Jacksonville Bankruptcy Lawyer Blog

When you file for bankruptcy in Jacksonville, Florida, a certain amount of your personal property is exempt from collection by creditors. Generally, you are allowed to keep $1,000 in personal property, $1,000 in vehicle equity and then either a qualified homestead or $4,000 dollars in additional personal property.
To be a qualified homestead the property must be under 1/2 acre if within a municipality or up to 160 acres if in an unincorporated area. Abutting lots can qualify as long as the land maximums aren't exceeded.
The value you assign to your property should be the approximate auction value of the property. That is to say, how much do you think you could get for that property at a bankruptcy auction? My bedroom set may have cost $1,200 ten years ago, but it is certainly not worth that today, especially at an auction. Evaluating your property is difficult and can sometimes require professional assistance. What is more important is that you are thorough in creating a complete list of what you own. Omitting valuable property interests by accident can look like an attempt to commit fraud. There are cases in which an appraiser will be sent to your house to evaluate your property. It is rare, but it does happen. You can, of course, pick and choose which property you keep based on it's value. If you don't care for an old, but valuable, wedding present you never use, you can list that property but not elect to exempt it, exempting something else instead.
Sometimes we run into the situation where a person has more property than can be exempted. This is often the case for automobiles which are owned outright. If a person's car is worth $5,000 and they keep a home and $1,000 in personal property, then they only have the $1,000 exemption for vehicle equity to apply toward this car. That leaves them with $4,000 in vehicle equity that is unprotected and could be subject to seizure by the trustee for the benefit of the creditors. What we can do in this situation is offer the Trustee a sum of money, typically around 85% of the unexempt value in exchange for keeping the car. The trustee often accepts the discount because if they had to repossess the item there is a cost to tow it and store it as well as to auction it off. The agreed sum can be paid to the trustee over an agreed to period of time, which is sometimes as long as a year. This is called a, "buy back" because in essence, you are buying the equity in your car back from the trustee. The trustee will even file a, "Notice of Private Sale" in the case indicating that the vehicle was sold to the debtor.
Every state has different kinds and amounts of property which can be claimed as exempt. There are also residency requirements to file using those exemptions. To use most of the Florida exemptions, the debtor must have resided here for at least 91 of the last 180 days. If the debtor wishes to exempt a homestead that is valued at more than $125,000, then they must have owned the property for at least 1215 days.
If you have questions regarding the best way of structuring your bankruptcy exemptions to maximize the property you have after bankruptcy, contact a Atlantic Beach Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Jacksonville, Florida debtors often ask me how much debt they must have to qualify for bankruptcy. In truth, there is no threshold requirement of debt to qualify for a Chapter 7 or Chapter 13 bankruptcy case although Chapter 13 does have an upper limit (over a million dollars).
One of the first questions I ask when meeting with someone for the first time is why do they think they need a bankruptcy -what brought them through my door. I then ask them general questions about their income, assets, liabilities and expenses and analyze their financial situation. Sometimes bankruptcy is not the best option for people I meet with. If that's the case, I tell them what I think and let them decide whether or not they want to file or explore another option. I think too many people (attorneys included), think that attorneys are supposed to make decisions for the client. In reality, we are only supposed to give advice. We tell you what we think and let you make the decisions.
Whether a person owes one hundred thousand or just a hundred, they can file bankruptcy. The question isn't whether they qualify, it's whether they should file at all. This is not a decision to be made lightly. Bankruptcy can be embarrassing and stressful. No one really wants to go bankrupt. Unfortunately, there are times when bankruptcy is the only option. For instance, Abraham Lincoln went bankrupt when his grocery store failed. I'm sure he'd have preferred some other option, but bankruptcy was the one that worked best for his situation at the time. He then went on to be one of the most recognized presidents of the United States.
When our founding fathers enumerated Bankruptcy in Article 1, Section 8 of the Constitution, they were recognizing the need for people to have a "restart" button on their debts. They knew how living in debt inhibits personal growth and built a system under which no one would be a slave to their creditors.
If you're considering bankruptcy, no matter how much debt you have, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Although it's Atlantic Beach location was rated #1 Best Sports Bar in 2008, Sneakers other two Jacksonville locations have filed for Chapter 11 protection this month.
The Beach Boulevard location reported only $300,000 more in debts than assets were as the the Point Meadows location owed $2.31 million more than it was worth. Both restaurants are owned by the same family.
Sneakers isn't new to the court system, the Atlantic Boulevard location being sued for allegedly violating the terms of it's rental agreement stemming back to November 2006. A final judgment for $94,000 having been submitted to the courts for unsatisfied back rent. This request, submitted in January 2012, has not yet been reviewed by the Honorable Jean Johnson of the Duval County Court. Hopefully, Sneakers will resolve this issue soon, otherwise we may see a Chapter 11 filed for the Atlantic Boulevard location as well.

