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Florida Bankruptcy Law

Chapter 7 and Chapter 13 bankruptcy law.
By Jonathan Alper, Esq.

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Last Entry: November 19, 2009 at 23:17:09

Chapter 13 Debtor Can Cram Down Investment Mortgage Using Balloon Payoff At Plan's End

Posted on November 19, 2009
Chapter 13 bankruptcy law permits debtors to "cram down" some secured debts. You can cram down secured car loans originated more than 910 days prior to bankruptcy, and you can cram down mortgages on investment real estate. No cram downs...

The Best Trustee Question, Ever

Posted on November 15, 2009
Picture this. I?m sitting with a bankruptcy client at a typical trustee meeting. It?s a normal Chapter 7 bankruptcy, and I don?t expect any issues. As soon as the Trustee finishes his usually opening questions and comments he ask the...

Each Spouse Wants To Protect Entireties Asset In Their Joint Chapter 7 Bankruptcy

Posted on November 12, 2009
Where one spouse files Chapter 7 bankruptcy and same debtor and the non-filing spouse has no joint unsecured debts any property owned jointly by the two spouses as tenants by entireties property is exempt and is not part of the...

Debtor Can Cram Down Loan For Wife's Car Purchased Within 910 Days of Filing Chapter 13.

Posted on November 09, 2009
Here's a blog post of interest to anyone considering a Chapter 13 bankruptcy and who owns a car subject to a car lien. South Carolina Bankruptcy Lawyer Unleashes Vulcan Intellect on Hanging Paragraph. The post authored by South Carolina bankruptcy...

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Bankruptcy's Effect On Employment And Security Clearance

Posted on November 05, 2009
I often get asked about the effect of filing bankruptcy on debtors' employment. I have sometimes been asked about bankruptcy's effect on a debtor's government security clearance. I found a really good blog post on the subject by California bankruptcy...

Bankruptcy Debtor Seeking Conversion From 13 To 7 Prior To Job Loss: Expresses Dissatisfaction With His Bankruptcy Attorney's Response

Posted on November 02, 2009
I received an email from a person who filed Chapter 13 bankruptcy and who expressed dissatisfaction with their attorney. The caller said that his company was downsizing, or going out of business, and he knew now that he would not...

Court Strips Second Mortgage In Chapter 7 Bankruptcy. Is It Precedent?

Posted on October 31, 2009
Chapter 7 bankruptcy strip second mortgage

Can Chapter 13 Plan Extend Lenght Of Debtor's Car Lease?

Posted on October 25, 2009
A lawyer called me with a question about a car lease in a Chapter 13 bankruptcy. His debtor filed Chapter 13 with a car lease that terminates in three years. His client?s bankruptcy plan is a five-year plan. Chapter 13...

Bankruptcy Not Abusive Where Homestead Mortgage Proceeds Used For Investments

Posted on October 25, 2009
Chapter 7 banrkuptcy abuse mortgage

Using Chapter 13 To Strip Second Mortgage After Completing A Chapter 7 Bankruptcy

Posted on October 22, 2009
Debtors are discovering that they can strip off their second mortgage lien on their primary residence by filing a Chapter 13 where the value of the house is equal or less than the balance of their first mortgage. In such...

Must Judgment Creditor Dissolve Bank Account Garnishment When Debtor Files Bankruptcy?

Posted on October 18, 2009
One of my bankruptcy clients had approximately $700 in a checking account just prior to filing Chapter 7 bankruptcy. Before we filed the bankruptcy petition one of the judgment creditors listed on A bankruptcy called my office to complain that...

Debtor's Rarely Use Bankruptcy To Steal Money From Creditors

Posted on October 13, 2009
Most people who file bankruptcy are good people who do not abuse the bankruptcy system. In fact, almost all of my bankruptcy clients feel bad about wiping out debts they believe they are morally obligated to pay. Then, once in...

Chapter 7 Bankruptcy Made More Difficult By The Newest Lower Median Income Numbers

Posted on October 11, 2009
The census bureau?s median income figures are changing effective for bankruptcy petitions filed after November 1, 2009. Median income is used to determine if prospective bankruptcy debtors pass the means test. Florida?s median income has been increasing since the new...

Second Mortgage Sabotage Of First Mortgage Modification Plan

Posted on October 08, 2009
I would like to ask you, the blog readers, to help a reporter who is investigating practices in the mortgage modification programs. A national business publication is investigating overly aggressive second mortgage lenders. The reporter, Mr. Robert Berner (312-451-7149), is...

Clients' Chapter 7 Bankruptcy Dismissed For "Abuse" and Extravagant Lifestyle

Posted on October 06, 2009
People who pass the means test, or are exempt from the means test, may still have their Chapter 7 bankruptcy dismissed if their filing is deemed "abusive." The United States Trustee (different from the Chapter 7 trustee) may file motions...

Orlando Bankruptcy Courts To Take Tougher Stand On Automobile Valuation

Posted on September 29, 2009
I have heard from several sources that Orlando Division bankruptcy courts are getting tough on car valuation in Chapter 7 bankruptcy. I have written previous blog posts about bankruptcy clients who successfully used valuation sheets from CarMax as evidence of...

Are You Entitled To A Refund Of Your Legal Fees Paid If You Change Your Mind About Filing Bankruptcy?

Posted on September 28, 2009
Sometimes people hire an attorney to file bankruptcy and then change their mind about filing. In some cases, the debtor works things out with his creditors; some prospective debtors receive family assistance to pay their bills, and other debtors just...

Is Debtor Or Trustee Entitled To Rental Income From Properties Not Included In Bankrutcy Estate?

Posted on September 25, 2009
Because of the depressed real estate market most bankruptcy debtors who own investment rental property have no interest in retaining the property after filing Chapter 7 bankruptcy. The Chapter 7 trustees are rarely interested in administering rental properties as part...

Does Bankruptcy Automatic Stay Apply to Creditors Located In Other Countries?

Posted on September 24, 2009
The automatic stay imposed by the filing of a bankruptcy stops all creditors from taking any action to collect a debt from the Debtor or to interfere with property of the bankruptcy estate. I represent a Debtor who owes money...

