A welcome to Florida sign that signifies Bankruptcy in Florida:

If you struggle to keep up with your debt, filing for bankruptcy in Florida may be the solution. Bankruptcy allows borrowers to stop all collection efforts and get a fresh start immediately. Phone calls, wage garnishments, foreclosure sales, and collection notices must stop immediately after filing bankruptcy. Bankruptcy also provides a discharge of debt to give people the fresh start they need to rebuild. Filing for bankruptcy in Florida has a lot of benefits, but it is not suitable for every situation. Contact a bankruptcy lawyer in Tampa to schedule a consultation if you are considering bankruptcy.

How Common is Bankruptcy?

Bankruptcy is more common than you may think. In 2018, there were 755,185 bankruptcies filed in the United States. Studies show the average American now has approximately $38,000 in debt. For June 2019, there were 852 new bankruptcy cases filed in Tampa alone. Medical bills are a significant factor in the number of cases filed. A study by the American Journal of Medicine found that 62.1% of all bankruptcy cases are attributable to medical reasons. Further, the study found that 92% of the people filing bankruptcy for medical reasons had over $5,000 in medical debt.

The Three Types of Bankruptcy

Chapter 7: Commonly called liquidation bankruptcy. Chapter 7 involves the sale of non-exempt property to repay creditors. Not everyone is eligible for Chapter 7, as there are specific income limits that you must meet.

Chapter 13: Also known as a reorganization bankruptcy. Chapter 13 involves the creation of a three to five-year payment plan to repay your debts. If you comply with your repayment plan, you should be allowed to keep your property and discharge the debt.

Chapter 11: This type of bankruptcy differs from Chapter 7 and Chapter 13 because it is designed to provide legal aid to struggling businesses and corporations. The company typically continues to operate, but its finances are restructured to maximize its repayment plan to creditors.

Where Do I File Bankruptcy?

Bankruptcy is filed in federal court. However, the bankruptcy procedure is different for individuals and businesses.

Bankruptcy Process for Individuals

The case is usually filed in the district where the borrower lives for individuals. For instance, if you reside in Tampa, you may file the case in the U.S. Middle District of Florida. The residence will be based on the most recent 180 days before filing the case. If there have been multiple residences within the past 180 days, the filing should be where you spent the most time.

Bankruptcy Process for Businesses

Generally, a business should file where the company is located. A corporation’s domicile will be the district where the business is incorporated. A domicile will not change unless a new one is acquired. See In Re Frame. On the other hand, the principal place of business will depend on the facts and circumstances of each case. For instance, many companies conduct business in multiple states and have locations throughout the country. In these types of situations, the principal place of business is the “nerve center “of the business. See In Re Peachtree Lane Associates. The “nerve center” will be where the corporation’s primary business decisions were made within 180 days immediately preceding the bankruptcy.

For cases involving business partnerships, the venue will be based on either the principal place of business or the location of principal assets. Residence or domicile is not a proper basis for venue in bankruptcy cases filed by partnerships. See In Re Willow Ltd. Partnership. Instead, the bankruptcy court will look to the principal place or location of assets. The principal assets of a business are the assets primarily used in the company’s operation. The assets must be related to the business; investments may not be sufficient. See In Re Newport Creamery.

 

Documents Needed for Chapter 7 and Chapter 13

You will need access to information to complete the bankruptcy forms necessary to initiate the bankruptcy proceeding. Additionally, the bankruptcy trustee will require documents to verify your petition was correct. Therefore, before filing bankruptcy, you should compile the following information:

    • A list of all your creditors, the nature of the debt, the amount owed to each, and their mailing addresses.
    • Your source of income, how often you are paid, and how much you are paid. Additionally, the same income information will be required for your spouse. Your spouse’s information is needed even if your spouse is not filing bankruptcy with you. This is necessary for the court, the trustee, and your creditors to determine your household financial situation.
    • A list of all your property (including real estate and personal items).
    • A detailed list of your monthly living expenses includes food, shelter, clothing, transportation, taxes, medicine, etc. These expenses must be reasonable and necessary for family maintenance.

 

Can I File Bankruptcy Jointly Without My Spouse?

Under Bankruptcy law, a married couple may file bankruptcy either individually or jointly as a married couple. See Bankruptcy law 11 USC 302. However, because a couple can file a joint bankruptcy, it does not mean they should jointly file bankruptcy. Deciding how to file bankruptcy should not be taken lightly; the decision can have long-lasting effects on your finances. If you need legal advice, you should contact a bankruptcy law firm in Tampa for assistance.

