How Does Florida Bankruptcy Impact Credit Reports & Scores?

If you are overwhelmed with debt, filing for bankruptcy may bring some needed relief. Bankruptcy is intended to discharge debt and give people a fresh start. In many cases, bankruptcy will help improve a borrower’s credit score. By discharging bad debts, cleaning up your credit report, and getting a fresh start, you may see a significant increase in your credit score. For more information on how bankruptcy affects credit scores, contact a Tampa bankruptcy lawyer.

There are many different types of bankruptcy filings, each with its own set of advantages and disadvantages. If you are considering bankruptcy you should first consult with a bankruptcy attorney in your area.

How Long Does Bankruptcy Stay on My Credit Report?

The bankruptcy filing may last on your credit report for a few years. If you completed a Chapter 13 bankruptcy, the filing may remain on your credit report for seven years. On the other hand, Chapter 7 bankruptcy will stay on your credit report for up to 10 years. See MyFico.com.

If bankruptcy is on your credit it does not mean you will be prevented from acquiring new debt. For instance, the waiting period for a mortgage may be a lot sooner. The FHA and Veteran’s Association allows borrowers to qualify for a mortgage in just two years after the discharge. See FHA Regulation 4155.4. As with most legal issues, the outcome will depend on the specific circumstances of each case. Therefore, you should consult with a bankruptcy attorney for information about your specific case.

 

How Will Bankruptcy Effect My Credit Score?

It is difficult to say with certainty how bankruptcy affects credit scores because credit scores are based on a multitude of factors. One of the factors that determine the credit score is the amount of debt a person has. Bankruptcy can assist with this factor by discharging debt a borrower may otherwise be obligated to pay. Another factor is open credit accounts with late payments, these accounts can significantly reduce your credit score. Fortunately, bankruptcy can assist with this aspect as well. If the debt is discharged in bankruptcy the account should no longer be reported as an open delinquent account.

Getting New Loans After Bankruptcy

You should be able to apply for credit cards immediately after you receive your discharge in bankruptcy. Some lenders will have no waiting period at all, you may be eligible for a loan the very next day. A great place to start rebuilding your credit is with a secured credit card. This is a credit card where you make a deposit into a savings account and then you receive a line of credit for that amount. For example, if you make a deposit of $800 into the savings account and you have a secured credit card that has a $40 annual fee, your line of credit will be $760.

Retail credit cards, such as department store cards are also a great way to start rebuilding your credit. Often, it is much easier to obtain a credit card from a retail store than it is from a bank. Retail stores like gas stations and department stores are primarily in business to sell their products, not issue credit. With a credit card, they can sell you more of their products. Therefore, many of their credit cards will have fewer restrictions than other types of credit cards.

Impact of Chapter 7 & Chapter 13 Bankruptcy on Credit Scores

Chapter 13 is considered a restructuring bankruptcy because the borrower continues to make payments to their creditors according to a court approved payment plan. Unlike Chapter 13 bankruptcy, Chapter 7 does not involve a payment plan. Instead, the bankruptcy trustee will liquidate a debtor’s assets and use the proceeds of the sale to pay creditors.  Fortunately, not all of a debtor’s assets will be subjected to liquidation by the bankruptcy trustee. For example, homes, retirement accounts, and cars may be exempt from liquidation.

 

Many creditors will view Chapter 7 less favorably than Chapter 13. It is not uncommon for banks to have longer wait periods to receive a loan after Chapter 7 than Chapter 13 bankruptcy.

 

Review Your Credit Report

It is also important that you review your credit report on a semi-annual basis. The Fair Credit Reporting Act allows every person to receive one free credit report every 12 months at www.annualcreditreport.com. See 15 U.S.C. § 1681. Be careful of using another website, as it most likely will require a fee or come with hidden conditions.

When reviewing your credit report, there are two types of errors that you could come across. First, information was added to your report that does not belong to you. Secondly, an agency sent the report of a different person, even though the information is accurate. If you see a bankruptcy on your credit report that you did not file, you should file a dispute.  You must do this by initiating a dispute with the consumer reporting agency and directly with the creditor.

