Jacksonville Bankruptcy Lawyer Blog

When someone files for bankruptcy a trustee is appointed by the court to hold the debtor's unexempt property in trust for the benefit of that debtor's creditors. That property is then either liquidated at auction or repurchased by the debtor. Because there is a cost associated with the collection and liquidation of assets, the trustee will often give a small discount to the debtor, should the debtor wish to pay for or "buy back" the unexempt property. These buy backs should be thought of as a courtesy, as they are not a right of the debtor and as such the terms are between the debtor and trustee.

In a Chapter 7, the trustee's pay is set forth by statute and begins as a set portion of the filing fee, say $60.00 of the $299.00. From there they get a graduated percentage of the property they liquidate for the benefit of the creditors. Those percentages are set forth in 11 USC 326(a) as follows:
25% of the first $5,000;
10% of the next $50,000;
5% of the next $1,000,000; and
3% of any monies in excess of $1,000,000.

In a Chapter 13, the trustees get paid a flat rate percentage of all the money they collect for creditors. This rate varies from state to state, but in Florida it is set at 10%, however it is actually calculated by dividing the total sum by 0.9 rather than multiplying by 0.01. As this percentage includes ANY payment to a creditor, including ongoing payments on home mortgages, it is hugely advantageous if we can allow a debtor to pay for their home outside their plan so as to avoid those ongoing charges.

Continue reading "Who is the Trustee and how does the Trustee get paid?" »

They all filed bankruptcy. But what's more interesting is that it wasn't until after their bankruptcy that they went on to the success we know them for today.

• Henry Ford filed bankruptcy in 1901 before organizing his third, and first successful business, Ford Motor Company. With his innovation of the moving assembly-line this business grew to make a $60,000,000 annual profit by 1916.
• In 1981, after leaving the band Blue Angel, Cyndi Lauper filed for bankruptcy protection after being sued by her manager over a contract breach. Two years later she released, "Girl's Just Want to Have Fun", a song which reached Top 10 in over fifteen different countries and went Platinum in the United States once sales exceeded 2,000,000.
• Despite his failure as a storekeeper in Illinois, Abraham Lincoln went on to become one of the best remembered presidents the United States has ever had. After filing bankruptcy in 1883 he was required to make payments to his creditors for seventeen years, far more than is not required for a Chapter 13 bankruptcy.
• Mickey Mouse is easily the most recognized cartoon character in the world, but if not for Walt Disney's ability to bankrupt his Laugh-O-Gram Films company in 1923, he may have never had the chance to start over and open Disney Brothers' Studio.

It is people like these that epitomize the true purpose of bankruptcy, which is to allow debtors to get another bite at the apple of life. If you would like to learn what bankruptcy can do for you, please call us at 904-685-1200 to schedule a free consultation with one of our Jacksonville Beach Bankruptcy Attorneys

A short sale is when you sell your property for less than you owe on the mortgage, creating a deficiency amount that you still owe on the loan. If you are planning to file for bankruptcy, a short sale is usually not in your best interest. Here are some reasons why:

1. A short sale will damage your credit. You will be defaulting on a contract, and so the mortgage company will report on your credit that you settled for less than the actual amount owed. This can oftentimes have the same negative effect as a foreclosure. If you are going to file for bankruptcy, then you do not need an additional negative report on your credit.

2. The short sale will not alleviate any liability issues. If you are filing for bankruptcy and surrendering the property, then you probably will not be liable for the deficiency amount anyways. In a bankruptcy, you almost always surrender the property in full satisfaction of the debt, so a short sale does not get you away from any problems that the bankruptcy itself does not handle.

3, You are wasting your time and money. If the bankruptcy is taking care of the liability issue, then a short sale is benefiting nobody except the realtor and the lender.

4. You will be losing time that you could spend in your property. When you short sale the house, you must leave immediately. When you file for bankruptcy and surrender the property, you have longer to stay in the property before you must vacate.

5. There is usually tax liability that comes with a short sale. If you are filing for bankruptcy, however, you will not face these tax issues and so do not want to incur them if not absolutely necessary.

