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.

Florida residents often roll off car lots without knowing if the high interest rate financing they received is even legal. There are protections from high interest rates for people in the Florida Statutes, but you need to know the protections are there and have a lawyer whose prepared to bring an action on your behalf.

Florida Statutes Title 34 §520.08 states that:
"(1) Notwithstanding the provisions of any other law, the finance charge, exclusive of insurance, shall not exceed the following rates:
(a) Class 1. Any new motor vehicle designated by the manufacturer by a year model not earlier than the year in which the sale is made--$10 per $100 per year.
(b) Class 2. Any new motor vehicle not in Class 1 and any used motor vehicle designated by the manufacturer by a year model of the same or not more than 2 years prior to the year in which the sale is made--$11 per $100 per year.
(c) Class 3. Any used motor vehicle not in Class 2 and designated by the manufacturer by a year model not more than 4 years prior to the year in which the sale is made--$15 per $100 per year.
(d) Class 4. Any used motor vehicle not in Class 2 or Class 3 and designated by the manufacturer by a year model more than 4 years prior to the year in which the sale is made--$17 per $100 per year."
For example, 1994 Chrysler Concorde is purchased and $6,524.35 is financed. The finance charge is $3,704.33 and the annual percentage rate is 27.5%. Forty-two payments are to be made monthly at the rate of $243.54. To determine whether the finance charge violates §520.08, the following equation is used (mouse-over a number to see where it came from):

$17 x ($6,524.35 / $100) x (42 / 12) = $3,881.78

Since the $3,881.78 allowable finance charge is greater than the $3,704.33 actually charged, this example of financing does not violate §520.08. If your contract indicates that you are being charged in violation of this statute, contact a Jacksonville Consumer Law Attorney at (904) 685-1200 for a free consultation that may end up with you paying less to keep your vehicle and the financier paying your attorney's fees.

Many Floridians contemplating bankruptcy believe that they can only keep one car when they file. This is because the Florida statutes only have one, "motor vehicle" exemption up to $1,000. Florida also has a $1,000 wildcard exemption as well as either a house or an additional $4,000 wildcard exemption. These wildcard exemptions can be used to keep a vehicle as well if the debtor decides. If a debtor had several vehicles worth less than $4,000, they could keep those vehicles. Note that the exemption amounts are only to be used on vehicle equity. If a car is worth $4,000 but has a $5,000 balance on the note, the vehicle has no equity and can be kept in the bankruptcy without using any exemptions.
There are two ways to keep a vehicle that has too much equity in a Chapter 7 bankruptcy. The first way is to go to a bank and to take a loan out with the vehicle as security. The funds from that loan can be used to pay for reasonable and necessary living expenses, which can include attorney fees. So, if a vehicle was worth $6,000, a debtor could take out a note for $5,000 on the car and then spend that money on groceries, gasoline, electricity and the attorney who files their case. They could then reaffirm the debt on the car and keep it in the bankruptcy.
The second way to keep a vehicle that has too much equity is to enter into a "buy back" agreement with the Trustee. Since the Trustee would be auctioning off your vehicle if you couldn't exempt it, they are often willing to sell you the car for a price slightly less than the vehicle's value. This makes sense for the Trustee because by selling the car to you they no longer have to pay any auction or repossession fees. The Trustees will also accept these payments over a reasonably long period of time, occasionally as much as a year.
If you have a car or truck (or both) that are near and dear to your heart, contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.

