.

What if the debtor is already in a modification and then files bankruptcy? If the debtor is filing a chapter 7,the bank must continue to honor the agreement unless there is a clause prohibiting the filing of a bankruptcy during the modification. It may be a good idea to inform the mortgage company you are contemplating filing for bankruptcy relief to avoid any surprises. If the debtor plans to file for chapter 13 relief, the debtor can keep the mortgage out of the bankruptcy and save some cash by not having to pay a higher Trustee percentage. The mortgage company will receive notification that the debtor has filed but as long as the debtor continues to make the trial or permanent modification payments on time, the bankruptcy should have no effect on the agreement.

Continue reading "Will Filing for Bankruptcy Hurt my Chances for a Loan Modification?" »

One of the common questions I get in bankruptcy consults relates to what paperwork will be needed to begin the process or get the case filed. As a practicing bankruptcy attorney in the middle district of Florida, we use a list that each client can go by when compiling documents and information. We know what bankruptcy Trustees in this district want and are looking for. The list may seem overwhelming at first, but these are basically documents everyone should already have in their possession for safekeeping and to maintain accurate records. We simply ask for a copy of those documents.

What items are needed? For example, we request tax returns for the last two years, six months worth of pay stubs, title/and or registration on vehicles, proof of insurance for those vehicles, twelve months worth of bank statements, copies of lawsuit paperwork, mortgage/deed information, proof of social security or pension (if applicable); credit reports from each federal agency, and a most recent copy of a bill or invoice from each creditor. We also have our clients fill out a packet where we ask the client to do an inventory of their household items. They are asked to value those items the best they can. In addition, we ask for the client to fill out all expenses so we can get an idea of what, if any, disposable income is available.

What resources are used to value property like cars, homes, boats and trailers? When valuing cars, motorhomes, boats, and trailers, the bankruptcy trustees in this district typically use NADA and/or Kellyblue book. In their opinion, this gives a fair value for these types of property. For homes and other real property, the Trustees typically use Zillow to get home values and appraisals. This could become very important when determining the amounts the debtor will be able to use in claiming certain exemptions. If the debtor has equity in the homestead, the debtor is not able to claim as much in personal property protection. If the debtor does not have equity in a homestead, the law as it reads today, allows the debtor to claim more in personal property protection.

Continue reading "What Paperwork and Documents are Needed to File a Personal, Florida Bankruptcy?" »

As a practicing bankruptcy attorney in the Middle District of Florida, issues about proof of claims arise quite frequently. What is a proof of claim? A proof of claim is a document filed with the bankruptcy court that shows what amounts debtors owe on debt. The claims are categorized as unsecured or secured or priority. Most credit cards and medical bills are unsecured claims. Debt like mortgages and auto loans are secured debt. Certain IRS debt and domestic support obligations are considered priority debt. Proof of claims have bar dates and if creditors fail to file their claim before the date expires, the creditor may lose its right to assert a claim. Proof of claims are important in chapter 7 cases if there are assets to be liquidated. Typically, the bankruptcy Trustee will make a finding of assets and give creditor notice that the proof of claims bar date will be extended in order for creditors to file proof of claims. Once it is known the debtor has assets available and subject to liquidation, creditors jump at the opportunity to file proof of claims. Unsecured claims will get a pro rata share of the distribution. Secured claims are allowed to get their full claim.

Who files proof of claims? Typically, creditors file proof of claims on their own behalf. However, many times, chapter 13 plans cannot be confirmed until certain proof of claims are filed. If the bar date on the claims pass, the debtor or the debtor's attorney or even the Trustee can file proof of claims on behalf of creditors. It would be noted in the proof of claim that a party other than the creditor is filing the proof of claim. However, if there were supposed to be arrears on a certain secured claim, the debtor's attorney can file a proof of claim on behalf of the creditor that shows no arrears and because the creditor waits to object (if at all) after the bar date, the objection is typically waived. This could save the debtor thousands of dollars. That is why creditors should file proof of claims in a timely manner.

Can the proof of claim be objected or disputed? In most circumstances, yes it can be, as long as the objection is timely. The amount owed on arrears, principal, or even objections to the wrong party claiming money is owed or no money being owed at all are common objections. If they are objections, the court will generally hold hearings to determine the issues and rule on those issues.

Continue reading "Who can File a Proof of Claim in a Florida Bankruptcy?" »

This answer could vary between state to state. Therefore, it is important to note that this answer could be different depending on the jurisdiction. "Trust" taxes, as these debts are often referred to, are generally not dischargeable in bankruptcy. The test is whether the business charged the customer sales taxes or if the business was responsible for the sales taxes and paid the tax directly (not imposed to customer). If the customer incurred the tax when the item or service was purchased, then the owner should have reserved that portion of the purchase in escrow to pay the state. If it the money was not sitting in escrow to pay the state, that means it was spent elsewhere and for other purposes and there lies the problem. The owner of the business cannot typically avoid personal liability on the tax debt in this situation.

If the business was responsible for the tax, then the owner of the business could avoid personal liability or at least discharge the obligation for failure to pay. States vary on whether or not it mandates that the sales tax be imposed on the customer or not. The business does not get to choose how it wants to impose the tax. What about employee taxes being dischargeable? The answer is generally no because this is money that should be set aside in escrow for each employee and if its not there, it means it was going or spent somewhere else.

What about child or domestic support obligations? These are not dischargeable debts. In fact, bankruptcy trustees can choose to dismiss cases based on arrears on back child support and with the debtor having no intention of repaying them. Property settlement agreements or obligations to the agreement may be dischargeable as long as there are not categorized as "support" in nature. For example, in lieu of traditional alimony, many courts will require an ex spouse to make the mortgage payments and that will be incorporated into the Agreement. This may look like a property settlement term but it is really more of a "support" award and the obligation would not be dischargeable.

Continue reading "Are state sales taxes dischargeable in a Florida bankruptcy?" »

This becomes rather important if the debtor is trying to file a bankruptcy primarily because the debt is "business" related. If the entire debt is primarily consumer debt, the debtor must take the mean's test in order to qualify for chapter 7 bankruptcy. Unfortunately, a home with a mortgage is considered a "consumer" debt and although the debtor may be current on the payments and plans on keeping, even reaffirming the property, its still a consumer debt. In many cases, this can disqualify a debtor from filing or converting to a chapter 7.

Do the trustees consider any circumstances that happen between the original filing and the conversion? Absolutely. These types of circumstances or "declinations" can be taken into consideration before the trustee files a motion to dismiss the case. Circumstances like a reduced income or extraordinary medical bills can be just a few of the contributing factors that would qualify the debtor under chapter 7 bankruptcy relief. Assuming these declinations do not help enough for the debtor to qualify for chapter 7, and a motion to dismiss is filed, the debtor may still fight the "presumption of abuse" alleged by the trustee.

The middle district of Florida's bankruptcy court has made it clear that relief should be liberally construed in favor of the debtor. What does that mean? It mean's the court should side with debtor unless there is some sort of clear abuse and the debtor can really make payments towards the debt in a chapter 13 setting. However, there is no guarantee that a bankruptcy court will rule in a debtor's favor. If there is a clear intent to defraud creditors then the Court will most likely grant the motion to dismiss and the debtor will not receive a discharge or the debtor may convert to a chapter 13 (assuming the debtor qualifies under the debt limits). The Court may also take into consideration any other exigent circumstances that it deems appropriate or helpful in making a determination. The presumption of abuse is not something practitioners should take lightly, but there is plenty of case law on the issue and it is pretty well documented on how each presiding judge rules on the issue.

If the debtor is an ex-veteran and is permanently disabled, this may give him or her a pass to avoid taking the mean's test. Again, as mentioned in previous posts, the mean's test looks at the disposable income of the debtor (assuming the debtor's household income is over the state median income levels). If the disposable income is high after being multiplied out over a sixty month period, this may establish the "presumption" of abuse.

Continue reading "What is considered a consumer debt in a Florida Bankruptcy? Is that Important?" »

As a Jacksonville bankruptcy attorney, many questions come up about bankruptcy and tax refunds. Many debtors are forced to send copies of their upcoming tax returns if they file their bankruptcy case late in the year before. If the case is a chapter 7 bankruptcy, the debtor should only have to send the following year's return. If the case is a chapter 13 bankruptcy, the debtor will have to send the tax return for every year they are in the bankruptcy. Typically, the entire refund is turned over in the chapter 13 unless the debtor can show a hardship as to why the circumstance is unique and the need for the money is substantial.

This additional "income" is considered just that by the Trustee "additional." This means that the debtors "disposable" income has increased if in fact a refund is received. All disposable income is required to go towards unsecured creditor debt in the chapter 13. Therefore, Trustees are justified in asking the debtors to turn the funds over. Many Trustees require the debtor(s) to send over their tax returns after filing. They further advise the debtors not to spend or use their refund until the Trustee has given them permission to do so.

The refund is considered a "contingent asset" of the bankruptcy estate and if the debtor has exhausted all exemptions in the bankruptcy filing, the entire refund may be subject to turnover. If the debtor(s) fail to comply with these requests, the Trustee could file adversary proceedings against the debtors and even revoke their discharge. If the debtors have exemptions that have not been exhausted during the initial filing, you may be able to use whatever exemptions are left to protect at least a part of the refund. Again, failure to comply with the Trustee's request could result in the Trustee revoking the debtors discharge. When a discharge is revoked, it means the debts that were originally discharged are no longer discharged and the debtor becomes responsible for the debt once again. This means lawsuits, judgments, liens and garnishments are reattached or may continue if the debtor loses the discharge. align="left" style="margin-right: 7px;" />

If you have questions or concerns about taxes and bankruptcy, you should consult with an experienced bankruptcy attorney. Having your entire case/dismissed discharged is not worth one tax refund. You have paid money and spent time and efforts to make sure your bankruptcy goes through smoothly and you get a fresh financial start.

Continue reading "Can I Keep My Tax Refund in My Florida Bankruptcy?" »

Redemption of property is where the debtor looks to pay a lump sum to the lender (whoever is using the property as collateral) for the fair market value of the property. The payment must be in the form of a lump sum payment and the value of the property must be less than what is owed. In addition, depending on what jurisdiction you are in and the Trustee appointed to your case, it may not be a great idea to redeem if the Trustee is going to want to have anything to do with the property. If the debtor redeems the property but the Trustee decides to pursue liquidation of that property, the debtor may be out thousands of dollars in cash that he or she just paid to keep and pay off the collateral.

Can a debtor redeem real property? What is real property? Land, homes, buildings, any property situated on land is considered real property. The answer is no the debtor may not. In reality, what debtor has this type of cash available anyway? More than likely, the debtor will not have this kind of cash flow or support from others to make such a large purchase. Does it make sense to allow redemption of real property especially when many homes are underwater and the value is not even close to what is actually owed? I think there is a strong argument for it, or some type of legislation that forces the bank to refinance the home at whatever the value of the collateral is worth. However, it would make sense that debtor still has to be able to afford that new payment before such a deal would or could be reached. It would allow many Americans to keep their homes as opposed to banks foreclosing on the property.

What is a reaffirmation and how is it different then redemption? A reaffirmation agreement tells the bankruptcy court not to discharge this particular debt. It is most common on auto and home loans. However, sometimes furniture store entities will require that the debtor sign a reaffirmation agreement in order to keep certain furniture. When a debtor reaffirms a debt, he or she agrees to the specified payment plan specified in the agreement. It may be a different interest rate than the original terms but most likely it will be the same. If the debtor signs a reaffirmation agreement and defaults on the property after the bankruptcy, the debtor could be held liable for any deficiency. The reaffirmation agreement is different then redeeming property in that the debtor cannot reaffirm the debt at fair market value and there is not a lump sum payment as opposed to redeeming the property.

Continue reading "Can I redeem my Personal Property in a Florida Bankruptcy?" »

This question comes up more often than you would think. As a practicing bankruptcy attorney in North Florida, I see it quite often. If the debtor is 100% positive he or she will be filing bankruptcy, then I probably would not worry about selling it unless you are planning to file a chapter 13. If you plan to file a 7 and you know you qualify, then short selling the property is risky because (unless you have the terms in writing) you could still be held liable for the difference between what you owed and what the property sold for. In addition, if the bank writes the difference off, it could be reported to the IRS and the borrower will be sent a tax form as it may be considered taxable income to the borrower. It makes a difference however if the property was or is a primary residence. If the property is a primary residence, you may not have any tax liability for short selling the property.

Is there tax liability on the amount of debt forgiven in a bankruptcy. The answer is generally, no. I am hesitant to say "never" or "always" in any type of blog because the law can be unpredictable at times and I do not want to mislead anyone out there. But, the answer is generally, no. Debtors are generally not taxed on the debt that is forgiven.

Do tenants have to continue paying rent when a property is in foreclosure? The answer is absolutely. Even though the landlord may be being foreclosed upon, the tenant must continue to make rent payments and even if the landlord is not applying those payments to the mortgage. There are Florida laws to help protect residential tenants from banks who foreclose, but that is about the extent of the protection. For example, the bank either has to honor the existing lease between the landlord or tenant once the property is foreclosed or they have to give the tenant 90 days notice before the tenants must vacate the property. This protection is generally not available in commercial leases. However, if there is a paying tenant, it may be in the bank's best interest to allow the tenant to remain on the property so that the bank has some revenue flowing in.

In a chapter 13, the debtor may choose to keep the property and cram down the value of the loan to the value of the property. This can only be done with investment property but it allows the debtor to only owe for the fair market value of the property.

Continue reading "Should I short sale my investment Property if I plan to File a Florida Bankruptcy?" »

Many times those who are self employed will be required to "personally guarantee" business debt if the vendor or supplier will extend credit to the business. If the debt is personally guaranteed, the business and the owner who signed for the debt are responsible in the event of a default of the terms of the agreement. If the business is insolvent, the vendor can look to the owner for recourse. Individuals can file personal bankruptcy on business debt that has been personally guaranteed. However, it will not discharge the business obligations to pay the debt, a separate business bankruptcy may be needed for that.

Are SBA loans dischargeable? Small business administration loans (SBAs) usually require a personal guarantee from the owner but these loans are government backed. The bankruptcy code has a list of debts that are excluded from discharge and SBA loans are not mentioned in this exclusive list. Therefore, it is arguable that these types of loans are or can be dischargeable. Recent tax debts or sales tax debts are not dischargeable. Student loan debt or judgments for fraud or driving under the influence are not dischargeable. There are a few others but these are the most common that come up in consultations.

What if I do not qualify for Chapter 7 because of my income but I have primarily business debt? Debtors who make over the state median income must take and pass the mean's test in order to qualify for chapter 7 bankruptcy. However, there are a few exceptions. Is the debtor a permanently disabled veteran? If so, the mean's test is not applicable. The debtor must be classified as permanently disabled though. Is the debt primarily consumer or business related? If it is primarily business related, then the debtor does not have to take and pass the mean's test. Income is irrelevant. The logic behind the business debt exception is because as an economic society, we want to encourage entrepreneurs and creative business minds to venture out, take calculated risks in formulating a business. Sometimes, it just does not work out and it would be a deterrent not to let these types of debtors file for chapter 7 bankruptcy relief. If they were forced to file chapter 13 relief, the debt would have to be repaid at least a portion and it is not a high percentage that debtors actually make it through a chapter 13 to get a discharge. Also, there are caps on the amount of debt that can be included in a chapter 13 bankruptcy.

Continue reading "Can I file a Personal Florida Bankruptcy for Business Debt?" »

Many times debtors often ask questions about the validity of the owners on their house note and are exposed to a lot of media coverage about the scandalous and fraudulent activities that have surrounded the mortgage industry over the last decade. They understand that foreclosure defense attorneys are fighting hard in state court and sometimes receive favorable results. But what about bankruptcy court? Does the debtor simply file the case and expect the right note older to file the appropriate proof of claim. Adversary proceedings can be filed to determine the validity, scope or priority of a mortgage lien. It is more commonly fought in Chapter 13s but can be done in chapter 7 cases also. New bankruptcy rules have been passed which require the party filing the proof of claim to attach substantial documentation that shows it is the rightful note holder. Failure to do so could result in the proof of claim being rejected or it gives debtors' counsel an easy avenue to question the validity through an adversary proceeding. Adversary proceedings generally do not cost anything to the debtor (unless attorney fees) in terms of filing fees and court costs. This is typically the case in every bankruptcy adversary proceeding where the debtor is the Plaintiff.

What is a proof of claim? Without assuming too much, a proof of claim is something a creditor must file (more important in a Ch. 13, but needs to be done in Ch. 7 cases if there is a liquidation of any type) showing and expressing how much is owed on a balance. Without a proof of claim, the bankruptcy trustee and or court does not know who to pay. They could go off the debtors' schedules but it should be the onus of the creditor to make this work. Filing a proof of claim is not difficult and can be accomplished online in most jurisdictions. What if the creditor lies about the debt or the amount owed? The party filing the proof of claim is filing under penalty of perjury. Therefore, if there are misrepresentations made, the court can impose sanctions or even criminal consequences. Typically, if a proof of claim and there is a dispute, it can be disputed but it must done or objected to within 30 days of the filing. Failure to object acts as a waiver and the claim will stand.

Again, the creditor must attach documents and substantial proof to show that the amount owed is correct and the debtor even owes that particular creditor the debt. This is where "owning" or having "the right to enforce the note" can be disputed. If there is an objection, the court may set a hearing on the issue. If the hearing requires evidence, it may be set for a final hearing.

Continue reading "Can I challenge the Owner of my Mortgage and Note in a Florida Bankruptcy Court?" »

The answer to this question depends on a variety of factors. What kind of lien is it? What is it attaching? More than likely the lien may be avoided or removed from the property by filing bankruptcy, but there are a few exceptions. IRS, student loan, or certain liens on homestead/investment property cannot be removed. Credit card companies or their collectors are not suppose to attach liens against a debtor's homestead property. Florida law and its Constitution protect the homestead from these types of creditors. The Florida Constitution does not protect the homestead against mortgagees who use the property to collateralize the debt lent out, against construction liens, personal property or IRS liens.

What about liens on vehicles? A credit card, line of credit, or collection firm may be able to put a lien on a vehicle if the debtor holds sole title. If the debtor shares title with a spouse, and has always been on the title together, then the property may be protected from attachment. However, assuming the lien is valid, until the lien is satisfied, it remains and clouds title. It can be removed through a formal bankruptcy, but it may not be in the debtor's best interest to file bankruptcy solely on this debt. Then again, it may be perfectly appropriate.It depends on each person's circumstances.The value of the vehicle and the amount of total debt should be taken into high consideration before filing for bankruptcy.

So, procedurally, how is a lien avoided? It can be avoided by filing a motion in the bankruptcy court. If the creditor does not object within a certain period of time, an order can be filed with the judge and the judge can sign off on it. If the creditor objects, then the judge may set a hearing on the issue. It could be evidentiary in nature or it may not. Very rarely do creditors or their attorney try and fight this unless they are just not very familiar with bankruptcy. After the judge signs off on the order removing the lien, it may be a good idea to get a certified copy and have it filed in the state court where the judgment was entered against the debtor.

What if the debtor does not receive a discharge? There could be many reasons as to why the discharge could be denied. If the discharge is denied or revoked, what happens to the debt for which the lien was placed? The debt remains and the lien could be put back on the personal property for which it was originally attached.