Bankruptcy Law Firm

At Florida Law Advisers, P.A., we understand that filing for bankruptcy can be a very confusing and intimidating process.  That is why we work so hard to make the process as easy as possible for our clients. With Florida Law Advisers, P.A., you get an experienced bankruptcy attorney in Tampa by your side throughout the case. We will help ensure your rights are protected and that you receive the utmost relief bankruptcy can offer. To schedule, a free consultation with a bankruptcy lawyer in Tampa call us at 800 990 7763.

How To Eliminate Medical Bills With Bankruptcy In Florida

The coronavirus (COVID-19) has had a devastating impact on the lives of countless Americans.  Many have fallen ill, and others have become unemployed and are struggling to make end’s meat. Whether the impact has been to your income or the expense of supplies needed to prepare for this emergency, the unexpected tragedy has caused great financial hardship. Fortunately, there are many different options for relief from debt due to coronavirus. To see which option may be best for your specific circumstances, contact a Tampa bankruptcy lawyer for a free consultation.

COVID-19 Stimulus Check

Congress recently passed the CARES Act, which may provide individuals with a $1,200 stimulus check. For joint filings, the coronavirus stimulus check would be $2,400. Plus, recipients may receive an additional $500 for each minor child. The money is certainly needed but it may not be enough to solve the bigger, more pressing financial problems. If you have a lot of debt or falling behind on payments $1,200 – $2,400 is only a temporary band-aid. In some cases, the most effective use of the money may be to file bankruptcy.

Bankruptcy can be used to eliminate debt, stop a foreclosure or repossession, and harassing calls from your creditors. There are two types of bankruptcy that borrowers can file, Chapter 7 and Chapter 13. A bankruptcy law firm can explain the differences and advise which type of bankruptcy may be best for your situation.

Chapter 7 Bankruptcy for COVID-19

Chapter 7 bankruptcy is the fastest type of bankruptcy and is designed to give borrowers a fresh start. As soon as the case is filed an automatic stay will be enacted. The stay will immediately end all collection activity, including foreclosure sales, garnishments, and car repos. Additionally, you can discharge debt in Chapter 7 without having to pay anything to the banks. The discharge is a court order that releases the borrower from all personal liability.

Chapter 13 Bankruptcy for COVID-19

Chapter 13 is the other type of bankruptcy used by borrowers. This type of case is often recommended for people trying to save property such as their home or car. As long as you have the property in your possession, you will be protected by the automatic stay. See 11 USC 362. These protections happen automatically once your bankruptcy case is filed. If you fell behind on mortgage payments, instead of making a partial payment that the lender may not even accept, you can file Chapter 13 and force your lender into a five year repayment plan. You may even be able to use the court’s modification program to modify the terms of your mortgage.

COVID-19 Car Repossession

You can use a Chapter 13 Bankruptcy to save your car even if your lender has a repossession out. As long as you still have your car when you file a Chapter 13, the car will be protected. As part of Chapter 13, you can force your lender into a five-year repayment plan. Additionally, the interest rate may even be lower than what you are currently paying the bank. The payment plan in the bankruptcy is based on the federal bankruptcy code Title 11, which means that you don’t need the bank’s permission.

On the other hand, if your car was already repossessed or if you can simply no longer afford your car, Chapter 7 Bankruptcy can ensure the loan doesn’t haunt you in the future. When a car is repossessed or even voluntarily surrendered your lender will auction the vehicle. If they are not paid in full for your loan you will be sent a bill for the remaining amount. The amount will include the balance plus interest, late fees, and legal fees. However, if you discharge the loan in Chapter 7 bankruptcy you will have no have personal liability for the car debt. Therefore, the bank would be prohibited from taking any collection action against you.

Late Credit Card Payments Because of COVID-19

For most people, the difference between credit card debt because of corona virus (emergency supplies, living expenses, unemployment) and normal credit card use is plain to see. There is a global pandemic and with so many jobs impacted people are incurring a lot of credit card debt because of coronavirus. Unfortunately, credit card companies don’t view these types of debt differently. Regardless, whether the debt was for necessary supplies or vacations, lenders will usually take measures to collect the debt, such as:

  1. Place the account in collections
  2. Harass borrowers with countless bills and phone calls.
  3. File lawsuits

If a credit card company is successful in suing you they will receive a judgment. At this point, the company suing you is likely a debt buyer and not the credit card company that you originally owed. The judgment holder will likely be charging interest and their legal fees as they pursue collection. In many cases, the interest and legal fees will be more than the original loan amount. However, a Chapter 7 bankruptcy can eliminate the judgment, including the interest and legal fees. See Florida Statute 55.145.