People contemplating bankruptcy often fear the effect it will have on their loved ones. Debtors often think that their credit is somehow merged with their spouse or that their children will be liable for their debts if they're still outstanding at time of death. I would like to dispel these rumors because they at worst are untrue and at best are misleading.
First and foremost, from a credit perspective married couples might as well be strangers on the street. One spouse may have a stellar credit score while the other may not. Sometimes all the unsecured debts are all in the name of one spouse, while the home mortgage liability is in the name of the other and so on. Oftentimes, home mortgage liabilities are so great that they require the commitment of income from both spouses to justify the bank's risk in permitting the loan. This is likely the reason people mistakenly believe that marriage results in the "merge" of credit. If there is any truth to this, it is like so: Once two spouses sign a mortgage note on a house, they are now in the same boat as to that debt. If that boat sinks, whose fault it is ceases to matter and they will both drown equally. This is why so many people file for bankruptcy soon after their divorce is completed.
The idea of inheriting debt is archaic. It's true that there are account of our own Thomas Jefferson having inherited debt from his late father-in-law, but any such law transferring liability on debts by inheritance is a thing of the past. Still, there are some ways in which a son or daughter may 'feel' they have inherited a debt. For instance, when someone dies and leaves an estate, the personal representative of the estate must make an accounting of the decedent's (dead person's) property and pay their creditors off before allowing the property to be distributed to the heirs. This may make those who inherit feel as though they're being forced to pay the decedent's debts. The distinction here being that it is the decedent's funds that are used to pay the debts and not those of the living heir.
A way an heir may become liable for their deceased parent's debts is by way of cosigning. If a son co-signed for a debt with his father and his father had made all of the payments up to the point of dying, the son would then have sole liability for the debt. He may feel that he 'inherited' the debt, although he technically did not.
Similarly, an heir can choose to assume a debt of a deceased parent. My own father chose to assume my grandfather's payments for a Harley Davidson motorcycle. This assumption was completely voluntary, but my father chose to do it to prevent the vehicle's repossession.
In short, we do not really inherit debt like we inherit property. If you have questions about how your debts may effect your heirs, contact a Atlantic Beach Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

#bankruptcy, #chapter 13, #b22c
One of the first questions I get when I tell people that they have to present a repayment plan in a Chapter 13 bankruptcy is, "How do they determine how much I have to pay?". Since in most cases they'll have to make payments for five years (60 months) the amount that must be paid is critical to their success. Not making a payment means the discharge is never granted and the debtor is left in about the same status they were previous to the bankruptcy.
The analysis of the debtor begins at the filing of their Form B22C. The B22C lists the debtor(s) income, deductions for reasonable and necessary living expenses and determines the amount of disposable income the debtor(s) then have. The disposable income is the maximum monthly payment that unsecured creditors will be receive during the bankruptcy.
These numbers can get tricky because what is reasonably necessary is defined by the IRS and may be more or less than the debtor(s) actually spend. Fortunately, these items are open to argument. If the debtor spends more on medicine than the IRS average, a debtor can get an increased deduction for these expenses as long as they can provide documentation that funds were actually expended.
Another important caveat is that the B22C must be updated if there are any substantial changes in the debtor's income. This can be a double edged sword because an increase in income can cause more money to go to unsecured creditors, but a decrease in income can cause the unsecured creditors to be paid less.
Occasionally, debtors want to keep property that does not qualify as exempt from collection for the benefit of creditors. When this happens, they debtor must then commit additional funds to the unsecured creditors equal to the value of the items they're keeping. Of course, if the unsecured creditors are already getting 100% of what they're owed, no additional payments are required.
If you have questions about the calculation of your Chapter 13 plan payment contact a Ponte Vedra Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

#bankruptcy
The following are helpful hints to help preserve your credit in the event that your wallet is stolen:

1. Instead of signing the back of new credit cards write, "See ID".

2. If you pay your credit card bills with checks, only write the last four or your card numbers on the "memo" line.

3. If you have a P.O. Box, use that address on your checks instead of your home address. If you do not have a PO Box, use your work address.

4. Photocopy the contents of your walled and keep the photocopy in a safe place. This way, if the wallet is stolen, you'll know right away which companies to call to report the theft.

5. When traveling over seas, photocopy your passport and keep the copy in your hotel safe. If the original is stolen, this will help the embassy verify your identity and invalidate the stolen passport.

6. Call your credit card companies to cancel your cards as soon as you verify the theft. This is easier if you've kept a list of the toll free numbers for each card in a safe place.

7. File a police report. This is vital to any defense you may have to credit card theft. In fact, it's very likely a duty imposed upon you by your credit card company.

8. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one).

9. Call the three biggest national credit reporting organizations and ask for a fraud alert to be placed on your account. Also call the Social Security fraud line number. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.