Continue reading "Can a Florida bankruptcy remove a lien?" »

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

An adversary proceeding is a lawsuit within the bankruptcy. It is treated very similarly procedure wise to state court lawsuits. There are all types of causes of action available and most require a filing fee to initiate the case. When the debtor is a party to the lawsuit, the debtor does not typically pay for any type of filing fee. What about if the debtor is a Plaintiff? Even so, the debtor is not charged with paying a filing fee. Many times debtors look to bring automatic stay violations or discharge injunction violations.

In these actions, the debtor is the Plaintiff looking to sue a particular creditor for such violation. A summons is required, and an answer to the adversary complaint should be filed within a specific amount of time, usually 30 days. Failure to answer the complaints could result in a default judgment. What does that mean? It means any defenses or counterclaims are waived and all allegations are deemed admitted. There are ways to set aside a default judgment, but that should be avoided if possible. There is usually a pretrial conference and the Federal Rules of Evidence and Procedure are deemed to govern the case. It is imperative that all parties involved know the procedural rules before getting involved with this type of case. Discovery is permitted also. What is discovery? Discovery comes in many forms: request for production of documents, request for admission, depositions, interrogatories, etc. To simplify the term, it means one party is trying to get information about the other party. Now, there are protections and objections that can raised to certain discovery. For example, a party cannot ask for communications between opposing counsel and his or her client. That is protected by the attorney-client privilege. There is an additional protection often used to protect certain documentation from being turned over to the opposing party and that is the "work product" rule. This rule protects property that the opposing counsel or party prepared in anticipation of litigation. This is generally not discoverable. Discovery requests that are burdensome are also objectionable if they are timely brought. If the only the way the information can be obtained is by opposing counsel providing then it the court may not find the request to be that burdensome.

After the pretrial conference and discovery has concluded, a trial or evidentiary hearing will most likely be set. During the trial, witnesses and exhibits are used by both sides in trying to prove or disprove the case. The bankruptcy judge rules (unless a jury trial which is rare) and the losing party may have the ability to appeal to the 11th Circuit Court of Appeals.

Continue reading "What is an Adversary Proceeding in a Florida Bankruptcy?" »

This question comes up many times because it seems as though it would be much cheaper and easier to file a personal bankruptcy and include the business (assuming the business is struggling) rather than having to file two separate cases. Unfortunately, that is not always the case. When someone "incorporates" and creates/registers a business entity with the secretary of state, that in and of itself creates a separate "entity." Although the debtor may be the only member/shareholder of the company, the debtor and the business are considered two separate entities. Therefore, a business must file separately from the owner for bankruptcy relief.

Business bankruptcies do not result in a "discharge" per se, but they can, in some instances, alleviate the owner from personal liability. Business bankruptcies are usually reserved for struggling businesses who cannot pay their state taxes and employee wages. In a chapter 7 business bankruptcy, the bankruptcy Trustee liquidates the business assets and pays off creditors. Creditors are classified and categorized by their "priority." IRS and state entities are high priority along with employee wages. Therefore, when assets are liquidated, these parties are paid out first and the idea is that their claims will be satisfied and the owner will no longer be personally responsible for those debts.

Unsecured creditors like most vendors, suppliers and investors receive a pro rata share of whatever is left of the liquidated business assets. If after all creditors and bankruptcies trustee are paid off, and there is still leftover equity of the business, the business owners may be able to split the difference. However, this rarely happens. Many times creditor vendors require the owner to personally guarantee business debt. They make this requirement in the event the business does struggle financially and there is nothing to attach or collect on for the business, they still have recourse against the individual owner in an individual capacity. In most instances, this will hold the business and the individual responsible for the same debt. It works much like a co-signor on a vehicle loan or credit card. One borrower may not be approved for the amount of debt wanting to be taken out, however, with a co-signor obligating his or her self to the debt, the lender feels it is not taking as big of risk in lending the money. Now, the lender has two individuals it cal hold responsible in the event of a default.

One pitfall that debtors should avoid when thinking about filing business or personal bankruptcy is to avoid transferring assets shortly before filing. That is a very quick way to have your case dismissed and you will not receive a discharge. Now, you are out time, money and effort. The best thing to do is to avoid transferring business or personal assets if you plan to file bankruptcy. The bankruptcy Trustee has the right to go in and void those transactions if they happened within certain time frames provided in the bankruptcy code.

Continue reading "Can I file Personal Bankruptcy and Include my Florida Business?" »

As a practicing Florida bankruptcy attorney, many times debtors ask if they are eligible to file bankruptcy for a 2nd or 3rd time. This answer depends on several factors. Which chapter did the debtor file before? Did the debtor receive a discharge? If the debtor did not receive a discharge, was the case dismissed for fraudulent intentions?

The new bankruptcy laws of 2005 changed many of the eligibiity requirements to file for both chapter 7 and chapter 13. If the debtor has FILED a chapter 7 within the past eight years and received a discharge in that case, the debtor cannot file a chapter 7 again until eight years lapse from the previous filing date. Note that the important date is the filing date in determining the length of time to become eligible.

The debtor could possibly file a chapter 13. Debtors only have to wait four years in between chapter 7 and 13 cases. If the debtor did not receive a discharge and as long as the case was not dismissed for fraudulent intentions, the debtor can refile the case as long as it is filed in good faith. The good faith standard is determined by the judge. In addition, the automatic stay is typically limited to 30 days after filing, therefore, the debtor would need to ask the court's permission to continue the stay until further notice. Usually, this request needs to be made as soon as the case is filed but can be made prior to the 30 days running out. What happens if the automatic stay is not extended? Creditors can continue to try and collect on the debt. If that means by lawsuits or by contacting the debtor, the creditor may do so within the confines of state law. Garnishments and liens could be implemented or reimplemented until the discharge order goes through in the bankruptcy.

That is why it is critical to have an attorney who is experienced and well versed in what they are doing to provide this service. The average layperson would not know to do this or how to do this. What is the public policy behind the limitation on the automatic stay (unless the debtor is successful at extending it)? The reason behind the rule is the system is not designed to keep putting creditors in a bind of when or when not a particular debtor files for bankruptcy. If the debtor were allowed to file case after case and there was no limitation on the automatic stay, creditors rights would be impaired and constantly being suspended. This suspension and backlog would carry over into the state courts. The 2005 amendments were highly influenced by credit card companies and other creditors. For

Continue reading "How long do I have to wait between Florida bankruptcy filings?" »

Many debtors are excluded and unable to qualify for Chapter 7 bankruptcy. The new laws of 2005 made it much more difficult for debtors to file for protection under chapter 7. With the passage of the mean's test provision in 2005, if debtor's made over the state median income, then they would be forced to pass the "mean's test" which takes into account disposable income, or in many instances the lack thereof. If the debtors' disposable income is too high, then there would be a "presumption of abuse."

This presumption can be defeated but it is rare and in most instances not worth the debtor or debtor's counsel to defend or fight the presumption. In some instances, the debtor may not have to worry with the mean's test. If the debtor is a "disabled" veteran (defined under the bankruptcy code), the debtor does not have to take the mean's test. If the primary cause of the bankruptcy is business debt, the debtor does not have to take or pass the mean's test. If the debtor's total household income is less than the state median income, then the debtor does not have to take or pass the "mean's test." Just because the debtor does not pass the mean's test in one month, does not necessarily mean he or she will not pass the following month or shortly thereafter.

The bankruptcy court and the Trustee's office look back to six months worth of pay stubs to determine if the debtor qualifies for chapter 7. If the debtor's total household income is less than the state median income, does the debtor have to file a chapter 7? Absolutely not. The debtor must have a steady income and the 13 plan must be reasonable and feasible. If the plan is neither, the case can be dismissed or ordered to convert to a chapter 7. It may or may not be in the debtor's best interests to convert to a chapter 7. It depends on the amount of debt, the nature of the debt, whether or not the debtor has a substantial amount of unpaid assets, and whether or not the debtor qualifies for a chapter 7. Before converting to a chapter 7 or a chapter 13, you should speak with an experienced bankruptcy attorney. If the case is dismissed, can I refile? As long as the case was not dismissed for fraud or misrepresentation and you have not filed on multiple occasions within a short period with a bad faith intent.

Continue reading "Do I have to take the "Mean's Test" Under Florida Bankruptcy Law?" »

The answer is absolutely no. Bankruptcy is designed for the debtor to include all creditors from all United States territories.That is why bankruptcy is governed by federal laws and jurisdictions. Although an American bankruptcy will not discharge an out of country debt, the debtor does not have to be a US citizen in order to file for bankruptcy protection in the US. In fact, debtors are required to list ALL assets and ALL liabilities on their petition and schedules. Failure to do so could result in a denial of discharge and having your case dismissed.

What happens if the bankruptcy Trustee discovers an asset that I have not listed. Again, the Trustee may revoke or deny a discharge. Usually, the Trustee will setup a 2004 Examination which is the equivalent of a deposition and ask several questions to determine whether or not the omission was intentional or by accident. If the Trustee determines that the omission was accidental, he or she should not revoke or deny your discharge because it was not properly disclosed. When the debtor(s) are examined at their initial 341 meeting of creditors, the trustee makes them swear to the answers they provide the Trustee under oath. Lying under oath is a crime known as perjury. Perjury is very serious and could cost a violator fines and jail time.

What happens if a debtor fails to list a creditor but wants to include the creditor after the filing date? That is not a problem as long as the discharge has not gone through. The debtor or the debtor's attorney may amend the schedules to reflect a new creditor. However, there is usually a court filing fee and most attorneys will charge additional fees to amend schedules unless it was the attorney's mistake to list the creditor to begin with.

If the discharge has gone through, then the case may not be reopened to add a creditor. Judges and the court system like the finality of judgments and do not like overturning or setting final judgments. Furthermore, the attorney could be sanctioned for even trying to reopen the bankruptcy estate and setting aside a discharge, even if it is temporary.

Continue reading "Can only Florida creditors be Included in a Florida Bankruptcy?" »

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.

Considering whether to file for bankruptcy is a difficult decision for most people. Bankruptcy laws and procedures are intricate and confusing. Below is some helpful basic knowledge of basic bankruptcy laws and procedures:

1. Who can file for bankruptcy?
Any natural person residing, domiciled or having property or a place of business in the United States may file a Chapter 7 bankruptcy. Businesses may also file a Chapter 7. A "means test" is used under Chapter 7: an income vs. expense test is used. If the means test indicates you, as the debtor, have enough disposable income to pay a significant portion of your unsecured debts, then you must file a Chapter 13 bankruptcy.

2. Who can file for bankruptcy in Florida? In the Middle District - Orlando Division?
If you plan to file in the Middle District - Orlando Division of Florida, than you must be an individual who resides in one of Florida's central counties. Florida's central counties include Orange County, Seminole County, Volusia County, Lake County and other surrounding counties. Asset exemption in Florida only applies to those debtors who have resided in Florida for the previous two years. If you do not meet the requisite residential requirement then the exemptions of the state where you previously lived for two years is used.

3. What if I'm married? Can I file for bankruptcy jointly with my spouse?
Yes. Married debtors are permitted to file a bankruptcy petition jointly. In fact, married couples who have acquired a significant amount of debt jointly are encouraged to file jointly.

4. What bankruptcy petition should I file?
The most common consumer bankruptcy petitions are Chapter 7 and Chapter 13. Those who are borderline insolvent will typically qualify for a Chapter 7. If you have a sufficient amount of funds or income under the means test and meet the Chapter 13 debt ceilings, you may have to file a Chapter 13. Each chapter has different procedures for eliminating or repaying your debt.

Continue reading "Basic Bankruptcy Information That Debtors Need to Know" »

In a chapter 7 bankruptcy case, the debtor may be presented with a decision about real and personal property if the property is secured by debt. If the debtor is asked to reaffirm the debt, the creditor is asking the debtor if he or she wants to keep the property then they must sign the agreement. This agreement tells the bankruptcy court that the debtor does not want the debt discharged and wants to keep paying on it after the bankruptcy. If the debtor fails to sign the agreement, then the creditor may repossess the property after the bankruptcy case even though the debtor may be current on the payments.

Many times creditors will ask a debtor to reaffirm personal property that is worth more than what property is really worth. In that instance, the debtor may be able to "redeem" the property if the good is an ordinary household good.

When a debtor redeems property, the debtor is paying not the balance the creditor wants the debtor pay but what the property is actually worth. This could save the debtors hundreds maybe even thousands of dollars. However, in order to redeem the property, the debtor must pay the lump sum owed as opposed to a payment plan (found in reaffrimation agreements). As is often the case, debtors typically do not have that kind of cash or finances available to redeem the property. Bankruptcy attorneys can and usually require a separate fee to negotiate or workout one of these options. The redemption option is not something many creditors will inform the debtors of. Why would they? They would be getting less money if the the value is less than what is owed.

Typically, if the debtor wants to redeem personal property (and assuming the creditor opposes) the debtor can have a motion filed with the court which would give notice tohe creditor of the debtor's intent. If the creditor fails to object to the motion and call it for hearing, the judge can sign off on the motion at whatever value the debtor listed the property as in the motion. An experienced bankruptcy attorney should be able to negotiate and advise as to whether reaffirming or redeeming the property is a the ideal option.

Continue reading "What is the difference between Redemption and Reaffirmation?" »

This depends on what exemptions the debtor is allowed. Florida exemptions allow a debtor to exempt $1000.00 towards one motor vehicle equity and $1000.00 in personal property. An additional $4000.00 is permitted if the debtor does not claim the homestead exemption.

In the Middle District of Florida, debtors do not have to claim the homestead exemption if they do not own the home they live in or if if they do own the home, the property has no equity. In addition, the debtor can choose not to keep the home and surrender the property and claim the additional $4000.00 property exemption.

If the vehicle has leftover equity after the exemption is applied, then that equity could be liquidated or the Trustee may choose to allow the debtor the opportunity to buy back the equity. This concept is only applicable in a Chapter 7. In a Chapter 13, the debtor does not have property liquidated because the debtor is making payments to secured and unsecureed creditors. Again, this is all contingent on whether or not the debtor is able to use the Florida exemptions. The debtor can use Florida exemptions if the debtor has lived in the state of Florida for at least the last 2 years. If the debtor has not lived here for the requisite time period, then you look to where the debtor resided the longest 180 days prior to the debtor moving to the state of Florida.

Continue reading "Can I keep my car if it is paid off in a Florida Bankruptcy?" »

Many debtors have limited income and their only source of income comes from Social Security. In the event a creditor, other than the IRS, obtains a judgment for relief against a debtor and that debtor's sole source of income is from social security, the creditor cannot or should not look to that stream of income to satify the judgment.

The stream of income is exempt from creditor attachment. Even if the income is deposited in a bank account, it does not lose its exempt status. If the creditor knowingly looks to garnish an exempt asset, the creditor may be held liable for damages, fees and costs. Also exempt from attachment in Florida is unemployment income. IRS and domestic support obligations are usually the exception to Florida exemptions.

If the debtor has a joint banking account with a spouse and the account was opened as tenants by the entireties, while the couple was married, then that account is exempt from creditor attachment if only one spouse is in debt to the creditor.

Continue reading "Can my Social Security become garnishable?" »

This is a very litigated upon answer and can be discussed for a substantial period of time. The answer varies by district but for home values, most Trustee's like to use Zillow to research a value on a piece of real property. Property tax and formal appraisals can also be used to list home values. For personal property values, the Bankruptcy Code requires the property to be valued at "replacement" or "fair markert" value. Many Trustees will employ appraisers to visit a debtor's home and conduct an inventory of all assets in the house. This is why it is important to list all assets accurately on your petition and schedules.

If the debtor(s) have appraisals on jewelry or antiques or any other asset, it may be considered when determining the real value. If the Trustee appraises something that seems excessive, the debtor (or debtor's attorney) can object to the value but then it must be shown what the true value should be.

If you have questions about bankruptcy, you should contact an experienced bankruptcy attorney.

Continue reading "How should I value my Assets When Filing for Bankruptcy?" »

Pursuant to Florida Bankruptcy Law, the debtor will have to attend a court hearing. This hearing is called the First Meeting of Creditors and is presided over the appointed bankruptcy trustee. At this meeting, the debtor is asked questions by the trustee while under oath. These questions typically concern the content of the debtor's bankruptcy papers, assets, debts, among other matters. Once the trustee if finished questioning, the creditors are permitted to ask the debtor questions.

Here is where the representation of an attorney is highly beneficial - an attorney can help you prepare for the Creditor's Meeting and will attend the meeting with, as well as provide representation. After the Creditor's Meeting, the debtor is unlikely to attend court again. However, the creditor may have to return to court in the event a creditor files a motion or an adversary action.

Continue reading "Do I have to go to court for my Florida Bankruptcy Case?" »

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?"" »

Pursuant to Section 341 of the Bankruptcy Code, a meeting is held where all the creditors - or appointed representatives - attend, the debtor is also required to attend this meeting. The purpose of this meeting is for the appointed trustee to examine the debtor while under oath regarding information that is been filed with the court (i.e., debtor's financial status and affairs and other relevant matters as to the administrations of the debtor's estate). If a creditor wishes to have a more in-depth examination of the debtor, the creditor typically requests a Rule 2004 examination from the court.

A discharge is one of the primary benefits and forms of relief under the Bankruptcy Code. A discharge is a statutory injunction against the commencement or continuations of any action to collect, recover or offset debts owed to creditors. The timing a debtor receives his/her discharge depends on the type of bankruptcy filed (i.e., Chapter 7 vs. Chapter 13). Although a discharge is essential to the "fresh start" debtors receive, a discharge can be denied or revoked by the court in certain situations. For example, a trustee is required to timely file a 2004 Examination. If not the request is not filed timely the examination is considered waived. Therefore, as a practical tactic, trustees file the request timely in order to avoid waving the examination. These requests, however, should be reasonable. Therefore, it is wise to seek representation of a Bankruptcy Attorney who can review these requests for reasonableness and make any objections to the request if proper. Contact Wood, Atter & Wolf, P.A., to speak with a Bankruptcy Attorney.

Many times debtors are hesitant or concerned about filing for bankruptcy relief when they are self employed. Recent precedent suggests that business property and shares are considered property of the estate for the individual debtord may not be protected from judgment creditors.

If a debt is personally guaranteed, the debt may be discharged against the individual but not necessarily against the business. The individual's shares and or business personal property (of single member LLCs and corporations) can be confiscated by the Trustee in a Chapter 7 case. In Chapter 13 cases, the personal property is protected, although you are in the Chapter 13 plan for a period of 3-5 years. That can bode burdensome for someone to be locked into a bankruptcy for that amount of time.

If the business is not profitable or does not own many assets, it may be best to just file the individual bankruptcy and let the business dissolve (depending on the creditors you owe for the busines) or allow the Trustee to seize the few assets that are available.

Continue reading "Are my Business Assets Protected if I file for Personal Bankruptcy in Florida?" »

When considering filing for bankruptcy, you should be aware of pre-filing mistakes that can be tempting. You should always be careful about taking your name off or transferring title to your assets before filing for bankruptcy, especially to “insiders”, which are close friends or family members.

The reason is that courts will closely scrutinize these types of transfers to determine if they are fraudulent, or made with the intent to frustrate the claims of creditors. If so, the transfer may be set aside by the court.

