Chapter 13

Published on: December 20, 2011

Bankruptcy Petition Preparers In Big Trouble With The Court

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.

Published on: December 20, 2011

Saab files for Bankruptcy

By David M. Goldman

Saab Bankruptcy The first automobile company to come up with heated seating has filed for bankruptcy in it’s home country of Sweden. Although it began as an aircraft manufacturer, Saab entered the growing automobile market after World War II. Saab sales peaked in 1988 at sales of nearly 135,000 and nearly returned to that peak in 2006. USA Today’s, data shows a decline in Saab sales by 20.3% from 2006 to 2009.

According to Inside Line, the Swedish Company Reorganization Act requires that a bankruptcy application be approved only if there is reasonable cause to assume that the purpose of the reorganization will be achieved. Since the purpose of this reorganization is to keep the company running, it will be interesting to see what transpires.

Of course, the worst of the impact of a corporate bankruptcy is borne by the employees of the company. BBC News reports that Saab’s employes have complained that they’ve not been paid since last month. Since corporate bankruptcies often take months (if not years) to complete, it’s hard to imagine just how many personal bankruptcies this corporate one will cause.

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Published on: December 19, 2011

What If I Miss a Chapter 13 Plan Payment To The Trustee?

By David M. Goldman

In a Chapter 13 bankruptcy, some of your debts must be paid through a Chapter 13 Plan. This plan lasts up to 5 years. A part of filing for Chapter 13 bankruptcy is that all of your monthly disposable income is committed to your unsecured creditors. Without proper budgeting, this may not leave money for unexpected expenses, like your car breaking down, unexpected medical bills, or needing to fly to California last-minute for a funeral. It is not uncommon for debtors to fall behind on their Plan payments on occasion. So what happens if you do?

If payments are a month or more behind, the Trustee will typically file a Motion to Dismiss your case for Failure to Make Plan Payments. If this is your first time missing a payment, the Court will enter an order giving you a specific amount of time to make up your payments, usually 60 or 90 days. The Order will state the date by which you need to be current.

One great way to make sure and not get behind on your payments is to have the money taken directly from your paycheck and given to the trustee. In the Jacksonville, Florida Middle District, we can have a judge sign an order for direct withdraw of those funds. This makes it much more difficult for debtors to get behind.

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Published on: December 16, 2011

I Just Moved To Florida. Can I File For Bankrtupcy?

By David M. Goldman

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.

Published on: December 16, 2011

The Underwater Mortgage: a Home or a House

By David M. Goldman

Bankruptcy and Underwater Home Mortgages Jacksonville residents are facing some of the hardest times ever. With 46% of Florida Homes worth less than their mortgages notes, a lot of folks are considering bankruptcy.

As attorneys, it is our job to counsel our clients on what action is in their best interest. I have worked at a few different law firms and I have found that there are three schools of thought. The first thought is that the debtor should always keep the house, regardless of it’s value to debt ratio. This philosophy feels that the American Dream should prevail and that every one of us deserves to own a home. While I don’t disagree that we should all have the opportunity to own a home, this philosophy often fails because the debtor’s income is simply too low to make the house payments. Attorneys who say that they always try to save the house either make so much money that they don’t remember what it’s like to struggle or even worse, they’re just telling clients what they think the clients want to hear. Be wary of attorneys who only tell you what you want to hear. That’s a sign of a good salesman, not of a good counselor.

The next school of thought is that the house should always be surrendered if it’s under-water. This purely economical approach makes more sense than the one toting the “American Dream” and it’s quite attractive. However I don’t think it’s enough to consider only the economics of the situation. Bankruptcy attorneys tend to think numbers, because that’s what we deal in, but a wise person once said something to the effect of, “A home is more than just a house.”

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Published on: December 16, 2011

Two Year Degrees Connected to Bankruptcy

By David M. Goldman

Bankruptcy Education College Associates In the recent publication, “Broke: How Debt Bankrupts the Middle Class” by Kathrine Porter, Miss Porter explains that while most Americans are pushed to attend college as though it were the only path to success, anything less than a four year degree will increase your probability of filing for bankruptcy. She goes on to state that the cause of bankruptcy for these individuals does not appear to be student loan obligations, but she offers no concrete alternative explanation.

A study by The Institute for Financial Literacy reiterates Porter’s surprise at the growing number of educated bankrupt, but still shows that the majority of bankruptcy filers are those who have only high school education or went to college but never finished.

Gant Daily came to similar findings but only showed a little more than 2% growth in higher education filings over the last few years.