Now, here are the numbers you always need to contact about your wallet, if it has been stolen:

1.) Equifax: 1-800-525-6285

2.) Experian: 1-888-397-3742

3.) Trans Union: 1-800-680 7289

4.) Social Security Administration (fraud line): 1-800-269-0271

5.) Apple Law Firm, PLLC.: 1-904-685-1200

When you file bankruptcy you're required to provide a list of everyone to whom you owe money. Those people and businesses are your creditors. There are separate sections in your bankruptcy petition for creditors that are secured and unsecured.
A secured debt is one that is backed by collateral. This means that if you don't pay the debt, the creditor can repossess something, typically a car or house, to help pay what is owed. If the collateral is sold for less than what is owed, the debtor must pay the difference. This is called a deficiency.
Unsecured debt doesn't have collateral like secured debt. It's security is the creditor's ability to damage the debtor's credit. This includes items like, medical bills, signature loans and most credit cards. Occasionally, a credit card will attempt to collateralize the item purchased using the card, such as furniture or jewelry.
Unsecured creditors are typically discharged with no payment in a Chapter 7. The only time an unsecured creditor will get paid out in a Chapter 7 is when the filing debtor had some kind of non-exempt property to surrender to the trustee for liquidation. Secured creditors can be made unsecured in Chapter 7 by surrendering the collateral back to the creditor. If payments are current, a debtor may choose to keep paying on a secured debt by reaffirming it.
Chapter 13 cases allow a debtor to catch up on late payments on secured debts. Unsecured creditors get paid a portion of what they're owed, depending on the financial situation of the debtor. There are also situations where secured debts can be "bifurcated" or divided into two debts, a secured and unsecured portion. This can be hugely advantageous if the debtor is paying very little toward unsecured creditors.
Finding out what debts will remain paid or unpaid is vital to creating a successful bankruptcy plan. contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.

Car payments seem to be unavoidable. Unless you're one of the rare people who have the luxury of being able to ride a bicycle to work, you must have a car. Everyone knows that the value of a car drops as soon as you drive it off the lot and as a result, many people who drive financed vehicles owe more to the lender than the asset is worth. Wouldn't you love to be able to pay what you vehicle is worth right now, rather than what you owe on it? You can, and here's how:
11 USC 722 allows a bankruptcy debtor to pay the secured portion of the debt owed on the car to satisfy the lien. "Security" for a loan the physical asset which can be exchanged to satisfy a lien. A typical security is a house or car. If you stop paying on the lien, the lender can take the house or car to satisfy the lien amount. Any value in the house or car above and beyond what is required to satisfy the lien (and associated fees) is returned to the borrower. A "Deficiency" occurs when the house or car sell for less than the lien amount. Deficiencies are unsecured debts for which a lender may sue. Deficiencies are very typical in the housing market these days.
When a debtor elects to use 11 USC 722, the court bifurcates the lender's single claim into two claims, one secured which is equal to the fair market value of the car and one unsecured which represents the reaminer. This way the borrower can discharge the unsecured portion, pay the secured portion and keep the vehicle. This is relatively easy in a Chapter 13 because the debtor can re-amortize the secured debt to be paid over the length of the Chapter 13 repayment plan, typically over five years. However, in Chapter 7 the payoff must occur immediately which is often impossible for people who're already bankrupt.
Those in Chapter 7 generally have three options when it comes to redemption: they can use their exemptions to hold onto a sufficient amount of cash to pay off the redemption, they can have a relative or friend pay off the balance or lastly, they can find third party financing. One might thing that third party financing for someone in a bankruptcy is difficult to find, but there are actually several businesses who specialize in financing 11 USC 722 payoffs. Yes, the interest rates for these transactions are high at around 28% but since the debtor no longer has to pay the unsecured portion of the debt they can still make economic sense.
I look at various third party finance companies to see if taking a third party loan and electing to use 11 USC 722 makes sense. If you're considering bankruptcy and want to make sure you put yourself into the best possible economic situation once the case is over, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