The basic rule is this: If the debtor transfers property, which includes money, to an insider within one year of filing for bankruptcy, the transfer may be set aside as an insider transaction. The transaction would be considered “preferential” by the bankruptcy code, meaning that it was for the benefit of the insider and to the detriment of the other creditors. If you transfer property or payback money to insiders to the detriment of your other creditors, the bankruptcy Trustee can file an action against the person who the transfer was made to in order to recover the asset(s).

The sort of behavior would be considered questionable by the court and possibly even fraudulent, and could result in the denial of your discharge. Moreover, if a debtor transfers ownership of any asset, including real estate, cars or certificates of deposit, for the purpose of frustrating the valid claims of creditors, the Trustee can file an action to “avoid the transfer”.

The bottom line is that those considering filing for bankruptcy should be very careful about transferring assets, taking their name off assets and repaying loans to friends or family members. These kinds of actions could lead to much bigger problems down the road for the debtor and for the people to whom the transfers were made. It is also important to know what property is exempt in Florida and therefore not subject to being taken by creditors.

Continue reading "Can I Take My Name Off Titles and then File a Florida Bankruptcy?" »

This answer depends on the reason, the chapter, and a variety of circumstances. Many times a debtor or debtor's attorney is looking to hold an entity liable for violating a discharge injunction. In order to do so, the bankruptcy case must be reopened and an adversary proceeding filed. (usually in the form of a complaint) Many times the debtor wants the bankruptcy case reopened in order to include a debt that was omitted from the bankruptcy schedule.

This district and most other districts do not allow the debtor to reopen the case to include creditors. Many times a debtor fails to reaffirm the debt on a vehicle and after the order of discharge goes through, the lender wants to foreclose or repossess the property. Whether or not the debtor will be allowed to reopen the estate for the sole purpose of filing the reaffirmation agreement depends on the Court and Judge assigned to the case.

Continue reading "Can I reopen my Florida Bankruptcy Case?" »

Many times debtors ask whether or not interest accrues on debt included in the bankruptcy. Interest does run on your secured debt and at the same contract rate the debtor agreed to (for the most part).

There are instances where the property can be crammed down and the Till interest applied. However, for the most part, the contract rate or terms that the debtor agreed to are the terms the debtor will have to live by unless a modification is reached with the lender. Interest on unsecured debt does not accrue. Interest on secured arrears do not accrue. Interest and penalties on tax debt do not accrue.

Therefore, when a debtor lists $100,000.00 in unsecured debt on the schedules, the most that the debtor could be required to repay the unsecured creditors is $100,000.00. When the Trustee requires a debtor to submit a 100% plan, this is what he or she is referring to. The Trustee believes the unsecured creditors should be paid at 100% over the life of the plan.

Continue reading "Does Interest accrue in my Chapter 13 Florida Bankruptcy?" »

The answer is you can. If you decide to surrender your home and or your vehicle, then you can discharge your personal obligation on those notes. However, if you want to keep the collateral, and you are in a chapter 7, you may have to sign a reaffirmation agreement or just stay current on the payments. In a chapter 13, it is a little bit different.

Although you may surrender the collateral, the lender is entitled to a deficiency claim if there is one. That claim would be lumped in and accounted for in the unsecured debt pool. The lender would be paid out whatever percentage the class is being paid out. If there is equity in the collateral, the lender would not be entitled to a deficiency claim.

These types of actions must be brought within 90 days of the confirmation order (assuming there is one). Failure to file a proof of claim for the deficiency within the 90 days (in most instances) waives the lenders right to a proof of claim.

Continue reading "Can I surrender my home and or vehicle in a Florida Bankruptcy?" »

An important question for those considering bankruptcy is how a filing will affect any existing wage garnishments. Wages can be garnished by employers for a number of reasons, including unpaid judgments, unpaid loans and domestic support obligations like child support or alimony. In a garnishment situation, a portion of the employee’s wages are held by the employer until the obligation is satisfied.

The short answer is that, yes, a bankruptcy filing under Chapter 7 or 13 will stop wage garnishments, but not under every circumstance. When one files for bankruptcy, an automatic stay goes into effect, meaning that all collection activities against the debtor must stop immediately, including wage garnishments. The garnishments will not restart and those debts will be dealt later with in the bankruptcy proceeding.

Filing for bankruptcy under Chapter 7 or Chapter 13 will help you with many kinds of debts, including unsecured debts such as credit card debt, medical bills and loans in which no collateral was given. However, under federal law there are certain types of debts which are not dischargeable in bankruptcy, meaning that they will not be erased under Chapter 7 or reorganized under Chapter 13.

These non-dischargeable debts include student loans and domestic support obligations, among others. So, if your wages are being garnished because of these types of debts, the garnishments will continue after filing for bankruptcy.

Continue reading "Can a Florida Bankruptcy Stop a Wage Garnishment?" »

One of the biggest problems in today’s economic climate is the prevalence of homes being foreclosed on, perhaps due to issues beyond the homeowner’s control. Maybe the homeowner lost his job and simply cannot afford to make the mortgage payments or has other, more pressing financial needs.

The fact is, one’s home is often his most valuable asset, both in economic and non-economic terms and when foreclosure proceedings are commenced, it can be difficult to know where to turn. Filing for bankruptcy can be one avenue for stopping foreclosure proceedings, although it is not necessarily a long-term solution.

The process works like this- after you have filed your bankruptcy case (which must be in good faith), there is an automatic stay which goes into effect immediately. This stay prevents your creditors from engaging in any further collections activities. This automatic stay will stop any foreclosure proceedings, at least temporarily. After you file for bankruptcy, the court will now legally control your debts and any property not covered by the Florida exemptions. After that, the debt that you owe on your mortgage will be dealt with in the bankruptcy proceeding.

In a Chapter 7 proceeding, a mortgage is considered a “secured” debt since the creditor owns an interest in the property and so the homeowner can either surrender the property or choose to reaffirm the secured debt and therefore keep the property as long as payments are made in a timely manner. In a Chapter 13 proceeding, the secured creditors are paid through the bankruptcy plan.

For any questions about what you can do to deal with a foreclosure proceeding or bankruptcy in general, contact the experienced attorneys at our Jacksonville, Florida bankruptcy law firm.

Continue reading "Can Bankruptcy stop a Florida Foreclosure?" »

This question depends on where the debtor lives and where the case was filed. Even if you live within a paritcular district, the venue you wish to file in may not be the one you are allowed under the bankruptcy code.

In the state of Florida, there are multiple bankruptcy courts within each district. For example, in the middle district of Florida, there are three court locations. Jacksonville, Orlando, Fort Myers and Tampa host these court locations. Florida also supports a Northern and Southern District with bankruptcy court locations in those locales. Bankruptcy law is primarily a creature of federal law. It makes sense to hold the bankuptcy proceedings in a federal forum.

Even after the bankruptcy case is closed, motions and other court papers can be filed in the same bankruptcy venue to reopen cases for all sorts of various issues. If there are issues that involve state law, the bankruptcy may hear and rule on some of these issues. Sometimes, judges may tell the parties to go resolve the issue in a state court venue.

Continue reading "Where are Bankruptcy Courts located?" »

What is a proof of claim? A proof of claim is what a creditor files to show they have an interest in the claim. Many times, the claim filed is wrong or mistaken in balance. It is important (more so in a Chapter 13 bankruptcy) to check the proof of claims that are filed with what you believe you owe.

Now, creditors are entitled to tack on reasonable late fees, attorneys fees and costs to the overall balance. However, the claim must be reasonable and if it is extraordinary the debtor can object to the proof of claim. There have been instances where proof of claims are filed and the debtor does not owe on that particular debt anymore.

It is important to get these proof of claims correct especially when dealing with secured claims. if you feel it is incorrect, you or your attorney may be able to object. Debtors can also fight and challenge the validity of mortgages and notes, just as if they were dealing with a foreclosure defense case.

Continue reading "Can I question a Proof of Claim that is Filed in my Florida Bankruptcy Case?" »

Many times cases can be dismissed for a variety of reasons. For example, in a Chapter 13, the debtor's failure to make the plan payments can cause a case to be dismissed. Once the judge signs the order and the case is dismissed, the automatic stay is lifted and the debtor loses the bankruptcy protection.

For example, once the case is dismissed, the debtor could have a vehicle repossessed if they were in default on the loan before filing for bankruptcy. A lender of real property could begin with or continue foreclosure proceedings against the debtor.

However, the debtor can file a motion for rehearing to reinstate the case. You have to show good cause why the case should be reinstated. Because many of the bankruptcy courts have gone to e-filing, there have been problems in the past with software glitches. This has, in the past, been a valid reason to reinstate the case

Continue reading "If my Florida Bankruptcy Case is Dismissed, can it be Reinstated?" »

This can be a more complicated matter than you would think. Currently, chapter 7 debtors can discharge whatever personal obligation they owe towards homeowner and condo assessments before they file. Once the case is filed, any new assessments that are incurred while title is still in the debtor's name, the debtor is personally liable for.

Only when title is transferred out of the debtor's name, will the debtor be released from these financial obligations. Even if the debt is discharged as to the debtor personally, the association can still put a lien against the property and foreclose on the lien unless it is satisfied.

In a chapter 13 bankruptcy, the debtor can roll pre-petition arrears into the chapter 13 plan. However, future assessments (even during the pending chapter 13 case) are the debtor's responsibility. The idea is the cost should have been calculated in the mean's test as an expense bringing dowon the debtor's disposable income.

Continue reading "Am I responsible for my Condo and HOA fees if I file a Florida Bankruptcy?" »

Many times clients have unexpected deaths in the family. Many times this can cause a problem if the debtor is to receive an inheritance. If the debtor is already in bankruptcy and the case is pending, any inherited property or any property that is expected to be inherited could be subject to the bankruptcy Trustees control.

If the debtor received an inheritance within the last six months, that too could be subject to the Trustee's control. What if you already spent the money? Well, the Trustee could ask where it all went and look to that party or entity for recovery.

If that party no longer has the money or property, it can be sued and be indebted to the bankruptcy court. Typically, the Trustee can only go back as far as six months on recovering any type of inheritance, but it could be longer. It is imperative to disclose this in your bankruptcy or else you could lose your discharge and have your case dismissed. Of course, the property is only subject to turnover in a chapter 7. Property is not liquidated in chapter 13.

Continue reading "My Florida Bankruptcy and My Inheritance" »

A Reaffirmation Agreement is something that a lender will typically send to a debtor who has a secured debt. By reaffirming the debt, the debtor is agreeing to be personally responsible for the debt after the bankruptcy. Any subsequent bankruptcy would never be able to save the debtor should the debtor default on the loan. Therefore, it is imperative to really analyze the situation and whether or not it is in yor best interests to reaffirm.

What happens if you do not reaffirm the debt? Well, the balance on your credit report should be reported as zero to that particular lender. However, if you wish to keep that secured property, you better keep making the payments on it in order to avoid foreclosure of the property.

However, because you did not reaffirm, the debtor cannot be held personally responsible debt. If a creditor tries to collect on this debt, they may be violating the discharge injunction. This type of violatio is taken very seriously by the bankruptcy courts and the debtor could be entitled to monetary damages as a result.

Continue reading "What if I do not Reaffirm a Secured Debt in My Florida Bankruptcy?" »

This is a very common question. If you are being represented by an attorney, the attorney should do due diligence in your case to make sure everything is covered. However, sometimes debtors lie to their attorneys. If something is omitted from a bankruptcy schedule it can be detrimental to your case and you could face criminal charges for fraud and or perjury.

Many times debtors fail to mention ALL real and personal property owned or that tey may have an interest in. All assets and liabilities must be disclosed to the Trustee. Understandably, people make good faith mistakes all the time. The Trustees, for the most part can make that determination and sense when fraud or deceit is present in a case. The Trustee does not expect perfect schedules and peititions in every case and many times the schedules can be amended to correct the mistakes. Trustees perform title searches and run background checks so its not like debtors can get away with not disclosing things.

Continue reading "What if I fail to List Something on My Florida Bankruptcy Schedules?" »

Many times the costs of filing bankruptcy can become unrealistic, especially if a debtor is looking for private counsel. Most communities have area legal aid that charge minimum, if any, costs. However, normally, the filing fee for filing chapter 7 is $299.00. The filing for chapter 13 is $274.00. Legal fees can becom expensive in a bankruptcy, depending on hocomplex the case is.

Our offic does not like to quote over the phone without a formal consultation because it is not fair to the client or the attorney. Only after a full blown consultation will the attorney know the complexity of the case and a fair fee for the services that will be needed. We do not like to under or over quote the fee. Each case is unique and different. In addition to the legal fees and costs associated with bankruptcy, the Code now requires Debtors to take financial education courses.

These courses can run anywhere between $15-$50. The debtors are required to take a pre-filing class and also a pre-discharge class. These classes are available on the Internet, by phone, and even in class room setting. They are pretty convenient and require about an hour of time.

Continue reading "How much does a Personal Florida Bankruptcy Cost? " »

In order to qualify for the additional $4000 iper debtor in wild card exemptions to protect personal property, you cannot also claim the homestead exemption. Essentially, you cannot claim both in a personal bankruptcy. If you are surrendering the homestead, you obviously do not have to claim it and you will be allowed the wildcard exemptions.

If you are not able to claim wildcard exemptions, then a debtor is limited to $1000 in motor vehicle equity and $1000 in personal property. Recently, the middle district of Florida bankruptcy court ruled that if a debtor is underwater on the homestead (owe more than its worth), then the homestead exemption does not have to be claimed even if the debtor wants to keep the property. This is a great decision for debtors!

They get to keep their home and use the wildcard exemptions. However, if a debtor has any equity in the homestead and wants to retain that property, the homestead exemption must be claimed or else the debtor loses the property. The additional $4000 can only be used for personal property, not real property (such as real estate, timeshares, burial plots, etc).

Continue reading "How do I get the Wildcard Personal Property Exemption? " »

. This is not uncommon. The Middle District of Florida sets confirmation hearings for chapter 13 plans. They are usually set 30-45 days from the meeting of creditors date. Often times, creditors and the Chapter 13 Trustee in the case will file objections and ask for amendments before a plan can be confirmed. Once a plan is confirmed, creditors (for the most part) are bound by the terms of the plan (including a payments and terms of payments).

At the confirmation hearing, if the plan is not ready to be confirmed, the case will most likely be continued unless there are other issues which merit a dismissal. It is not unusual for a case to be continued multiple times because these plans must be exact to the penny in order to be confirmed. What should the debtor do if this happens? Nothing, if being represented by an attorney.

The attorney should be receiving all correspondence from the court and should make the necessary adjustments based on the objections. The debtor should just keep making the payments according to the plan until he or she receives notification otherwise.

Continue reading "What happens if my Chapter 13 plan is Objected Too?" »

Many times a debtor looking to file bankruptcy will have recently moved to another state or jurisdiction. For example, if a Floridian moved from Jacksonville to Pensacola, he or she may have to file the bankruptcy in the Pensacola, Northern District Federal Courthouse. Jacksonville is in the Middle District along with Tampa and Orlando.

The Middle District of Florida is one the highest volume areas in the country for filing bankruptcies. If a debtor has moved to the state of Florida and it has been less than 90 days since that relocation, the debtor cannot file in Florida.

In addition, the personal property exemptions that are enjoyed by each debtor, could be different if the debtor has not lived in the state of Florida for the past two years. Therefore, if you want to file bankruptcy in Florida, you have to have lived here for at least the past 90 days.

Continue reading "Can I file my Bankruptcy in Florida? " »

When valuing your vehicle, the Trustee will want to know the condition of the vehicle and what its "replacement value" would be in the market. The Trustee looks to NADA and Kelly Blue Book, among other, to help value debtors' vehicles.

For ordinary assets such as applicances and furniture, the Trustee will look to "fair market" value. Normally, the Trustee will not do a personal, walk through, inventory of a debtor's home. Many times, the Trustee may ask debtors to send in pictures or additional information based on the petition and schedules filed in the case. When valuing a debtor's primary residence or any other type of real property, the Trustee will use zillow.com to determine the market value of the home.

The market value of the home is important as it pertains to whether or not there is equitty which in effect, determines the personal property exemptions allowed under the case.

Continue reading "How are my Assets Valued by the Trustee in my Florida Bankruptcy?" »

Many times debtors are concerned with whether or not they are required to go to court. For the most part, debtors only have to attend court one time. Once the case is filed, there is a 341 hearing, also known as the meeting of creditors. Do the creditors actually show up? It is very rare for a creditor to show, but even if one does, it really has no bearing on the case.

The 341 meeting is not in front of a judge, but is in front of a Trustee. The Trustee is the representative of your creditors and the administrator for the court. At the 341 meeting, the creditor will want to verify contact information and ask a few questions based on the petition and schedules that were filed in the case. After this hearing you should not have to go back to court for anything. There are circumstances where the debtor may have to go back, but for the most part, that is not the case.

Debtors are not even required to attend Chapter 13 confirmation hearings unless they are not being represented by an attorney.

Continue reading "Do I have to go to Court for Bankruptcy?" »

Many times debtors wish to keep a credit card or another form of debt outside of a bankruptcy. In both consumer chapters, all debt and assets must be disclosed and listed in the debtors petition and schedules. In fact the Trustee will ask each debtor under oath and penalty of perjury if everything is listed.

In the eyes of the Trustee, it is not fair that one particular creditor in the same class (unsecured) is paid more (as a %) than another creditor in the same class. For example, if debtor wants to list all credit cards except for credit card A and B, its not fair that they get paid more than the credit cards listed in the petition and schedules. Credit cards are treated as unsecured debts and they are basically last in the food chain when it comes to getting any type of distribution.

However, in the middle district of Florida, first priority mortgages on primary residences may be left outside of the Chapter 13 plan if they are current. This will help lower the overall Chapter 13 plan payment because the Trustee gets a 10% fee for all debt included in the plan.

Continue reading "Can I leave out Certain debts from Bankruptcy Trustee" »

This depends on several factors. How much debt do you have? What kind of debt is it? Do you work? How much income are you bringing in? What is the source of your income? Are you behind on payments? Are you facing lawsuits and/or garnishments? Have you ever filed bankruptcy? How long have you been in Florida? Are you court ordered to pay some of the debt?

These are just a few of the questions and issues you can expect to be addressed during an initial consultation with a Florida bankruptcy attorney. Once it is determined that you should file for bankruptcy releif, he next step is determining when and what chapter to file. Timing is important in filing for bankruptcy.

There may be an immediate need to file or you may be able to wait a few months before it being the right time to file. The point is you should speak with an experienced bankruptcy attorney before deciding on whether or not to file for bankruptcy relief.

Continue reading "Should I file a Florida Bankruptcy?" »

Many times debtors are not eligible to file for a particular bankruptcy chapter either because they make too much money for a 7 or they have had a recent bankruptcy discharge. The idea behind the BAPCA amendment in 2005 is that it was designed to prevent abuse of the bankruptcy system.

Many credit card companies and banks were behind the BAPCA legislation. If a debtor does not qualify for 7 or 13, then he or she may have to turn to chapter a 11 or tough it out until eligible for a chapter 7 or 13 again. If a debtor did not receive a discharge in bankruptcy, then the time requirements for filing again or not applicable unless the case was dismissed for fraud or with prejudice for any reason.

Chapter 11 is usually reserved for high net worth individuals and businesses looking to restructure. Chapter 11s are expensive and its not unusual for a debtor to run a ten thousand dollar bill in attorneys fees.