U.S. Trustee Demonstrates More Flexible Means Test Analysis For Recently Unemployed Chapter 7 Debtors

Posted on September 15, 2009
A debtor?s income for purposes of the bankruptcy means test is based on his last six months actual gross income. The six month income is doubled to arrive at an annual income number. In today?s economy many people are considering...

Good Article About Credit Rating Myths

Posted on September 11, 2009
Many people, if not most people, facing a foreclosure or bankruptcy are very concerned about the impact on their credit rating. Clients frequently ask me how will the foreclosure, short sale, or bankruptcy affect my credit and how can they...

Inherited IRAs Not Exempt- According To Florida State Court Decision

Posted on August 23, 2009
IRA funds are exempt from creditors in bankruptcy pursuant to the exemption in Florida Statute 222.21(a)- except if your "IRA" is inherited, according to a recent decision by a Florida appellate court. The case considered a judgment creditor?s claim against...

Car Repossessed After Bankruptcy Court Rejects Reaffirmation Agreement: Car Payments Were Current

Posted on August 20, 2009
If you file Chapter 7 bankruptcy and want to keep a car with a car loan you are required to sign a reaffirmation agreement with the car lender. Reaffirmation agreements are not automatic; they are subject to approval by the...

Homestead Questions: Size And Owneship Period For Bankruptcy

Posted on August 20, 2009
A client asked me two homestead questions which questions I have previously heard from other clients or email inquiries. This client owned a homestead with significant equity within a municipality. Homestead properties within a city up to � acre in...

Responding To Initial Letters From Debt Collection Companies Prior To Bankruptcy

Posted on August 11, 2009
I found an interesting post on attorney Jonathan Stein?s "California Debt Collection Blog." (http://www.californiadebtblog.com/). Mr. Stein?s post responded to questions from clients about demand letters from his client?s creditors. People had asked Mr...

Mobile Home Residents Should Qualify For Florida's $4,000 Wildcard Property Exemption

Posted on August 04, 2009
Many Chapter 7 bankruptcy debtors live in mobile homes. In Florida, these mobile homes are exempt in bankruptcy whether or not the debtor owns the land on which the mobile home is situated. Mobile homes are not exempted under the...

Bankruptcy, Mortgage Modification, and Short-Sales

Posted on August 02, 2009
Many people file Chapter 7 bankruptcy to eliminate unsecured debts at the same time they are trying to reduce secured debts through a modification of their home mortgage or a short-sale of their home. Bankruptcy clients have reported that their...

Limited Homestead Protection Prior To Two-Year's Florida Residency

Posted on July 26, 2009
If you file Chapter 7 bankruptcy and own a non-exempt real property jointly with a non-filing co-owner (including your spouse) the bankruptcy trustee can for the sale of the jointly owned property regardless of the co-owner?s objection. The trustee?s authority...

Client Seeks Bankruptcy To Avoid Imputed Income After A Foreclosure On Investment Property

Posted on July 23, 2009
Some people facing mortgage foreclosure consider filing bankruptcy to preclude liability for deficiency judgments. Deficiency liability is not the only problem associated with foreclosure; another issue is income tax from imputed income when a lender foregives part of a mortgage...

Restablishing Good Credit After Bankruptcy

Posted on July 23, 2009
Most bankruptcy clients ask me during our initial consultation how bankruptcy will affect their credit and how long will it take them to reestablish their credit after bankruptcy. I have written a few blog posts on this issue. I recently...

Can Debtor's Deduct In Means Test Mortgage Payments Owed But Unpaid?

Posted on July 21, 2009
Prospective bankruptcy debtors who earn above applicable median income must pass the means test in order to file Chapter 7 bankruptcy. The means test formula deducts from income certain allowable expenses to determine if your net income is under the....

Debtor Is Responsible To Report Changes In Finances Or Assets Up To Day His Petition Is Filed

Posted on July 19, 2009
I read a blog post by attorney Craig Andresen, a Minnesota bankruptcy attorney, discussing a problem which occured when a debtor?s assets or finances changed just prior to the attorney?s filing of the debtor?s bankruptcy petition. Most bankruptcy clients complete...

Man Dies Hours After Filing Joint Bankruptcy; Widow Loses Life Insurance Benefits

Posted on July 15, 2009
I received a call from an attorney from his car on the way back from a creditor meeting with the bankruptcy trustee. The attorneys clients, husband and wife, filed a joint bankruptcy petition. The petition was filed in the morning....

Roommates Sharing A Rented House With Separate Leases Are A Two-Person Household For Bankruptcy Means Test

Posted on July 08, 2009
A debtor?s income relative to the applicable median income is important. Debtor?s below median income are exempt from the means test, whereas those above median income must qualify under the means test to file Chapter 7 bankruptcy. Your applicable median...

Leasing Portion of Homestead Land To Third Party Does Not Impair Exemption

Posted on June 30, 2009
I came upon another interesting court decision concerning Florida homestead. In this bankruptcy case a debtor owned a property in the county less than 160 acres. The debtor placed two mobile homes on the property. He lived in one mobile...

Chapter 7 Trustee Goes After 2009 Prospective Tax Refunds

Posted on June 26, 2009
Bankruptcy trustees may be more aggressively seeking your income tax refunds. Tax refunds are non-exempt money in most bankruptcy cases. If you file bankruptcy during the first four or five months of the calendar year, and you are due or...

Bankruptcy Court Exempts Homestead Property Used For Debtor's Business

Posted on June 23, 2009
Homestead protection applies to homes and land occupied by a debtor as his primary residence. Property used for commercial purposes or for the production of income generally does not qualify for homestead protection. A Florida bankruptcy court recently considered married...

Resulting Trust Theory Can Protect Asset Titled With Parent For Estate Planning Purposes

Posted on June 19, 2009
In the past week I received similar questions from three prospective bankruptcy debtors about assets owned jointly with their parents. In each instance, the parent had added the debtor/ child to the parent?s deed, bank account, or CD for estate...