These days, debts are bought and sold like stocks. By the time a debt collector files suit against you, they may be the third or fourth agency to hold your debt. Generally, this is a good thing because Debt collectors assume that they will be able to win by default in nearly all of their cases. As a result, these collectors rarely keep proper documentation (or don't even get it in the first place).
Adopted by nearly every state, the Uniform Commercial Code sets forth requirements that must be met by a secured creditor before they can assess a deficiency against a debtor. There are varieties of other provisions that can be used to protect consumers: the Fair Debt Collection Practices Act, the Federal Truth in Lending Act, etc. One of the most powerful protections a consumer has is the Florida Rules of Civil Procedure. When one knows how to get evidence and how to present pleadings properly, the strength of a case is greatly amplified.
When a collector files a complaint with the court, they must have the debtor served at their last known address. There are a variety of defenses that can be used: Perhaps the collector hasn't properly shown that they are owed the debt, perhaps the debt amount has been improperly calculated, perhaps the debtor isn't even the right person -the list goes on and on. What is important to keep in mind is that a lack of action on the part of the defense means that they consent to the facts alleged. This is called a default judgment. Default judgments are difficult, though not always impossible to "re-open" and work out properly. It's far easier to defend such a case if counsel is sought prior to a judgment being obtained, preferably before the initial twenty days after service of process has occurred. By getting into a case early, a lawyer will almost invariably have a better chance at defeating the complaint and may be able to get attorneys fees or file a counter-claim for damages (suing the person who is suing you).
If you've been served due to an unpaid debt, whether legitimate or not, the creditor in your case must follow the proper procedures to collect against you. Contact a Jacksonville Consumer Debt Defense Attorney at (904) 685-1200 for a free analysis of your case.

If you want to reaffirm a debt after filing for bankruptcy, your must executed a new agreement with your creditor. This reaffirmation agreement must be written and must be signed by both you and the creditor. Should you sign this reaffirmation agreement? Here are some pros and cons.

Pros
First, if you want to keep the property, you must sign the reaffirmation agreement. Also, if you do sign, you will be certain what your payments will be, what your interest rate is, etc. Signing a reaffirmation agreement may also help rebuild your credit, since you are taking responsibility for a pre-filing debt and are making regular payments on a debt.

If the collateral is something other than a car, say furniture or electronics, then you may be able to negotiate a lesser amount due before signing the agreement. This is because the alternative to reaffirmation for the creditor is to repossess and auction off the property -something that costs the creditor money. Sometimes creditors would rather renegotiate your contract than to go through this hassle.

Cons
By signing the reaffirmation agreement, you are stating that you are now going to be responsible for the debt again. So if you cannot pay in the future and default, you no longer have the remedy or protection of bankruptcy available to you (unless you file again). If you default, a creditor may be able to garnish your wages to cover your debt.

If you have a debt for which you would like to reaffirm, or have any other consumer law issue contact a Jacksonville Bankruptcy Lawyer today for your free consultation.

As is most legal processes, bankruptcy can be a difficult thing to maneuver. There is a lot of misinformation out there, you need to be careful to get your information from a trusted source. Here are some myths regarding bankruptcy:

Myth 1: If I file for bankruptcy, everyone will know.
Like most legal proceedings, most bankruptcy documents are public record. Since I work at a law firm in the bankruptcy department, I search these records all the time. I even have a special username and password that allows me access online. However, how many times do you think your friends, family, or co-workers search through federal court records? The truth is that while your bankruptcy documents will be public information, it is unlikely that those you know would search to find them.

Myth 2: If I file for bankruptcy, I have to give up all my house.
If you are filing a Chapter 7 or Chapter 13 bankruptcy, you are often able to keep your house. Obviously, you need to be sure that you can pay your mortgage, or it would be useless to try and keep the house. But if you can afford the payments, then you can reaffirm the debt and retain your house. In a Chapter 13, you can even catch up on mortgage arrearages through your Plan, which may be all the help you need to keep your home.

Myth 3: Chapter 13 Plans require you to pay all of your unsecured debts.
A "means test" is the tool used to figure out if you qualify for a Chapter 7 or Chapter 13 bankruptcy. If you must file a Chapter 13, then a similar test tells you what your disposable monthly income is. This amount must be paid to your unsecured creditors. So, depending upon your situation, you could pay all of your unsecured debt, very little of your unsecured debt, or none at all.

Myth 4: Married couples must file bankruptcy together.
This is not true. You can file a joint petition if you want to save on court costs, but you are not required to. A Jacksonville Bankruptcy Attorney can assess your particular situation and tell you whether it is beneficial for one of you or both of you to file, based on how much debt you have, what kind of debt it is, and in whose name the debt is in. Often times it is more beneficial for one spouse to file.

To discuss any questions you have regarding bankruptcy, creditor harassment or consumer law, contact a Jacksonville Bankruptcy Attorney today at 904-685-1200 for a free consultation.