When a bank wants to foreclose or repossess property from someone who has filed bankruptcy protection, that bank must obtain permission from the court for relief from the automatic stay provided by 11 USC §362. If the Judge enters an order granting that permission, the lender can then return to the county court and resume collection activities.
Select Portfolio Servicing (SPS) sought to foreclose on a mortgage held in trust by First Franklin Mortgage Loan Trust which encumbered a property possessed by a debtor in Chapter 7. SPS filed a motion for relief from automatic stay and the debtor objected on the grounds that the Mortgage Electronic Registration System (MERS) could not establish that it held an enforceable right against the property as MERS had no valid and enforceable interest in the mortgage.
States have various recording requirements for secured loans. One of the most common terms is "Perfection". A lien must be "Perfected" for it to attach to the subject property. "Perfection" is synonymous with "Recorded with the County (or state)". If a lien is not properly recorded, the lien does not attach to the property and is as unsecured as a credit card, i.e. you don't pay your mortgage and the lender can't take the homestead.
For years banks did the job of recording their liens and any subsequent assignments of their interest. However, by 1995 banks were selling mortgage notes multiple times and a MERS, a publicly traded company, came along and and offered banks a new solution to the assignment recording issue: Record the initial lien properly, then assign the interest to MERS. MERS would then buy and sell the mortgage notes 'in house' without recording those assignments and would nominate servicers to collect on unpaid mortgage notes. This method bypassed the debtor protection requirements set up by states and made things much easier for lenders.
When the New York court considered the issue, it blatantly stated, "This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law." To give permission to foreclose, the court requires that the entity requesting permission be the holder of the note and mortgage. The court in this case found that MERS, nor U.S. Bank had demonstrated no evidence that it either a valid holder of the note or mortgage nor had they validly recorded transfers with the state or county as required to remain secured. The court finished their opinion stating, "...in all future cases which involve MERS, the moving party must show that it validly holds both the mortgage and the underlying note in order to prove standing before this Court." This means that any MERS loan that attempts to obtain relief from automatic stay in New York will have to show ownership of both note and mortgage to have the right to ask for permission to foreclose.
The implications beyond this single bankruptcy case are huge. If MERS is found to be an invalid method of lien assignment and notes and mortgages have been lost the basis of perfection for hundreds of thousands of loans would be absent and all of those mortgage liens would become unsecured debts. If this were to occur, Florida borrowers could file Chapter 7 bankruptcy, discharge the unsecured mortgages and keep their homes. The impact on the banks would be severe as well as they would lose millions of dollars of home backed loans.
If you have questions about MERS or secured assets in bankruptcy, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Nearly half of Florida homes that have mortgages are worth less than the mortgage debt on the home. This, combined with the nation-wide decrease in incomes has lead to one of the greatest recessions our country has seen.
A home mortgage is essentially a contract. You promise to make payments according to the contract's terms, and the lender promises to transfer the home's title to you when you finish making your payments. The government regulates these contracts by creating laws that set out procedures for things like foreclosures. Of course, there is still an element of free contract which allows lenders and borrowers to negotiate the terms of their agreement at any time. The government is limited in how much they are allowed to interfere with contracts so instead of trying to force banks to offer mortgage modifications, they make programs like HAMP, which offers lenders tax deductions or other benefits to make deals with borrowers. Personally, I think that the government isn't offering the lenders enough in benefits because banks aren't particularly helpful in getting borrowers into the program. HAMP mods are done in-house by the banks and "can" lower a borrowers mortgage payments to 31% of their gross income if you qualify. But what if you don't qualify, and what if your payments are already below 31% of your gross income?
This is where lenders will begin the foreclosure process. They may offer you a so called, "in house modification", but offer or no, the foreclosure process will continue until either you are somehow successful in obtaining an in-house modification or your home is sold on the courthouse steps. This is because the judiciary can't force a bank to modify your loan. Honestly negotiated terms that were created in accordance with the laws can't usually be modified by the government due to our rights to free contract as citizens. That being said, a recent program out of Orlando creates an opportunity for people facing Jacksonville bankruptcies and foreclosures.
As previously stated, our government can't force lenders to modify contracts, but our Judges can order those lenders to attend mediation with the client. The primary excuses used by banks to justify to forbearance of a mortgage modifications are that the paperwork was not received, that it was outdated or that no one with modification decision making authority was available to review it. Now the judges in the Middle District Bankruptcy Court of Florida's Jacksonville Division are accepting motions on behalf of those who are bankrupt in Chapter 13 cases to order that lenders with decision making authority attend mediation with borrowers, and require that all up to date papers required to effectuate a modification be provided to both parties prior to the mediation. This method, although new, is reported to have greatly increased the success rate of borrowers obtaining modifications. This more direct approach should give borrowers a more direct approach when dealing with lenders by having a judge order them to mediation and gives lenders a bargaining chip they don't always have- if the bank refuses to propose a good modification, the borrower can simply surrender the property in the bankruptcy. Since banks have more houses right now than they know what to do with, this proposition should make them far more likely to want to strike a deal.
If you have questions about how to get a mortgage modification in the bankruptcy arena, contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free initial consultation.