The Effect of Bankruptcy Or Foreclosure On Your Ability To Qualfiy For Your Next Home Mortgage

Posted on June 10, 2009
One of my recent clients works as a supervisor in the mortgage lending department of a national bank. Many people asked me about the impact of bankruptcy and foreclosure on their credit. I asked this client how many years does...

HOA Fees Liability After Bankruptcy

Posted on June 09, 2009
I read an interesting blog post about liability for homeowners association fees after filing Chapter 7 banrkuptcy.I still owe HOA Fees after I filed Bankruptcy and Surrendered my Home? : Bankruptcy Law Network. The new bankruptcy law does not discharge...

Bankruptcy's Effect On Credit Score: Lender Rebuts Common Myths

Posted on June 02, 2009
Bankruptcy debtors often worry about the effect of a bankruptcy on their credit rating and their ability to finance new cars and homes after filing bankruptcy. The consensus opinion of my clients is that a Chapter 7 bankruptcy ruins your...

Resulting Trust Theory Used To Exclude From Bankruptcy Assets Titled In Debtor's Name

Posted on May 28, 2009
Parents often add their children to the parent?s bank accounts or real estate title so that the child can use the assets for the parent?s benefit in the event of the parent?s disability or to avoid probate upon the parent?s...

Can Small Business Survive Owner's Personal Bankruptcy?

Posted on May 27, 2009
Many bankruptcy clients during the current recession own a small businesse, and they are concerned about the impact of their personal bankruptcy on their business. Can they continue to own and operate their small business while filing personal bankruptcy to...

Bankruptcy Sometimes Involves Luck

Posted on May 19, 2009
Like most things in life bankruptcy involves some luck. Particularly, there is luck in the draw of your bankruptcy trustee. There is variation among Chapter 7 bankruptcy trustees in their policies concerning pursuit of non-exempt assets which can be taken...

Can Debtors File Bankruptcy in Florida While Caring For Parents in Another State?

Posted on May 14, 2009
In the past month two prospective bankruptcy clients presented the same issue with similar facts. The debtors had moved to Florida in the past year and rented apartments intending to get a job and reside in Florida. Soon thereafter, the...

Homestead Exemption and Entireties Exemption Are Independent Protections

Posted on May 08, 2009
A joint debtor?s homestead can be exempt in bankruptcy either as homestead pursuant to the Florida Constitutional exemption or exempt as tenants by entireties pursuant to the exemption established by our state court judicial traditions. Suppose that five years prior...

Bankruptcy Attorney Doesn?t Return My Phone Calls

Posted on May 07, 2009
I found an interesting article about bankruptcy law practice written by a Oregon bankruptcy attorney named Karen Oakes. My Bankruptcy Attorney Doesn?t Return My Phone Calls. Why? : Bankruptcy Law Network. All attorneys , not just bankruptcy attorneys, are reminded...

"Special Circumstance" Exception To Means Test Is Narrowly Construced By Florida Court

Posted on May 05, 2009
People who earn above median income and who fail the "means test" cannot file Chapter 7 bankruptcy. There is an exception for debtors who can demonstrate "special circumstances." I have had many clients who felt their circumstances were special so...

Dismissals Of Chapter 7 Bankruptcy As Abusive When Debtor Passes Means Test

Posted on May 03, 2009
Many bankruptcy debtors do not understand eligibility for Chapter 7 bankruptcy. They rely too much on the means test, and they assume that if they are exempt from or pass the means test they automatically are eligible for Chapter 7....

Mortgage Companies Refusing Loan Modification To Some Chapter 7 Debtors

Posted on May 03, 2009
There was an article in the newspaper today concerning the increasing number of mortgage modifications for troubled homeowners. I have received inquires from some of my bankruptcy clients who are attempting to modify their home mortgage after filing Chapter 7...

U.S. Senate Defeats Bill That Would Allow Bankruptcy Judges To Modify Mortgages in Chapter 13

Posted on April 30, 2009
The United States Senate defeated the proposal to permit bankruptcy judges to force modification of home mortgages in Chapter 13 bankruptcy proceedings. The bill earned 45 votes, far less than the 60 votes needed to cut off a potential filibuster....

Chapter 13 Plan Payments Can Change If Family's Financial Situation Changes During Plan

Posted on April 26, 2009
I often have to explain to prospective Chapter 7 bankruptcy debtors that they are ineligible to file Chapter 7 and fail the means test because they make too much money relative to their expenses. The means test forces these debtors...

Excessive Credit Card Debt In Unrealistic Plan To Save Business Not Grounds To Deny Chapter 7

Posted on April 26, 2009
A debtor?s business is failing; there is no rational prospect of saving the business in poor economic environment. Nevertheless, the business owners tries to keep the business alive by funding operating deficits with charges on several personal credit cards...

Surrendering Home Does Not Affect Means Test Calculation in Chapter 7

Posted on April 26, 2009
A prospective Chapter 7 bankruptcy debtor has substantial credit card debt and a large mortgage payment on a house that has lost its equity in the housing collapse. By depleting savings the debtor has managed to keep all payments current....

Bankruptcy Court Gives Homestead Protection To Motor Home

Posted on April 24, 2009
Questions come up from time to time about qualification of motor homes as protected homestead property. There have been several court cases which have disqualified motor homes, as well as houseboats, as homestead. However, a recent case in Orlando bankruptcy...

Can Debtor Claim Homestead After Moving Into Assisted Living Facility?

Posted on April 20, 2009
Today, I responded to a caller who was considering filing Chapter 7 bankruptcy for his elderly parent. The parent owns a house in Florida free and clear of any mortgage debt. The parent suffers from dementia. The family moved the...

Negotiating Mortgage Modification Can Create Substantial Abuse Issues in Chapter 7 Bankruptcy

Posted on April 12, 2009
Dealing with your mortgage company and filing Chapter 7 bankruptcy are supposed to be independent of one another. Filing Chapter 7 bankruptcy should not effect your relationship with the mortgage lender of an exempt homestead property; but, it can in...