Upon filing for bankruptcy protection, an automatic stay is put in place. This means that creditors can not try and collect from you. So a creditor cannot call you to request payment, send bills to you, garnish your wages anymore, or repossess your car without court permission. If there is a foreclosure suit against you, that suit must also stop immediately. If your home is sold and you filed prior to the sale, that sale can be vacated. Obviously, this is a powerful tool bankruptcy. Many people file to stop creditors from taking actions against them or their property.

The automatic stay will remain in effect until one of the following things occurs:
1. A creditor petitions the court for relief from automatic stay and the court enters an order granting it;
2. You receive a discharge in your bankruptcy case; or
3. Your case is dismissed.

If you have creditors that you would like to keep at bay by filing for bankruptcy and getting automatic stay protection, contact a Jacksonville Bankruptcy Attorney today for a free consultation to discuss your specific case.

Two bankruptcy petition preparers in Wisconsin are in big trouble with the Court, facing possible criminal charges. Jennifer Abbott, who is a disbarred attorney, was cited with contempt by a bankruptcy judge. The Court said that she has violated bankruptcy Court Orders repeatedly and she refused to obey a subpoena issued by the U.S. Trustee's office. Abbot has also been convicted of felony theft for stealing from a client.

The second bankruptcy petition preparer, Gaynor Morrison, is in trouble for failing to appear in bankruptcy Court when ordered to do so. Also, he was alleged to have been overcharging clients and failed to return fees to clients after being ordered to by the Court.

Bankruptcy petition preparers are non-attorneys who help people file for bankruptcy. Courts and trustees often comment that the petitions or other required documents are flawed when drafted by a bankruptcy petition preparer. If this happens and the case gets dismissed without discharge, people could lose valuable assets or have to pay additional filing fees. Not all bankruptcy petition preparers are unprofessional, but it is best to have a licensed attorney with knowledge of the complexities of the Bankruptcy Code prepare your bankruptcy documents. To contact a Jacksonville Bankruptcy Attorney today, call 904-685-1200.

Yes, you can still file for bankruptcy. However, a very important part of every bankruptcy case is your exemptions. Exemptions allow you to keep your real and personal property. There are federal exemptions, but most states have adopted their own exemption laws. To use Florida exemptions in your bankruptcy, there are residency requirements. If you have lived in Florida for the 730 days prior to your filing, you can use Florida's exemptions. If you have not lived here for that long, then your exemptions will be those of the state in which you resided for during the 180 days prior to your filing or the federal exemptions, whichever your prior state's law indicates.

Florida is often seen as having a liberal homestead exemption, as it allows you to keep your home despite unsecured creditors. However, to use the Florida homestead exemption, you must have owned the home for 1215 days, otherwise you can only protect up to $125,000 in equity. Since nearly half the homes in Florida are underwater on their mortgage, it is a rare circumstance that anyone has more equity that the federal system allows. If you are unclear what exemptions you are allowed to use, contact a Jacksonville Bankruptcy Attorney today to discuss your specific case and what exemptions would be best for you.

The U.S. House of Representatives introduced a new bill, the Mobile Informational Call Act of 2011, that would allow businesses to dial consumers' cell phones using an automatic dialing system. This practice is oftentimes called "robo-calling". This means that the operator does not have to manually dial each number. Rather, the computer system can dial the numbers and play a prerecorded message on many phones at once. The current law is that operators have to manually dial the numbers (unless the customer consents to robo-calling), which is not very profitable for many collection agencies.

The down side to this bill would obviously be that creditors would be able to start robo-calling your cellphone. This does not sit well with many consumers. But some creditors say that the current regulations have not kept up with the technology of today, and that a lot of people do not have home phone lines anymore. Creditors are wanting robo-calling access to cell phones.

The upside to the bill, however, is that an airline company could robo-call passengers if a flight was cancelled or is running late. Or your credit card company could set up a system to automatically call you if they think someone is fraudulently using your card. Or your bank could robo-call with a message that someone changed the address or PIN number on your account.

It does not look like the bill will be passed as it is. But the proponents may make some changes and re-introduce the bill. Either way, remember that the FDCPA is still in effect. Creditors cannot harass you. Creditors can only call at certain times during the day. Creditors cannot be abusive. If you have problems with creditors, contact a Jacksonville Bankruptcy Attorney today.