Jacksonville bankruptcy attorneys, and attorneys everywhere have faced record numbers of new clients with debt problems. The last five years have been devastating, with home values plunging and politicians screaming across the country that they have new solutions to help us from drowning in debt. There is no doubt that the economy will be the largest issue of the upcoming Presidential Election.
Statistics are a staggering example of our economic squalor. There were 1.4 million bankruptcies across America in 2011, up about a million cases from 2007. A million extra cases per year in only four years is a motivating factor, but what can we do about it?
Most people aren't sure what to do. Their jobs have lowered their pay or laid them off altogether, many of them are coasting by on savings and hoping for the economy to pick up. Many are depending on loan modifications that may never be granted. Even the government's Home Affordability Modification Program (HAMP) has been called a Scam.
Using credit cards to survive is like clutching a life raft with a pinhole in it. You can put a little air into it occasionally to get by, but without fixing the problem you're eventually going to run out of air and the ship is going to sink. I urge people to use credit if they must, but to recognize that this cannot go on forever.
One of the worst things I see is when people mortgage their home or take 401K withdrawals to try and support themselves through the struggle. In Florida, 401K accounts and most homesteads are exempt from collection by creditors in bankruptcy. Too many people try and use these funds to coast a little closer toward dry land, but it's often not enough. When these people file bankruptcy, those funds they used trying to avoid filing are gone. This is often a loss of tens of thousands of dollars that could have been used for rebuilding.
According to Bankrate.com, a home mortgage should not exceed 28% of your gross annual salary. If your home mortgage now exceeds this due to a loss of income, you should contact an attorney immediately about your options. Although many take years to accept it, a bankruptcy may be the only way to get out from under a house. By realizing this now, you may be able to preserve assets and restore credit sooner instead of spending years with your mortgage debt looming.
If you don't have mortgage debt and you have only credit card debt, you can follow Bankrate.com's Back-end ratio to see if you can afford your payments. Your Back-end ratio will give you a monthly budget amount that you can afford to pay toward your debts. If the total of your interest only credit card payments comes close to or exceeds this number, you should probably consider filing for bankruptcy.
Once you have these factors under control, save three months of living expenses in a savings account. Then you should be in a very secure place.
By taking the steps to control where your debt is headed today, you can be better prepared for the hard times to come. By contacting a Jacksonville Bankruptcy Attorney, we can analyze your financial situation to see if bankruptcy or some other option is best for you. You may call us at (904) 685-1200 for a free initial consultation.