Credit Crunch Affecting Chapter 7 Trustee Property Sales: More Leverage To Debtors

Posted on April 07, 2009
Credit problems are affecting Chapter 7 Trustees as well as Chapter 7 debtors. At a recent creditor meeting a Trustee explained to me that tightening of credit in the general economy is adversely affecting the trustees ability to liquidate non-exempt...

Its Becoming Harder To Get Car Loan After Chapter 7 Bankruptcy

Posted on March 27, 2009
Its more difficult for anyone to get credit today, and its particularly becoming more difficult to get credit after filing bankruptcy. I had a conversation yesterday with a man who manages a large car dealership. He has been in the...

Good News For Used Car Dealers May Not Be Good For Chapter 7 Debtors

Posted on March 26, 2009
I buy all my cars from a guy named "Mo" in Longwood, Florida, at his business called Auto Gallery. I?ve purchased several used cars from Mo during the past 15 years. Last week I asked Mo how his used car...

Homestead Protection For Commercial Building With Upstairs Apartment

Posted on March 25, 2009
The issue is whether you can exempt as homestead a commercial building with an second floor apartment used as your primary residence. A south Florida debtor owned a commercial building in Miami. He operated a adult entertainment club on the...

Consequences Of Debtor Not Signing Reaffirmation Agreements For Car Loans and Leases

Posted on March 22, 2009
Chapter 7 bankruptcy debtors are required to reaffirm car loans in order to keep their car and their car loan through a bankruptcy. The bankruptcy code says that if a debtor does not reaffirm a car loan (or other secured...

Bankruptcy Does Not Exempt Cars Because You Need Car To Get To Work

Posted on March 22, 2009
Bankruptcy law is supposed to give the honest debtor a fresh start in life. A good job is the basis of a fresh start for most bankruptcy debtors, and most good jobs in Florida require that the employee commute by...

Financing Car Purchase During Chapter 7 Bankruptcy

Posted on March 20, 2009
Many Chapter 7 bankruptcy clients would like to surrender a car and escape an upside-down car loan, but they are afraid they will not be able to buy a replacement car. Many people have destroyed their credit by the time...

Is Repayment To Friend Prior To Bankruptcy An Impermissible Preference?

Posted on March 18, 2009
Bankruptcy is designed to treat all creditors equally. If a debtor favors particular creditors by paying the preferred creditor just before filing bankruptcy the bankruptcy trustee can force the preferred creditor to give back the money for equal distribution to...

Mortgage Modification Program Enacted By Federal Government

Posted on March 07, 2009
I receive several emails and calls daily from people with problem home mortgages. This week several people have asked me whether they qualify for help under the government?s new mortgage assistance program. I read an article in the Wall Street...

Trustee Takes Debtor's Interest In Real Property Wholly Paid For By Parent Co-owner.

Posted on March 02, 2009

Possible Limit On IRA Exemption In Florida Bankruptcy Cases

Posted on February 28, 2009

Court Makes Bankruptcy Easier For Mobile Home Residents

Posted on February 22, 2009
A bankruptcy court in Tampa made bankruptcy easier for people who live in mobile homes on rented mobile home lots. A recently enacted Florida statute provides a $4,000 "wildcard" exemption for personal property which courts have said can be tacked...

Creditor Harassment Claims During Chapter 7 Bankruptcy

Posted on February 17, 2009
understand some Chapter 7 trustees in Tampa, and maybe elsewhere, are asking some debtors at the creditor meeting if they have been subject to creditor harassment prior to filing bankruptcy. The question is being asked to see if the debtor could assert a claim under the Fair Debt Collection Practices Act...

Pre-Bankruptcy Planning: Court Allows Large Cash Investment in Homestead Same Month Bankruptcy Filed

Posted on February 15, 2009
A recent court decision from the 8th Circuit Court of Appeals seems to provide debtors greater leniency to shelter money in their exempt homestead.

Does Sending 1099 To Bankruptcy Debtor Violate Automatic Stay?

Posted on February 11, 2009
The debtor received his bankruptcy discharge in 2008. The mortgage company sent the debtor an IRS From 1099 representing imputed income for forgiveness of the mortgage debt. The attorney believes that sending the 1099 may be a violation of the automatic stay

Not A Fraudulent Conveyance To Take Your Name Off Title Of Asset Wholly Paid For By Another Person

Posted on February 11, 2009
I have written occasionally, and recently, about situations where a parent purchases an asset and puts their child?s name on the asset as a joint owner for estate planning purposes

Car Title Determine's Chapter 7 Trustee Interest In Car Paid For Wholly By Debtor's Parents

Posted on February 01, 2009
Many parents put their children on title to the parents? real estate, bank accounts, and cars for estate planning purposes. The parents want to give the children access to the assets in the event of the parents? disability or death....

Chapter 7 Trustee's Discretion To Pursue or Ignore Non-exempt Assets

Posted on February 01, 2009
Chapter 7 trustees have discretion to pursue, or not pursue, a debtor?s non-exempt assets for the benefit of the bankruptcy estate. Just because a debtor files bankruptcy with assets over the personal property exemption limits does not mean he will...

Chapter 7 Bankruptcy Risks Money In Jointly Owned Parent/Child Bank Account

Posted on January 25, 2009
Parents often add their child?s name to the parent?s bank account so that the child will have access to the parent?s fund to pay the parents? medical care and other support expenses as they grow older. This arrangement causes problems...

Do Large, Irregular IRA Withdrawals Count As Debtor Income In Means Test Calculation?

Posted on January 22, 2009
The definition of income is important in the administration of the "means test" to determine eligibility for Chapter 7 bankruptcy. Some sources of income are specifically excluded from "income" for means test purposes; social security is an example of income...

Don't Allow A Mortgage Lender To Invade Your Bank Accounts To Pay Past-Due Payments

Posted on January 20, 2009
People often are driven to file bankruptcy after a creditor has successfully seized their money. Many banks want the borrower to maintain bank accounts as a condition of getting a home mortgage Often prospective bankruptcy clients tell me they have...