Married couples are the only parties allowed to file for bankruptcy jointly. If a couple intends to file jointly, they should do so in the initial petition. Bankruptcy courts have consistently rejected amendments to add a spouse after the case has been filed. See In Re Clinton. Further, the filing of a joint petition does not automatically entitle the couple to a joint administration or consolidation. Instead, under Bankruptcy Rule 1015, the bankruptcy court has the discretion to deny the joint administration or consolidation. However, joint petitions filed by a married couple are almost always administered jointly unless there is an objection.

Are There Benefits to Filing Bankruptcy With My Spouse?

Exempt property is the property you do not have to forfeit when filing for Chapter 7 bankruptcy. A joint filing may entitle the couple to double the amount of some exemptions. For instance, Florida bankruptcy exemptions for a motor vehicle are only $1,000 in an individual bankruptcy case. However, when filing jointly, the exemption doubles to $2,000. Additionally, the personal property exemption of $1,000 increases to $2,000 when filed jointly. See In Re Hawkins. It is important to note; the remaining exemptions will remain the same and not increase by filing a joint petition. Therefore, a couple filing for bankruptcy in Florida may be able to claim more exemptions by filing separate, individual petitions.

The number of state and federal exemptions you are eligible for may significantly impact whether or not to file jointly. Depending on the circumstances of your case, all of your property may be exempt from bankruptcy. On the other hand, if you file for a Chapter 7 bankruptcy and your property does not qualify for an exemption, the Florida bankruptcy judge may rule that the debtor’s non-exempt assets must be liquidated.

Is Marital Property Safe in Bankruptcy

Under Florida law (689.115), when a married couple jointly purchases a home or other personal property, it is presumed that the property will be held as tenancy by the entireties. In a tenancy by the entireties, the marital union owns the property rather than by the individual spouses. This is an important fact to consider if you contemplate filing bankruptcy when married.

Each party to the marriage has an undivided one-half interest in the marital union, which in turn owns the property. Thus, a creditor of one spouse may not place a lien on property held as a tenancy by the entirety without both spouses agreeing to do so. Therefore, if only one spouse agrees to give property held as tenancy by the entireties to a creditor as collateral for a loan, the creditor will not be able to force a liquidation of the property. Instead, the creditor will only have a lien on that spouse’s one-half interest in the tenancy by the entireties.

Liquidation Requirements for Chapter 7 Bankruptcy

Chapter 7 bankruptcy is also known as liquidation bankruptcy. In Chapter 7, the borrower may be required to sell certain assets as a case requirement. Fortunately, not all of a debtor’s property will be subjected to liquidation by the bankruptcy court. Florida bankruptcy exemptions are provided for many of the assets a debtor might own. If an asset is exempt from liquidation, the borrower will not be required to sell the asset. Click here to learn more about non-exempt assets and which assets may be protected in bankruptcy.

The Means Test for Chapter 7

To be eligible to file Chapter 7 bankruptcy, you must pass the means test. The means-test requires borrowers to earn below a specified income. The income is based on the median income of similar household sizes. The median income is determined by the U.S. Census and is updated frequently.

The test is designed to weed out those who “need” bankruptcy from those who don’t. It was developed to keep people from abusing Chapter 7 bankruptcy. You only have to pass the means test for Chapter 7 bankruptcy. Borrowers seeking relief under Chapter 13 will not be required to pass the means test. Additionally, the means test may not be applied in your case if you are a disabled veteran. Also, you may be exempt if your debt is primarily business-related debts, as opposed to consumer debts.

Is There a Credit Counseling Class for Bankruptcy

Yes, all borrowers, including those filing for bankruptcy in Florida, are required to take a credit counseling class before submitting their bankruptcy filing. The class must be completed within the 180 days immediately preceding the bankruptcy filing. Once the course is complete, the debtor will need to file a statement of compliance with the bankruptcy court. The statement should include either a certificate or a statement that the debtor received the briefing but does not have a certificate. The certificate of completion should be filed along with your bankruptcy petition. If not included, the case may be rejected by the Court.

The class can be done on an individual basis or conducted in a group setting. Most often, borrowers take the class online from the comfort of their homes. You can usually even use a smartphone or tablet to complete the course. Private companies provide the course, and you can use any company approved by the bankruptcy court. The fee will vary between class providers but is usually around $10.

How Much Does Chapter 7 Bankruptcy Cost?

