Articles Posted in Exempt Assets

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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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One of the major concerns that most people have when they begin to consider whether or not they should file a Chapter 13 Bankruptcy is what will happen to their property. Will it be taken from them or will they be able to keep it? But what most do not consider is the property that they may acquire after they have already filed their bankruptcy. It can easily be assumed that all property you own at the time you file your Chapter 13 Bankruptcy will be part of your bankruptcy estate. But what if you inherit property or are the victim in a car accident in which you have the right to file a lawsuit after filing?

First and foremost, there is a duty in a Chapter 13 to update your schedules when you acquire new assets until your Chapter 13 Plan is completed. This rule applies to property you acquire pre-confirmation as well as property acquired post-confirmation. Luckily, not every little piece of property you acquire post-confirmation requires you to update your schedules. It is suggested that only major ones require disclosure.

As a general rule, the following post-petition acquired types of property will always be considered to be a part of your bankruptcy estate and require disclosure to your Chapter 13 Trustee:

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Yes an owner of a LLC can file bankruptcy in Florida. There is nothing that prevents a member of a multi-member limited liability company (MMLLC) from filing a personal bankruptcy in Florida or anywhere else in the United States. Additionally, if a member files a personal bankruptcy, the assets of the MMLLC can be protected from being taken by your bankruptcy trustee to settle your personal debts. This is because assets of a Florida multi-member LLC are not considered part of your bankruptcy estate. Charging orders are the exclusive remedy against a multi-member LLC in Florida. Once a charging order is obtained any distribution you might be entitled to receive from the multi-member LLC could be taken by the party holding the charging order. Most creditors find a charging order unattractive because along with the right to obtain distributions comes the responsibility for income taxes on the income generated by the ownership interest in the Florida LLC.

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whitecollar handcuffs black and whiteFor years people have turned to asset protection trusts and offshore accounts to protect their assets. While a trust can be a great estate-planning tool to protect your assets, off-shore accounts and trusts used to defraud your bankruptcy trustee could place a you in some very hot water. Oftentimes trustees of a trust will not distribute funds because they are able to withhold a distribution at their own discretion and a foreign bank may make the same claim.

On the outset this might seem like a great idea: the bankruptcy court cannot force the legal entity or bank to present the money and therefore the debtor doesn’t technically have to turn the assets over to the bankruptcy estate. However, a bankruptcy court will usually remedy this situation by holding the debtor in civil contempt until the repayment has been made. This means that if a trustee or bank refuses to make a distribution, the debtor could face a lot of jail time.

Another similar issue has become more frequent in bankruptcy court. In the case of In Re 1990’s Caterers LTD., a debtor admitted he had received money from a property auction that was owed to the bankruptcy estate. However, at the subsequent contempt hearing the debtor said he had spent the money so there was nothing left to turn over. The court was then presented with the issue of whether the debtor’s inability to return spent money excused the debtor from civil contempt and incarceration.

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home-in-handsHave you inherited your parents homestead property? Do you own it free and clear from any mortgage or lien? Do you reside in the property? Are you considering filing a Chapter 7 Bankruptcy? If so, then I urge you to consult with an attorney at the Law Office of David M. Goldman, PLLC. Each one of the questions posed above are key factors in determining what affect a Chapter 7 Bankruptcy filing may have on your inherited real property.

In Florida there is a broad homestead exemption available to those filing bankruptcy; however, you must first meet some very strict requirements. If you acquired the real property at least 1,215 days (approximately 3 years and 4 months) prior to filing the bankruptcy and it is your homestead, then you may use an unlimited homestead exemption, but if you have not, then your homestead can only be protected up to $125,000. It is also important to note that you do not have to reside in the subject property as your homestead for the 1,215 days prior to filing bankruptcy in order to enjoy full protection. For example:

Your mother and father have lived in their current home in Florida as their primary residence for the last 15 years and even filed their homestead exemption with the state. When they pass away, they leave their homestead property to you; free and clear from any mortgage or lien. However, you do not move into the property and instead you continue to reside with your wife and children in another home, which also happens to be in the state of Florida and which you consider your homestead.

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In 2013, a Jacksonville resident traveled to Venezuela for a vacation where his family claimed he passed away from a heart attack. The U.S. embassy confirmed his death in the local seaside tourist town of Rio Chico, and he was reportedly cremated. But it turns out he has been very much alive. This was confirmed recently by his appearance in a federal courtroom in Asheville, North Carolina.