These are just a few reasons why a short sale might not be in your best interest if you are planning on filing for bankruptcy. Speak with a Jacksonville Bankruptcy Attorney today to discuss your specific situation.

A reaffirmation agreement is an agreement between you and the creditor that holds a secured lien on collateral that you have previously purchased. This reaffirms the debt that you owe the creditor. So if you own a car and you file Chapter 7 bankruptcy, you can either surrender the collateral (give it back to the creditor), redeem the collateral (refinance through another company), or you can reaffirm the collateral by signing a reaffirmation agreement with the creditor and filing it with the court. This reaffirmation agreement basically says that you will be responsible for the debt just as you were before you filed the bankruptcy. If you do not do one of the above options, the creditor can repossess your vehicle.

As for your home, In re: Linderman dictates that you must also do one of the above options for your real property. So if you file a Chapter 7 bankruptcy and want to keep your home, you must sign a reaffirmation agreement with your mortgage company.

If you need help with your bankruptcy or want to know how to file a reaffirmation agreement, contact a Jacksonville Bankruptcy Attorney today.

Many people wonder what effect their spouse's prior bankruptcy will have on them and their relationship. First and foremost it is important to remember that these people are not, "deadbeats". Unexpected illnesses, job losses and underwater mortgages are all common reasons for filing bankruptcy. With 46% of Jacksonville homes under water, there are at least half a million Jacksonville residents with a good reason to file bankruptcy.

It is also important to consider how long ago their bankruptcy filing occurred. A bankruptcy stays on a debtor's credit history for ten years, but is only supposed to have an effect for seven. If your fiancé filed for bankruptcy several years ago, the bankruptcy may have no effect on your new credit relationship at all. However, if the bankruptcy was recent, it is possible that it could effect your ability to purchase a home as a couple with a prime rate mortgage.

While it's not something most people want to think about, your spouse's prior bankruptcy may limit your own options were you needing to file a bankruptcy. 11 U.S.C. 727 prevents a debtor from getting a discharge in Chapter 7 if they had a previous discharge in a case that commenced within eight years of filing the new petition. Or, in the case of Chapter 13, a case that commenced six years before the date of filing the new petition unless they paid 100% of the claims in the old case or paid at least 70% of the claims in that case and proposed it in good faith with best efforts.

What does this really mean? You won't lose your independent right to file bankruptcy by virtue of your spouse's prior filing, but if you think there's a remote chance that you might need to file bankruptcy with your spouse within eight years of the end of their prior bankruptcy, call a consumer bankruptcy attorney and see what the facts are. It's possible that your prior spouse filed a case, but didn't get a discharge. If that's the case, it may not have an effect on either of your rights in bankruptcy going forward. If you'd like to speak with me about this issue or would like to schedule an appointment to review your options in bankruptcy, please call us at 904-685-1200.

No, there is not a minimum amount of debt that you must have in order to file a bankruptcy. You can file with any amount owed to any creditor. However, you will want to analyze whether a bankruptcy is in your financial best interest. Meaning that if you have a very low amount of debt with only a few creditors, it may be in your best interest to negotiate with those creditors to try to lower your amount due to them. A Jacksonville Bankruptcy Attorney can possibly negotiate a debt settlement with your creditors for you. If the creditor has already filed a lawsuit against you, the Jacksonville Bankruptcy Attorney can defend the suit on your behalf and try to reach an amicable solution between you and your creditor.

Contact a Jacksonville Bankruptcy Attorney at 904-685-1200 today for all your consumer law needs!

A means test dictates what chapter of bankruptcy you qualify for. This is a very important part of your case, and a Jacksonville Bankruptcy Attorney will make sure that it is done correctly. The attorney will input your income for the prior six months and then take deductions for the things allowed by law. Knowing what deductions can be taken and how to accurately calculate them is extremely important, as this will lower your disposable monthly income amount.