Although bankruptcy filing rates are down, the primary cause for most bankruptcies at my office is underwater home mortgages and the inability to pay those mortgages.
When someone applies for a mortgage, the bank (or mortgage broker) uses a variety of tools to determine the amount of money the applicant can borrow -and for how long. Of course, one of the factors that weighs heaviest is the borrower's ability to repay the loan. Although interest rates have varied greatly over the years, the term length of mortgages has generally increased. For instance, mortgages are usually thought to last thirty years, but now I have seen forty year mortgages and have even heard of fifty year mortgages.
Since the average age of a first-time homeowner is 34, a forty year mortgage would leave the buyer at 74 by the time they paid off their house. According to the CIA, the average American lives to be a little more than 78 years. This means that people (often couples) work almost their entire lives to pay off their homes.
Combine these grim facts with the idea that their home is now worth far less than they owe and that they have a decreased income and you have a person who is in dire need of bankruptcy if they are ever going to own a home at all.
If your home is underwater and you are unable to continue your payments, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

This attorney is getting a lesson on just how annoying having creditors call you can be -and they aren't even my creditors.
Although I've had the same telephone number for over two years, creditors have started to call me looking for a person who I'll refer to as, "Tony Doe". Tony apparently gave his telephone number to multiple creditors long ago and has only recently fallen on hard times. Now I am receiving phone messages from a blocked number asking me to call a collection company with my reference number. They were sure to remind me in the message that, "You are now on notice." Even if I were Tony, I don't think being "on notice" has any legal relevance, though it was declared in a threatening tone. They left me this message despite the fact that my voice mail states that I am Attorney and who I am.
I quickly dialed the number back and was put on hold, when they finally got back to me I gave them the reference number and explained that I was not Tony Doe but could they please give him my phone number when they get a hold of him so that I could help him defend this debt. The creditor then promised that she removed me from their call list, though only time will tell.
If you have creditors calling you and would like them to stop, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Oftentimes when people prepare to file for bankruptcy we find that there are other people who appear to owe debts jointly with them. The rights and obligations of these people vary depending on whether they are Co-Debtors or Authorized Users.
A Co-Debtor is any person who has signed into a debt with someone else. A Co-Signer is a Co-Debtor. All bankruptcy petitions have a section dedicated to Co-Debtors.
While bankruptcy can remove your personal liability from a debt, anyone who is joint on that debt remains liable. Because of this, Co-Debtors are given notice when a case is filed and will be obligated to pay of the person filing bankruptcy doesn't.
Co-Debtors are different from Authorized Users as the latter is only authorized to use the debtor's credit. They use no credit of their own and the obligation does not show on their credit report. In most states (Florida included), Authorized Users have no liability on these debts even if they signed for the transactions, so even if the debtor files bankruptcy, they have no liability.
Determining who has liability for debts is not always clear. If you are considering bankruptcy and would like to speak with an experienced attorney about these matters, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

When someone files for bankruptcy an automatic stay is put into place. The stay prevents creditors from making any collection attempts (calling, repossessing, selling) prior to obtaining court permission or, prior to the dismissal of the bankruptcy case.
A Co-Debtor Stay created by 11 USC §1301 occurs when the person filing bankruptcy owed a debt jointly with a non-filing person, typically a spouse. By virtue of being a co-debtor, creditors may no longer make collection attempts against the non-filing person as well. This becomes particularly useful when the creditor has a security interest, such as in a home. For example, if a couple was behind on a jointly owned homestead but one spouse individually owed a large amount of credit card debt, that one spouse could file a Chapter 13 bankruptcy, catch up on the mortgage arrears and simultaneously discharge their unsecured debts. While that spouse was in bankruptcy, the bank could not foreclose on the home as to the non-filing spouse because of the automatic stay protection.
Unfortunately, the Co-Debtor stay does not go into effect as to business assets or function in Chapters 7 or 11, so a conversion from a Chapter 13 to a Chapter 7 would cause problems.
If you have questions about how the co-debtor stay may be used to protect you or your loved ones, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

John Pregent of Georgetown, Massachusetts plead guilty to one count of bankruptcy fraud involving a scheme to defraud creditors in the bankruptcy case of Technical Fabrications, Inc. (TechFab), his business.
The Chapter 7 case (businesses can only file Chapters 7 and 11) was filed July 26, 2010 in the Massachusetts District Court, Case No.: 10-18028 and intended to discharge the debts of the business. Normally, this wouldn't be a problem, however prior to filing the bankruptcy case and at his direction, Mr. Pregent had TechFab sell of valuable assets to a newly-formed company and had that new company pay him directly for the assets. This was done in an attempt to prevent TechFab's creditors from getting paid money from the liquidation of those assets. Pregent also failed to disclose these transfers (even under penalty of perjury), which probably explains why it took nearly two years to prove him guilty.
Unfortunately for Pregent, the Federal Bureau of Investigation got involved and he now faces a felony with up to five years imprisonment, three years supervised visitation and a hefty $250,000 fine. Sentencing is set for 2:30, May 5, 2012.
Bankruptcy was designed by our legislators as a means to get help to those who need it while not completely ignoring the rights and needs of the creditors. An attempt to defraud an already liberal bankruptcy system is exploitative, demeaning and gives a bad name to all of those who require bankruptcy protection.

