Jacksonville Bankruptcy Lawyer Blog

We all believed that debtor's prisons were things of the past but in light of the recent arrest of an Illinois state citizen over a medical bill for $280 dollars, it's apparent that debtor prisons have not yet resigned themselves to the history books.
Lisa Lindsay, like many women in the United States contracted breast cancer. After surviving the ordeal she was sent a bill for $280. Lindsay was told she didn't have to pay the bill as it was sent in error, yet the hospital sold the debt to a collection agency. State troopers then took her from her home in handcuffs by which time she ended up having to pay $600 to settle the charges. I have written on this subject before, but the instances of arrest have increased as debt collectors have gotten more aggressive.
The law in most states allows for the arrest of people for contempt of court. Contempt of court is what gives the court the ability to arrest those who don't pay their child support. What happens in these cases is the collector getting an order for the debtor to perform some action (typically provide payroll records). When the debtor doesn't provide them, they are found in contempt of court and a warrant is issued for their arrest. The problem is that in the cases where people are being arrested the vast majority of the debtor's addresses for notice are incorrect. This leads to people being arrested for not providing documents they didn't know they were ordered to provide. Some states, such as Illinois, are amending their procedures to require that these debtors be served with papers before an order of contempt can be issued. This should minimize arrests for those states, however most of them, including Florida, remain without these protections.
If you are concerned that you may be arrested for non-compliance with a court order, contact a Jacksonville Consumer Debt Attorney or call us at (904) 685-1200 for a free consultation.

The Jacksonville Bankruptcy court is part of the Middle District and a Middle District Court ruled on October 11, 2011 that Social Security benefits need not be included in either the Means Test or in the disposable monthly income (DMI) paid to unsecured creditors in a Chapter 13.

To quote the Honorable Judge Steele:
"Therefore, a Chapter 13 plan need not provide that social security benefits be included as projected disposable income which will be applied to payments for unsecured creditors." See Vandenbosch v. Waage

Now we know that Social Security funds will not be used in calculating Chapter 13 payments, but what about cases that have already been filed? Judge Steele stated in his opinion that these benefits, "need not... be included as projected disposable income". I would analyze this to say that they can be included if the debtor desires or needs to use the funds to show that they can fund a plan to overcome the "Good Faith" requirement of Chapter 13, but that the debtor cannot be required to use these funds if the debtor chooses not to.

What is yet to be seen is whether we can reduce payments on already confirmed plans that contemplated including the social security as income on Form B22C (Means Test). The court requires that a plan be modified if there is a, "change of circumstances" as to income. Historically, this meant an increase or decrease of income, not a reclassification of what income means. I take the position that this is a change of circumstances sufficient to justify a modification, though we will have to wait and see.

Continue reading "Social Security Benefits Exempt From Chapter 13 Payments" »

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.

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.

A lot of people give their 16 and 17-year old children cars to drive. But in Florida, a minor child cannot own property. So the car must be titled in the parents' name. If this is the case, this asset might be unexempt property, or at risk of being taken to pay your creditors. However, a recent case from the Southern Division of Florida clarified how one could keep this from happening. The court said that the parent could own a car as trustee for the minor child and keep this asset away from creditors in a bankruptcy. To find out how to hold the car in trust for the child, or for any other bankruptcy questions, contact an Orange Park bankruptcy attorney now to discuss your situation.

If you've ever seen (or read) Master in Commander, you may recall that the central character was attempting to flee debtor's prison. Debtor's prison was very common for many years, and the question is often asked: can the government put you in jail for owing money to a private party? The answer is no. The United States used to have a Federal prison for unpaid debts; however, it was abolished in 1833. Some states still allow debt collectors to seek arrest warrants for debtors in default, but Florida is not one of those states. Further, the US constitution prevents incarcerating someone simply for owing a debt.

However, if you owe a debt to the state or federal government, you may find yourself in jail. The recent economic downturn has caused thousands of Floridians to owe court fees, and some of them are being jailed -- not for owing a debt, but for "failing to follow a court order".

Defaulting on a debt is rarely a good thing. If you have mounting debt and are unsure of what to do, contact a Jacksonville Bankruptcy Attorney to discuss whether bankruptcy is a good option.