Chapter 13 Bankruptcy Changes Clear Key Hurdle: Hope For Homeowners

Posted on January 09, 2009
I received a few phone calls today about articles in national newspapers concerning prospective changes to Chapter 13 bankrupcy law. Plan to Cut Foreclosure Rate Clears Key Hurdle - WSJ.com. The proposed new law is intended to help homeowners modify....

Mobile Home Owner Eligible For "Wildcard" Personal Property Exemption in Chapter 7 Bankruptcy

Posted on January 04, 2009
People who do not claim or benefit from a homestead exemption are entitled to an additional personal property exemption in the amount of $4,000 in Chapter 7 bankruptcy. The $4,000 property exemption can be added to the debtors Constitutional exemptions...

How Can Chapter 7 Debtors Learn To Properly Value Their Furniture On Their Bankruptcy Schedules

Posted on January 03, 2009
Florida bankruptcy law permits each debtor to exempt $1,000 of furniture and other personal property including cash. This exemption is small compared to personal property exemptions permitted bankruptcy debtors in other states. Fortunately, your personal property is valued for bankruptcy...

Study Suggest Reasons For Failure of Voluntary Mortgage Modifications And Solution Through Chapter 13 Changes

Posted on December 26, 2008
Mortgage lenders' voluntary loan modification programs have given many homeowners hope that their bank will negotiate with them to help save their homes from foreclosure. However, a study sponsored by an organization of bankruptcy attorneys (the "NACBA") found that the...

Discharge Of Attorney Fees Awarded As Discovery Sanction In Civil Lawsuit

Posted on December 08, 2008
A caller and prospective bankruptcy debtor asked if attorneys fees awarded in a civil proceeding as a discovery sanction could be discharged in a Chapter 7 bankruptcy. The caller was concerned that "sanctions" imposed by a civil state court are...

People Without "Green Cards" May File Bankruptcy in Florida

Posted on December 08, 2008
Do you have to be a U.S. citizen or a permanent resident to file bankruptcy in Florida? A caller asked me today whether he had to have his "green card" before he could file Chapter 7 bankruptcy. You do not...

Gambling Debt In Chapter 7 Discharge

Posted on December 03, 2008
From time to time I speak with prospective bankruptcy debtors who have accumulated gambling debts. Some of these callers have borrowed large amounts of money on their credit cards to fund their gambling enterprises. The issue is whether money borrowed...

Bill Introduced To Permit Chapter 13 Debtors To Modify "Upside Down" Home Mortgages

Posted on November 28, 2008
Democratic congressman introduced this week a bill (H.B. 7307) to change Chapter 13 bankruptcy law to permit homeowners to modify the terms and principal balance of their home mortgages. This change in the law would mean that people whose mortgages...

Why Home Loans Should Not Be Reaffirmed

Posted on November 28, 2008
I saw a good blog entry written by San Diego attorney Miachael Doan about reaffirmation of home mortgages.Why Home Loans are not Reaffirmed : Bankruptcy Law Network. I have tried over the years to discourage my bankruptcy clients from reaffirming...

When Is Chapter 13 Better Than Chapter 7 Bankruptcy

Posted on November 23, 2008
The following post is submitted by attorney Kelly Kilpatrick: It?s a tough position to find yourself in ? you?re way over your head in debt and there seems to be no way out, except to resort to declaring bankruptcy. It?s...

Can Debtor Avoid Judgment Lien Existing Prior To Homestead Purchase?

Posted on November 22, 2008
A judgment lien automatically and immediately attaches to any real property the debtor owns in any county where the creditor records a certified copy of the lien. If a debtor owns investment property where a judgment lien is recorded the...

Interesting Question About Homestead Exemption In Bankruptcy

Posted on November 12, 2008
I enjoy getting challenging questions for readers, especially from other attorneys. I write my blog entries for "people" as opposed to attorneys, so I am flattered that any attorney would find my comments interesting. Here?s an interesting email from a...

Make Sure Your The Value Of Your Automobile On Your Bankruptcy Petition Reflects The Depressed Used Car Market

Posted on November 12, 2008
Bankruptcy trustees have in the past determined the value of a debtor?s car by using the average of the wholesale and retail value in the NADA car book (the yellow book). In the past few months car values have plummeted...

Is There A "Hardship Exemption" Under Florida Law?

Posted on November 11, 2008
Florida law has many laws protecting the debtor?s ability to provide for his family. Creditors cannot take a family homestead, and creditors cannot garnish the wages of a debtor who supports a spouse or children. A debtor may own a...

Interesting Homestead Issue In Bankruptcy Court

Posted on November 03, 2008
While waiting my turn in a bankruptcy courtroom I heard a debtor?s attorney and a bankruptcy trustee argue an interesting homestead case. The debtor purchased a single family townhouse as his principal residence. After the moved in he created a...

Is Motor Home Exempt Homestead In Chapter 7?

Posted on November 03, 2008
An asset protection client described the following homestead dilemma. The client lived in a mobile home on a lot he and his family rented in a trailer home park. The mobile home had a motor and was drive able, but...

Availability of Credit Cards After Bankruptcy

Posted on October 22, 2008
A common concern of people considering Chapter 7 bankruptcy is whether they should keep and reaffirm one or more credit cards during bankruptcy. Many Chapter 7 bankruptcy clients believe they need at least one credit card after filing bankruptcy to...

Attorney Helps Re-establish Credit After Bankruptcy

Posted on October 21, 2008
An Orlando attorney contacted me recently to discuss his law practice that focuses on resolving credit report issues and debt collection matters. I was happy to receive his call because many of my bankruptcy clients ask me for assistance dealing...

Are Investments Financed With Consumer Credit Cards Non-Consumer Debt For Means Test Qualification?

Posted on October 15, 2008
We are preparing a bankruptcy for a client whose household income is over $100,000 per year. He does not even come close to passing the means test. The client states that most of credit card debt is for cash advances...

Hiring Debt-Relief Company To Negotiate With Credit Cards

Posted on October 15, 2008
Many prospective bankruptcy clients ask me during their initial consultation whether they should use a company to help them negotiate settlements with credit card companies prior to pursuing Chapter 7 bankruptcy. My experience is that credit negotiation companies can help...