William "Gary" Busey of Malibu, California filed for Chapter 7 bankruptcy protection on February 7, 2012 citing less than $50,000 in assets and over $500,000 in liabilities.
Gary, who starred in the original Lethal Weapon film alongside Mel Gibson and Danny Glover claimed to have snorted cocaine off of his dog, "Chili" with a straw as recently as 2008. While such a history would render a average citizen unemployable, Busey appears to still be making films although two of the most recent titles are horrors titled as Piranha3DD and Mansion of Blood. With any luck, he'll be able to pull of a "Vincent Price-esq" image for himself.
For now, the court awaits the remainder of Busey's paperwork as he filed a bare bones petition and the documents that were filed on his behalf do not have his original signature. While this may lead one to think they could be fraudulent, it is not likely as many bankruptcy attorneys forgo original signatures of the majority of related papers.

The Teamsters make up more than 90% of Hostess's work force and have threatened to strike if the judge in Hostess's Chapter 11 case allows the company to cut wages and benefits for employees. Information explaining what these benefits and wages are is not readily available.
The Teamsters Union, founded in 1903, has a history of aggressively fighting for the rights of it's members. Dennis Raymond, director of the Teamsters Bakery and Laundry Conference, stated that, "This vote shows that, while our Hostess members are willing to take significant steps to save the company, they can only go so far,".
It looks to me like these Hostess members may be go so far as the unemployment line, especially if the business cannot become solvent. If the court finds that the business cannot be profitable, it may be divided up and auctioned off to the highest bidder. It's possible that Teamsters may not lose jobs in that scenario, but it's becoming a tired cliche for unions to strike businesses out of existence.

Twenty-two years ago Patricia Kluge divorced her husband of nine years and was given one of the largest divorce settlements in history at one billion dollars. The annual interest rate as predicted by People Magazine was $1.6 million a week. Even so, the former actress of, "The Nine Acres of Nakedness" managed to deplete those assets to less than $2.6 million in real and personal property in a little more than two decades.
Mrs. Kluge and her husband listed $123,000 worth of personal property as exempt on their petition including a $5,000 wine collection and a $80,000 wedding/engagement ring set. §34-26 of Virginia's exemptions allows for wedding rings and bands of any value.
Perhaps shedding some light as to what caused Kluge to plunge financially, I would note that her mansion, once listed for £62 million, finally sold for £9.3 in mid-2011.
I do wonder how she and her husband qualified for Chapter 7 bankruptcy when their Schedule I income was reported as $188,376 a year when Virginia's median income is $64,288 per year, but that's between them, the courts and the U.S. Trustee.

Bankruptcy is complicated. If you're represented by counsel, your attorney will ask you questions and based on your answers, will advise you on which of the four chapters of bankruptcy available to individuals you may want to file. Sometimes choosing the chapter that will put the client in the best position hinges on a single fact or two -and sometimes facts change.
Fortunately, the legislature realized the possibility of changing facts in bankruptcy cases and created a solution, 11 U.S.C. §706. This provision allows a debtor to convert their case to another chapter. Of course, the debtor still must pass the qualifications for the chapter to be converted to, such as passing the "Means Test" for a Chapter 7 or being under the debt limits of Chapter 13.
If you would like to meet with an attorney to discuss the possibility of Bankruptcy, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