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Published on: December 15, 2011

12 Days of Christmas – Day 9 File Chapter 13 and Save

By David M. Goldman

December is often a hard time for families to pay their bills. Often in January, people begin to think about filing bankruptcy. This can be a problem because one of the things that must be done prior to filing a bankruptcy is to have filed all previous tax returns including the current year. It is virtually impossible to file your tax returns in January for most people. To reward those who file by the end of the year, we are offing a $500 discount on Chapter 13 Bankruptcy filings. Court fees and costs are not included and generally run $281. To find out more about filing bankruptcy contact a Jacksonville Bankruptcy Lawyer or visit our Jacksonville Bankruptcy Lawyer Blog.

The Law Office of David M. Goldman has decided to do 12 great specials for our new and existing clients. Some of the specials will only be valid for the day they are mentioned, but we will honor this special as long as you contact us about it by December 25th and pay for it by the end of the year.

If you want to be the first to find out about the special offers by the Law Office of David M. Goldman for the remaining 12 Laws of Christmas, be sure to check this blog daily or subscribe to our blog updates.

Published on: December 14, 2011

Debtors Prisons Abolished, But Some Still Jailed

By David M. Goldman

Debtor's Prison, Bankruptcy, Collection Practices There’s not much that inspires us to act (or not act) than the threat of imprisonment. Collection agencies are using a new angle on collections that can lead to the arrest of unwitting debtors.

The Fourteenth Amendment states that “[n]o state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law”. Despite the protections of this amendment, collectors are satisfying the requirements of due process by filing suit, unilaterally scheduling hearings, and when the debtors fail to appear for court, they have they ask the judge sign an order for them to appear. If they don’t show up for the second hearing, the judge will issue a warrant for the debtor’s “willful” non-appearance before the court. The next time the debtor is pulled over for a route traffic stop, they can be arrested.

The problem with this satisfaction of the due process requirement is two-fold. First is the fact that most collection agencies have bad or outdated addresses for debtors. People move all the time, especially those with financial troubles. If the address is incorrect, then the debtor never gets notice of the hearing. This makes the “willful non-compliance with a court order” no longer willful. If the debtor didn’t know, how could they willingly not comply?

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Published on: December 13, 2011

Disclose Everything in Bankruptcy

By David M. Goldman

Bankruptcy, Honesty, Oath, Perjury When filing for bankruptcy, it is very important to be very honest and disclose everything. If you do not, you risk having your bankruptcy denied, discharge revoked or even prison time in the worst case scenario. When you sign your bankruptcy documents, you are doing so swearing that they are true under penalty of perjury. If the trustee finds out that something you have in your schedules is incomplete or untrue, this will raise a red flag and the trustee will scrutinize your bankruptcy schedules even more.

A common way that people fail to disclose everything in bankruptcy is trying to hide assets. Debtors might leave off a gold watch or a private bank account. This is a big mistake. When filing for bankruptcy, you must list all of your assets. Even if you think an asset is inconsequential or minute, you should list it. It is better to have overkill than to raise a red flag.

Another thing debtors sometimes fail to list is creditors that happen to be friends or relatives. Or maybe the debtor does not want a specific creditor to know that they have filed for bankruptcy, so they do not want to list that creditor. You should not do this. You need to list all creditors to whom you currently owe any kind of debt on your bankruptcy papers. The trustee wants to make sure that all of your creditors get their fair share of your estate. No matter your intentions, make sure to list every creditor. If you do not and the trustee finds out, this will raise a red flag.

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Published on: December 12, 2011

Concealment of Assets in Bankruptcy

By David M. Goldman

When people are in desperate situations, they often have desperate thoughts. One of those thoughts that often comes to light in my office is the idea of hiding assets from the trustee. Sometimes it’s money, sometimes it’s your great grandfather’s old service revolver. Either way, these items must be listed in your bankruptcy petition as they are your property. Declaring them does not necessarily mean that you have to lose them, as certain amounts of personal property is exempt in bankruptcy.

18 U.S.C. §152 makes it a federal felony to knowingly and fraudulently conceal any property belonging to the estate of the debtor from the United States Trustee or from creditors. The penalty for this crime is a fine up to $250,000, up to five years in federal prison, or both.

The easiest thing to do is not hide assets in the first place. The Federal Bankruptcy Code is there to provide relief to those who need it. It allows for certain amounts of exempt property so that those who need it can attempt to restart their lives and get out of desperate situations. The best way to deal with property you don’t wish to lose in a bankruptcy is to attempt to exempt it properly. If you would like to meet with an attorney who understands how the Florida bankruptcy exemptions work, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.