Watch What You Say When You Meet The Bankruptcy Trustee

Posted on October 09, 2008
I tell my bankruptcy clients that when they meet the Chapter 7 Trustee they should answer his questions truthfully and simply, but that they should not volunteer information which is not responsive to questions. Last week, one of my clients...

Debtor's Decision To Surrender Car Was A $1,000 Mistake

Posted on October 09, 2008
A bankruptcy client owned a car with a small car loan. The client had thousands of dollars of equity in a car and stated on his bankruptcy petition that he wanted to reaffirm the loan and keep the car. I...

Company Recommended To Help With Mortgage Workouts

Posted on October 07, 2008
People facing foreclosure occasionally asks me whether they should hire an attorney or a nonlegal company to help them negotiate mortgage modification. I explain that most attorneys, including myself, do not do that type of work and that negotiating a...

Mortgage Foreclosure Mitigation in Final Rescue Bill

Posted on October 05, 2008
I have previously posted on this Blog information about homeowner mortgage benefits in the initial bailout bill that was rejected by the House on September 29, 2008. I have reviewed the final, revised bill signed into law on October 3,...

Florida Bar Homeowner Assistance Article

Posted on September 30, 2008
A recent blog post described a voluntary program initiated by the Florida Bar to help homeowners negotiate with mortgage lenders. An article about this program appears in the current issue of the Florida Bar News. Link: Fighting against foreclosure. The...

Draft of Financial Recovery Act Promises Foreclosure Relief

Posted on September 28, 2008
The current draft of the governments? financially recovery act, formally the "Emergency Economic Stabilization Act of 2008" contains several provisions designed to help homeowner prevent foreclosure. The terms of the Act are drafted in general, unspecific terms, and certainly there...

Using Chapter 7 Bankrputcy To Battle Mortgage Lender Seeking Foreclosure

Posted on September 28, 2008
I probably get one or more calls and emails each day from someone who wants to file Chapter 7 bankruptcy because they are facing a mortgage foreclosure. People believe they should file bankruptcy to avoid a deficiency judgment that they...

Modification Of Chapter 13 Plans For Debtors In Financial Distress

Posted on September 28, 2008
I attended a meeting of local bankruptcy attorneys where the Chapter 13 Trustee spoke about current developments. She stated that the real estate recession in Florida, and job losses in many related industries is causing more and more Chapter 13...

Joint Tax Refund Not Protected As Entireties Asset

Posted on September 14, 2008
There have been several cases in recent years, after 2001, dealing with exemption in bankruptcy of joint tax refunds where only one spouse has filed bankruptcy. The general rule is that property owned jointly by husband and wife is exempt...

Here?s a question I received last

Posted on September 13, 2008
Here?s a question I received last week about using Chapter 13 bankruptcy to rescue an investment property and a primary residence from foreclosure. "I"m in the midst of having two homes foreclosed on. One in an investment propert with a...

Question About Income Taxes In Chapter 7 Bankruptcy

Posted on September 13, 2008
Treatment of income tax debt in Chapter 7 bankruptcy is a complicated subject. There are many rules and exceptions to the rules applicable to determine if past due taxes can be discharged. I received the following question by email: "I...

Can Chapter 13 Help Debtor With $ 1 Million Plus Mortgage

Posted on September 13, 2008
Here?s a question I received last week about using Chapter 13 bankruptcy to save an investment property and a primary residence from foreclosure. "I'm in the midst of having two homes foreclosed on. One in an investment propert with a...

Stay Of Residential Evictions Under New Bankruptcy Law

Posted on September 10, 2008
I received the following email from a landlord (creditor) concerning a tenant who filed bankruptcy on the eve of eviction. "I got my final judgment for possession count 1 only Sept. 4 my tenant went to file bankruptcy September 5...

Cash Value Life Insurance Owned Jointly With Non-Filing Spouse

Posted on August 29, 2008
The cash value of a life insurance contract may be exempt under Florida law. Cash value life insurance is exempt only to the extent of life insurance owned by the debtor insuring his own life. The exemption does not hinge...

Trustee Pursues Next Year's Tax Refund This Year

Posted on August 26, 2008
In previous years Chapter 7 trustees would inquire about debtors? income tax refunds after the first of the year through May or June. They would ask if the debtors had filed their tax returns, if they had received a refund...

Person Earning $25,000 Per Month Wants To File Chapter 7 Bankruptcy

Posted on August 20, 2008
Most people would agree that a person who makes $25,000 per month should not be able to discharge his unsecured debts in a Chapter 7 bankruptcy. One such high-earning individual came to my office to discharge over $1million of unsecured...

Does Creditor Commit Fraud By Using Credit Card and Filing Bankruptcy Soon Thereafter?

Posted on August 05, 2008
Many debtors express concern that a creditor will say they were defrauded when the debtor used the credit card filed bankruptcy wiping out the debt. I am often asked how far back will creditors look in deciding whether use of...

Appeals Court Upholds Discharge Denial For Homestead Purchase and Improvement Shortly Before Bankruptcy

Posted on August 03, 2008
Purchasing a homestead in Florida shortly prior to filing bankruptcy could be deemed a fraudulent transfer and lead to a denial of your bankruptcy discharge. Purchasing or improving a Florida homestead and then filing bankruptcy soon thereafter is, by itself,...

Bankruptcy Does Not Discharge Some Attorneys Fees

Posted on July 29, 2008
Bankruptcy does not solve all debt problems. This week I interviewed a client who wanted to file Chapter 7 bankruptcy to stop a lawsuit. The prospective client had been appointed trustee of a family member?s trust. After the family member...

Second Mortgage Lender More Likely To Pursue Deficiency Judgment

Posted on July 24, 2008
I have often written about mortgage deficiency judgments pointing out that up to now few institutional mortgage lenders are pursuing deficiencies in Florida. Borrowers should distinguish between personal liability on first and second mortgages. When either the first or second...

Is Unmarried Roomate Included in Household Size?