A commonly overlooked issue when it comes to bankruptcy is what happens to the debtor's tax refund. Income tax refunds are treated like any other asset owned by the debtor except that it is still being held by the government. The Trustee has an interest in a pro-rata share of the refund based on the month you file because the refund has been earned up to that point. If you file at the end of April, the trustee could have an interest in 4/12ths of your next year's tax return. When someone files for bankruptcy protection, they are only allowed to keep a limited amount of assets, called exempt property. These exemptions are limited and are declared at the time of filing the petition. If the trustee has any objections to these exemptions, he or she must formally announce those objections within thirty days of the filing of the bankruptcy.
There are a few different strategies on how to deal with refunds. Some attorneys suggest that the debtor wait until they get their refund, spend the refund on reasonable and necessary living expenses such as gasoline, groceries, healthcare etc. and then file for bankruptcy. Others suggest that the debtor adjust their deductions (if there's enough time to do so) so that the return will be smaller or non-existent. If possible, I prefer to use the debtor's remaining exemption amounts to cover the trustee's interest in the return. If the trustee would get $400 and the client is eligible to keep $400 due to their exemptions, I can use the exemption to let the client keep the money.
Although it's not often an attractive option, the debtor can also simply give up the whole tax return if they feel their exemptions are better used elsewhere.
If you have questions about keeping your tax return in a bankruptcy, or some other kind of bankruptcy question, contact a Jacksonville Beach Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Tenancy by the Entireties, only permitted in a few states, is a term unknown even to many attorneys. The lack of knowledge of it's existence helps to illustrate the stupidity of it's application: Spouses must intend to hold property as "Tenants by the Entireties" to be afforded it's protection, yet nearly no one knows that this system (or any system) of ownership exists.
There are several ways people can hold property. Tenants in Common is fairly frequent. Another is Joint Tenants with Rights of Survivorship. Each of these open a different can of worms in different areas of law. What Tenancy by the Entireties (TBE) can do, is allow a bankruptcy filer to keep their property provided that the property is held by a non-filing spouse provided that the property is held by TBE and that the property is not under-secured. Fortunate for Florida debtors, the inherit flaw of requiring the owners to intend TBE is overcome by the courts now presuming that TBE is intended if the couple is married and the property is acquired pursuant to the requirements of TBE. TBE requires that property be acquired at the same time for both spouses, they must have the same title, same interest in the property, have the same right to possession and, of course, be married.
If you have questions about TBE, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

It is generally accepted that bankruptcy's origins began in the Torah and Old Testament within the Book of Deuteronomy Chapter 15:1-2 as well as under Mosaic law. The story loosely translated states that all debts shall be forgiven at the end of every seven years. From this our founding fathers outlined bankruptcy rights and courts in our Constitution. Even today we have maintained the "end of every seven years" rule by allowing a Chapter 7 discharge to be achieved only ever eight years (eight being the end of seven).
These holy books also say that a person who is freed from debt-bond should not be left empty handed. The idea behind this is that releasing a person from debts does no good if they must then incur new debts to survive -they need some amount of property with which to rebuild. Again, our country has followed this wisdom, this time by creating bankruptcy property exemptions. By allowing debtors to retain some property, they will be better suited to rebuild and will be less likely to become 'slaves' to debt again.
There are many complexities to bankruptcy that you should know before you make the life changing decision to file. If you'd like to sit down with me for an hour to see if bankruptcy is right for you, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

As I've said before, there has been a steep decline in foreclosure filings, however a recent article in The Florida Bar News by Gary Blankenship, explains that despite the decrease in foreclosures last year, there appears to be an enormous backlog of foreclosures yet to come.
Linda Goodner, a States Courts Administrator recently appeared before the Senate Criminal and Civil Justice Appropriations Subcommittee to discuss what changes would be needed to handle the estimated 368,000 foreclosure cases pending in courts across Florida as well as the cases that are yet to be filed. In her estimation, there will be another 380,000 cases filed by 2016 -at which point she anticipates that foreclosures will return to normal.
One proposal came from Representative Shawn Harrison who proposed that banks be given the ability to pursue non-judicial foreclosure in exchange for giving up their rights to file deficiency judgments. This is an interesting proposal.
To allow banks to foreclose on homes non-judicially could mean infringements on home-buyer's rights. We've already seen numerous procedural violations by a multitude of lenders. Obviously, taking the judicial process out of the equation could be unreasonably risky for lenders who wanted to keep their homes. On the other hand, the forfeiture of the right to assess a deficiency judgment could drastically reduce the need for bankruptcies, which would be a huge financial and credit benefit to many Americans.
It is impossible to say what the best system for handling foreclosures in our current dilemma is, but a change in judicial procedure would be welcome.