Medical Bills from Coronavirus

All medical bills from coronavirus should qualify for discharge in bankruptcy. See 11 USC 524. The discharge is a permanent court order releasing your personal liability on the debt. Further, the discharge prohibits a creditor from taking any collection action. In many cases, obtaining a discharge for hospital bills will be the main reason for filing bankruptcy. However, not all debts will be eligible for a discharge in bankruptcy. Therefore, if you are considering filing for bankruptcy you should speak with a bankruptcy attorney in Tampa before taking any legal action.

Consult a Bankruptcy Law Firm in Tampa

At Florida Law Advisers, P.A. we understand that these are difficult times. Too many Americans are getting ill, losing their job, and falling behind on bills. If you are struggling with debt we may be able to help. Regardless, whether you need help with Chapter 13, Chapter 7, or other forms of debt relief we provide the competent legal advice you can trust. Call us now at 800 990 7763 to speak with a Tampa bankruptcy attorney at our firm.

How To Stop Car Repossession In Florida

Repossession of a vehicle is an unfortunate situation too many people suffer.  If a borrower fails to make timely payments for a car loan the lender may begin the repossession process. See Florida Statute 537.012. For many, cars are essential for getting to and from work, school and repossession can have devastating consequences. Moreover, missed payments can lead to the bank initiating repossession without even providing notice to the borrower.

Fortunately, there are options and rights for borrowers to stop car repossessions in Florida. If you received threats of repossession, contact a bankruptcy attorney for legal advice without delay. An experienced Tampa bankruptcy attorney may be able to prevent the car from being repossessed and eliminate late fees and penalties.

How to Stop a Car Repossession Quickly

If you have defaulted on a car loan, the lender usually can have the car repossessed without notifying the owner. See Florida repossession laws. Borrowers at risk of a car repo need help right away. For many borrowers facing a car repo, the automatic stay protection is the answer. The automatic stay forces creditors to stop all collections attempts against you. As soon as the bankruptcy is filed an automatic stay instantly goes into effect. Under the stay, creditors cannot call you, continue with a lawsuit, repossess, or foreclose on your property. Regardless, how many months late payments are or how high the outstanding balance is, a repossession will be stopped

In car repo cases, timing is everything. If you may soon default on a car loan, it’s important to speak with a Tampa bankruptcy lawyer before your car is repossessed. If you wait too long the automatic stay may not be able to help. The automatic stay only prevents the bank from taking the car, it will not force them to return a car they already had before the case being filed.

Stop a Car Repossession with Bankruptcy

The automatic stay will stop all collection activity as soon as the bankruptcy is filed, but it is not intended to be a long-term solution. Borrowers will need to consider whether they should file for Chapter 7 or Chapter 13. Each form of bankruptcy will have its unique benefits and disadvantages. The type of bankruptcy you choose will greatly impact your ability to keep the car or discharge the balance owed. If you think bankruptcy may be a solution, schedule a consultation with a bankruptcy attorney to learn more.

Payment Plan to Stop Car Repossession

Chapter 13 is the most common option for borrowers seeking to stop car repossession.  Chapter 13 provides car owners with up to 5 years to pay off the car loan. In many cases, 5 years is enough time for the owner to catch up on the payments. Additionally, by spreading the payments over a new 60-month loan it helps reduce monthly payments. A 60-month loan is a vital tool that borrowers can use to permanently stop the car repo and make the loan affordable.  Most of the time, the interest rate applied is around 6%.  In some cases, this will allow borrowers to save money on interest as well.

How to Wipe Out Car Loan

If you do not want to keep the car, you can surrender the vehicle and discharge the debt. Simply walking away from the automobile is not a good solution. The balance will often be thousands of dollars more due to legal fees, interest, and late penalties. If the car repo auction does not provide enough money to pay the full loan, the bank can garnish wages and place liens on your property for the remaining balance.