Your disposable monthly income number is one of the most important things in your bankruptcy case. This number dictates whether you can file for a Chapter 7 bankruptcy or if you must file for a Chapter 13 bankruptcy. Also, if you file for Chapter 13 bankruptcy, your disposable monthly income number will dictate how much money you must pay to unsecured creditors in your Chapter 13 Plan.

The means test can be very tricky, you really need to know what you are doing to get an accurate test. If it is not done correctly, the trustee will file an objection in your case. We offer means testing here at Apple Law Firm. Contact a Jacksonville Bankruptcy Attorney today for your free consultation.

With few exceptions, qualifying for a Chapter 7 Bankruptcy requires a debtor to show that their household income is less than the median household income for the same family size in their region. These amounts are updated and changed each year by the IRS. In Florida the numbers currently are as follows:

Household Size	Median Income
1	$40,029
2	$50,130
3	$54,594
4	$65,135

*For each additional member beyond 4, add $7,500.

Debtors have three options when it comes to secured assets in a Chapter 7 bankruptcy. The first option may be the most obvious: Surrender. The option of surrender gives the debtor the ability to simply give up their interest in the secured property and pass it back to the creditor.

The next option is to Reaffirm. To Reaffirm a debt, the debtor offers the creditor a contract to allow the debtor to keep the property, often with the same terms as the original agreement. This allows the obligation to "go through" the bankruptcy and often enables debtors to keep their financed cars or homes. However, it is important to note that it is up to both the creditor and debtor to come to this agreement. If for some reason the creditor doesn't want to reaffirm the debt, no one can make them. For this reason I make sure to advise my clients to be sure they're up to date on all payments on these secured items going into the bankruptcy to induce the creditor into agreeing. Typically, these agreements do work out.

The final and least used option is Redemption. Redemption is the debtor's right to purchase the secured property for it's fair market value at the time of filing. It is important to note that this is not the agreed upon amount in the contract. You may owe $3,800.00 on a car, but if it's only worth $1,000.00 on the day you file, you can pay the $1,000.00 and satisfy the debt to the creditor. The problem with this option, which is why it's least used, is that very few people who are bankrupt can come up with the additional money. Still, it is better to have options you have little chance of using than have no options at all. I have also heard of some third-party financing companies who will pay off your Redemption amount if you sign a secured note with them. I have never actually seen this work out for the debtor and it seems counter-intuitive to begin a bankruptcy with a new debt, but as I said before, options are good.

Continue reading "Secured Assets in Bankruptcy" »

Marriage may be a blessed arrangement that brings us together, but with financial problems being one of the most common reasons for divorce, it makes sense to try and clear up any of those issues from earlier in your life before tying the knot.

When BAPCPA (the Bankruptcy abuse prevention and consumer protection act) passed in 2005, new requirements were imposed on debtors wanting to qualify for Chapter 7 bankruptcy. One of those requirements was 11 USC 707(b) or the "means test". 707(b) requires a debtor to show that their gross income for their family size is less than the median income for a family of the same size in their geographic region. These median income charts are made available through the IRS and are updated annually.

Generally, if a debtor's household income for their family size is higher than the median, that person is not eligible for a Chapter 7 (liquidation) bankruptcy and must instead file a Chapter 13 (reorganization) bankruptcy. Defining income is usually not difficult, the IRS defines gross income under 26 USC 61, and most everyone has had experience with it as we've almost all paid our taxes based on it.

What is more difficult for debtors is that the bankruptcy court doesn't just count the debtor's income, but also the income of all household members as well as any "regular contributions" to the household, perhaps from parents or friends who regularly pay a single bill. A marriage will always increase the household size (unless you were living together prior to the marriage), but won't always increase the gross income of the debtor's household. If the new spouse has a stellar income, this will disqualify the debtor from filing a Chapter 7, but will help them fund a Chapter 13. If the new spouse has no income, this will help a debtor who would otherwise have been over the income limits qualify for Chapter 7.

In reality, bankruptcy is a concept that comes from biblical times (see Deuteronomy 15:1-2). As a result, it has transformed through all the years and societies of the world and can be very complicated. If you're considering bankruptcy you should talk to a professional. If you would like to schedule a free consultation with our Jacksonville Bankruptcy Attorney, please call 904-685-1200.

