Articles Posted in Automatic Stay

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Listing All Property In Bankruptcy, Automatic Stay ViolationIf somebody broke into my home while I was gone and took all of my personal property, I would want to be compensated for my loss, and I should be, right?
Imagine that like many in Florida today, you live in a home that is underwater on it’s mortgage. You consult an attorney and because you fear a deficiency judgment or a 1099 for debt forgiveness income, either of which could result from a foreclosure. That attorney suggests that you file bankruptcy, which you do. You indicate in the bankruptcy petition that you want to surrender the home to the creditor. You are also required to provide a list of personal property to the court, but because you know you’re only allowed to keep a certain amount of property in a bankruptcy, you decide to omit some valuable items. You rent a side apartment, but don’t completely move out of the house. One day you return to the house to pick up some items and find it completely bare. You call your attorney and find out that the mortgage company violated the bankruptcy rules by entering your home and that you can sue them to recover the value of the lost property. You quickly create a list for your attorney of all the property that is missing and the attorney stops you. You did not list all of these items on your petition. This brings about at least two problems: first, you lied to the court under oath. This is perjury and your attorney may have to withdraw from representation because you used their services to perpetrate a fraud. Second, when you filed your petition you swore that you provided a complete list of your personal property and at the 341 hearing, you were sworn in and asked if the list was complete. If you now sue the creditor for taking your property, you’re going to have to explain to the court why you failed to disclose property on your schedules and show that the property did, in fact, exist in the first place.
Listing all of your assets is a requirement of the Title 11 bankruptcy code. This is in the code because you’re only allowed to keep a limited amount of non-exempt property in a bankruptcy. Situations like the one above turn the law on it’s head, but really do stress the importance of honestly and accuracy on bankruptcy schedules. If you’re considering a bankruptcy, it is important to get legal advice. Contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

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Automatic Stay, Debt, BankruptcyLet’s face it, when people file bankruptcy it’s because they want their creditors to leave them alone. They’re tired of the receiving second and third late notices and of the constant telephone calls. They may even admit they owe the debts, but now there’s penalties and interest they can’t afford. Bankruptcy may be a solution.

Regardless of which Bankruptcy Chapter you choose, an automatic stay goes into effect when you file. The automatic stay prevents creditors from making collection attempts -this is a very powerful thing.

If someone files bankruptcy and the next day their house is sold by the court, there trustee can request that the state court judge “vacate” the sale and depending on the kind of bankruptcy the debtor can continue to live in the house and catch up on their arrearage.

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Eviction in Jacksonville, Florida Automatic Stay Protection#bankruptcy

The Jacksonville, Florida court determined in 100 B.R. 579.pdf that the automatic stay protections extend to protect against not just evictions but damage resulting from those that are done wrongfully.

The debtor had entered a lease agreement with a residential property. Days prior to filing a bankruptcy case the debtor was served with an eviction notice. Despite receiving notice of the bankruptcy filing, the landlord forced her way into the Debtor’s home and placed the debtor’s belongings on the street. Before the debtor was able to discover the eviction, her personal possessions were stolen.

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MERS Cannot Foreclose, No Standing in BankruptcyWhen 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.

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Co-Debtor Stay, Bankruptcy Protection, Chapter 13When 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.

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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.

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Automatic Stay, BankruptcyUpon 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;

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4326761005_36b8cac3f3_oYour Jacksonville home has a sale date. You’ve been holding off on filing bankruptcy because you thought a mortgage modification might be possible and now you have 24 hours before your home is going to be sold. If you think that nothing can be done to stop it, you’re wrong.

If you file bankruptcy in the morning and your home was going to be sold in the afternoon, that sale will be stopped by the automatic stay. In simple terms, the automatic stay tells creditors to, “Stay away” until either the bankruptcy has completed or until they are granted court permission to collect again (a process which takes weeks).

The problem most people have is that filing a bankruptcy case requires a LOT of paperwork, and because this paperwork has to be accurate and is signed under penalty of perjury, it has to be accurate and complete. Fortunately, there is a way to gain the benefits of the automatic stay without having to complete all the paperwork up front: The Bare Bones Filing.

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If you have filed a bankruptcy in Jacksonville and have had debts discharged in the Florida bankruptcy court, a creditor cannot make an attempt to collect on that debt. If the creditor does, they are likely violating 11 USC §524. §524 serves as an injunction preventing the creditor from contacting the discharged debtor. This is similar to an injunction in family law commonly known as a Restraining Order. However, while a violation of a Restraining Order can lead to imprisonment, violation of a bankruptcy discharge injunction often leads to money being awarded to the client.

Discharge violations occur often and are sometimes overlooked by clients who just want to move on with their lives. The amount of money a client can be awarded depends on the severity and frequency of the collection attempts. Generally, the cost to bring an action against the creditor is paid for by the money collected from them. That means that a client could pay nothing out of pocket and could still walk away with cash.

If you are being contacted by a creditor who should have been discharged in your bankruptcy and would like them to stop, please contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.

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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.

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