On the other hand, if a debt is discharged in bankruptcy the borrower will be released from all personal liability on the debt. See bankruptcy law 11 U.S.C § 727. Further, the discharge prohibits a creditor from taking any collection action against the borrower. Bankruptcy is designed to give borrowers a fresh start, not be burdened with debt from cars they no longer own.

Lien Strip a Car in Chapter 13 (Cram Down)

A cramdown in bankruptcy will allow you to keep the car and shave thousands of dollars off the loan. With a cramdown, the borrower keeps the car and will only owe the car’s market value, not the loan balance. Thus, if your loan exceeds the car’s value you may get a windfall and save thousands of dollars. For instance, if your car is worth $5,000 but you owe $9,000, you would save $4,000 (9,000 – 5,000) and get to keep the car! To be eligible, the borrower must have purchased the car at least 910 days (roughly 2.5 years) before the filing date of the Chapter 13 bankruptcy petition. See bankruptcy law 11 US 1325.

How to Lien Strip a Car in Chapter 7

Chapter 7 has traditionally been the option for surrendering a car in jeopardy of repossession. However, section 11 U.S.C. 722 of the bankruptcy code allows what is called a “redeeming” of the car- essentially, a new loan that pays just the value of the vehicle (like the cram down in Chapter 13), rather than the outstanding loan balance. Moreover, in Chapter 7 there is no  910 rule, so you won’t need to wait 2.5 years to use this option. For instance, if you only owned the vehicle for one year, you may still be eligible for reducing the car loan.

Consult a Tampa Bankruptcy Law Firm

If you are at risk of losing your vehicle to repossession contact Florida Law Advisers to speak with a bankruptcy lawyer.  We are a customer service-oriented bankruptcy law firm committed to providing personalized attention and dedicated legal counsel. All of our initial consultations are free and convenient payment plans are available. To speak with a bankruptcy lawyer in Tampa now or schedule a free consultation call us today at 800 990 7763.

Filing Bankruptcy In Florida For Credit Card Debt (2020)

Credit card debt is a huge problem for many families struggling to pay the bills. The high interest rate and excessive fees make it nearly impossible to pay off the debt. Fortunately, many borrowers can find relief and get a fresh start with a Chapter 7 or Chapter 13 bankruptcy. Bankruptcy can put an immediate end to the harassing collection notices and eliminate the credit card debt.

For many, bankruptcy is the best solution when credit card debt is out of control. You may be able to wipe out all the credit debt without even paying a portion of what is owed. However, bankruptcy is not right for everyone, you should consult with a bankruptcy lawyer in Tampa for advice about your specific case.

Credit Card Debt in Bankruptcy

Credit card debt in bankruptcy is almost always treated as an unsecured debt.  See bankruptcy law 11 U.S.C. § 109(e).  Unsecured debts are loans that are not secured by collateral.  Collateral is something used to establish trust for a loan; the typical example is when one uses a home as collateral for a mortgage.  Because there is no collateral needed for most credit cards, the debt is treated as unsecured.  Unsecured debts, such as credit cards are typically discharged without having to pay even a portion of the debt.

Discharge of Credit Cards in Bankruptcy

If a debt is discharged in bankruptcy the borrower will be released from personal liability on the debt. See bankruptcy law 11 U.S.C § 727. Further, the discharge prohibits a creditor from taking any collection action against the borrower. Therefore, if your credit card debt is discharged, the debt owed will be wiped out. Banks are not allowed to call you, send bills, or take any other action to collect on a debt that was discharged.

Credit Card Judgments

If a credit card company is successful in suing, they will receive a judgment. At this point, the company suing you is likely a debt buyer and not the credit card company that you originally owed. The judgment holder will likely be charging interest and their legal fees as they pursue collection. In many cases, the interest and legal fees will be more than the original loan amount. See Florida Statute 55.145.

Under Florida law, most judgments are valid for 20 years. See Florida Statute 95.11. Therefore, the creditor has 20 years to continue to attempt collection. The creditors may even be allowed to garnish your paycheck, take money from your bank account, and put liens on your property. Even worse, courts allow the garnishments to begin before the borrowers even receive notice.

Garnishments from Credit Cards

Once they obtained the judgment they can move forward with garnishing a borrower’s wages. If your wages are being garnished filing for bankruptcy may be the quickest way to stop the garnishment. Immediately after a Chapter 7 or Chapter 13 bankruptcy case is filed an automatic stay will be enacted. The automatic stay requires all collections efforts to immediately stop, including garnishments. Additionally, you may be able to discharge the credit card judgment in Chapter 7 or Chapter 13 bankruptcy.