Posted on July 17, 2008
Here's an interesting article I found concerning the amount of people counted in determining size of a debtor's household.Link: Can I Include My Roommate in My Household Size? : Bankruptcy Law Network. The larger the size of the debtor's household...

Court Denies Entireties Ownership Of Law Practice

Posted on July 17, 2008
An attorney formed a corporation to own his law practice. He formed the corporation under Florida?s general corporation statute instead of the professional corporation statute. He issued all the stock to himself and his wife jointly. The lawyer then filed...

Insuring Your Bank Deposits

Posted on July 15, 2008
In the past few days following the failure of IndyMac Bank in California I received a few email questions from people concerned about the safety of their bank accounts. Most people know that the FDIC incures bank accounts up to...

Defending Mortgage Foreclosure

Posted on July 01, 2008
There are so many foreclosures and so few attorneys who know how to defend on behalf of the homeowner. I have referred many clients facing foreclosure to an Orlando real estate attorney named David Cohen. David has had good success...

Unfiled Tax Returns: Chapter 13 Bankruptcy

Posted on June 29, 2008
I received an interesting email about Chapter 13 and income taxes from attorney Larry Heinkel from St. Petersburg. Mr. Heinkel specializes in the area of income taxation and bankruptcy and represents debtors in bankruptcy courts throughout Florida. (taxproblemlaw...

A Resident of Another Country Wants To File Bankruptcy in Florida

Posted on June 29, 2008
Can a person who currently resides in another country file bankruptcy in Florida? A client called to discuss elimination of his credit card debts which he accumulated while living in Florida. The client and spouse recently moved from Florida and...

Debtor's Discharge of Attorneys Fees Payable As Part of Divorce Judgment

Posted on June 22, 2008
A Chapter 7 debtor cannot discharge alimony or child support obligations. A bankruptcy client asked me whether he could discharge that part of a divorce judgment related to his spouse?s attorneys fees. I found that this issued had been addressed...

Are Joint Tax Refunds Protected As Entireties Property When One Taxpayer Files Bankruptcy?

Posted on June 21, 2008
Florida law presumes that personal property owned jointly by married couples is tenants by the entireties property which is exempt if one spouse files bankruptcy individually. A new client this past week asked me if a tax return he expects...

Workers Compensation Payments in Bankruptcy

Posted on June 12, 2008
I consulted today with a client who is the beneficiary of a workers? compensation award. He currently receives monthly workers? comp payments, and he expects an additional lump sum settlement in the near future. A creditor recently received a large...

Chapter 13: Court Determines Amount of Avoided Secured Liens

Posted on June 01, 2008
In Chapter 13 bankruptcy the debtor can wipe away part or all of some judicial liens. Judicial liens are liens placed on property by judgment creditors as opposed to purchase money liens which are placed on property by the vendor...

Does Means Test Include Income Earned By Non-filing Live-in Companions?

Posted on May 31, 2008
Many Chapter 7 means tests involve issues about the size of a household and computations of household income. Consider the following questions posed in an email. A prospective debtor lives with his young child and the child?s mother. The debtor...

Joint Tax Refund: Is It Exempt As Entireties Asset?

Posted on May 30, 2008
I would expect that tax refunds payable to husband and wife who filed taxes jointly would be considered tenants by entireties property exempt from the creditors of either spouse. A bankruptcy trustee challenged the exemption of a joint tax refund...

Can An Undersecured Mortgage Lender Attack Tenants By Entireties Assets In Chapter 7?

Posted on May 20, 2008
I often get legal questions I can?t answer with certainty. For instance, I recently consulted with a man who had guaranteed a large business debt. His wife did not sign the guarantee. The man and his wife had most of...

Negotiating With Car Lenders

Posted on May 20, 2008
I had a conversation with some bankruptcy attorneys at the bankruptcy court building. The attorneys told me that their own bankruptcy clients have had increasing success negotiating with automobile finance companies to modify terms of car loans after the clients...

Social Security Income in Chapter 13

Posted on May 16, 2008
I received an email about the treatment in Chapter 13 bankruptcy of money received for basic social security and for social security disability. Social security payments do not count as income for computation of means test eligibility under the new...

Homestead Accounts Not Applicable For Sale After Filing Bankruptcy

Posted on May 09, 2008
I spoke with a person currently involved in a Chapter 7 bankruptcy and is involved in a dispute with the Trustee over her homestead exemption. Prior to filing bankruptcy the debtor listed her house for sale. She filed Chapter 7...

Bank of American Gets Tough On Credit Card Payments

Posted on April 30, 2008
People who bank at Bank of America and who have credit cards through the same bank are having problems when they don?t pay credit card payments. Bank of America, more than most banks, is enforcing a provision in their credit...

Can You File Bankruptcy In Florida If You Work And Live Overseas Temorarily?

Posted on April 20, 2008
I received an email from a man who was working overseas on a long-term work assignment. His last residence in the United States was in Volusia County, Florida. He wanted to know if he could file bankruptcy and if his...

Debtor Loses Car Titled Jointly With His Child

Posted on April 17, 2008
Parents who buy cars for a child often hold title to the car jointly with the child. In a recent case from the Orlando bankruptcy court a debtor asserted that a titled jointly by the adult debtor and his child...

Discharge Of Fraud Judgment With Credit Cards

Posted on April 13, 2008
A prospective client consulted with me for "pre-bankruptcy planning." The client had a judgment for over $100,000 from a civil suit where the prospective debtor was found liable for civil fraud. Debts from fraud are not dischargeable in bankruptcy. This...

How Do Bankruptcy Trustees Get Paid

Posted on April 13, 2008
Bankruptcy clients sometimes ask how much money a bankruptcy trustee gets paid and how are they paid. I read a good summary of Trustee compensation in a blog post by California attorney Michael Doan on the Bankruptcy Law Network: CHAPTER...

Getting Banks To Pay Your Taxes: Some Debtors Are Discharging Credit Card Debt Used For Income Taxes

Posted on April 04, 2008
I have met three or four prospective Chapter 7 bankruptcy clients over the past few months who told me they paid their 2007 taxes with a credit card and that they now want to file bankruptcy to include the same...