Elena Escamilla, a staff attorney for U.S. Trustee, Donald F. Walton, filed a law suit against Keith D. Collier for violations including: Sanctions for Violation of the Automatic Stay, Injunctive Relief, Violation of Discharge Injunction an Conflict of Interest Resulting in Disgorgement of Fees.

If you entered into a deferred payment plan whereby you made payments after the filing of a Chapter 7 bankruptcy or post-petition payments outside the plan in a Chapter 13, you may not have any obligation to make these payments and you may be entitled to a full refund of all payments made thus far. You should discuss your specific circumstances with a Florida attorney.

This is not the first time Middle District of Florida (which includes Orlando, Jacksonville, Tampa and Ocala) has ruled that actions which appear synonymous are inappropriate. See Walton v. Clark & Washington.

After the death of a friend or loved one, it can be very confusing what to do with their finances. When an individual dies, sometimes the debt they leave behind must be paid by their estate, other times it does not. If the deceased had a co-signer on a debt, then that co-signer is still legally responsible for that debt. In some states, a spouse may also still be liable for certain debts such as health care expenses.

Oftentimes, a relative is NOT liable for the debts of the deceased. But a creditor may call you and imply that you are responsible or try and guilt you into paying. This may be illegal and our Jacksonville Consumer Law Attorney may be able to make the creditor stop their collection activities against you and sue the creditor for any damages.

Before you pay for these debts, contact a Jacksonville Consumer Law Attorney to discuss if you must pay the debt or not.

There are four Chapters in bankruptcy available to individuals, they are Chapters 7, 11, 12, and 13. Chapter 11 is usually associated with big businesses, like Winn Dixie did a few years ago. Chapter 12 rarely used and is specially formulated for "Farmers and Fishermen". So it's Chapters 7 and 13 that people usually think of when they think of bankruptcy.

Many people coming into my office have done some research and because they've discovered that there are payments required in a Chapter 13, they instantly decided that Chapter 7 is best for them. Chapter 7 may be a quicker and less expensive bankruptcy, but it often means liquidating your unexempt assets and surrendering any secured assets whose payments are behind.

Chapter 13 offers some forms of relief that aren't available in Chapter 7. The Chapter 13 gives a debtor the opportunity to "catch up" on any mortgage arrears they have by spreading the amount owed over a five-year period.

There is also the opportunity of re-classifying "secured" second and third mortgages as "unsecured" debts in a process called, "Lien Stripping". This would mean that after making five years of payments toward your unsecured creditors, the remainder of that second mortgage is discharged in the same way a credit card debt would be. This can be a huge advantage for some people.

Another valuable option in a Chapter 13 is the "Cram-Down" option under 11 USC § 506, which allows debtors to "cram down" the secured amount of a debt on a vehicle or other property under the right circumstances. This has been hugely advantageous to some truck drivers who have very large "secured" notes on trucks whose values have diminished over the years faster than the amounts owed on them.

Continue reading "Chapter 13 "Cram-Down"" »

The Middle District of Florida has Divisional Locations in Jacksonville, Ocala, Orlando, Tampa, and Ft. Meyers. Bankruptcy filings within the Middle District of Florida have dropped 17.2% between January and June, 2011, compared with the same time frame in 2010. Although this seems to be good news for the economy, many people are still faced with outstanding debts that they just cannot handle. Filing for bankruptcy can get you a fresh, new start. If you would like to talk about your options, contact a Jacksonville Bankruptcy Attorney today for a free consultation.

Many Jacksonville clients come to me with the same concern: "I need to get out of my upside-down home mortgage, but who will rent to us after we file for bankruptcy?" Having encountered this question so many times, and in the interest of trying to keep children in the same school district, I have created a list of apartments who are willing to rent to people who are either in bankruptcy or who have recently received a discharge. We provide this list to each of our Chapter 7 and 13 clients. It includes homes or apartments on the Northside, Westside, Southside, Mandarin, Orange Park, Arlington, Atlantic Beach, Neptune Beach and Jacksonville Beach. By no means are these all of the places a client could potentially live. Very few places said that a recent bankruptcy would be an outright bar to renting, though a few would require an increased security deposit.