The Court will charge filing fees for Chapter 7 bankruptcy. The fees will vary by Court. Some may be higher than others. For instance, the filing fee for Chapter 7 bankruptcy in Tampa is $335. If you needed to reopen a closed case, the Court would charge a fee of $260. There may be additional costs for your credit report and credit counseling class. Your lawyer will also charge a fee for their legal services.

How Much Does Chapter 13 Bankruptcy Cost?

As with Chapter 7, the filing fee for Chapter 13 will vary by filing location. For instance, the filing fee for Chapter 13 bankruptcy in Tampa is $310. There will also be fees for the credit report and credit counseling class. Additionally, the Court may charge a $45 fee for a mortgage modification if required. If you need to convert Chapter 13 to Chapter 7, there is a $25 fee.

The fees will be changed occasionally by the Court. You can access the fee schedule for the Middle District of Florida (Tampa Bay area, Jacksonville, and Orlando) by clicking here. For information on the fees charged by the Northern District of Florida (Gainesville, Panama City, Pensacola, and Tallahassee), click here.

Do I Have to Go to Court?

Yes, when a debtor files bankruptcy, they will be required to attend a meeting of the creditors. The meeting of creditors is commonly referred to as the 341 meeting because the meeting is required under section 341 of the bankruptcy code. Failure to attend the meeting can result in your case being dismissed. See In Re Lewis. Debtors can have their bankruptcy lawyer present with them at the meeting. If you filed for bankruptcy, it is strongly recommended to have your bankruptcy attorney present with you.

Are Creditors Required to Attend the 341 Meeting?

Creditors are not required but do have the option of being at the meeting. Usually, if creditors attend, they will hire an attorney to appear on their behalf. However, creditors are generally most concerned with asset evaluation and location. Since most Chapter 7 cases have no assets, the cost of an attorney is usually not beneficial to creditors. If we see creditors at the meeting, they are typically small, personal creditors.

A typical example is family members you borrowed money from. Whether or not these personal creditors decide to show up is much more unpredictable. If creditors attend the 341 Meeting, they will have the right to ask the borrower questions.

When Does the Meeting of Creditors Occur?

Under bankruptcy law, the meeting of the creditors must take place between 20 and 40 days after the order for relief. The debtor will be required to attend the meeting and answer questions of the trustee and creditors under oath. Only creditors and the trustee will be allowed to question the debtor. The bankruptcy judge assigned the case, and equity security holders of a debtor corporation may not attend the meeting of creditors. In most cases, creditors do not attend the 341 meeting, and the trustee will be the only party in attendance. The trustee will typically inquire about the debtor’s income, expenses, assets, and debts. Debtors have the right to have their Tampa bankruptcy lawyer at their side during the meeting. Borrowers should take full advantage of this right to ensure they are not asked improper questions.

The 341 meeting also acts as a deadline for creditors to file complaints to determine the dischargeability of debts. Under Bankruptcy Rule 4007, the complaint must be filed within 60 days after the first date set for the meeting of creditors. If the complaint is not submitted by the deadline of this filing date, the creditor may lose its right to file the complaint.

Preparing for the Meeting of Creditors

An experienced Tampa bankruptcy lawyer will typically spend substantial time preparing his client for the 341 meeting. The trustee will usually question the debtor about the financial information submitted on the bankruptcy petition and schedules. The trustee’s questions will be designed to help determine if the debtor’s bankruptcy paperwork is accurate. The bankruptcy trustee will investigate if the borrower honestly and correctly represented their assets, income, and debts on the bankruptcy petition. Debtors must answer the questions accurately and truthfully at the 341 hearing as the bankruptcy code requires. Providing false information to the trustee or creditors at the 341 meeting can result in criminal charges.

You will need to bring your driver’s license (or other state-issued, non-expired identification) to the meeting. Additionally, you may be required to provide your social security card as well. We suggest arriving early to allow time to find your room and confer with your bankruptcy lawyer. Remember that this is a reasonably informal proceeding, but you will still want to dress professionally and act respectfully in the meeting.

How Long Does the 341 Meeting Last?

The U.S. trustee will oversee the meeting of creditors you have to attend. Often, bankruptcy trustees are expected to schedule five hearings for each half-hour slot on their schedule. This means that typically, these hearings are not lengthy. However, the meeting will be extended if the trustee discovers something that needs further questioning. The trustee can conduct the hearing as long as necessary to resolve any outstanding questions. If necessary, the trustee can even continue the 341 meeting for a later date.

What is the Discharge of Debt?