The final adversary proceeding in the Chapter 7 bankruptcy of Teresa and Giuseppe "Joe" Giudice is now closed. An adversary proceeding may be thought of as "case with in a case". This adversary proceeding was filed by the United States Trustee seeking to deny the Giudices a discharge of their debts. The trustee's one-hundred-and-twenty-five allegations indicate what may be the true nature of a "Real" housewife and her husband.
Some of the allegations include:
1. Non-disclosure of any bank accounts, vehicles, copyrights or intellectual property.
2. They also disclosed their combined monthly income to be $3,250 for Joe and $3333.33 for Teresa (plus assistance of $10,000 per month from family members).
3. They failed to disclose ownership of 393 Lexington Ave., Clifton, NJ and 399 Lexington Ave., Clifton, NJ.
The Giudices both signed this petition under the penalty of perjury.
There are generally two reasons why you wouldn't disclose the truth: neglect or fraud. By not disclosing their personal property, they would be allowed to keep that property if the trustee or creditors did not object. By citing only about $79,000 in annual combined income, they'd probably qualify for Chapter 7 bankruptcy in New Jersey, where the median income is very high (you must be under the median for Chapter 7). By not disclosing whole houses, they could potentially keep them if the trustee or creditors did not discover them. But the trustee did discover them and sent them a letter requesting documents relating to these items.
Within a month of the trustee's letter, the Giudices filed amended documents listing one of the pieces of real estate, four vehicles, a Maserati lease and three previously unlisted businesses. Teresa's reported income more than doubled.
It appears that the trustee wasn't satisfied with their answers and subjected the Giudices to a 2004 examination (similar to a deposition). Under oath, Teresa disclosed that she had a Lakeland Bank account, a previously undisclosed business and a previously undisclosed book deal for her now published book, "Skinny Italian." Her husband Joe disclosed that he had not actually filed taxes for 2006, 2007 or 2008 (although he'd provided the Trustee with copies of returns previously), disclosed another business and disclosed that he collects rent from two other commercial businesses.
Teresa's now disclosed bank account at Lakeland Bank showed $106,819.90 in deposits in the seven months leading up to their case filing and $192,620.90 during the three months AFTER the case filing. She also disclosed that she'd been paid $250,000 as an advance on her book.
Now, I must admit that these were all allegations and that none of them were specifically proven to be true. Pursuant to a consent agreement, Teresa was denied a discharge acknowledging "...her desire to resolve the Adversary Proceeding without the need for further inquiry or litigation, and without her making any further admissions..." her husband was also denied a discharge.
Bankruptcy fraud is a crime punishable by imprisonment and fines. When someone attempts to lie about their income hide assets in bankruptcy, it is an insult to everyone -those filing bankruptcy themselves and those who can and do pay their creditors. When an attempt to defraud occurs at this magnitude, I think that only imprisonment should follow. These two should be investigated thoroughly and if these allegations are true, they should go to jail for their crimes.
The Giudice's bankruptcy case remains open.

Many of those considering bankruptcy wonder if they too must file bankruptcy if their spouse does. In truth, they do not. Although it's sometimes a good idea for both spouses to file on a joint petition, it is not always necessary. For instance, a joint filing means paying only one filing fee and will allow both parties to get on with their life (there may be some special property exemptions available in this situation as well).
In some circumstances, all or most of the debt will be in one spouse's name. In that case, it may make sense to file one spouse and not the other. Any joint debts (debts that are in both names) can be discharged as to one party, but will leave the non-filing spouse solely responsible for those debts.
Once in a while, I meet a person who hasn't spoken to or seen their spouse in years. They no longer have joint debts and are in every sense (other than legally), divorced. The courts recognize that this sometimes happens and allow married couples to file bankruptcy individually and allow them to maintain separate homestead exemptions. All that the court requires to do this is that the debtor filing bankruptcy swear that the separate households are maintained for some other reason other than to defraud the bankruptcy court.
If you are married, considering bankruptcy and would like a free analysis of your options going forward, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

A bill has passed through the Florida House of Representatives that would prevent recipients of Food Stamps from purchasing snack foods such as cupcakes and other "junk foods". The proposal is yet to have made it to the Florida House of Representatives Bills list, likely because it hasn't yet gained Senate approval.
According to News 4 Jax, the use of food stamps in Duval County is reported to have increased by 130% from 2006 to today. DCF spokesman John Harrell also reported that one out of every three children are being helped by food stamps.
There are existing limits on food stamps already, such as those against purchasing tobacco and alcoholic beverages.
To qualify for Food Stamps, your income should generally be within 130% of the Federal Poverty line, that's $24,089 for a family size of three.
One thing is for sure, if this bill is enacted, there will be a lot of low income people who are forced to eat healthier.