NFL Star Rick Sanford initially filed for Chapter 7 bankruptcy in February 2009 in South Carolina. Sanford did not list all his assets, however. He failed to disclose his interest in a Colorado condo, which later sold, netting him $70,000.00. When the trustee in Sanford's case challenged his listing of assets, Sanford withdrew his bankruptcy petition. He was subsequently charged with fraud and plead guilty. The court sentenced him to 2 years probation, 30 days home confinement, and 100 hours of community service.

When filing for bankruptcy, it is very important to be honest and list all of your assets. Oftentimes, your Jacksonville Bankruptcy Attorney can exempt your assets so you can keep them away from creditors.

Famous singer Toni Braxton filed for relief under Chapter 7 Bankruptcy in September of 2010, listing luxurious personal property items, such as a Porsche, lavish household contents, and expensive jewelry. She claimed around $1.6 million in assets. The judge in her case has now granted her a discharge. This means that she will no longer be liable for certain debts. This is her second bankruptcy preceding since 1998.

To see what assets of yours you would get to keep after filing for bankruptcy, contact a Jacksonville Bankruptcy Attorney today to discuss your specific situation.

Filing for bankruptcy will stop the future sale date of your home, even if there has been a final order foreclosing the property. This is due to an automatic stay that is immediately put into place upon filing for bankruptcy. Under the automatic stay, a creditor cannot take any action against you to try and collect a debt. So your foreclosure suit will halt immediately and your sale date will be cancelled; no more action will be taken in the case until the automatic stay is no longer in place.

The automatic stay will be effective until the conclusion of your bankruptcy. In a Chapter 7, this will probably be a short amount of time, around 4-6 months. But this extra time may give you the opportunity to catch up on your mortgage, achieve a modification, or sell your property. However, in a Chapter 13 bankruptcy, your case will not be concluded until after your Plan payments are finished. This will be anywhere from 3-5 years. Within those years, your Plan will allow you the opportunity to catch up on arrearages and so cure your deficiency with your mortgage company.

There are many ways in which a bankruptcy might be in your financial best interest. Help with mortgages that are in default is just one way a Jacksonville Bankruptcy Attorney can help you. Call us today at 904-685-1200 to schedule a free consultation.

Many people find that bankruptcy is the right option for them if they are having problems paying their mortgage. First, a Chapter 13 bankruptcy can give you time to catch up on the arrearages that you owe through a Chapter 13 Plan. Also, your Jacksonville Bankruptcy Attorney can file a motion within your bankruptcy requesting that your Judge order the mortgage company attend mediation, where your Jacksonville Bankruptcy Attorney can negotiate on your behalf to reach an amicable resolution. Finally, if you feel that you cannot or do want to catch up on your mortgage and are ready to walk away from your house, surrendering the property in your bankruptcy will shield you from any liability from a deficiency judgment.

If you are behind on your mortgage, contact a Jacksonville Bankruptcy Attorney today to discuss your options.

If you receive a summons from a collection agency, you have two options: respond or do not respond. If you do not respond, you will get a default judgment against you. This opens you up for garnishments or liens on your property. The better option is to respond to the complaint filed against you. This will give you the opportunity to defend yourself and/or negotiate a settlement. You only have a certain amount of time to respond to the summons, so you must do so in a timely manner. The time limit that you have should be listed on your summons, it is usually between 21 and 30 days.

If you have received a summons and would like to speak with Jacksonville Bankruptcy Attorney call 904-685-1200 today.

There is current legislation before both the US Senate and US House of Representatives that would allow private school loans to be discharged in bankruptcy, as most of them were before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Legislators are reasoning that there is a strong interest in not allowing federally backed student loans to be discharged in bankruptcy, but these reasons do not apply to private school loans and so they are rethinking the laws. The New York Times wrote an interesting article on the topic.

To see if your loans qualify for discharge, contact a Jacksonville Bankruptcy Attorney today to discuss your situation.

