Jacksonville Bankruptcy Lawyer Blog

Published on: December 25, 2011

Fannie Mae and Freddie Mac consider zero interest proposal

Zero Interest Rate Bankruptcy Home The Federal Housing Finance Agency is reviewing a proposal that would permit Judges of Chapter 13 cases to give 0.00% interest rates on FHFA loans during the duration of the five year cases. Since about 90% of all U.S. Mortgages are FHFA backed, this would allow nearly all mortgages to have zero interest rates for five years. This comes on the heels of the Federal Housing Finance Agency’s plan to allow Chapter 13 bankrupt to enter modifications and attempt to reduce their principle balances.

The proposal comes with two caveats: 1. The home must be worth less than it’s mortgage (46% of Florida homes are underwater) and 2. whether or not to grant the modified interest rate would be up to the bankruptcy judge.

White House spokeswoman Amy Brundage told the Financial Times that the administration is not considering this particular idea. Fortunately, this bill can become law without approval from the White House. Even if a President were to use their veto power, the bill could still be passed by a 2/3rds majority vote by both houses of Congress.

Continue reading →

Published on: December 23, 2011

Louisiana Debtors Sentenced to 6.5 years for bankruptcy fraud

By David M. Goldman

Bankruptcy Prison, Fraud A Shreveport, Louisiana man was sentenced to 6.5 years in federal prison for concealing over $400,000 in assets in a joint Chapter 7 petition. He also attempted to discharge a debt of $750,000 which was supposed to be held in escrow for a real estate project. He was convicted of concealing assets, making a false statement under penalty of perjury and bankruptcy fraud. As part of his criminal monetary penalty, he is to pay the U.S. Trustee $754,000. According to the National Association of Bankruptcy Trustees, the case was investigated by the FBI and the United States Bankruptcy Trustee’s Office and prosecuted by the Assistant United States Attorney.

Many people forget that bankruptcy relief is a privilege with limitations and that abuse of the system can be severely penalized. Before taking actions could lead to trouble, you should first consult experienced counsel. Contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Published on: December 23, 2011

Florida Judgment Statute of Limitations is 20 Years

By David M. Goldman

Florida Judgment Statute of Limitations 20 Years The Florida District Court of Appeals shed light on how Florida’s Statute of Limitations functions as to Judgments in their recent decision in Corzo v. West.

In Corzo, the creditor, Corzo Trucking Corporation, had obtained a judgment against the debtor, Bob West in 1984. Corzo had been unable to locate West for twenty-one years, but since the debt owed by West was so large, ($120,223.80 in principle plus $297,933.61 in interest, totaling $418,157.41), an attempt was made and he was located in the state of Georgia. Suit was brought in 2006 in an attempt to force West to “make good” on the 1984 judgment. West did not file any papers or attend hearing in 2006 and a default judgment was obtained against him. In 2009, when Corzo attempted to enforce the new 2006 judgment, West replied the action and the judge dismissed the case. Corzo appealed this decision and brought about the new case.

The District Court of Appeals explained that the 2006 judgment is a distinct and different judgment from the 1984 judgment. Despite being based on the prior judgment, the new one had it’s own case number and was enforceable once obtained for another twenty years. What West should have done was appear to court when summoned in 2006 and brought up the defense of the statute of limitations then. At that point the new judgment wouldn’t have been entered and the old judgment would have been unenforceable, but because he didn’t bring up the defense at that time, the court considered it waived. Now he has to deal with nearly half a million dollars in debt.

Continue reading →

Published on: December 21, 2011

Jacksonville Bankrupt Seek Rentals

By David M. Goldman

Many people who are considering bankruptcy are concerned that they will be unable to find a place to live if they give up their home. Although I have addressed this concern in the past by calling housing complexes around the city to see if they will rent to those who are bankrupt, there are still people who worry. Of course there is always the thought, “Sure, it someone else who filed for bankruptcy found a place to rent, but it what if it won’t happen for me?”. It’s easy to understand this concern as almost nothing is more important than having shelter, especially if you have children.

According to the Consumer Bankruptcy Project of 2007, 70% of those who who surrender their home in bankruptcy rent thereafter. Others chose to live with relatives, purchased a different house, etc. I still keep a list for my clients of properties around Jacksonville who will rent to those who file bankruptcy. If you would like more information regarding bankruptcy or would like to get your complex added to our list, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

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.

Continue reading →

Published on: December 20, 2011

Bankruptcy Petition Preparers In Big Trouble With The Court

By David M. Goldman

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 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.

Continue reading →

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.

Continue reading →

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.”

Continue reading →

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.