Although bankruptcy filers using Florida exemptions are only allowed to keep around $1,000 in vehicle equity, financed vehicles can almost always be kept through a bankruptcy case. Generally, items that are reasonably necessary for the care and support of the debtor and their dependents are exempt from seizure for the benefit of creditors. For more about exemptions, read my article on Keeping Personal Property in Bankruptcy.
Different rules apply when the vehicle is unreasonable or has an inappropriately large amount of equity. For instance, a Maserati may be unreasonable to attempt to reaffirm in a Chapter 7. In Chapter 13 there are two mechanisms that can cause problems with keeping high value or unnecessary vehicles. The first of these is the "Feasibility Test" of the Chapter 13 plan. When you submit a payment plan in Chapter 13 the plan itself must be reasonable. If you're making a $700 payment per month on a turbocharged super-mobile and only make $1,200 a month, your plan may be unfeasible.
The second and more likely test is the "best interest of the creditors" test. This test, more formally known as 11 U.S.C. § 1129(a)(7)(A)(ii) requires that the creditors in a Chapter 13 obtain at least as much money for their claims as they would in a Chapter 7 liquidation case. If a debtor retains a motorcycle that would have to be liquidated in a Chapter 7, the debtor must either turn the vehicle over to the Chapter 13 trustee or offer to pay the value of the motorcycle to the unsecured creditors over the life of the plan.
Overall, there is often some way to keep your vehicles, especially those necessary for your daily life and there are even some occasions when you can keep luxury vehicles. If you have questions and want to make sure your bankruptcy is done properly so that you can retain all the vehicles you can, contact a Jacksonville Beach Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

A Notice of Filing Bankruptcy is generated in every bankruptcy case and goes out to all of the debtors various creditors. That notice has important dates on it, such as the date of the "Meeting of Creditors" and a "Deadline to File Object to Exemptions". The notice also typically establishes the "Claims Bar Date". The Claims bar date establishes a date by which all creditors must have filed claims in your case. If there is no claim made, then the creditors can never collect. Because many creditors don't file claims, it is possible to pay less in a Chapter 13 than paying individual creditors through settlement negotiations. This is especially true with residential mortgages.
If you have multiple debts and would like to learn more about the claims bar date in bankruptcy, contact a Jacksonville Beach Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

It has been slightly more than three years to the day since Chrysler LLC and Fiat S.p.A. agreed to form an alliance. That alliance wasn't formally announced until Chrysler's bankruptcy, later that year. Fiat bought out a large chunk of Chrysler Group, approximately 30%, and reports it's eventual goal to be 51%, however cannot make this purchase until Chrysler's debts to the U.S. Government are repaid. That being said, Chrysler Group has reported a profit this year of $183 million which is a huge improvement over the $652 million loss in 2010. My first thought when reading this is that I ought to go buy some stock, but apparently it's not currently publicly traded.
It will take a few good years of profit to get the company on the solid ground upon which it once stood, but this is certainly a good start. It inspires hope in those who have gone bankrupt and it helps produce more jobs for Americans.
If you are considering bankruptcy and have questions, please contact a Jacksonville Beach Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

There are various causes of bankruptcy, one of the most common is illness. Some studies go so far as to state that 62% of all bankruptcies are caused by medical bills. Some call this a "Medical Bankruptcy", though there is not technically any such thing. A recent study by the American Society of Clinical Oncology found that cancer patients are almost twice as likely to file bankruptcy as are their healthy counter-parts.
Nearly all medical debt is unsecured. Unsecured debts are generally discharged in a Chapter 7 bankruptcy and in a Chapter 13 bankruptcy they are paid your disposable income for a per-determined period of time. Even cosmetic medical debt is unsecured although that may not mean you can discharge it due to bankruptcy rules regarding luxuries. Reconstructive cosmetic surgery debt is generally acceptable to discharge as it is considered reasonable and necessary. The one caveat to discharging medical debt is that you want to be as reasonably sure as possible that you are filing at the right time. You don't want to file bankruptcy after having a knee replacement only to have the other one replaced two months later.
If you would like a free consultation to talk about your medical debt and how it can be handled in bankruptcy, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200.