Credit Cards with Allegations of Fraud

It is important to hire a bankruptcy attorney to prevent being accused of fraud in a bankruptcy case. If a lender successfully proves fraud, the credit card debt may be ineligible for discharge.  This process usually starts with the creditor challenging the discharge based on the belief the debt was incurred through fraud.  See Bankruptcy Code section 523(a)(2)(A).  Fraud is a defense against dischargability for credit cards in bankruptcy.   For credit card fraud the creditor will need to prove one of two things: (1) that the card was obtained through fraud, such as falsified information on an application; or (2) the use of the card itself was done fraudulently. If you think a lender may have a claim of fraud, contact a bankruptcy law firm for legal advice right away.

Adversary Proceedings for Credit Cards in Bankruptcy

If a lender accuses you of fraud in bankruptcy, they will need to file a notice of adversary proceedings. This step is mandatory if a credit card company wants to challenge the dischargability of credit cards in bankruptcy based on fraud.  There are very specific time-frames involved for a credit card company to file this notice. If the claim is not timely filed, the creditor may be barred from challenging the discharge of credit cards in bankruptcy.

The court looks at several factors when deciding whether or not there is fraud for the credit cards in bankruptcy.  The bankruptcy judge will look at the following factors, but it is important to remember that not one single factor is outcome dispositive.  The judge will look at all of the facts relevant to these factors before making a decision.

The court will evaluate: (1.) the length of time between the charges and the bankruptcy filing; (2.) whether or not an attorney had been consulted concerning the filing of bankruptcy before the charges were made; (3.)the number of charges made; (4.) the amount of the charges; (5.) the financial condition of the debtor at the time the charges were made; (6.) whether the charges were above the credit limit of the account; (7.) whether the debtor made multiple charges on the same day; (8.) whether or not the debtor was employed; (9.) the debtor’s prospects, (10.) whether there was a sudden change in the debtor’s buying habits; and (11.) whether the purchases made were luxuries or necessities. See In re Dougherty.

Contact a Bankruptcy Law Firm in Tampa

At Florida Law Advisers, we understand how stressful credit card debt can be. That is why we work so hard to make the case as easy as possible for our clients. We will help ensure your rights are protected, keep you well-informed every step of the way, and help you receive the utmost protection bankruptcy can offer. Regardless, if you need help with Chapter 13, Chapter 7, or other debt relief our professional legal team will provide you with the competent legal advice you can trust. To schedule a free consultation with a bankruptcy attorney in Tampa call us at 800 990 7763.

How To Stop A Wage Garnishment In Florida

What is a Wage Garnishment?

Garnishment occurs when a creditor takes legal action to seize a portion of your wages, bank account, or other assets. In wage garnishment cases, the creditor will contact your employer and have your employer deduct a specified amount of money from your check each week to be forwarded to the creditor. Wage garnishments can be particularly devastating to debtors (borrowers) because the writ of garnishment is continuing. Therefore, a single writ of garnishment can continue to garnish wages until the full amount of the debt is paid. Fortunately, debtors in Florida do have many legal options to prevent or stop a wage garnishment. If you are threatened with a wage garnishment or your wages are already being garnished, contact a Florida wage garnishment attorney in the Tampa Bay area for help.

How Can a Creditor Garnish My Wages?

Most creditors will not be permitted to seek a wage garnishment until they have first obtained a judgment (court order) allowing them to collect the debt. However, unpaid income taxes, court ordered child support, and student loans are the exception to this rule, they will not be required to obtain a judgment prior to seeking garnishment. Creditors will have up to 20 years to collect the funds owed under a judgment. See Florida Statute 55.081. The statute of limitations to collect on a judgment is substantially longer than most other debts. The statute of limitations on most other debts is typically only 5 years. See Florida Statute 95.11.

How Can I Stop a Florida Wage Garnishment?

If you have been notified that your wages will be garnished, you will need to act quickly. The time from the judgment until the garnishment begins can be as little as a few days. Contact a Florida Wage Garnishment Attorney as soon as possible to discuss your options and the possible exemptions you may qualify for.