Jose Lantigua’s death was all an apparent ruse; an alleged plan that would allow him to escape more than $9 million of debt that included fraudulent insurance claims. Lantigua is a 62-year-old from Jacksonville, Florida and was arrested next to his wife’s home in North Carolina. He was charged with many crimes in Florida, including 7 counts of filing fraudulent insurance claims and other fraud charges.

In Jacksonville, Lantigua seemed to be a business success. He was a former executive for Fidelity National Information Services and bought two furniture stores in 2008, which were lauded as a local favorite in a 2013 edition of the Jacksonville Business Journal. The truth about Lantiua’s death became evident after one of the insurance companies that were to pay out life insurance proceeds hired an investigator to look into the man’s death.

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Those who file for bankruptcy in Florida may be surprised to learn it is possible to keep your pension and retirement funds you have worked so hard for.

 When someone files for bankruptcy, the bankruptcy estate can take the debtor’s nonexempt assets to pay off his or her creditors. What property is exempt will depend on whether the debtor files a chapter 7 or chapter 13 bankruptcy, and the bankruptcy exemptions of the state in which the debtor resides.

Congress overhauled the bankruptcy codes in 2005 under the Employee Retirement Income Security Act (ERISA). Since then, most retirement accounts and pension plan funds have been deemed property that is exempt from creditors during bankruptcy.

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pickIn many Chapter 7 bankruptcies where the Trustee determines there are assets, the Trustee can collect administrative fees at the close of the bankruptcy case. You are probably first wondering what are administrative fees and what do they mean to me.

First, assets are basically just about everything you own (from money in any sort of financial account, to cash, to your home, to the furniture in your home, and etc.), but the Trustee cannot touch every asset. You are allowed to use certain and specific exemptions to protect all or some of your property. Some exemptions are limited to a dollar amount while others, such as retirement accounts, may be fully protected.

Assets or property that do not qualify for an exemption or are over the dollar amount allowed can be taken by the Trustee and used to pay your debts. However, in many situations, the Trustee may offer you a payment plan equal to the dollar amount of the asset not protected in exchange for you being able to keep the asset.

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If you are deciding whether you should file a Chapter 7 Bankruptcy or not, the first question that needs to be answered is do you qualify? Whether a person can file a Chapter 7 Bankruptcy almost entirely depends on their current income and household size. As of April 1, 2015, the current household size to income ratio is as follows:

Household Size Yearly Income
One $42,718
Two $52,421
Three $57,977
Four $67,539
Five $75,639
Six $83,739

To determine if you qualify for a Chapter 7 Bankruptcy use the following example: You are married with two minor children. This would be considered a household size of four. Your income must equal or be less than $67,539 in order to qualify for a Chapter 7 Bankruptcy.

If you make slightly more than the income allowed, you might still be able to qualify if you have certain types of expenses that can be deducted from your income. If you still make more than the income allowed and still need or want to file bankruptcy, you will have to file a Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy is a reorganization of your debts instead of a strict liquidation as is the case with a Chapter 7 Bankruptcy.

chooseHowever, whether or not a Chapter 7 Bankruptcy is right for you is more than just a question of if you can qualify or not. If you have a lot of assets, you may want to stay clear of a Chapter 7. Any money sitting in a financial account that does not qualify for an exemption will be take from you by the Trustee and used to pay off your debts. This is also true for personal property and real property that is not your homestead. If you have lots of assets and still want to file bankruptcy and be able to keep them, a Chapter 13 Bankruptcy might be a better choice for you.

In other words, there are a lot of considerations to take in to account before deciding whether or not to file a Chapter 7 Bankruptcy. It is best to meet with a bankruptcy attorney who understands all ways you can qualify for a Chapter 7 and which assets may or may not be protected. The attorneys at the Law Office of David M. Goldman, PLLC are here to help you navigate the confusion that comes along with facing bankruptcy. Contact an attorney today by calling (904) 685-1200.

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slave As tax season comes to an end, many of my bankruptcy clients want to know whether they can keep their tax refund. The answer is it depends. It depends on when you filed your bankruptcy,     how much your refund is, what bankruptcy chapter you filed, why you need your refund, etc.

Chapter 7 Bankruptcy

If you filed a Chapter 7 Bankruptcy, your tax refund is automatically deemed to be property of your bankruptcy estate and must be turned over to your Trustee ASAP. The Trustee will use the refund to pay off your creditors. You may be able to keep all or part of your refund if you are able to exempt it. When you file bankruptcy, you are allowed certain exemptions you can use to keep some of your property. You can use some of your exemptions to keep your tax refund if you choose.

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