The goal of bankruptcy is to give borrowers a fresh start. The new start is obtained by discharging the debt. The bankruptcy discharge is a court order releasing the borrower from personal liability on the debt. The discharge prohibits a creditor from taking any collection action against the borrower. See 11 U.S. 727. In most cases, obtaining a discharge will be the primary reason why a borrower files for Chapter 7 bankruptcy.

Borrowers should be cautious of objections to the bankruptcy discharge. Both the trustee and creditors can raise objections and prevent discharge. The objection can prevent the discharge of a specific debt or all of the debts. The most common objections raised involve acts by the borrower to hinder, delay, or defraud a creditor. Typical examples that may be brought to light by trustees and creditors as potential bankruptcy fraud include hiding or undervaluing assets.

Can I File Bankruptcy Again?

Yes, borrowers can file bankruptcy more than once. However, there may be waiting periods to refile imposed by the Court. The length of the wait will depend on the details of your previous case and the type of new case you intend to file. Additionally, there may be limitations placed on the automatic stay protection. An automatic stay is enacted when a bankruptcy is filed to stop all collection activity immediately. If the previous case was dismissed and you refile within one year, the automatic stay lasts only 30 days. If you had multiple dismissals within one year of your new filing, no automatic stay would be granted.

When Can I File Chapter 7 Bankruptcy?

Bankruptcy filers who previously filed Chapter 7 must wait eight years from the commencement date of their previous case. See Bankruptcy law 11 U.S.C. § 727. The “Commencement Date” is the day you filed your bankruptcy petition with the court. For example, if you filed on October 1, 2010, you would have to wait until October 1, 2018, to file again.

Conversely, if you previously filed for Chapter 13, you only have to wait six years to file Chapter 7. The waiting period will begin on the commencement date of your previous case. Fortunately, there are some exceptions to the 6-year waiting period. If you paid your previous Chapter 13 payment plan in full you might not have to wait the entire six years. Additionally, if you paid 70% of your payment plan in good faith, you may not have to wait to refile.

When Can I File Chapter 13 Bankruptcy Again?

The waiting period to refile Chapter 13 is less than to refile Chapter 7. If you previously obtained a discharge of debt in Chapter 13, you only need to wait two years to refile. On the other hand, if your previous case was a Chapter 7, you will need to wait four years. The 4-year waiting period begins on the commencing date of the last case. Filing a Chapter 13 and Chapter 7 is commonly referred to as Chapter 20.

How Will Bankruptcy Affect My Credit Score?

Credit scores are based on a multitude of factors. One factor that determines the credit score is the amount of debt a person has. Bankruptcy can assist with this 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. For more information on how bankruptcy affects credit scores and how the score is calculated, click here.

The bankruptcy filing may last on your credit report for a few years. If you completed a Chapter 13 bankruptcy, the filing might 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. Many car loan lenders will have no waiting period at all; you may get a loan the very next day. The F.H.A. and Veteran’s Association allows borrowers to qualify for a mortgage just two years after the discharge. See F.H.A. Regulation 4155.4.

How Does Debt Settlement Differ From Bankruptcy?

Debt settlement is a process in which you negotiate with your creditors to pay a reduced amount. To explore debt settlement, you need to have an income stream that will enable you to repay your creditors. Most creditors will only accept a settlement if the borrower can show they can afford it. If an agreement is reached, the loan’s remaining balance should be forgiven.

Unlike bankruptcy, you cannot force your creditors to accept less. A debt settlement only occurs if the creditor agrees to the proposal. Essentially, the creditor holds all the cards in debt settlements. Usually, the most considerable risk to the creditor will be the borrower filing bankruptcy. If bankruptcy is filed, the creditor’s power may be limited or non-existent.

Is Bankruptcy Better Than Debt Settlement?

Determining how to handle your debts is not an easy decision. It is essential to evaluate each option carefully to choose the best option. The surest way to achieve this goal is to seek the guidance of a legal expert who knows the pros and cons of debt settlement and Florida bankruptcy. By seeking the services of an experienced Tampa bankruptcy attorney well versed in Florida bankruptcy law, you can help ensure that every angle has been considered during the decision-making process.

Is a Lawyer Required for Bankruptcy or Debt Settlement?

Debt settlement can usually be handled without a private attorney because a court filing is not required. While you can enlist the help of an attorney, you can work directly with your creditors if you wish. There are also third-party debt settlement companies that can negotiate with creditors on your behalf. Keep in mind, you cannot force the creditor into a debt settlement, even if you hire a lawyer.