Continue reading "What if I do not qualify for a chapter 7 or chapter 13 Florida Bankruptcy?" »

A personal injury cause of action or a potential cause of action is considered property of the debtor's bankruptcy estate. It does not matter whether or not a lawsuit has been filed before the bankruptcy was filed. If the accident occurred pre-petition, then for bankruptcy purposes, that is a potential asset that must be disclosed in the debtor's petition and schedules.

If the accident occurred after the bankruptcy was filed, and the debtor filed a chapter 7 bankruptcy, this is not a pre-petition action and any proeeds collected are not part of the bankruptcy estate.

However, if the debtor is filing a chapter 13 bankruptcy, any wages, income or proceeds received after the bankruptcy is filed is considered property of the esate for the length of the bankruptcy plan. There can be many timing issues when dealing with a bankrutpcy and a civil action at the same time. You should consult with an attorney before committing yourself to either one.

Continue reading "What if I have a Personal Injury Cause of Action Before I file my Florida Bankruptcy?" »

The short answer is no. Student loans are not dischargeable in a bankruptcy. There are rare instances where it can be done, but the debtor must show an extreme hardship as to why they should be discharged or forgiven.

For example, the few instances where someone is able to have student loans discharged is because the debtor is and forever will be permanently disabled and unable to work. Another example is if the debtor has to financially support minor children but does not have the physical or mental capacity to adequately provide the support for these children. As you can tell, these are extreme circumstances.

Therefore, it is better to know going in that you most likely will not be able to have your student loans discharged. It also makes a difference whether or not the loans are federally or privately backed. You are less likely to have a federally backed student loan debt discharged than a private loan.

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

It is an unsettled and highly debated area of bankruptcy law. Should a debtor who is willing to surrender a home or property in a bankruptcy be liable for post filing homeowner association assessments? As of right now, the answer is yes.

Chapter 7 bankruptcy discharges unsecured debts that were incurred by the Debtor pre-filing. Any debts that are incurred post filing, the debtor is responsible for. Assessments incurred post filing are among these debts. So, even though the debtor intends on surrendering the home, until the title is out of the debtor(s) name, they will be billed for the assessments.

There may be ways to have the Trustee sell the home off quicker, but that means that any occupants muct vacate the home faster also. The sooner the deed and title is out of the debtor's name, the less they will be responsible for in HOA or condo fees.

Continue reading "Florida Bankruptcy and My HOA " »

The answer depends. Most debtors who have to convert, convert from a Chapter 13 to a Chapter 7. What is the primary reason for this? It usually can be attributed to Debtors not being able to make their payments or fall behind on their plan payments and cannot catch up.

Sometimes, it is a result of a debtor losing a source of income. In any event, a case can be converted from a chapter 13 to a chapter 7. However, any secured assets may be lost or foreclosed upon if they are not brought current by the time conversion is complete. It is not unusual for a case to be converted from a chapter 13 to a chapter 11.

This usually needs to be done if the debtor has debts that exceed the limits for chapter 13 and the debtor does not qualify under chapter 7. It is better to have a case converted from one chapter to the next as opposed to having the original case dimissed. For one, the conversion filing fee is much less than a filing fee for filing an entirely new case. Second, there automatic stay limitations if a debtor has had a recent case dismissed

Continue reading "Can I convert my Florida bankruptcy from one chapter to another? " »

Many times, homeowners are looking for loan modifications or principal reductions through a bankruptcy. In a chapter 7, the debtor cannot strip liens off real property. Unfortunately, banks are not forced to offer loan modifications in bankruptcy, period. In a chapter 13, second liens are subject to strip offs and "cram downs" may be allowed for investment property, but even then, loan modifications are not required.

The National Association of Consumer Bankruptcy Attorneys is in the process of proposing new legislation that would force banks into a principal reduction compared to the market value of the property. Once the debtor completes the bankruptcy, the new value of the loan should equate with the real value of the property.

The debtor must file a chapter 13 bankruptcy to restructure the home loan. If you have questions or concerns about bankruptcy or modifications, you should contact an experienced bankruptcy attorney.

Continue reading "Is Principal Reduction Available in a Florida Bankruptcy? " »

Suspending driver licenses is a practice that is becoming more and more common among insurance carriers when a civil judgment is obtained against a defendant who did not have valid automobile insurance at the time of the accident.

In order to prevent this, the defendant can show the state of Florida proof that you did in fact have valid insurance at the time of the accident and your license should be reinstated. If that does not work, you can get consent from the (plaintiff or in most cases plaintiff's attorneys) to put down a deposit and setup a monthly plan to reinstate your license. As long as you keep making the payments and satisfy the debt, your license should be valid.

Continue reading "My License was Suspended because of a Civil Judgment: Help!" »

This is a question I get many times from my clients. The answer depends on each client's uniques set of circumstances. If all a client is facing is a foreclosure suit and no other debts, we need to find out what type of noneconomic values the client has on keeping the home.

Most homeowners are underwater, and at the end of the day, if the loan is reinstated through a bankruptcy, is the client satisifed on paying for an investment that may never have equity again? If a client has no real attachment to the home, foreclosure defense may alllow someone to stay in the home longer without making a mortgage payment than ad they not tried to fight it.

The HAMP (Obama plan) has not really worked well and borrowers are being left in limbo on whether or not they will be approved for loan modification. If the debtor has other debts that need to be controlled through a bankruptcy setting, than maybe bankruptcy is something the debtor should consider.

Continue reading "Should I consider bankruptcy or foreclosure defense?" »

I get this question all the time. Clients do not want someone coming out and going through their stuff. Whether a trustee will or not, really depends. In most cases, no. However, that is not to say that they will not. If a Trustee questions the amount listed as a personal asset, the Trustee may decide to visit the personal residence just so that he or she can personally see the asset.

Many times the trustee may ask the debtor to photograph the asset and send it in. Remember, part of the Trustee's job is to go through and liquidate nonexempt assets (in a Chapter 7) if they are any available.

The Trustee pays back creditors with the proceeds from the sale and are usually entitled to a percentage of whatever they recover. If you do not disclose an asset and the Trustee somehow finds out about, the debtor could the discharge and could face federal charges for perjury and defrauding the court.

Continue reading "Does a Bankruptcy Trustee come out to My House? " »

Some of my clients have asked me about workman's compensation benefits and whether or not these benefits must be turned over to the Trustee in a bankruptcy. Trustees may try and ask the bankruptcy court to make the debtor turn over these proceeds but Florida statute 440.22 provides that these benefits should be exempt from all creditors (except for alimony or child support).

What if the debtor settled a workman's compensation claim? The bankruptcy court for the Middle District of Florida has issued case law opinions declaring that even these types of settlements are protected. What if, after the settlement, the debtor deposits those proceeds into a bank or investment account? Do they lose their exempt status?

Again, the middle district bankruptcy court says these funds do not lose their exempt status and are protected from creditors (except for domestic support obligations).

Continue reading "Worker's Compensation Benefits and my Florida Bankruptcy " »

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

Many times creditors make mistakes and misreport items on credit reports. If a debt was discharged in a banIkruptcy, the balance on the credit report should be zero. If the creditor reports anything but zero, the former debtor should try notifying the creditor of the mistake.

The former debtor should document everytime he or she tried contacting the creditor including who answered the phone call and what was said. If the creditor continues to misreport items, the debtor should notify an attorney and seek legal advice as to whether or not there is merit to a claim.

The attorney could reopen the bankruptcy case and file an adversary proceeding alleging the discharge injunction/automatic stay has been violated. There may be an opportunity for the debtor to recover monetary damages.

Continue reading "What if a discharged debt appears on my Credit Report after my Florida Bankruptcy?" »

Many times, parties to a contract will try and insert termination clauses in the event one party files for bankruptcy. The party agreeing to the clause believes he or she is waiving their right to file for bankruptcy if the need arises or else they are in breach.

The Bankruptcy Code specifically addresses this issue and, for the most part, holds these types of clauses unenforceable. The clause will state something to the effect of..."should one party file for bankruptcy....this acts as a default under the agreement and that party is in breach." Again, these types of agreements are not enforceable. Once a bankruptcy petition is filed, that property under the contract is considered "property of the debtor's estate." Prior to 1988, these types of clauses were permitted and enforced.

Lawyers and companies have not taken out these clauses out of their standardized contracts for various reasons including laziness and intimidation factors. If you have questions about these types of contracts, you should contact an experienced attorney.

Continue reading "Are termination clauses for filing bankruptcy enforceable? " »

Yes. Whether a debtor files for chapter 7 or 13 bankruptcy relief, the debtor must disclose all assets that are in his or her name. That does not mean go out and take your name off assets retitle personal property. That is a very quick way to have your bankrptcy case dismissed and you could subject yourself to federal charges for trying to defraud the court.

Listing all assets includes all bank accounts where you are listed as an accountholder, all vehicles in your name, all retirement accounts, all stock plans, etc. It even includes your clothes and household appliances. Many clients always ask me, "Why do I have to list all of my assets if I am filing for Chapter 13 relief?" The answer is because the federal bankruptcy code and the courts say you do.

Also, in a chapter 13, a debtor's unsecured creditors must recevive a distribution over the life of the plan of what they would have received had the case been filed under chapter 7. That is why the debtor must still apply exemptions in the case.

Continue reading "Do I have to disclose all of my assets in a Florida bankruptcy? " »

What is a deficiency judgment? A deficiency judgment is a judgmet obtained by a creditor typically for a car repossession or a foreclosed upon home. The deficiency is the difference between what original borrower owed on the property and what it was ultimately sold for after reposession or foreclosure.

Typically in the past, lenders have not been real aggressive in pursuing these types of claims. However, the frequency and volume of filings is picking up nationwide. These types of judgments can be large sums of money.

If wages are garnished to satisfy these types of debts it could take a lifetime to pay these creditors back. Bankruptcy can stop garnishments on these types of action and judgments.

Continue reading "Banks May Start Pursuing Deficiency Judgments in Florida Foreclosures" »

Many times our clients feel ashamed and embarrassed about having to file for bankruptcy relief. However, in most cases it is absolutely necessary for that debtor to file in order to come out of harassment and overwhelming financial stress. Noone should have to live under those types of circumstances.

Bankruptcy was designed to give individuals and businesses fresh starts to their financial well being. Most collection agencies and credit card companies are only concerned about one thing: getting paid. And they will go to extremes in order to get what is owed. Nevermind, that they impose 25% interest rates or that they have no desire to negotiate and work out payment plans when you have had a drop in income.

Although many clients are eligible for chapter 7 relief, they sometimes choose to go with a chapter 13 so that they can sleep at night knowing that their creditors are getting paid at least something back. Attorneys should always do what is in the best interests of their clients under the confines of the law ethics rules. If this includes allowing a clients to choose a legal route that helps them sleep at night, then so be it.

Continue reading "Feel no Shame for Filing for Bankruptcy Relief" »

Many times debtors are in bankruptcy and experience an unexpected death. Following the death, the debtor may become concerned about any inheritance or distributions made to the debtor on behalf of the estate.

The Trustee (in a Chapter 7) may consider inheritance distributions six months before and six months after the filing date. Therefore, if the debtor can hold off on receiving distributions for six months after the file date, then he or she should do so. Furthermore, Florida has certain exemptions that are available to protect other distributions such as life insurance proceeds. Whether or not 401(k) proceeds should or should not be protected depends on if the 401(k) rolled into a an inherited IRA.

It is still up in the air whether or not Florida law will protect such an IRA but it is has a better chance of being protected than if the proceeds went straight to the beneficiary. You should contact an attorney should you have any questions or concerns.

Continue reading "My Florida Bankruptcy and my Unexpected Inheritance" »

In a chapter 7 bankruptcy, the debtor(s) may choose to surrender, reaffirm, or redeem secured debt. If they choose to surrender the personal or real property, they certainly can, and they are forever discharged of that personal debt obligation.

vIf the debtor chooses to keep the property and continue making payments, then the debtor will have to sign a reaffirmation agreement and show proof of the agreement to the bankruptcy court. The debtor does have 60 days to rescind the agrrement if they change their mind.

One final option that is available for personal property only, is to redeem the property. Redemption means if the debtor is able to pay the full value of the property (at replacement value) in one lump sum, then he or she may do so and own the property free and clear of any liens.

Therefore, (hypothetically speaking) if a debtor owes $10,000 on a vehicle and the vehicle is only worth $3,000, then if the the debtor was able to pay a $3000 lump sum value up front to the lender, he or she could and they would own the vehicle outright.

This is very rare because most people who file for bankruptcy are struggling financially and do not have the means available to make such a payment.

Continue reading "What does redemption mean? " »

The answer really depends. Who is the creditor trying to garnish your social security? Is it the IRS or is it a credit card company? Garnishment can occur even though the law may prohibit such a garnishment. Credit card companies are sneaky and many times overambitious.

Florida law prohibits credit card companies from garnishing social security, including once the income flows to a bank account. Therefore, bank levies are prohibited as well where social security income is the only source of income in that account. It gets tricky if it is combined with other sources of income.

Moving forward, the Internal Revenue Service (IRS) may try and garnish a debtor's social security and they are, for the most part, authorized by the federal code to do this. Student loan companies that are backed by the Federal Government may try and garnish social security. If you feel income is being garnished wrongfully, you should contact an experienced attorney.

Continue reading "Can my Social Security be Garnished? " »

Many times debtors complete the bankruptcy process and are relieved to start fresh from a financial standpoint. Unfortunately, debtors may continue receiving incoming calls from creditors whose balances against the debtor should have been discharged. It begs the question, does the automatic stay continue after the bankruptcy discharge?

The answer is most likely. If a creditor was listed in the bankruptcy schedules, had notice of the bankruptcy, and the debt was discharged, that creditor cannot contact the debtor in trying to collect past debt even after the discharge goes through. In some cases, an unsecured creditor may accidentally be ommitted from the schedules.

If the case was a chapter 7 no asset case, that debt should also be discharged even though it was excluded from the schedules. The reason being has to do with the fact that since no unsecured creditors got zero distribution, the ommitted creditor would have received nothing anyway. However, if there was a distribution to unsecured creditors, the debtor could not discharge the ommitted unsecured creditor balance.

Therefore, if you feel a creditor is violating the automatic stay after your bankruptcy, you should contact an attorney to assist you. There may be monetary damages available.

Continue reading "Does the Automatic Stay Follow my Bankruptcy Discharge? " »

One of the new requirements from 2005 mandates that debtors must take two credit counseling classes in order to successfully file and complete their bankruptcy. The debtor must take a pre-filing course and a post-filing course.

Both can be taken over the Internet or over the phone. If it is a married joint filing, then they can take one course together. There is no need for both spouses to take two separate courses. It is cheaper to take it over the internet. The course will send you a certificate of completion.

You just need to make sure your attorney or the court receives the prefiling certificate (before or just after you file) and the post-filing certificate (just before your discharge)

Continue reading "Do I have to take Credit Counseling classes in Order to File for Bankruptcy? " »

Businesses have two options in filing for bankruptcy relief. There are separate chapters for farmers and municipalities. Businesses can either file for Chapter 7 or Chapter 11 bankruptcy relief. Chapter 13 (Reorganization) is not available for businesses, trusts, or any other entity. In a Chapter 7 (Liquidation), the bankruptcy Trustee looks to capture and liquidate assets in the name of the business that are not protected by exemptions.

At the close of the bankruptcy, the business will also be dissolved. Business reorganization is available in a Chapter 11 bankruptcy. That is where current management is permitted to continue running the business unless the bankruptcy Trustee feels current management is inadequate for the job. In a Chapter 11, the business may be able to opt out of contracts without civil liability.

Continue reading "My Business Needs to File Bankruptcy: What Chapter should it File?" »

You may be collection proof for now. Collection proof simply means that your creditors have nothing to garnish or lien against you. However, if you ever intend on getting another job or having assets in your name, your past and future creditors may try and garnish wages or place liens against assets.

Therefore, it may be in your best interest to file when you are unemployed and have no assets. This should also help you pass the mean's test in a chapter 7. However, because you are unemployed or are on a low fixed income, it will probably be difficult to come up with attorney's fees and costs for a bankruptcy. Maybe you have friends or family members able to financially help you through this time with bankruptcy fees and costs.

If you do borrow money from friends or family do not pay them back on loans shortly before filing for bankruptcy. If you do this the trustee in your bankruptcy may be able to recapture that money from the person you paid it to. Let them know you will pay them back after the bankruptcy is completed.

Continue reading "I have no Job and no Assets: Should I file a Florida bankruptcy now? " »

Since 2005, the bankruptcy laws have been much tougher on debtors. The infamous mean's test was introduced and debtors and bankruptcy attorneys hae to keep this in mind when looking to what chapter debtors qualify for.

A debtor must take the mean's test if the debtors entire household income is above the state median. The mean's test looks at the debtor's disposable income. Disposable income just means gross income less allowable expenses. we use the word allowable because expense limits or caps are set by the IRS guidelines.

Therefore, hypothetically, if your family of four spends $1,200.00 a month on groceries and the IRS guideline for a household of four is only $800.00, the debtor only gets to use $800 in expenses. Theoretically, the additional $400.00 should be used to pay back creditors.

Continue reading "Deducting Certain Expenses for Mean's Test Purposes (Part I)" »

In the most recent post, we discussed IRS guidelines for mean's test purposes. This post deals with secured debt that debtors wish to surrender but want to claim as an expense under the mean's test. Can debtors do this?

The answer is probably yes. The mean's test looks to actual expenses incurred before the debtor files the petition. Therefore, if a debtor is wanting to surrender either real or personal property, if the IRS provides for that expense in its guidelines, then the debtor may deduct that expense even though he or she is surrendering the property. This should really help the debtor lower overall his or her disposable income.

The lower the debtor's disposable income, the better chance he or she has at passing the mean's test.

Continue reading "Deducting Certain Expenses for Mean's Test Purposes (Part II)" »

The answer is unfortunately no. Public policy plays a big role in prohibiting a bankruptcy from discharging criminal fines and costs. If a debtor, convicted of a crime or crimes, is permitted to discharge those obligations, that would certainly inhibit the deterrence factor.

The system wasnt to deter those convicted of crimes from doing similar acts in the future. Therefore, there are penalties imposed on these people. These penalties could include paying costs and fines, losing civil rights, etc.

If a penalty is lifted because someone files for bankruptcy, this weakens the deterrence factor. So for example, toll booth charges, speeding tickets, and DUI fines are not dischargeable.

Continue reading "Can I discharge criminal restitution fines and court costs in my Florida bankruptcy?" »

This really depends on the district your case is filed in and that Trustee's preference. If you want to keep credit cards that you owe balances on outside of the bankruptcy, you would have to reaffirm the debt. It is almost never in a debtor's best interest to reaffirm unsecured debts.

Reaffirm just means the debtor agrees to become personally obligated after the bankruptcy for the debt. This is also assuming the Trustee in your district allows or permits the debtor to keep the accounts open. Most of the time, Trustees prefer you to include all unsecured debt in the bankruptcy. In their eyes, its not fair that one creditor gets paid more than other unsecured creditors.