Head of Household Exemption in Florida:

Under Florida Statute 222.11, if you qualify as a head of household you may be legally entitled to stop a wage garnishment. The head of a household is someone who pays at least 50% of the living expenses for a dependent. The term “dependent” in head of household cases is broad and can include many different types of situations, children are not the only type of dependent that will qualify under the law. For instance, dependent may include an aunt, uncle, parent, or even a former spouse receiving alimony. See Killian v. Lawson.
It is important to note, the head of household exemption does not protect tax refunds from garnishment. Tax refunds are not considered wages, thus they are not protected under the head of household statute.

What Are Other Exemptions That Can Stop Garnishments?

Head of household is not the only exemption that can be used to stop a garnishment. For instance, exemptions to garnishments may also include social security benefits, welfare, workers’ compensation, veterans’ benefits, pensions, life insurance benefits, and disability income benefits.

Alternatively, the debtor may be able to file a lawsuit to vacate the judgment. If the judgment is vacated, the previous court order granting the judgment to the creditor will be null and void. Whether or not vacating a judgment will be a successful option depends on the facts and circumstances of each case. If you think you may have legal grounds to vacate a judgment contact a wage garnishment lawyer for assistance.

Federal Protection From Garnishment:

Under Federal law 15 U.S.C. 1673, garnishments may not exceed 25% of a debtor’s disposable income. This protection applies to all debtors, not just those you qualify as head of household. This limit applies to the total amount of garnishments; thus, even if a debtor is facing multiple garnishments, the total garnishment may not exceed 25%. However, the garnishment may exceed 25% of the debtor’s disposable income if the disposable income exceeds 30 times the federal minimum wages per week. In these cases, the garnishment will be limited to the lesser of either 25% of the debtor’s disposable income or 30 times the federal minimum wages per week.

Procedure to Stop Wage Garnishments in Florida:

When a creditor seeks a garnishment, the clerk of the court must send notice to the debtor regarding the garnishment. The notice must inform the debtor of the garnishment and the right to file an exemption. The debtor must file any exemptions to the garnishment within 20 days of receiving the notice. See Florida Statute 77.041. Additionally, the creditor must send the debtor notice of the garnishment. The notice must be sent first class mail within 5 business days of the writ of garnishment being issued.

If the debtor timely files a claim of exemption and request for a hearing, the creditor will 14 business days from the date they are served a copy of the exemption by mail to file a sworn written statement that answers the debtor’s claim of exemption. The claim of exemption and request for a hearing is hand-delivered the creditor will only have 8 business to respond. If the creditor fails to timely respond to the debtor’s claim of exemption the court will automatically cancel the garnishment. A court hearing will not be necessary to dismiss the garnishment.

Incorrect Garnishment Judgement:

If the debtor believes that the garnishment judgment was made in error, the judgment can then be contested. It is important to hire a Florida Wage Garnishment Attorney for the best way forward, if you have already completed payments for the debt, if it was included and then discharged in a bankruptcy or if it never belonged to you in the first place.

Using Bankruptcy to Stop Garnishment:

Immediately after a Chapter 7 or Chapter 13 bankruptcy case is filed an automatic stay will be enacted. The automatic stay requires all collections efforts to immediately stop, including garnishments. The automatic stay is often the quickest way to stop a wage garnishment. Unlike filing for the head of household exemption, you do not have to wait weeks or months for a court hearing to stop the garnishment. Instead, the garnishment must be stopped as soon as the bankruptcy case is filed.

Additionally, you may be able to discharge the judgment in your bankruptcy case. The discharge is a court order releasing you from all personal liability on the debt. This is important because the head of household process does not eliminate the debt, it only temporarily stops the garnishment.

Contact a Florida Wage Garnishment Attorney Today

If you are threatened with a wage garnishment or your wages are already being garnished contact Florida Law Advisers to schedule a consultation with a Florida wage garnishment attorney. Our initial consultation is free and we offer flexible payment options. At Florida Law Advisers, we take an aggressive approach to stopping wage garnishments. We understand how devastating wage garnishments can be to a family, and we vigorously fight to defend our client’s rights. Call us today to speak with a wage garnishment lawyer, we are available to answer your calls 24/7.