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debtWhen thinking about filing a Chapter 7 Bankruptcy in Jacksonville, Florida, not knowing or understanding the Jacksonville Bankruptcy Process can make filing bankruptcy seem very overwhelming and scary. Not only are Jacksonville Bankruptcy Attorneys asked about what to expect after filing bankruptcy; they are also asked what clients should and should not do before filing for bankruptcy. In order to help you better understand the Jacksonville Bankruptcy Process, please see below for a general timeline of events you should be familiar with.

6 to 8 Years Before Filing a Jacksonville Chapter 7 Bankruptcy:

If you filed a Chapter 7 Bankruptcy before AND received a discharge of your debts, then you will not be eligible to file a new Chapter 7 Bankruptcy before eight years after you filed your previous Chapter 7 Bankruptcy.

If you filed a Chapter 13 Bankruptcy AND received a discharge, you might be able to file a Chapter 7 Bankruptcy after six years if you paid a minimum of 70% of your unsecured claims.

1 Year Before Filing:

Your Bankruptcy Trustee can look back as far as one year for debts paid back to relatives or close business partners. What this means is that a payment made to a relative or business partner could be construed as a preferential payment over your other creditors. If this should happen, the Court could take the payment back from them in order to distribute it evenly to all of your other creditors.

This same concept holds true if you have tried to hide your assets from your creditors by transferring, destroying or hiding any of your property within one year of filing Bankruptcy. In this situation, the Trustee might deny a Chapter 7 Bankruptcy discharge and/or recover the property.

However, your Jacksonville Bankruptcy Attorney may prefer that you wait two years to ensure there are no issues when you do file. Continue reading →

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One of the best benefits of declaring a Chapter 13 bankruptcy in Jacksonville, Florida is the ability to “Cram Down” certain assets such as a car loan, certain real estate debts, or even some personal property. A cram down allows debtors to lower the principal balance and interest rates on debts they owe on secured debts. A Jacksonville Bankruptcy Attorney can help you determine if any of your debts might be eligible for a cram down through bankruptcy.

So how does an asset qualify for a cram down? First, the debt must be a secured loan. A debt is a secured loan when a lender has a security interest in the asset or collateral. This interest grants the lender certain rights to the asset, such as the right of repossession of the item if the debtor defaults on his or her payments. The most common type of security interests are found in cars and houses.

A cram down can occur when a person declares a Chapter 13 Bankruptcy. Unlike a Chapter 7 Bankruptcy, this type of bankruptcy requires that the debtor pays back his or her debts through a repayment program, which lasts 3 to 5 years.   It is important to note that a person’s homestead property does not qualify for this benefit. Continue reading →

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Police are currently investigating a loan modification and debt consolidation business in Florida. The owners supposedly presented themselves to clients as attorneys but were not licensed attorneys at all. The Boca Raton company claimed to be an industry leader in foreclosure and pre-foreclosure litigation in South Florida.

According to authorities, the two men convinced homeowners to stop paying their mortgages and to ignore notices from their mortgage holders to let them negotiate with the lenders. The scheme tricked homeowners into paying high upfront monthly legal fees for legal services that were not performed or supervised by a Florida attorney.

Florida Attorney General Pam Bondi has also filed a lawsuit against these networks of fraudulent attorneys for the unlicensed practice of law.   Bondi claims the network, which held itself out to be a group of 100 attorneys, posed as lawyers to take advantage of vulnerable clients.   The people behind the scheme also duped inexperienced young attorneys into working for them, and the defendants even used real names of actual Florida attorneys without their knowledge. Continue reading →

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Law bookAgainst common belief, filing bankruptcy can be a very easy process; especially if you are filing a Chapter 7 Bankruptcy. Knowing what to expect when filing bankruptcy as well as hiring an experienced bankruptcy attorney are the keys to making it as easy of a process as possible. The goal of this article is to inform you of what to expect when filing bankruptcy.

Regardless of whether you are planning to file a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, the beginning of the process is very similar. If you choose to hire an attorney, which I strongly encourage you to do, the process begins with an initial consultation in which you and your attorney discuss your reasons for filing bankruptcy, your income and household size, as well as your assets. Depending on your goals, income and assets, you and your attorney will discuss the pros and cons of filing a Chapter 7 Bankruptcy verses a Chapter 13 Bankruptcy and together come up with a plan that is unique to your specific set of circumstances.

Once you have decided which type of bankruptcy you will be filing, the next step is to gather the documentation your attorney will need in order to prepare your bankruptcy petition. Your attorney will let you know what he or she will need, which differs depending on your specific set of circumstances. Once your attorney has all the documentation he or she will need for your petition, an appointment is set for you to meet with your attorney again in order to review your bankruptcy petition for completeness and accuracy. Once the petition has been reviewed and signed by you, your attorney will file it with the court and you are then automatically assigned a bankruptcy case number. Continue reading →

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To begin, it is important to point out that there are some very important differences between an individual bankruptcy and a corporation bankruptcy. When a corporation files a Chapter 7 Bankruptcy, the corporation WILL NOT receive a bankruptcy discharge. The bankruptcy discharge is what tells your creditors you are no longer liable for the debt you owed them. This means that the corporation will still be liable for all debts not paid off when the bankruptcy estate has been fully administered and closed. The other major difference to take note of is that corporations are not allowed any exemptions. This means a corporation cannot protect any of its property like an individual can. An individual is afforded very specific exemptions, or protections, for certain types of property or assets up to a specified dollar amount.