Continue reading "Can I keep certain credit cards outside of my Florida Bankruptcy?" »

Many times clients want to know where they can pull their credit report. We have our clients pull credit reports from three agencies: Equifax, Transunion, and Experian. We have them pull all three in case one report misses something. You can pull them over the phone or by the internet

If you have not pulled a report within the last year, each report should be issued at no charge. If you have pulled within the year, it may cost around $15-20 per report. We do advise that you be careful of what agencies you pull your report from.

In many instances, other companies will ask for credit card information and charge you for pulling credit information. In addition, they may not be as reliable as the three reports mentioned above.

Continue reading "Where can I get my credit reports? " »

In a recent post, we mentioned the fall of powerhouse attorney foreclosure firm, David J. Stern. As a result, many foreclosure cases are in limbo and lenders/servicers are struggling to figure out where to go next.

For one Jacksonville investment property, the entire loan was written off and the man who owns the property owns the property free and clear of any liens now. David Stern was handling the foreclosure case against the owner of the Jacksonville property.

The loan was for around $72,000. The owner made one payment and then stopped paying because the value of the property dropped dramatically. However, once Stern dropped the case, Wells Fargo didn't feel it was worth pursuing because the value of the property had dropped drastically.

Continue reading "Man Benefits from Foreclosure Error on Jacksonville Property" »

Many personal injury judgments are being recorded and if the defendant cannot pay, plaintiff's are having defendants' licenses suspended. If the defendant cannot pay and is able to discharge this debt through a bankruptcy, then he or she should be able to show the discharge paperwork to a local DMV and get his or her license reinstated.

However, if the defendant was charged with driving under the influence of alcohol or committed some type of intentional act, the personal injury debt would not be discharged. The only way a defendant would be able to have their license reinstated, in this instance, would be to pay off the judgment, any restitution, and any court fines and/or costs. Criminal fines and court costs are not dischargeable in a bankruptcy.

Continue reading "Personal Injury Judgments, License Suspensions, and Bankruptcy" »

In recent posts, we mentioned how there are thousands of Florida foreclosure cases sitting in limbo especialy with the closing of powerhouse foreclosure firms.

Many of these cases have had zero activity for quite some time and, therefore, are subject to dismissal for "failure to prosecute." This is great news for many homeowners that are facing foreclosure suits. It should buy time to stay in their homes a little longer until the bank decides to refile a complaint, if they choose to do so.

A home is not like a vehicle in that a vehicle can be repossessed anytime there is a default by the borrower. No lawsuit is needed. However, real property cannot be "repossessed" until a competent court permits the foreclosure to occur.

Florida judges will most certainly begin dismissing cases to help free up their dockets and relieve the limited resources that are available to handle these massive caseloads.

To learn more about this article, please visit, Florida Courts May Begin Dismissing Foreclosure.

Continue reading "Are Florida Courts Dismissing Foreclosure Suits? " »

Many times debtors cannot continue to make the chapter 13 plan payments as set forth and approved by the Chapter 13 Trustee.

They foresee having economic troubles with making the payments but still need economic relief. Debtors can convert their 13 case to a chapter 7. This also assumes the debtor's income meets the income requirements and the mean's test is satisfied.

However, keep in mind that if you are not current on secured debt, there is a strong possibility the creditor will ask relief from the automatic stay and ask the bankruptcy court to pursue state court remedies.

For example, if you are behind on your mortgage and you convert your caseto a chapter 7, you may subject the property to foreclosure.

Continue reading "Can I convert from a Chapter 13 to a Chapter 7 after I have filed my petition? " »

Often times debtors file bankruptcy and have received or are expecting to receive tax refunds from the previous tax return. In chapter 7 and chapter 13 cases, these refunds are considered property of the estate.

It may be forfeited to the bankruptcy Trustee unless there are exemptions available to protect it. If a debtor is in chapter 13, they are more than likely going to have to surrender the refund every year they are in the bankruptcy unless you can show a hardhsip for why you need it. The refund is considered additional income and does not satisfy that month's plan payment requirement.

If you have already spent the refund, the debtor may become indebted to the bankruptcy court for the amount of the refund and may have to pay back the court over a period of time.

Continue reading "Tax Refunds and Bankruptcy" »

In most cases, yes. Bankruptcy should be a last resort kind of option. However, when clients schedule a consult with our office, it is usually the only or best option at that particular moment.

Bankruptcy will certainly affect a debtor's credit. However, there is a good chance your credit is already shot by the time you file for bankruptcy. What bankruptcy does provide is an ability to approximate beginning and end dates in terms of how long your credit will be dampered. If a debtor does not file bankruptcy and continues to be delinquent on bills and other debt, the debtor runs the risk of garnishments, judgments, and liens in addition to a poor credit score.

Alternatives to bankruptcy are do nothing and become delinquent on bills, try and work out agreements with creditors yourself (which rarely works) or hire debt consolidation companies. Most debt consolidation companies are being heavily monitored by the Federal Trade Commission and every state attorney general for taking large fees upfront and never negotiating on client's behalves.
Needless to say, bankruptcy is sometimes the only option available.

To read the corresponding article, please visit Bankruptcy, The Last Resort.

Continue reading "Should Bankruptcy be a Last Resort Option? " »

The Middle District of Florida (which consists of the Jacksonville, Orlando, and Tampa areas)
saw a decrease in bankruptcy filings for the first quarter of 2011. 2010 was a record breaking year for number of filings.

Reports show that filings are down about 16% thus far for the three major chapters. However, the decrease may be attributed to the foreclosure freezes because of the robo-signing debacle last fall. People are able to stay in their homes longer because of the freeze but once foreclosure filings pick up so too will bankruptcy filings.

There were 2,415 bankruptcy filings in the Jacksonville Division from January to March. There were 2,799 filings at the same time last year in the Jacksonville Division.

To learn more about this article, please visit Bankruptcies declining after record 2010.

Continue reading "Bankruptcy Filings down for 1st Quarter of 2011" »

If a debtor is filing for chapter 7 bankruptcy relief, and the debt is primarily personal debt, than the debtor may have to consider passing the "mean's test." What is the lookback period for determining whether or not a debtor will qualify for a chapter 7?

The Trustee will lookback to the income from the past six months from the date of filing in determining eligibility.

The entire household income will be considered. Therefore, if a debtor who is contemplating bankruptcy makes too much money but knows the income will reduce soon, then he or she should hold off for a few months until the six month average falls below the state median income for that household.

Continue reading "What time period is considered for whether or not I qualify for Chapter 7? " »

Yes. A debtor may add tax debt into the plan payments that are being paid to the Trustee every month. In fact, the debt will not accrue additional penalties or interest charges while it is included in the plan.

If the tax debt is older than three years, their is a possibility that the remaining balance after your last 13 plan payment can be discharged. Any and all tax debt can be included in the plan. However, any tax debt that you incur postpetition, you will be responsible for.

Back taxes and bankruptcy can be a very difficult combination to grasp especially when one has an implication on the other. If you have questions about tax debt and/or bankruptcy, please do not hesitate to ask.

Continue reading "Can tax debt be included in my Ch. 13 Florida Bankruptcy?" »

This is a very common question that comes up in bankruptcy. In addition to credit card and medical debt, there are additional debts that are considered unsecured and should be discharged in your bankruptcy. Old utility bills, car repossessions, evictions, contract damages, and personal injury judgments are just a few other debts that should be discharged through the bankruptcy.

We have our clients pull credit reports from all three credit reporting agencies to ensure that all creditors are listed in the bankruptcy petition and schedules. Debtors should also anticipate future creditors and list them in their schedules. Credit reports only pick up existing or current creditors.

For example, if you are contemplating bankruptcy but know you have an expensive medical procedure coming up, you may want to wait to file for bankruptcy in case you need to include that debt in your bankruptcy. Remember debt incurred post-filing, you are personally liable for.

Continue reading "Apart from Credit Cards and Medical Bills, what other unsecured debts are discharged in a Bankruptcy? " »

Many debtors who filed bankruptcy before are wondering how long they have to wait before they can file again. The answer depends on several factors.

First, how long has it been since you FILED your last bankruptcy? Notice the key date is the filing date, not the discharge date.

Second, did you receive a discharge in your case? If you did not receive a discharge, you may file again without waiting as long as the case was not dismissed with prejudice.

Third, what chapter are you looking at filing? The waiting period is different depending on the chapter you are filing. A debtor must wait eight years between filing dates on Chapter 7s.

There is only a four year waiting period between Chapter 7 and Chapter 13 filings.

Continue reading "How long do I have to wait to file for bankruptcy again? " »

First, it really depends on the type of debt. If a debtor has mostly unsecured debts, then bankruptcy may be a viable option. However, if a debtor has mostly student loan and current IRS debt, then a bankruptcy will not do the debtor much good because those debts are generally nondischargeable.

There is no amount of debt that is required or needed to file for bankruptcy. It really depends on each individual case. $10,000 in credit card debt may not be as damaging to one debtor as it is to another. It really depends on whether or not a debtor feels he or she can get out of the financial hole currently consuming their lives. Credit card interest rates can be very excessive and just making the minimum payment every month will never satisfy that balance. In most cases, you will be paying on that debt much longer than you ever anticipated.

Many times debtors have bad luck and incur thousands and thousands of dollars in medical debt. The medical company will normally turn the debt over to a collection agency if the debtorhas defaulted on the debt.

Continue reading "How do I know if I have enough debt to file for bankruptcy?" »

Many times debtors leave vehicles and other assets in their own names and never transfer the title to the individual actually benefitting from the asset. However, if a debtor is considering bankruptcy, it is not a good idea to begin retitling assets. Although the asset may be for another's benefit, it is still your asset because it is in your name!

This will be a red flag to the bankruptcy Trustee and he or she may try and dismiss the petition altogether if he or she feels abuse or fraud is involved. In fact, the Trustee can retroactively go back 90 days (for non-insider transactions) and/or 1 year (for insider transactions) from the time the petition is filed. An insider transaction simply means the debtor transferred an asset to a family member or friend.

If a Trustee believes there is preferential treatment, he or she can actually go and recapture the asset that was transferred and consider it "property of the debtor's estate."

Continue reading "Vehicles in my Name But For Others Benefit and Bankruptcy " »

A reaffirmation agreement is something a lender (holding a secured lien) will send you once a debtor files for bankruptcy. These are common for vehicle loans and mortgages. The question becomes should you sign the reaffirmation agreement? And what does that mean?

It means you will be personally responsible for the loan until it is paid off. You should really consider the total value of the vehicle compared to the value of the loan. If the lender wants you to reaffirm a loan that is much more than the vehicle is worth, it may not be in your best interest to sign the agreement. This is particularly true if you have other means of transportation.

If you do not have other means of transportation, it may be in the debtor's best interst to sign the agreement. Redemption is a little bit different. Redemption basically crams down the value of the loan equal to the value of the vehicle. Lenders are hesitant to do this and attorneys typically charge an additional fee to negotiate a reaffirmation or redemption proposal.

If you do not sign the reaffirmation agreement, the lender may try and foreclose or repossess the property. Mortgage loans should never be reaffirmed.

Continue reading "What is a Reaffirmation Agreement and do I have to sign one? " »

Debt consolidation companies are under close scrutiny from many state Attorney Generals and the Federal Trade Commision (FTC). Reason being, many of these companies were requiring large, upfront fees and not doing anything in return.

One of the many fallbacks to using a debt consolidation company is that your creditors are not legally required to negotiate with these types of companies. There are no state or federal laws in place that forces these companies to negotiate with debt consolidation companies.

However, in a bankruptcy not only does the automatic stay keep creditors from contacting the debtor throughout the bankruptcy, it forces creditors into negotiations and agreements that they necessarily would not have agreed to outside of a bankruptcy.

Continue reading "Should I use a debt consolidation company rather than Bankruptcy? " »

Here are a few tips on what actions to avoid if you are thinking about filing for bankruptcy. First, do not go out and retitle a bunch of your assets. Second, do not pay back family member for debts you owe them. The Bankruptcy Trustee may seek to recover those payments from the family member you made the payments too. If they do not have that money to pay back the Trustee, they will be in debt to the bankruptcy court. Third, do not take out cash advances, pay day loans, or balance transfers. Many times, these debts are non-dischargeable. Fourth, if you owe the IRS, do what you can to setup a payment plan with them! Fifth, keep making the monthly payments on secured debt. It is the unsecured debt that you can stop making payments on to help with legal fees or costs.

Continue reading "Actions to Avoid Before Filing for Bankruptcy " »

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The answer really depends. A debtor who incurred attorney's fees for the purpose of obtaining a divorce will most likely be on the hook for those fees even after a bankruptcy discharge.

In addition, child support and other domestic support obligations are generally non-dischargeable. However, property settlement obligations may be discharged in a bankruptcy. The debtor will have to show that the financial obligations were not for support or alimony but for property settlement purposes.

Other debts that are generally not dischargeable include criminal fines, judgments for intentional torts or fraud, and student loans

Continue reading "Can I discharge attorney's fees and domestic support obligations in a Florida Bankruptcy? " »

Many ex-spouses still share debt on mortgage/vehicle notes and credit card accounts. If only one party files for bankruptcy, can the creditor go after the party not filing for bankruptcy to collect a debt?

The answer is, probably not. In bankruptcy, a co-debtor stay may be available (at least during the bankruptcy). The stay would apply to the party filing for bankruptcy and to the non-filing party if requested. If the debtor is in a chapter 13, the co-debtor stay would last as long as the debtor continued making the plan payments to the Trustee and the case does not get dismissed.

Creditors can ask the court for relief from the automatic and co-debtor stays. If granted, the co-debtor may have to continue making the payments in order to keep his or her interest in the property.

However, please keep in mind, once the debtor receives his or her discharge in connection with the shared marital debt, the creditor can collect the full balance from the non-filing party at the conclusion of the bankruptcy.

Continue reading "Mortgages, ex-spouses, and My Bankruptcy" »

Most bankruptcy courts and Trustees will require debtors to be current on filing past tax returns before the debtor can file a bankruptcy petition. (at least the last 4 years of returns) It is rare to see a Trustee allow a debtor to file a petition without being current.

In the rare instance that it does occur its usually in a Chapter 13. The Trustee may allow the proceeding to move forward after negotiations with an IRS or state agent to include whatever balance owed in the Chapter 13 plan.

Debtors cannot assume the Trustee will permit that. Therefore, debtors should be current on filing returns if they are thinking about filing for bankruptcy.

Continue reading "Bankruptcy and Tax Returns" »

A recent study shows U.S. citizens who are facing foreclosure are more likely to have higher stress levels. That seems pretty obvious.

There are over 3,000 counties in the U.S.. A county is labeled "stressed" if it receives a scaled score of 11 or more out of a possible 100.

The score is based on unemployment, foreclosure, and bankruptcy rates. Based on 2010 data, Florida is considered a very stressful state. This is due in large part to the substantial increase in foreclosure, bankruptcy, and unempoyment rates.

What may come to a surprise is the fact that States that have many manufacturing facilities actually saw a decline in stress levels. Is that a sign that manufacturing plants are finding work or factory workers have moved elsewhere to find employment? Hopefully, 2011 will be a much less stressful time for all US counties.

To learn more about this article, please visit AP analysis: Foreclosures raise US economic stress.

Continue reading "Foreclosures Linked to Americans' Stress Levels" »

Bankruptcy is always an option of last resort. If you have not applied for a loan modification with your lender, you probably should before filing for bankruptcy. If approved for the loan modification, it may help lower your payment.

Unfortunately, only those that are behind on their mortgage payments will usually be considered and approved for a loan modification. Loan modifications can take several months. Meanwhile, your mortgage debt is accruing unless you continue making the payments during the modification process.

If the loan modification is denied, your option of last resort may be to file for bankruptcy relief. This will stop any foreclosure action (at least temporarily) and allow the debtors to remain in the home while they negotiate with the lender.

Continue reading "Should I file for a loan modification or bankruptcy to protect my home? " »

The bankruptcy code provides that if a debtor has primarily business debts, the means test is not applicable in a Chapter 7 bankruptcy. To determine whether or not a debtor must take the means test, he/she will have to take a look at the type of debts they have and their family income. The debts must be primarily consumer based and their household income is more than the Florida state median income level for the debtor's size household.

For example, if 1 earner makes more than $3,281.92/month, then that debor must take the "mean's test."

Once again, if the debtor's debts are primarily business related, the debtor does not have to take the mean's test. There is no presumption of abuse despite the debtor's household level of income.

Continue reading "Applicability of the Means Test and Business Debts " »

If the ex-wife is the only party on the deed, then the ex-husband creditors cannot put liens against the house even if the ex-husband is the only one on the mortgage. This type of property settlement is common among divorced couples.

One spouse will continue to make the mortgage payments while the other spouse has full ownership (through the deed). As mentioned in a recent post, only one spouse can file for bankruptcy. Whether that is the best cause of action really depends on the amount of shared debt.

Also, if a couple recently divorced, then whatever was agreed upon in the settlement distribution is important. Did one spouse agree to become fully responsible for what was otherwise known as shared debt? These are important factors in determining whether one or both spouses/ex-spouses should file.

Continue reading "My ex is the only one on the deed: Can my creditors put a lien against the house? " »

LLCs (limited liability companies) are very common and are one of the preferred business structures in todays business economy. For the most part, LLCs protect or insulate members from personal liability regarding business debt.

But what if the LLC is a single member LLC an he or she has personally guaranteed the debt? Well, if the owner personaly guaranteed the debt, then the company protection is lost. The business and the individual become responsible for the debt. If that is the case, the debtor may want to think about personal bankruptcy and taking the company into bankruptcy. This can be accomplished through a chapter 7.

Taking a business into chapter 13 cannot be done. If the business was looking to restructure or reorganize, the only option would be Chapter 11. In fact, recent Florida cases have held that the assets of a single member LLC may be considered when the owner files for personal bankruptcy.

Continue reading "LLCs and Personal Bankruptcy" »

If you and your spouse are contemplating divorce and bankruptcy, you may want to finalize the divorce first. It may be more beneficial especially if there is a lot of marital property that must be settled.

Many times, part of the divorce settlement will include one spouse completely assuming the entire debt where it once was shared jointly. For example, many times a spouse will agree to become solely responsible for making the mortgage payments and allow his or her ex-spouse and family to remain in the home.

However, if there is no marital property, it may be in your best interest to go ahead and file your personal bankruptcy first. This is especially true if there are pending lawsuits or garnishments against you.

You should contact an experienced bankruptcy attorney before making such a decision.

Continue reading "When should I file for Divorce if I am considering Bankruptcy? " »

Active service members have financial problems just like ordinary civilians. Many times the active member is stationed elsewhere but his or her spouse lives in Florida. Can the couple file for bankruptcy in Florida?

The answer is probably. The debtor would just need to show that the Florida residence is the marital home. Also, the court may look to the intent of the debtor as to whether or not he or she plans to live in Florida permanently once resigning from active service.

What impact does a bankruptcy have on an active service member? The impact really depends on what level of security clearance the debtor has obtained. The higher the clearance, the more likely he or she may lose that clearance.

If you have questions about bankruptcy and residency requirements, you should contact an experienced bankruptcy attorney.

Continue reading "Military Debtors and Spouses in Florida" »

Bankruptcy will stop most garnishment actions. However, garnishments for domestic support obligations will continue even after the bankruptcy is filed. Garnishments must stop because of the automatic stay.