In Florida, a statute of limitations puts a limit on the amount of time for which you are liable for a debt. For an oral contract, the limit is 4 years. For a written contract or promissory note, the limit is 5 years. On a revolving balance contract, such as credit card, the statute of limitations is 4 years.

If you think that you do not owe a debt because the statute of limitations has run out, contact a Jacksonville Consumer Law Attorney at 904-685-1200 for a free consultation to find out.

When you file for Chapter 13 bankruptcy, you will pay off your debts through a Chapter 13 Plan that lasts anywhere from 3-5 years. A Chapter 13 Plan allows a debtor to catch up on most any debt, including mortgage arrearages, owed taxes, missed payments on vehicles, HOA dues, legal fees, fines owed to the city or state, and more.

Your unsecured creditors might also get some payments through the Chapter 13 Plan. If they will and how much will they receive is determined by your means test and the amount of unexempt property that you have. Any amount of unsecured debt that you have over this amount will be discharged at the successful conclusion of your Chapter 13 bankruptcy. For example, if you owe $20,000 in unsecured debt and your case only dictates that you must repay $5,000 to unsecured creditors, the $15,000 balance gets discharged or forgiven when you successfully complete your Chapter 13 Plan. If your case dictates that no money must be paid to unsecured creditors, then the entire balance of $20,000 would be forgiven.

To see how a Chapter 13 Plan would be structured for your specific situation, contact a Jacksonville Bankruptcy Attorney today for a free consultation.

In a Florida bankruptcy case stemming from a divorce, a husband's lawyer argued that an alimony obligation was in part dischargeable by showing that it was not completely of a supportive nature. There are several kinds of alimony in the state of Florida, such as temporary, rehabilitative or lump sum. In this case, the alimony was labeled as rehabilitative. Rehabilitative alimony is usually intended to aid or help educate the person receiving it so they can increase their income to what it would have been had they not lost time and educational opportunities while helping their ex-spouse reach their career goals.

In general, alimony is considered to be for the support of another, making it non-dischargeable in bankruptcy under section 523(a)(5). As a result, family law attorneys will sometimes label what is actually a property settlement "alimony" so their client won't have to worry about their ex-spouse discharging the debt. However, in the case of In re Harrell, the Judge found that an alimony award can be either supportive in nature or a property settlement and that it is the distinction between that those two that indicates the portion that can be discharged. In that case, only $500.00 of a monthly alimony obligation of $1,150.00 was found to be support and the remainder was discharged.

Many bankruptcy clients are mistakenly advised by their own family law attorneys who say that alimony is always a support obligation and that support obligations are non-dischargeable in bankruptcy. Although it is accurate to say that true "support obligations" are non-dischargeable, I would take a serious look at any alimony obligation before determining it to be untouchable in bankruptcy.

Continue reading "Florida Case allows ex-spouse partial discharge of alimony obligation" »

Yes. You must disclose all sources of income on your bankruptcy schedules. You can, however, put on the schedules that this support is not likely to continue in the future, but you must disclose any monies received in the prior six months from any source. Some income, however, is exempt from counting towards your Current Monthly Income calculation as reported on the means test. Some social security income, unemployment income, pension income, etc. will not count towards your Current Monthly Income. Your Ponte Vedra Bankruptcy Attorney will know how to list your income so it will be most beneficial to you. Contact us today at 904-685-1200.

Whether or not you qualify for a Chapter 7 bankruptcy does not depend on what type of job you have, what your profession is, whether it is full-time or part-time, or whether it is seasonal employment or not. The question is not what type of job you have, but rather what your income is. To qualify for a Chapter 7 bankruptcy, your Jacksonville Bankruptcy Attorney will look at your income over the prior six months and compare it to the median income for your area. This is called the means test. If you pass the means test, your income is less than the median. If your income is over the median, then you still can qualify for a Chapter 13 bankruptcy. To see if you qualify for a Chapter 7 bankruptcy, call a Jacksonville Bankruptcy Attorney today at 904-685-1200.