You are now probably wondering why a corporation would ever file for bankruptcy? Well, under certain circumstances, it may make a lot of sense for a corporation to become bankrupt. Continue reading →

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Protect_thumbSection 529 of the Internal Revenue Code allows parents to set up education savings accounts for their child’s future college expenses. In Florida, these educational savings accounts are most commonly known as Florida’s Prepaid College Fund or Florida’s 529 Savings Plan. These types of plans can only be established for a child, stepchild, grandchild or step-grandchild and set up in the name of the person establishing the account (for example the parent or grandparent of the child) and the funds belong to that person.

When filing bankruptcy, this means the person who established the prepaid college fund for must disclose the fund in their bankruptcy petition as an asset. I am sure you are now wondering whether or not you will loose the prepaid college fund if you have to file bankruptcy, since it must be disclosed. The answer is, it depends. There are Federal and Florida specific exemptions for these types of accounts. If the exemption applies, then the funds should be safe from your creditors and you will get to keep it if you find yourself in the dire position of having to file for bankruptcy.

In Florida, Florida Statute 222.2 defines Florida’s exemption of assets in qualified tuition programs as:
Continue reading →

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Many people who are considering filing for bankruptcy have life insurance policies and do not want to loose them by filing bankruptcy. However, your life insurance policy may not actually be considered a part of your bankruptcy estate or, if it is considered a part of your bankruptcy estate, there might be an exemption that will allow you to protect it. Whether your life insurance policy will be considered a part of your bankruptcy estate first depends on what type of life insurance policy you have. The second big consideration is who the beneficiary is on your life insurance policy. There are two main types of life insurance polices, Term Life Insurance and Whole Life Insurance, which we will discuss in turn.

Term Life Insurance:

Term Life insurance is life insurance that does not have any cash value while you are alive. Instead, upon your death it will provide proceeds to your designated beneficiary. In other words, it does not mature until your death. Thus, Term Life Insurance is not considered a part of your bankruptcy estate, because there is no “cash value” for your bankruptcy trustee to administer and provide to your creditors.

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kia_rioOne major concern clients have when making the difficult decision of whether or not to file for bankruptcy is their primary means of transportation; in other words, their motor vehicle. In most cities in the United States, having a vehicle can make the difference between being able to get to work consistently and maintain employment or not. Having a reliable means of transportation can be your lifeline. Attorneys receive many questions such as, “Do I get to keep my vehicle if I file bankruptcy?” and, “Will I be able to purchase a new vehicle.” Unfortunately, the answer is always, “It depends.” But what does it depend on?

One of the main considerations taken into account when your Trustee decides whether or not you get to keep your vehicle is whether your vehicle has any equity in it. The next consideration is whether or not you have exempted that equity. In Florida, you are only allowed to exempt $1,000.00 of equity in a motor vehicle per debtor. However, there could be other ways to protect more equity. If you are leasing your vehicle or took out a car loan to purchase that vehicle, and you currently owe your lender the full value of the vehicle or owe more than the vehicle is worth, then you can most likely keep the vehicle simply by reaffirming the lease or loan. Continue reading →

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Inheritance and bankruptcy are two topics that are not commonly thought of at the same time, nor is inheritance even thought of as a consideration when deciding to file bankruptcy. The issue being that if you file for bankruptcy and receive an inheritance within 6 months of filing, you could loose your entire inheritance to your bankruptcy estate. In other words, your bankruptcy trustee will take your inheritance from you and use it to pay off your debts. The majority of most people who file for bankruptcy have not taken into account the possibility of receiving an inheritance, and as a result, are naturally devastated when they learn they do not get to keep their inheritance as they expected. To put it simply, if you believe you may receive an inheritance within the next 6 months, you may need to wait to file for bankruptcy.

But what if you cannot wait to file bankruptcy due to an imminent foreclosure sale date or garnishment? Can anything be done to save your inheritance? An even less thought about concept is the planning your parents, or any other person who may leave you an inheritance, can do. By simply establishing the right kind of estate plan, your parents, or anyone else for that matter, can protect your inheritance from being taken by a bankruptcy trustee. By having any person who may leave you an inheritance include something known as a “spendthrift provision” in their will or other estate planning documents, your inheritance should be able to be protected if you find yourself in the difficult position of having to file for bankruptcy.

What is a “spendthrift provision” you may ask yourself? It is a provision found in a will or trust document that allows a personal representative or the trustee of a trust to first look to see if a beneficiary is in the middle of a bankruptcy or if they are about to file for bankruptcy before giving the beneficiary their inheritance. Simply put, the personal representative or trustee can first look both ways before crossing the street to make sure it is safe to give the inheritance to the designated beneficiary. If it is not safe, then the personal representative or trustee can take the appropriate steps to ensure the inheritance will not be lost.

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For many, being able to make charitable donations and continue to tithe to their religious organization is something that is extremely important to them. When their debts become more than they can manage many people begin to think about filing bankruptcy, and whether or not they will be able to continue making their donations is a major concern. Another concern is whether or not the donations they have already made will be affected if they file bankruptcy. Congress understood and recognized this. In 2006, Congress added the Religious Liberty and Charitable Donation Clarification Act to The United States Bankruptcy Code, but what does this Act actually mean?

Chapter 7

When filing a Chapter 7 bankruptcy, the Religious Liberty and Charitable Donation Clarification Act allows charitable donations or tithing as long as there is an established history of the donations or tithing, and the amount is not extremely unreasonable in relation to your monthly gross income. Additionally, charitable donations and tithing may even help you qualify for a Chapter 7. In order to qualify for a Chapter 7 bankruptcy, you must first pass the means test. The means test makes sure you do not have enough income for a Chapter 13 Payment Plan instead. However, the means test does allow you to deduct certain monthly expenses from your gross income. Regular charitable donations and tithing is one deduction that is permitted and could even help you qualify to file a Chapter 7 bankruptcy.

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