The automatic stay comes into effect as soon as the bankruptcy petition is filed and it operates to stop most debt collection activities. Once a creditor receives notice that a debtor has filed for bankruptcy, the creditor MUST stop contacting the debtor or the debtor's family members through all forms of communication.

If a creditor continues to contact the debtor in an effort to collect on a debt, the debtor may have a cause of action against all creditors breaching the automatic stay. Money damages may be available.

Continue reading "My Wages are Being Garnished: What can a Bankruptcy do for me? " »

The answer depends on several factors. Bankruptcy should always be a last resort. First, does the debtor have mostly secured or unsecured debt? Secured debt is debt backed by collateral. Examples of secured debt are mortgages, vehicle loans, etc. Unsecured debt is not backed by collateral. Examples of unsecured debt include medical bills and credit cards.

Second, has the debt been charged off? If most of the debt has been charged off, the creditor may report it to the credit bureaus but that debt is essentially forgiven and a bankruptcy would do nothing for you regarding that debt.

Next, are your wages being garnished or are there pending lawsuits against you? If so, the bankruptcy will stop the garnishment and most lawsuits unless the garnishment is related to dometic support obligations.

Are the biggest expenses in your life, daily living expenses? If so, bankruptcy probably will not benefit you. You should consult with an experienced bankruptcy attorney to determine whether or not bankruptcy is right for you.

Continue reading "Is Bankruptcy right for me? " »

No. Many times only one spouse is responsible for all of the debt. In this instance, it is probably wiser for that spouse to file for bankruptcy alone.

However, if there is shared debt, and the spouse that files for bankruptcy gets a discharge on that debt, the non-filing spouse can still be held wholly responsible. This even applies to 2nd mortgages or liens on primary residences.

If only one spouse files for Chapter 13, and the 2nd mortgage is stripped off after the debtor's final plan payment, the 2nd mortgage lender can still look to the non-filing spouse to recover the balance owed. If you have questions on whether or not you should file by yourself or jointly with your spouse, you should cntact an experienced bankruptcy attorney.

Continue reading "Does my Spouse have to file Bankruptcy with me? " »

First, in order to file for bankruptcy in the state of Florida, you must have lived consistently in Florida for at least 90 days (3 months) leading up to the filing of the petition. If you live in one of the following counties, you may file your bankruptcy case in the Jacksonville middle district. The counties include: Baker, Bradford, Citrus, Clay, Columbia, Duval, Flagler, Hamilton, Marion, Nassau, Putnam, St.Johns, Sumter,
Suwannee, Union and Volusia.

If you live in Brevard, Lake, Orange, Osceola or Seminole counties, then you have to file in the Orlando division of the Middle District.

Continue reading "Can I file my bankruptcy in Jacksonville, Florida? " »

Many times debtors are willing to part with real estate property. However, banks and other lenders will choose not to accept the signing over of the deed from the borrower for a release of liability. What should a debtor do in this situation? Will bankruptcy protect the debtor?

The short answer is yes. If the debtor qualifies and files for a Chapter 7 bankruptcy and surrenders property, the debt on the property will be discharged as to the debtor filing for bankruptcy. However, if only one party to the note files for bankruptcy, then the lender can legally seek full recourse against the party who did not file for bankruptcy.

Continue reading "Can I Surrender Real Property in a Florida Bankruptcy?" »

A common question in bankruptcy is "How much is my vehicle or vehicles worth?" There are several vehicle appraisers out there but the most commonly used entity is "Kelly Blue Book." In fact, their site can be viewed at Kelly Blue Book.

After applying allowed exemptions, if there is still unprotected equity in the vehicle, the Trustee could essentially seize the vehicle or make the debtor buy back that equity. If there is a loan on the vehicle, and the loan is worth more than the vehicle, then there is no equity and no threat of losing the vehicle as long as the debtor continues to make the loan payments.

Continue reading "What is the Value of My Vehicle in a Florida Bankruptcy? " »

In a chapter 7 you may be able to get a full discharge on tax debt if:

1) the debt owed is at least three (3) years old;

2) if you are not suspected of tax evasion;

3) if the IRS has had at least 240 days to inspect the return for which the debt is owed;

4) not debt related to payment penalties for not filing your returns on time or filing them late and

5) the IRS cannot already have a lien against any of your property for that debt you want discharged.

If all 5 factors are present, you may have a chance to have the full debt discharged in a Ch. 7. In a Ch. 13 you may be able to have the remaining debt (that meets the above description) discharged after your final plan payment.

Continue reading "Can I get my IRS tax debt discharged in a Florida bankruptcy?" »

The Bankruptcy Code states that if a debtor charges more than $500.00 on one credit card for luxury items within the last 6 months prior to the filing of the petition, that debt will be nondischargeable.

The Code basically defines "luxury items" as any expense not reasonably necessary to live. Also, if a debtor makes charges or purchases on a credit card with the intent never to repay that creditor, that debt will also be considered nondischargeable.

In addition, if a debtor makes over $750 in cash advances or balance transfers within 70 days of filing the petition, those debts will not be discharged either.

This all makes sense. It would not be fair to creditors or good public policy to allow debtors to run up large debts right before filing bankruptcy and then have those debts discharged. That would be a complete abuse of the system and that is why the Code provides these types of provisions and exceptions to discharge.

Continue reading "Can I charge whatever I want to on my credit card right before filing bankruptcy?" »

The Associated Press reported bankruptcy filings slowed down in 2010. December 2010 showed a 3% decrease in filings from December 2009.

There was an overall 10% increase in filings from a year ago but the rate had been growing between 25-35% each year for the last several years.

There is not much indication as to whether there has been a bigger decrease in Ch. 7 filings as opposed to Ch. 13 filings. With foreclosure filings continuing to rise, it is much more likely more 7s are being filed than 13s. But is the drop in bankruptcy filings a sign that the economy is strengthening? Only time will tell.

To learn more about this article, please visit
AP: Surge in bankruptcies shows signs of slowing.

Continue reading "Bankruptcy Filings Slowing " »

Chapter 11 is really designed to help businesses or high net worth individuals restructure their debts and repay a large portion of them. If a business entity wishes to stay in business but needs bankruptcy relief, this chapter of the Bankruptcy Code is available for that purpose. Business or corporate entities cannot file under chapter 13.

Many celebrities file under chapter 11 because they either make investments under some type of entity and want personal liability protection or they do not qualify for other chapters. Chapter 11 is very expensive, but it does allow an entity to avoid certain contracts and has other benefits connected with the filing.

If a business files under chapter 11, the executives of the company will have to show that they are competent enough to continue operating the business during the bankruptcy. If creditors object or if the Trustee feels he can run the business more efficiently, then the Trustee may try and remove the executives from management and run the business himself.

Continue reading "What is a Chapter 11 bankruptcy?" »

Whether a debtor files a chapter 7 or 13 bankruptcy, the effect on the credit report will be the same. A bankruptcy will stay on a debtor's credit for 10 years. However, many of debtors find themselves getting credit offers within months of filing for bankruptcy.

There are two main reasons why creditors do this. (1) They know the debtor is about to have a large part of their debt discharged or will only have to pay back a small portion and (2) The debtor will be personally liable for the new debt because it will be several years before he or she can file for bankruptcy again. For larger purchases such as for homes and vehicles, it may take a bit longer to get lines of credit.

There are several ways to rebuild credit. The overall scheme to rebuilding your credit is to make payments on time to as many creditors as you can. Some examples are apartment leases (rent), utility bills, and small limit credit cards.

Continue reading "How long will bankruptcy show on my credit history?" »

Once a bankruptcy petition is filed, the Trustee (representative of the creditors) sends notice out to all of a debtor's creditors that are listed on the debtor's schedules within the petition. Debtors must make sure all creditor's and potential creditors are listed in their schedules. Once the creditor receives notice, the creditor can no longer contact the debtor or the debtor's family members in an effort to collect the debt owed to them.

If a creditor disregards the notice and contacts the debtor, the creditor is in violation of Section 362 of the Bankruptcy Code and damages may be available for the debtor's benefit. The creditor can no longer make phone calls, write letters, garnish wages, or proceed with litigation. (with a few exceptions, i.e. Familiy law and criminal cases).

Continue reading "What Constitutes A Violation Of the Automatic Stay In A Florida Bankruptcy?" »

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCA) of 2005 changed this country's bankruptcy laws substantially. This legislation has made it much more difficult for debtors to file for Chapter 7. In order to qualify for Ch. 7, a debtor must pass the "mean's test" unless a majority of the debts are business related.

An analysis of the "mean's test" must be conducted if a debtor's household income is over the state median income level. The Trustee will look back to the last six months leading up to the filing of the petition in calculating your income. All income from every source will be considered.

For example, the median monthly income for households in Florida is $3,281.92 for a single earner. The median income level for two earners is $4,100.08. If a debtor's income is more than the median income for the state, you must pass the mean's test. The mean's test looks to your disposable income (monthly income - living expenses) every month.

The Bankruptcy Code sets guidelines as to how much you can claim as an expense. This is done for all common living expenses. A debtor may be allowed to claim more than the limit set by the Bankruptcy Code if good cause is shown. In any event, the Trustee will look to the debtor's disposable income and basically multiply that number by 60. If the debtor's number exceeds the allowed figure set by the Code, then the debtor has failed the mean's test and vice versa.

However, the debtor is not automatically disqualified from filing a Ch. 7, but there is a presumption of abuse and the debtor must overcome that presumption in order to become eligible.

Continue reading "The Chapter 7 Means Test In Florida: A Quick Overview" »

The automatic stay is arguably one of the most powerful features of a bankruptcy. The stay takes effect once a bankruptcy petition is filed and is applicable in every bankruptcy case in every state.

The federal law stops creditors from trying to collect on debt after a debtor has filed the bankruptcy petition. Once a creditor is put on notice that the debtor filed for bankruptcy, the creditor can no longer contact the debtor or the debtor's family members in trying to collect the debt owed. In fact, it is a breach of federal law to do so and the debtor may be entitled to damages.

However, mortgage companies and holders of car notes typically will ask the bankruptcy court for relief from the automatic stay. This is done by filing a motion with the court and if granted, the automatic stay would not longer be applicable to the party who filed the motion. Thereafter, the lender can request that the debtor continue making payments on the property in order to keep it. Such relief is usually not granted until 30-60 days after the initial bankruptcy petition is filed, affording the debtor valuable time to make arrangements to move out of a property or work out a settlement with the lender to catch up their payments.

Continue reading "How does the Automatic Stay in a Florida Bankruptcy help me?" »

1) The first effect this will have is making it virtually impossible to rebuild your credit. Each time you miss a payment you will take a hit then your account will be sent to collections where it will continue to fester unresolved until the collector eventually sues and gets a judgment against you which will be good in Florida for twenty years. Once that happens you will have twenty years of worrying about the judgment creditor trying to collect it from you.

2) If you stop paying a mortgage, the lender can foreclose against your property and come after you, personally, for any deficiency.

3) If you are an apartment tenant and stop paying rent, you can be evicted and the landlord can sue you for the remainder of the lease. If you are renting property, it can be repossessed.

4) If you are behind on any type of vehicle payment, the asset can be repossessed and you could be personally liable for any deficiency.

5) After being granted personal judgments against you, creditors may be able to garnish wages,garnish bank accounts, put liens on your property, and will more than likely harass you and your family to pay them.

Continue reading "What happens if I stop paying my creditors and do not file bankruptcy? " »

Whether a debtor files Chapter 7 or Chapter 13 really makes no difference on his or her credit report. The bankruptcy will be on your history for ten (10) years. However, it is a common myth that debtors who file bankruptcy will struggle to ever receive another line of credit.

Basically, there are two reasons a creditor will be willing to extend credit after you have received a discharge from your bankruptcy. If your case is dismissed or you do not receive a discharge for whatever reason, this is not applicable to you.

1) After your discharge, the creditor knows you cannot file for bankruptcy again for at least a few years and you will be personally liable to them in the interim.

2) After your discharge, you should have some extra cash to pay back your new creditor because a lot of your old debt has been discharged.

You can begin rebuilding your credit by staying current on your bills (including utility) and other daily living expenses. If applicable, stay current on your secured debt that was not discharged in bankruptcy. If you continue to pay your car loan on time until the end date or stay current on your mortgage you will have already begun strengthening your credit score.

Continue reading "How Do I rebuild My Credit Once I Have Filed Bankruptcy In Florida?" »

This is a question that comes up in nearly every bankruptcy situation. There are debtors who try and self-file thinking they are saving money on legal fees and just paying the court costs.

Most of the time debtors wind up going to see an attorney shortly thereafter because their case has just been dismissed. The process can be very difficult. If you do not fill out documents correctly or miss deadlines your entire petition can be dismissed. Now your out court fees and will have to pay those again most likley if you choose to refile. Had you gone to an attorney to begin with, you probably could have avoided dumping these costs and saved yourself some stress.

Many times, if a debtor knows bankruptcy is imminent, the debtor can free up extra cash by stopping payent towards unsecured creditors. Unsecured creditors are creditors who do not have collateral againt the debt they are owed. For example, credit card and medical debt is usually considered unsecured debt. If you are entitled to a tax refund this year you can put it towards your legal fees to file bankruptcy. Once you file the refund may be subject to administration by the Trustee in a bankruptcy anyway to pay your creditors.

Continue reading "How do I pay for a Florida Bankruptcy if I am broke? " »

Each situation is different and you should consult with an attorney before deciding on bankruptcy. There is not a magic number of debt or threshold you must incur before you can file. However, there is a cap on the amount of secured and unsecured debt you can have in order to file chapter 7. There may be other options available to avoid bankruptcy altogether.

Many factors are taken into consideration such as: household income, overall debt, type of debt, and the value of your assets. Chapter 7 should probably be considered if you have a lot of unsecured debt, (creditors who do not have collateral on any of your property)you have very few assets, make a lower income, and will not be able to repay these creditors anytime soon.

Chapter 13 should be considered by those who have a lot of property they wish to keep, have a stable income, and who are unable to file Chapter 7.

There are typically other options available when you are behind on your mortgage. To qualify for these alternatives to bankruptcy, you should check with your lender to see if you in fact do qualify.

Continue reading "How Much Debt Is Enough To Consider Bankruptcy In Florida?" »

For the most part, student loans are not dischargeable in a bankruptcy. There are exceptions if the debtor can show an “undue hardship,” but this is very difficult to show and is rarely granted.

However, many debtors are unaware of what actually qualifies as an “educational loan” under the federal bankruptcy code and just assume the loan is non-dischargeable in a bankruptcy.

Section 523(a)(8) of the US Bankruptcy Code, at 11 U.S.C., excepts from discharge debts for "an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or an obligation to repay funds received as an educational benefit, scholarship, or stipend; or any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual" unless "excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor's dependents".

For the purpose of this paragraph, the definition of a qualifying education loan includes loans made solely to pay the higher education expenses of an eligible student, where the student is either the debtor, the spouse of the debtor, or the dependent of the debtor. In addition, the loans must be for study at a school that is eligible to participate in Title IV programs and where the student is enrolled at least half time. Loans that don't meet this definition are still dischargeable even if they were used to pay for higher education expenses.

Continue reading "For Purposes of a Florida Bankruptcy, What Is A Student Loan?" »

Bankruptcy filings in the U.S. Bankruptcy Court Middle District of Florida are currently on track to exceed 68,000, about ten percent higher than 2009, according to a recent article in the Florida Times-Union.

In the first six months of 2010, Middle District bankruptcy filings totaled 34,104 and were dominated by Chapter 7 filings, which totaled 25,458, or 75 percent of total filings.

Chapter 13 filings were the second most common, with a total of 8,190.

Chapter 11 business reorganization filings were up 43 percent for the first half of 2010, when there were a total of 440 petitions versus 308 for the first six months of 2009.

The U.S. Bankruptcy Court Middle District of Florida covers over 10 million Florida residents in Jacksonville, Tampa Bay, Orlando, Daytona, Fort Myers and Ocala.

One key reason for the continued high rate of bankruptcy filings in Florida continues to be ongoing unemployment. Earlier this year, Congress did not extend unemployment benefits and for many unemployed Florida residents, employment benefits have started to run out.

The bad economy has shown many Floridians that filing bankruptcy is a viable option for many of them to keep some personal assets while shedding onerous debt.

Can't afford to file for bankruptcy? You should still contact a Bankruptcy Attorney to find out some basic information. For example, you need to know the statute of limitations for the debt you know and whether or not your are judgment-proof. "Judgment-proof" essentially means a creditor or collection agency has nothing to go after because you have no assets. After meeting with a Bankruptcy Attorney and determining your are judgment proof, write your collector notifying them of your status, state you cannot repay the debts, and demand for contact to stop. If is a right under federal law to have debt collectors cease and desist.

What are other things you need to know that an attorney can advise you on?
1. Does your state allow wage garnishment? If so, a creditor can sue you and get a judgment that allows them to garnish a portion of your income. Some states only allow wage garnishment for certain debts, such as student loans, child support and taxes.

2. Be wary of scams. At times where you are considering bankruptcy or are close to defaulting on your mortgage, you can be extremely vulnerable. Scams artists take advantage of your vulnerability and offer to rescue your for a fee. Go to www.QuestionsProtect.org for tips on avoiding scams.

3. Drowning in student loans? You may not have many options. However, FinAid.org, a non-profit, financial aid website, offers information on how to get out from under these debts. The most important thing is to NOT ignore your student loans. Also see for Bankruptcy and Student Loans for more information on the relationship between the two.

4. If you're deeply in debt, do not use your retirement money to help ease the problem. In 2005, the bankruptcy reform increased the amount of retirement savings that can be sheltered from creditors to $1 million.

A national survey of bank risk officers found that few expect credit standards to be relaxed this year, and more than half believe credit standards may tighten even more.

The Professional Risk Managers’ International Association (PRMIA) conducted the survey for credit score company FICO in July with risk professionals, asking them for their outlooks for the next six months for credit delinquencies, consumer credit demand and the lending environment.

With personal bankruptcy filings at their highest levels in five years, FICO chief research officer Andrew Jennings said it is “difficult for lenders to open up the flow of credit without taking on significant risk.”

Nearly 53 percent of the risk managers said they expected mortgage delinquencies to increase and about one-third said they expect them to remain the same.

Risk officers also said they expected consumer appetite for credit to increase; however, they expect creditors to maintain conservative lending practices. Over 46 percent said they expect credit approval criteria to become more strict, and 65 percent said they expect that the amount of new credit extended to consumers will decrease or hold steady.

Over 50 percent said they expected credit card delinquencies and charge-offs to increase. Not surprisingly, 99 percent of bank risk officers surveyed said they expect their institutions to either increase or maintain the same priority on risk management.

It is probably no stretch to say that millions of Florida residents are struggling financially, due to the state’s high unemployment rate (two points higher than the national average) and the housing market crash.

If you are one of these, you may be wondering not only if filing bankruptcy is a good option for you and your family, but how you will know when the right time is to seriously consider it.

The American Bankruptcy Institute has provided a useful bankruptcy checklist for consumers and says that if several of these apply to you, you might consider bankruptcy:

• You have had your paycheck or your bank account garnished;
• The majority of your debt is unsecured debt -- credit card bills, medical bills, etc.;
• The amount you owe creditors – beyond your house and car payments – is more than you could pay off in five years;
• You are getting calls from collection agencies;
• You are have more than one bill that is more than one month past due;
• You have had lawsuits filed against you by creditors;
• A large portion of your debt includes medical bills that your insurance does not cover;
• Your income taxes have not been paid;
• You do not have many assets;
• You have no – or very little – savings;
• You have had a car or other property repossessed;
• Your home is currently threatened by foreclosure.