Mortgage Deficiency Judgments: A Different Opinion From Creditors

Posted on April 01, 2008
In response to my statements on this Blog that most lenders do not pursue mortgage deficiency judgments, I received a email from an experienced collection attorney expressing a contrary opinion. The collection attorney stated that he knows that lenders will...

Deficiency Judgments: Update On Tax Consequences

Posted on March 31, 2008
Mortgage deficiency judgments are main reason people express currently for seeking my asset protection advice. I have previously written on this Blog that most lenders do not pursue mortgage deficiencies and some of the reasons for this policy. I just...

Preferential Repayment Of Parents' HELOC Loan

Posted on March 27, 2008
If a debtor repays a prior unsecured loan to another family member within one year of filing bankruptcy the trustee can recover the repayments from the family member as a preferential payment. Debtors are not permitted to prefer family members...

Credit Repair After Bankruptcy

Posted on March 10, 2008
Often I am asked about rebuilding credit after bankruptcy. Although credit rating is a lending issue and not a legal bankruptcy issue, I understand from reports of prior clients that most people find it easier than first throught to re-establish...

Why Won't Mortgage Company Negotiate With Me?

Posted on March 07, 2008
At least once a day someone calls me about problems they face paying one or mortgages on their Florida real estate. Many people ask if I could assist them, or at least advise them, in negotiating a work out agreement...

What Happens When Debtor Buys A Car For His Child

Posted on March 06, 2008
Many young adults need their parents? help to purchase their first car. Sometimes the parent puts the car in their own name in order to get lower insurance premiums or better loan rates. Typically, the child drives the car, makes...

Student Loan Discharge: Bankruptcy Court Explains Undue Hardship

Posted on February 27, 2008
Bankruptcy clients usually accept the fact that student loans are not dischargeable. Some clients are aware of the "undue hardship" exception where these loans can be discharged. It is very difficult to wipe out student loans as an undue hardship....

Florida Court Curtails Personal Property Exemptions

Posted on February 27, 2008
An Orlando bankruptcy court issued a decision which curtails the personal property exemptions for debtors who own their own residence. The case is In re: James Matthew Franzese, Case No. 07-3944-KSJ. In July, 2007, the Florida legislature created a $4,000...

Dealing With Annoying Debt Collectors

Posted on February 22, 2008
Many bankruptcy clients become upset and worried because they are harassed by credit card collectors. I usually advise people filing Chapter 7 to stop making credit card payments upon deciding to file bankruptcy. Ceasing payments increases collection activity...

Credit Rating After Bankruptcy or Foreclosure

Posted on February 20, 2008
Clients frequently asked me how bankruptcy or a mortgage foreclosure will affect their credit. rating. I usually respond by stating that one?s credit rating is not a legal issue unless there is a violation of federal credit reporting acts. Recently...

Tax Rebate

Posted on February 14, 2008
Most people who are considering bankruptcy will soon receive the economic stimulus tax rebate recently passed by Congress and signed by President Bush. Someone asked me today whether a bankruptcy trustee will try to seize the refund as part of...

Interpreting Florida's New $4,000 Personal Property Exemption

Posted on February 05, 2008
The Florida Constitution gives debtor?s a $1,000 exemption in all personal property such as cloths, furniture, and cash in financial accounts. The Florida legislature enacted a new law in July, 2007, providing debtors an additional $4,000 "wildcard" exemption in personal...

Another Tax Trap From Short Sale or Deed in Lieu

Posted on January 31, 2008
I saw an email about income tax liability associated with foreclosure or bankruptcy sent by attorney Larry Heinkel. The email addresses income tax liability from the foreclosure of properties which have previously been depreciated for tax purposes. Most people know...

Is Payment To Parents' Corporation A Preference To An Insider

Posted on January 29, 2008
Within six months of filing Chapter 7 bankruptcy a debtor paid back a $10,000 loan from his parents by taking a cash advance on a credit card. In fact, the parents made the loan from a business checking account from...

Childrens' Trust in Chapter 7 Bankruptcy

Posted on January 27, 2008
Parents establish an irrevocable trust for the benefit of their children and primarily for educational purposes. The parents serve as trustees. One of the children has special needs. Family friends want to help the parents out financially. Rather than give...

New Law Eliminates Income Tax Liablity For Some Short Sales

Posted on January 25, 2008
Previous posts on this blog have discussed income tax risk associated with giving banks a deed in lieu of foreclosure or arrangements for a short sale. The general rule is that foregiveness of debt, including a bank's waiving mortgage deficiency...

U.S.Trustee Seminar Helps Clarify Means Test Exemptions

Posted on January 25, 2008
The U.S. Trustee?s office in Orlando held a seminar to discuss their application of the Means Test. Among many interesting topics were the characterization of debts as either consumer debts or business debts. The distinction is important to determine if...

Chapter 13: Stripping Away Second Mortgage

Posted on January 14, 2008
I occasionally get valuable tips from other bankruptcy attorneys who read this blog. Ben Stolz, Esq. recently referred me to this article about stripping away unsecured second mortgages in Chapter 13 bankruptcy cases. Link: Second and Third Mortgages Mean You...

Did Transfer of IRA Proceeds Lose Protection Prior to Bankruptcy?

Posted on January 06, 2008
A prospective Chapter 7 bankruptcy client told me he had recently withdrawn substantial money from his IRA and had given the money to his adult son. The client intended to buy a house to be used as his new homestead,...

Bankruptcy Discharge of Credit Card Debt Used to Pay Taxes

Posted on December 20, 2007
A caller asked me if he could discharge in bankruptcy a credit card charge of $10,000 used to pay property taxes on commercial real estate. The general rule is that all credit card debt and other unsecured debts are dischargeable...

Are Partnership Distributions Means Test Income?

Posted on December 18, 2007
The means test considers all regular family income. In some cases, it is unclear whether money the debtor receives to pay living expenses is income for means test purposes. Consider a person who invests $200,000 in to a business partnership....