If you answered “yes” to three or more of these, you should contact our Jacksonville bankruptcy law firm about a free initial consultation.

Perhaps the greatest source of relief for distressed debtors who file bankruptcy is what is known as the automatic stay. As soon as your bankruptcy attorney files your petition, the automatic stay goes into effect – meaning that creditors must stop all their collection efforts, including phone calls, letters, lawsuits or anything else they are doing to try to collect on a debt.

The automatic stay also prevents secured lenders – those who hold your mortgage or car loan note – from repossession, foreclosure or selling any of your property. However, when it comes to secured creditors, these benefits are temporary – if you do not keep up with your payments after your bankruptcy is over, secured creditors can still proceed with a foreclosure, repossession or sale of your property.

There are also some exceptions to the automatic stay, including alimony, child support, student loans, most taxes and criminal restitution.

If you have filed Chapter 7 bankruptcy, the automatic stay terminates as soon as your Chapter 7 bankruptcy is discharged (closed). If a majority of your debt is unsecured (credit card debt, medical bills, etc.), you will not care that the automatic stay has expired because that debt will have already been wiped out through the Chapter 7 bankruptcy process.

However, if most of your debt is secured debt, then you should consider filing Chapter 13 bankruptcy, which extends the automatic stay throughout your repayment period of three to five years. Plus, the automatic stay in Chapter 13 bankruptcy filings also protects anyone (spouse, parent, etc.) who may be responsible for the same debt as you are.

If bankruptcy was a physical illness, we would be able to feel its symptoms and know that something was wrong. However, many people come to bankruptcy in a state of surprise – or denial – about how they got there, even if it was through no fault of their own.

In the past year, more than 1.5 million Americans have filed bankruptcy – more than 20 percent from one year ago. And more than ten times that number – around 15 million – are currently unemployed in a bleak jobs market.

So are there “symptoms” that put you at greater risk for bankruptcy? There are:

Heavy credit card debt – carrying a lot of credit card debt, especially on cards that have high interest rates, can put you in a financial hole quickly and keep you there for years. Discharging this debt through bankruptcy is one option if you will be unable to pay off this debt.

High medical bills – a health crisis can quickly put you deeply in debt. In fact, medical bills are the #1 reason people file bankruptcy.

Student loan debt – the cost of attending college has outpaced many Americans’ ability to pay for it.

Aspirational spending – this is just spending more than you can afford so you appear more prosperous – aka, “keeping up with the Joneses.”

Payday loans – taking out advances on your paycheck by using payday loans is a sure sign you are in major financial trouble. It has been estimated that fees on a one-week loan can make the interest rate as high as 911 percent. Which should have you calling 9-1-1 for help!

A Pew Research Center survey of nearly 3,000 Americans entitled, One Recession, Two Americas shows that 55 percent of adults say the “Great Recession” has made noticeable changes in the way them live – and a majority of those say the changes have been major.

The Pew study classified Americans as fitting into two distinct groups over the past four years: the Lost Ground group (55 percent) and the Holding Their Own group (45 percent). Of those in the Lost Ground group:

• 44 percent say they have experienced major changes in the way they live
• 35 percent have had trouble paying their mortgage or rent
• 42 percent have had to borrow money from family or friends
• 48 percent experienced difficulty finding and paying for medical care
• 48 percent said their family income decreased
• 60 percent tapped into savings and retirement funds
• 64 percent said that their financial situation today is worse than five years ago

The Pew survey found that unemployment is clearly related to which group an individual fell into, with a highly disproportionate number of those in the Lost Ground category
experiencing a job loss, pay cut, cut in hours or unpaid time off. In terms of demographics, the Lost Ground group had a higher number of young people, minorities and those with a high school education or less than those in the Held Their Ground group.

If you have lost so much ground that you are considering filing bankruptcy, contact a Jacksonville bankruptcy attorney.

National credit reporting firm Experian has ranked Jacksonville 112th out of 142 U.S. metropolitan areas for average credit scores. An Experian study said that the average credit score for Jacksonville is 727, down from 730 in 2009 and 736 in 2007.

The credit scoring system used by Experian and the other two major credit reporting agencies is called VantageScore, which is based on a consumer’s history of paying bills on time, the amount of credit they utilize and the outstanding balance on loans. Those with lower credit scores find it more difficult to obtain loans and are considered to be at a higher risk by lenders.

Jacksonville currently falls into the high-risk category, according to the Experian report, which makes it more difficult for Jacksonville residents to obtain loans and for those who do, they are more likely to be stuck with paying higher interest rates on those loans.

Jacksonville’s low rating is due in large part to the large number of homeowners who are underwater on their mortgages or in foreclosure, and the area’s high rate of unemployment. The report found that Jacksonville residents have a high number of late payments in comparison with other U.S. metro areas.

If you are struggling with debt and want to learn about your options for debt relief, contact a Jacksonville bankruptcy attorney.

As millions of Americans still struggle to make ends meet, a Woman’s Day article is offering some practical advice from financial experts in dealing with three major financial crises: unemployment, having an underwater mortgage and loss of retirement savings.

Unemployment: If you have lost your job, financial experts agree that your first step should be to stop as much spending as possible. Forget about paying off debt and make the minimum payments only. Apply for unemployment benefits as quickly as possible. If you have to, use credit cards for groceries and gas, but nothing nonessential. Do not raid your retirement accounts. Take any job offer that comes along.

Underwater mortgage: If you can still make your payments, stay where you are. If you have to move, you can probably get a bargain in this market on another house – if you can’t sell yours yet and you are not terribly underwater, considering waiting to sell until the economy gets better, even if you have to tap into your savings to make up the difference. Think hard about renting – it is not always a good option. If you are considering walking away, speak first to a foreclosure defense attorney to learn about all your options.

Loss of retirement savings: If you haven’t made a move yet, leave your accounts alone. Do not stop contributing to a 401 (k) and do not cash out. If you dumped all your stocks, buy back in now while prices are still low. Get help from an estate planning attorney or financial planner on the best move for your age and risk tolerance level.

To get information on bankruptcy as an option for debt relief, contact our Jacksonville bankruptcy law firm.

Jan Hatzius, the chief U.S. economist for Goldman Sachs Group, has two economic outlooks for the nation over the next six to nine months: “fairly bad” to “very bad”.

In the fairly bad scenario, Hatzius says that the unemployment rate will continue to rise at a moderate pace to about ten percent, and economic growth will be at a 1.5 to 2 percent snail’s pace. In the very bad scenario, the U.S. economy would return to a full recession.

Hatzius said that he believes the Federal Reserve will probably make some kind of move to hasten growth in early November at its next meeting. This may include increased Treasury purchases to keep borrowing costs low.

While he noted that the “fairly bad” outlook is the one he believes is more likely to occur, Hatzius did say that he thinks the odds of a renewed recession have risen from 15 to 20 percent at the beginning of this year to 25 to 30 percent today.

Fed Chairman Ben Bernanke said earlier this month that he believes the Fed has an obligation to help the economy as long as unemployment hovers around the 10 percent mark.

If you have suffered a job loss and have a large amount of debt that you are no longer able to handle, contact our Jacksonville bankruptcy law firm.

The U.S. Labor Department reports that the U.S. economy lost 95,000 jobs in September, a sharp drop that was far worse than economists had predicted and an ominous indicator that the fragile economic recovery has stalled.

The government reported that the majority of the job losses were in the government sector, and included Census worker jobs and local government layoffs. Total government jobs fell by 159,000, and the private sector added only 64,000 new jobs during September. Economists say that private sector jobs must be added at the rate of 150,000 per month for the unemployment rate to remain flat.

The Labor Department reported that the national unemployment rate remains at 9.6 percent. This rate measures the percentage of American workers actively looking for jobs. Another unemployment measure – which includes people who have given up looking for work and those who have accepted part-time jobs because they cannot find full time employment – rose last month from 16.7 percent to 17.1 percent.

Of the 159,000 government jobs lost, temporary Census employees accounted for 77,000 losses local government layoffs totaled 76,000, and 7,000 state government jobs were eliminated in September. The report said that most of the state and local government job losses were in education – a total of 72,700.

If you are unemployed and want to learn about your options for debt relief, contact a Jacksonville bankruptcy attorney.

According to the American Bankruptcy Institute, consumer bankruptcy filings in the U.S. are up 11 percent for the first nine months of the year, as compared with the same period one year ago. From January through September, U.S. consumer bankruptcy filings totaled 1,165,172, as compared with 1,046,449 for the same nine-month period in 2009.

The ABI noted that consumer bankruptcy filings for the first three quarters of this year are the highest since 2005, when the bankruptcy laws were changed to try to make it more difficult for Americans to discharge their debt through bankruptcy.

The ABI said that it now expects 2010 consumer bankruptcy filings to total almost 1.6 million.

For the month of September, U.S. consumer bankruptcy filings rose 4.4 percent compared with September of 2009. The September 2010 consumer bankruptcy filing of 130,329 was also 3.3 percent higher than the previous month. Chapter 13 bankruptcy filings were approximately 30 percent of all filings, which was a slight increase from August as well.

ABI executive director Samuel J. Gerdano said that consumer debt and continued financial stress were the main contributors to the increase in U.S. consumer bankruptcy filings in 2010.

Millions of Americans have filed for bankruptcy since the economic crisis began, shedding or restructuring their debt and moving on with their lives. And most, if not all, were concerned with repairing and rebuilding their credit following a bankruptcy filing.

A recent Wall Street Journal article provided some tips for doing just that:

Check your credit report. Make sure that all the debts you discharged in bankruptcy are properly noted, since it is important for creditors to know that debt is no longer yours.
Keep checking your credit report. You want to ensure you keep your credit report clean, up to date and error-free.

Live on a budget.

Get new credit carefully. Take baby steps at first – pay all your bills on time and don’t utilize most than 50 percent of your credit limit.

Use online banking and automatic payment plans to help you pay bills on time.

If you can’t get a regular credit card, look into a prepaid credit card or secured credit card. Be sure you get one that does not have large annual charges or upfront fees.

Be sure you keep your credit ratio low – when means charge only 30 to 50 percent of your credit limit per month, and pay it off each month.

In its annual report on the economic well-being of American households, the Census Bureau reported that high unemployment has left one in seven Americans of working age in poverty, the highest level in almost 40 years.

The Census Bureau said that the national poverty rate in 2009 was 14.3 percent, which translates to 43.6 million Americans, up 1.1 percent from the 2008 level of 13.2 percent.

In addition, the number of Americans with no health insurance coverage rose to 50.7 million, or 16.7 percent of the population. This is up from 15.4 percent in 2008. The increase is primarily due to out-of-work Americans losing employer healthcare benefits.

Mississippi had the highest percentage of impoverished Americans, at 23.1 percent, followed by Arizona, New Mexico, Arkansas and Georgia. New Hampshire had the lowest percentage: 7.8 percent.

Analysts said that the poverty rate was actually lower than predicted by many demographers, because many lost incomes were eased somewhat by increases in Social Security payments and unemployment benefits extensions. The Census Bureau estimates that approximately 3.3 million people were kept from poverty in 2009 because of extended unemployment benefits that paid unemployed workers for up to 99 weeks following their layoff.

Job loss and unexpected medical costs are two of the main reasons that Americans seek bankruptcy protection. If you need more information on how bankruptcy may help you, contact our Jacksonville bankruptcy law firm.

A study from the American Bankruptcy Institute says that 42 percent of consumer bankruptcies filed in 2007 were by Baby Boomers – those between the ages of 45 and 64 – and that the boomer generation continues to be disproportionately represented in bankruptcy proceedings.

Featured in the September issue of the ABI Journal, the study – Aging and Bankruptcy Revisited – updates a 2002 study that studied the correlation of age and bankruptcy filings. The new study found that the percentage of people filing bankruptcy who were over the age of 55 increased by 61 percent from 2002 to 2007, outstripping the aging of the general population as a whole.

In addition, the study found that the median age of those filing for bankruptcy increased to almost 45 in 2007, from 41.4 in 2002 and 37.7 in 1994. Americans under the age of 25 experienced the largest percentage drop in bankruptcy filings from 2002 to 2007.

Researchers found that the housing crisis has been responsible for many consumer bankruptcy filings. The study found that there was a 118 percent increase in bankruptcy filings in those states that suffered decreases in home price indexes.

Another trend noted by researchers was the rise in Chapter 13 bankruptcy filings, although they could pinpoint whether it was because of the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 or because more debtors were using a Chapter 13 bankruptcy filing as a strategy to keep their homes from foreclosure.

A recent New York Times feature focused on the problems unemployed Americans over the age of 50 are having finding another job, and the growing fear they battle that they may never work again. If this is you, filing bankruptcy may be a solution to relieving yourself of debt you can no longer afford to pay off.

According to the Labor Department, the average length of time it takes American workers 55 and older to find another job is 39 weeks, the longest of any age group. And, at the current pace of 82,000 new jobs a month created in the U.S., it would take eight years to gain back the eight million jobs lost during the recession.

The Census Bureau reports that the poverty rate among those aged 55 to 64 increased from 8.6 percent in 2007 to 9.4 percent in 2009. One analyst quoted in the Times story worries that older workers who are forced into early retirement might present the country with a large policy problem in the future – a new class of “unemployables” that have been cast off during a vulnerable time in their careers and lives.

If you have suffered a job loss and have a large amount of debt that you are no longer able to handle, contact our Jacksonville bankruptcy law firm.

The Labor Department announced that the nation’s unemployment rate rose in August to 9.6 percent from 9.5 percent in July, but that private employers had hired more than 67,000 workers over the past three months, which was more than previously predicted.

Economists say that the private sector job gains mean that the economic recovery is still underway. Temporary employment was up by nearly 17,000 jobs, an indicator that employers are hiring, just not permanently yet.

The Labor Department tied the slight rise in unemployment in August to the resumption of job searches by more than half a million Americans. It noted that those who are unemployed but not actively looking for work are not included in the monthly unemployment statistics.

Analysts said that hiring continues to be weak across all industries for the fourth straight month, and predicted that the jobless rate could continue to rise in the coming months.

According to an Associated Press story, the U.S. economy lost almost 8.4 million jobs in 2008 and 2009. To date in 2010, private employers have added 763,000 jobs back into the economy, but the national unemployment rate continues to hover just below the 10 percent mark as it has since January.

For many of the unemployed, filing bankruptcy can provide relief from debt and financial strain. To get information on bankruptcy as an option for debt relief, contact our Jacksonville bankruptcy law firm.

Seeking to recoup revenue no longer available to them because of the Credit Card Accountability and Responsibility and Disclosure Act of 2009, lenders are now targeting consumers with offers for “professional” credit cards that are not covered by the new legislation.

Once targeted only to business owners, professional cards are now being offered to millions of consumers. An article in the Wall Street Journal noted that in the first quarter of this year, over 47 million professional card offers were mailed to consumers, a 256 percent increase from the same period one year ago.

None of the prohibitions placed on credit card issuers by the Card Act apply to professional cards. With some cards, if the consumer is just one day late in making a payment, the interest rate can go up to almost 30 percent automatically. Consumers can also get hit with credit limit fees, rate hikes on existing balances and agreement changes without notice – all activities that have been outlawed by the Card Act.

Debt-troubled consumers may find professional card offers more attractive since some issuers are making it easier for them to qualify. The WSJ article said that applications for the Chase Ink professional card have been vastly simplified, from having to provide information on your business, including a federal identification number, to now just have to check a box that says you own a business.

To get information on bankruptcy as an option for debt relief, contact our Jacksonville bankruptcy law firm.

A new report from the American Bankruptcy Institute shows that personal bankruptcy filings declined 8 percent in August from one month earlier, to 127,028. However, despite the drop, year-to-date consumer bankruptcies continue to outpace 2009 levels. As of August, there were over one million personal bankruptcy filings nationally, as compared with 921,000 for the same period one year ago.

Analysts say that continued high unemployment and tight credit continue to plague consumers, who must borrow to pay off debt. When they are unable to do so, they usually file bankruptcy in an effort to relieve their debt burden.

The South Florida Business Journal reports that personal bankruptcy filings in Miami-Dade, Broward and Palm Beach counties were up 59 percent in August from the same period one year ago, going from 2,127 in 2009 to 3.387 in 2010. Business bankruptcies were up seven percent from one year ago, but down 17 percent from last month.

Miami-Dade County continues to lead the state in personal bankruptcy filings, which jumped 74 percent in August over the same period one year ago and five percent from July.

The American Bankruptcy Institute said that consumer bankruptcy filings are still on track to reach a total of 1.6 million filings in 2010, the highest in five years, since the bankruptcy laws were overhauled in 2005.

Even though the courts have instituted mortgage mediation as part of the Florida foreclosure process, there is no ruling that forces creditors to offer homeowners a mortgage modification. The news is full of stories these days of homeowners who were working with their lender through the lengthy mortgage modification process, only to find that the foreclosure process was still ongoing. What happens in this case? They still lose their homes.

If you cannot make your mortgage payments and want to be able to keep your home, bankruptcy may be your best option. In fact, it may be your only option these days. Filing bankruptcy automatically stops the foreclosure process in Florida.

If you file Chapter 13 bankruptcy, you will have up to five years to catch up on any mortage payments that are in arrears as well as time to negotiate with your lender for a mortgage modification – and you will not lose your home in the process.

If you file Chapter 7 bankruptcy, your unsecured debts are wiped out, which may free up enough income for you to be able to make your mortgage payments and keep your home.
If you are currently trying to work out a mortgage modification and have been told that the foreclosure on your home has been stopped, be sure that you have this in writing from your lender.

In addition, you should consult with a Jacksonville bankruptcy lawyer in case you need a back-up plan to save your home from foreclosure.

According to a recent article in the Jacksonville Business Journal, Jacksonville bankruptcy filings for the first half of 2010 are at the highest level since the new bankruptcy laws were enacted in 2005, making it harder for consumers to fill bankruptcy and creating a surge in new cases before the new law went into effect.

During the first six months of 2010, bankruptcy filings in the Middle District of Florida, which includes Jacksonville, Orlando and Tampa, were up over 15 percent from the same period one year ago. Personal bankruptcies – Chapter 7 and Chapter 13 cases – were up over seven percent.

The largest percentage increase in Middle District of Florida bankruptcy filings was for Chapter 11, or business bankruptcies. A total of 440 businesses filed for Chapter 11 bankruptcy protection during the first half of 2010; over 25 percent of those cases were filed in Jacksonville, including several high-profile real estate filings by the Sawgrass Marriott Resort & Spa in Ponte Vedra Beach and the Shoppes of Lakeside in Neptune Beach.

One reason for the high number of commercial real estate filings is the number of lease defaults that commercial property owners have suffered during the economic crisis. In some instances, defaults on leases have forced more commercial properties into Chapter 11.

A July 21 article at CNNMoney.com says that all those ads telling consumer they can save their homes from foreclosure by filing personal bankruptcy are NOT too good to be true. They’re true!

The article notes, however, that if you do not have sufficient ongoing income to continue to pay on your mortgage – even if you obtain a modification from your lender – then filing personal bankruptcy will not save your home from foreclosure.

As the report states, filing bankruptcy will stop foreclosure in its tracks. The court not only forbids lenders from continuing the foreclosure process, it also forbids them from even contacting you to try to collect.

So which do you file, Chapter 7 or Chapter 13?

Most experts believe that Chapter 13 is more effective in helping debtors keep their homes because the 3-5 year timeline usually provides enough time to repair broken finances. Chapter 13 bankruptcy may even allow a debtor to “strip away” second and third mortgages, especially if the home is worth less than you owe.

Chapter 7 bankruptcy may be a solution if discharging all your unsecured debt will free up enough income to allow you to make your mortgage payments. However, Chapter 7 bankruptcy usually results in the liquidation of all of a debtor’s assets, including a home. Your Florida bankruptcy attorney can provide you with guidance.

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" »

If you are nearing the age of retirement – or have significant assets stashed away in retirement accounts for when that day finally arrives -- how would filing a Chapter 7 or Chapter 13 bankruptcy affect your plans for retirement?

The good news is, if you have money in an ERISA-qualified pension plan like a 401(k), 403(b), Roth IRA, SEP IRA, SIMPLE IRA, Keogh, profit-sharing plan, money purchase plan or defined benefit plan, all of your money is exempt from creditors. That means you get to keep it, even if you file for Chapter 7 or Chapter 13 bankruptcy.

The only exceptions to this rule are for traditional and Roth IRAs: the exemption is limited to $1,095,000 per person, so if you have more than that in a traditional or Roth IRA, anything over that amount can be used to pay off creditors.

You should also know that while the funds in your account are exempt, any income you receive from retirement benefits is not. If you file Chapter 7 bankruptcy and are currently receiving income from retirement benefits, you can keep what is necessary for your own support and the rest will go to pay off debt. If you file Chapter 13 bankruptcy, your paid benefits will be figured into your income when determining your repayment plan.

A survey by Sallie Mae and Gallup says that American families are borrowing more and spending more savings to cover college costs, which rose 17 percent on average in the 2009-10 school year.

The survey of over 1,600 college students and parents conducted last spring revealed that while more families were implementing cost-cutting measures, like students living at home and eliminating college choices based on cost.

Other findings included:

Parents pay over 37 percent of a student’s college expenses by tapping into savings, using current income or taking out a loan. The second biggest contributor is grants and scholarships, which covered 23 percent of college expenses.

The number of parents who said they borrowed money to pay for college rose to 46 percent, from 42 percent one year earlier. Parents paying from income and savings rose 26 percent.

Students borrowing to pay college expenses jumped from 16 percent to 25 percent in the past year.

For families with annual household incomes of $100,000 to $150,000, the average cost of college increased as much as 30 percent. For those with annual household incomes of under $100,000, costs rose almost 20 percent.

Most financial experts agree that parents who take money from savings and current income or borrow heavily face a greater risk for financial problems of their own in the future. If spending for college has had a negative impact on your personal finances and you are considering filing bankruptcy to recover, contact our Jacksonville, Florida bankruptcy law firm.

If you think you want to file Chapter 7 bankruptcy, there is a comprehensive “means test” used to determine if you can qualify. In general, you can qualify for Chapter 7 bankruptcy in Florida if your monthly income over the past six months has averaged:

• One-person household: $3,423
• Two-person household: $4,339
• Three-person household: $4,864
• Four-person household: $5,730

However, just like with income taxes, there are a number of exemptions that may qualify you even if your monthly income exceeds these levels. A Jacksonville bankruptcy attorney can help you figure out if a Chapter 7 bankruptcy filing is best for you, or if a Chapter 13 bankruptcy filing may suit your situation better.

To qualify for Florida Chapter 13 bankruptcy, your secured debt (mortgages, car loans) cannot exceed $1,081,400 and your unsecured debt (credit card debt, medical bills, etc.) cannot exceed $360,475.

In addition, you must have sufficient income to repay your debts. Income sources can include a spouse’s income, your wages or unemployment benefits, pensions, Social Security benefits, workers’ compensation or disability benefits, child support or alimony you receive, rent, royalty income or proceeds from selling property.

You must also be current on your state and federal tax filings for four years prior to filing for Chapter 13 bankruptcy.

A recent Wall Street Journal article reported that just months after passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009, the credit card industry is rolling out new fees in an attempt to recapture some of its lost revenue.

The Card Act legislation, which restricted a number of controversial fees for things like account inactivity and regulated hikes in interest rates, was expected to cost the credit card companies an estimated $390 million annually in lost revenue. A number of consumer interest groups have already filed complaints with the Office of the Comptroller of the Currency, saying that banks may already be violating the Card Act with their new products.

One of those products is a “professional card,” which is being marketed to millions of Americans. Masquerading as a corporate credit card, these new cards carry the same terms as consumer cards and the new law does not cover them.

Another product recently introduced by Citibank is a “rebate” card, which refunds up to 70 percent of finance charges if the consumer pays on time. However, rebate cards are also not covered by the Card Act, and issuers can revoke them abruptly and charge cardholders higher rates.

Additional ways that credit card companies are trying to minimize the effects of the Card Act on their bottom line include raising balance transfer fees and minimum finance charges, instituting annual card fees, charging upfront processing fees and raising foreign transaction fees.

If you are struggling with unmanageable debt, contact our Jacksonville bankruptcy law firm.

While the economy may be slowly recovering, job losses continue to grow. If you happen to be in Chapter 13 bankruptcy and lose your job, making it impossible to make your agreed-upon payments, what are your options?

First, you need to notify your bankruptcy attorney immediately. Although your options may be limited, your bankruptcy attorney can explain them to you and together you can decide on the best course of action.

Loan Modification – If you are now unable to make your mortgage or car payments because of a job loss, your lenders may be willing to grant a limited-time deferment of payment or further modify the terms of your loan. But time is of the essence here – you want to start working with your lenders as soon as possible so you do not default on your Chapter 13 bankruptcy plan.

Chapter 13 Dismissal – You may be able to get the court to dismiss your Chapter 13 bankruptcy and deal with your creditors yourself.

Chapter 13 Conversion – If you no longer have any income or any assets with equity, you may be able to convert your Chapter 13 bankruptcy into a Chapter 7 bankruptcy, making it possible for you to pay your essential bills and ignore other creditors. You must qualify for Chapter 7 bankruptcy, and your bankruptcy attorney can provide you with the information you need to determine if you qualify.

If you have a question regarding bankruptcy, please contact our Jacksonville bankruptcy law firm.

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

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

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

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

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

Are you an average consumer with some debts? Are you unsure if bankruptcy is right for you? Or, whether bankruptcy is even an option for you at all? Call a Jacksonville, Florida Bankruptcy Attorney immediately. An attorney will sit down with you, explore your options and help you decide whether bankruptcy is right for you.

Something most people do not know is that you do not need to be $10,000, $20,000 or $25,000 in debt to file - there are no debt limits or debt requirements.

Below is a list of indications that you are in financial trouble and should see legal recourse:
1. Are you living paycheck to paycheck?
2. Are you unpaid debts causing your stress because you have no idea how you will repay them?
3. Are you not opening your mail because of overdue bills?
4. Are your ignoring calls from aggressive collectors?
5. Do you have to pay most of your bills late because you just do not have the money?
6. Do you have more than 3 credit cards with balances on them?
7. Are most of these credit cards maxed out?
8. Do you find yourself paying late fees regularly?
9. Are you one month or more behind on your mortgage or credit card payments?
10. Is your car at risk of being repossessed?
11. Is your home in pre-foreclosure?

Continue reading "Is Bankruptcy Right for Me? - A Checklist to determine whether or not You should consider filing for Bankruptcy in the State of Floria" »

Florida’s June unemployment figures were released last week and those who were hoping for good news have been disappointed. In metro Jacksonville, unemployment rose to 11.2 percent in June after three months of consecutive declines. In Duval County, the unemployment rate for June was 11.7 percent, up from 11.4 percent in May and from 11.0 percent in June of 2009.

With unemployment continuing to rise, personal bankruptcy filings could climb in the next six months. Bankruptcy filings are a lagging indicator, which means that higher rates of unemployment now (a leading contributing factor to filing bankruptcy) can mean more filings a few months down the road.

The Florida Agency for Workforce Innovation released the latest employment statistics for the state, which can be found here.

Among the findings:

People out of work in metro Jacksonville in June totaled 77,356 in June, up from 71,788 one year ago.

Six counties in Northeast Florida had gains in unemployment numbers for June: Baker County up .5 percent to 11.2 percent, Clay County up .2 percent to 10.3 percent, Duval County up .3 percent to 11.7 percent, Nassau County up .3 percent to 10.8 percent, Putnam County up .9 percent to 13.4 percent and St. Johns County up .4 percent to 9.6 percent.

The total unemployment rate for Florida in June was 11.6 percent, up .5 percent from one month ago. The national unemployment rate was 9.6 percent.

The majority of new job losses were in construction, financial services, manufacturing and information technology. There were job gains in private education and health services, government and professional and business services.

Continue reading "Jacksonville Unemployment Rises to 11.2 Percent in June" »

Lisa Myers, an investigative reporter for NBC News, provided a report on the Today Show on July 7 that profiled the debt settlement industry. She interviewed Helen Wilson, whose family was struggling with debt after paying a relative’s medical bills. After doing an Internet search, Wilson said she found Credit Solutions, a debt settlement company in Dallas, which she said claims it can settle debts for half what consumers owe and allow them to be debt-free in three years.

Wilson said she was told by Credit Solutions to ignore bills and warning notices from creditors. When the harassment escalated, she called the company for help and was told they would deal with her creditors. However, Wilson said that after a year, her family’s debt is higher and one creditor has sued them. She says the $6,000 she had to pay to Credit Solutions as an upfront fee could have been used for her bills.

In response, Credit Solutions said they generated 11 settlement offers for Wilson, who said she could not afford them. Credit Solutions also denied telling Wilson to stop paying her bills. But that’s not what Myers found.

Going undercover as a consumer with debt, Myers called the company and asked: Do I go ahead and make that payment (on my overdue bills)? The answer she got: “No, no, you stop right away.”

The debt settlement industry blames a few bad apples for these headlines, but the Federal Trade Commission is moving to crack down on them and ban upfront fees.

The Attorneys General of three states – Texas, New York and Missouri -- have all charged Credit Solutions with false advertising and deceptive practices, saying that 80% of debts do not settle.

To see the entire NBC News Today Show investigative report, go here.

Continue reading "Debt Settlement Industry Profiled in NBC News Investigative Report" »

Floridians who have been bearing the often unbearable pressures of being in debt are finding that there are several important benefits to filing Florida bankruptcy, including:

No more creditor harassment. Once bankruptcy has been filed, creditors are prohibited from any type of communication with you – phone calls, letters, emails – demanding payment. Even if it turns out that some of your debts are not dischargeable in bankruptcy, those creditors are still barred from contacting you under the law. If they do, you should notify your bankruptcy attorney immediately to get it stopped. Creditors may not pursue you following the discharge of your bankruptcy.

Stop foreclosure. Filing bankruptcy can be one of the best things a homeowner can do to save their home. If you are in the foreclosure process, a bankruptcy filing temporarily stops your lender from proceeding. Filing bankruptcy may even help you save your home, since most of your consumer debt will be discharged and you may then have the income necessary to catch up on your mortgage payments.

Eliminate debt. A bankruptcy filing eliminates unsecured debt, which includes credit card debt, medical bills and any personal loans not secured by property or other assets. Once this debt is eliminated, you will have more income to put toward your mortgage or car payments.

Declaring bankruptcy and defaulting on bills or mortgages can have a tremendous impact on your credit score. Your credit history, credit reports and credit scores are all based on how your debt payment history. Delinquent debts will stick around for seven years from the date of their delinquency. The most impressive thing one can do for a lender is pretty simple - pay what you owe! Here are starting off points to help rebuild your credit (Note: assume a FICO credit score from 550-600 or a VantageScore credit score ranging from 601-700):

1. Begin with a passbook savings loan. - You essentially borrow your own money at a very low interest rate. Your repayments will appear as an installment loan on your credit report. However, you should always check with your lender to ensure that the repayments will be reported to the credit bureaus. Other installment loans that can help your credit are loans for furniture or other large items and car loans. That is, if you are in the market and can afford to purchase a new car. Try to get loans from a bank or credit union as opposed to finance company loans or payday loans.

2. Apply for a secured credit card. These are similar to passbook loans in that you must deposit the amount of your credit limit with the issuing bank. After your have made several on-time payments for a specified duration, many banks will upgrade you to an unsecured credit card.

It is important to note that if had a debt forgiven for any amount larger than $600, that forgiven amount will be reported to the IRS and will show up on a Form 1099 as income later this year. For example, if you settled a $4000 debt for $2000, you will be required to include the $2000 from the 1099 as taxable income on your next tax return.

Rebuilding your credit can be easier than you may think. By not living outside your means and taking on new debt that is sure to be paid off, you can rebuild your credit score and no longer live under a dark, looming cloud. You should contact a Bankruptcy Attorney to discuss your decision of declaring bankruptcy and what, if any, other alternatives may be available to you. A Bankruptcy Attorney can also help you draft a financial plan or budget to help get you out of debt.

As young adults graduate from college or grad school, some important life lessons are in order. One of the hardest life lessons to learn is how to behave rationally – know your limits. This task may be especially hard for recent graduates as they experience a transition from student-life to adult realities. Student loans come due, employment at higher pay jobs become available and bigger purchases seem more feasible. However, recent grads need to know how to manage their finances to avoid burying themselves under massive piles of debt.

An article published by CNNMoney.com offered 3 pieces of advice to recent grads:

1. Your Career: Listen to your Adversaries.
In business dealings, the people with whom you often butt heads are more than likely the same people who have the greatest insight into you. If someone knows exactly how to get under your skin, he or she has a good sense of your personal faults. Also, it is wise to listen to a person’s point of view that you might not entirely agree with. Being able to listen to other points of view can give you some insight into how others might see or deal with a situation and give you a leg up on the competition.
2. Your Investments: Buy and Hold.
Do not believe that you can conquer the stock market. The wisest investment plan for a recent grad is a buy-and-hold strategy. You’ll make more money in the long run by minimizing taxes and trading fees.
3. Your Love Life: Understand the Odds.
If you have an argument with your spouse or fiancé, about half the time you are in wrong. Grasp this fact and understand it – it will keep you from a costly divorce. To read more about this topic see Financial advice to recent grads.

Knowing your limits is very important for young adults – do not live outside your means. The younger you can learn your limits; the better off you will be in the future. It is important to note that if you declare bankruptcy, the obligation to pay off your student loans does not go away; unless under extremely rare circumstances that is usually never recognized by the courts.

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

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

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

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

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

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

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

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

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

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

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

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

To read more on this topic see Bankruptcy in Florida.

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

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

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

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

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

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

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

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.

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

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

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

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

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

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.

• Under- or unemployed workers seeking new degrees


• Continued depressed home valuations that have limited the use of home equity loans to fund education


• Increased awareness by students that government loans are a better funding vehicle than private loans

GAO's investigation found that some debt settlement companies engage in fraudulent, deceptive, and abusive practices that pose a risk to consumers. Seventeen of the 20 companies GAO called while posing as fictitious consumers say they collect fees before settling consumer debts--a practice FTC has labeled as harmful and proposed banning--while only 1 company said it collects most fees after it successfully settles consumer debt. (GAO was unable to obtain fee information from 2 companies.)

In several cases, companies stated that monthly payments would go entirely to fees for up to 4 months before any money would be reserved to settle consumer debt. Nearly all of the companies advised GAO's fictitious consumers to stop paying their creditors, including accounts that were still current.

GAO also found that some debt settlement companies provided fraudulent, deceptive, or questionable information to its fictitious consumers, such as claiming unusually high success rates for their programs--as high as 100 percent. FTC and state investigations have typically found that less than 10 percent of consumers successfully complete these programs.

The Supreme Court Wednesday made it easier for consumers to sue debt collectors for sending erroneous collection notices.

The high court, in a 7-2 opinion by Justice Sonia Sotomayor, ruled that debt collectors can't shield themselves from such lawsuits by arguing that they made a legal error when sending a collection notice...

At issue were the actions of an Ohio law firm that initiated foreclosure proceedings on behalf of Countrywide Home Loans Inc.

The homeowner, Karen Jerman, disputed that the debt existed. Countrywide later acknowledged that Ms. Jerman had in fact paid the debt, and the law firm withdrew the foreclosure lawsuit.

Ms. Jerman then sued the law firm, arguing that it violated federal debt-collection law by stating in its foreclosure suit that Ms. Jerman's alleged debt would be assumed to be valid unless she contested in writing.

A lower court agreed with Ms. Jerman that the firm violated the federal Fair Debt Collection Practices Act, but ruled that the law firm was shielded from liability because the violation wasn't intentional and was the result of a bona fide legal error.

Justice Sotomayor and the court disagreed, ruling that Congress hadn't explicitly provided a mistake-of-law defense to debt collectors.

• 401(k) plans


• 403(b) plans


• Roth, SEP and SIMPLE IRAs


• Profit-sharing plans


• Keoghs


• Defined benefit plans


• Money purchase plans

• Set all your social network account settings to “private” so only those you know can view your personal information.


• Never list your contact information – phone, email address or physical address -- on a social networking site.


• Do not list any employment information on any of your social networking sites as debt collectors may use this information in an attempt to garnish your wages.


• Never accept an invitation to “friend” someone you do not know, even if they say they are a friend of someone you do know.

• Debt collectors cannot call you before 8 a.m. and after 9 p.m. unless you give them permission to do so.  You can also request that they not contact you at work.

• Debt collectors cannot speak to anyone other than the debtor or the debtor’s spouse or attorney about the debt.  They are allowed to contact other people only to obtain information about a debtor’s location, and are prohibited from contacting a third party more than once for this information.

• Debt collectors must provide you with written information about the debt, how much you owe, the name of the creditor and how to respond if you don’t think you owe the money.  They must do this within five days after they first contact you.

• Debt collectors cannot keep contacting you if you have notified them in writing that you do not believe you owe any or all of the money, or if you have requested verification of the debt.

• Debt collectors are also prohibited from threatening you, using abusive language, repeatedly using the phone to annoy you, lying about the debt, misrepresenting themselves or their company, and engaging in unfair practices.

"By the time most people file for bankruptcy, their credit is already trashed, they have a high debt-to-income ratio - a key indicator lenders look at - and they've likely defaulted on more than a few accounts.

"That's not to say it's best to file if you can avoid it, but your ability to borrow most likely won't be gone for good. Most people will start receiving credit card solicitations 18 to 24 months after coming out of bankruptcy."

• 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

• A second or vacation home


• A second car


• Stocks, bonds and other investments


• Cash and bank accounts


• Valuable collectibles or family heirlooms

• Foreclosure – an automatic stay will stop foreclosure proceedings temporarily.


• Eviction – if your landlord has already started legal proceedings to evict you, an automatic stay will not help.  But if he hasn’t, the automatic stay can buy you some time.


• Wage garnishment – automatic stays stop any wage garnishment action by one or more creditors.


• Disconnection of utilities – if a utility company is threatening to disconnect you because of nonpayment, an automatic stay will stop a disconnection for at least 20 days.

• Criminal proceedings


• Lawsuits over child support or alimony


• Some IRS proceedings


• Repayment of loans from a pension