While it is not required to hire an attorney, it can significantly improve your chances of success. A 2014 study found that only 48.2% of all bankruptcy cases without an attorney received a discharge of debt. Conversely, 82.1% of borrowers who hired a lawyer received a discharge of debt.

There are many reasons you should hire a Florida bankruptcy lawyer to help you eliminate your debts. But not all bankruptcy attorneys are created equal. You should take careful consideration to ensure you retain the right lawyer for your case. Before hiring an attorney, ask the lawyer about their experience and qualifications. You should also do an internet search and research their reviews from previous clients.

5 Star Bankruptcy Attorney in Tampa with Free Consultations

We invite you to contact Florida Law Advisers, P.A., to schedule a free consultation with a Florida bankruptcy attorney at our law firm. We will take the time to review your financial situation to see if bankruptcy is the best option to help you get out of debt. At Florida Law Advisers, P.A., we understand that filing for bankruptcy can be confusing and intimidating. That is why we work so hard to make the bankruptcy process as easy as possible for our clients.

Our Tampa bankruptcy attorneys have years of experience navigating bankruptcy proceedings and providing legal advice to help people solve their financial problems and obtain a fresh start. Regardless, whether you need help with Chapter 13, Chapter 7, or other forms of debt relief, our professional legal team can help—call 844 265 2165 to speak with a bankruptcy attorney at our firm today.

A foreclosure notice to signify the end of the Florida foreclosure moratorium for covid-19

The COVID pandemic has had a devastating impact on the health and financial stability of many Floridians. In response to the COVID pandemic, Florida issued a foreclosure moratorium. A moratorium is a temporary prohibition or suspension of an activity. The foreclosure suspension was in effect for many months but recently expired. Fortunately, there may still be other options available to prevent foreclosure. To see which option may be best for your specific circumstances, contact a foreclosure defense lawyer in Tampa.

Florida COVID-19 Foreclosure Moratorium

On April 2, 2020, Governor Ron DeSantis issued Executive Order 20-94 in response to the COVID crisis. The Order suspended foreclosure actions and evictions for 45 days. Shortly before its scheduled expiration, Governor DeSantis issued an additional extension for 30 days. The Governor continued to extend the Order each month for 30 days until recently. On September 30, 2020, Governor DeSantis announced he would not be extending the order and would allow it to expire on October 1, 2020.

Florida COVID-19 Moratorium Payments

Neither Executive Order 20-94 nor any subsequent Orders release homeowners from rent or mortgage obligations. Homeowners were required to continue to pay their mortgage during the Florida COVID foreclosure suspension. Therefore, if mortgage payments were not made during this time, homeowners may be in default and at risk of foreclosure.

Florida Foreclosures Rise

According to ATTOM Data Solutions, Florida had the country’s second-highest foreclosure filing rate in August. California was the only state with more foreclosure filings in August. The foreclosure crisis has especially hit Jacksonville hard. Among metropolitan areas with populations greater than 1 million, Jacksonville had the highest foreclosure rate. According to the study, one in every 5,877 housing units in Jacksonville was in foreclosure.

Florida also led the nation in new foreclosure starts during August. Foreclosure starts were up 24 percent nationally from July. Unfortunately, the rate of foreclosure may continue to rise due to the COVID pandemic. Approximately 10% of mortgages in Florida were 30 days or more delinquent. This is significantly higher than the national average of 7.3%

CARES ACT Mortgage Assistance for COVID-19

The CARES ACT was passed by Congress earlier this year to help alleviate the financial hardship caused by COVID. Under the CARES ACT, government-backed mortgages may be eligible for a mortgage forbearance of up to 180 days. A forbearance is when your lender suspends payments for a limited amount of time. Forbearance does not forgive or eliminate payments; it only delays them. Any missed payments during the forbearance period will need to be addressed when the forbearance ends.

The CARES ACT also prevents foreclosure of government-backed loans until December 31, 2020. No foreclosure case for a government-backed mortgage may be filed until after December 31, 2020. If a foreclosure case was already filled, the CARES ACT would prevent the auction from occurring before December 31, 2020.

Florida Foreclosure Trial

Foreclosure cases in Florida are conducted without a jury. Instead of a jury, the judge will decide the outcome of the case. Homeowners will have to persuade the judge to rule in their favor. Judges are typically a lot less likely to be swayed by fairness principles than a jury would be. Judges will usually want homeowners to rely on legal defenses to prevent foreclosure. For instance, relying on a bank’s customer service representative’s false statements may not be enough to stop a foreclosure. You should consult with a Tampa foreclosure attorney to learn more about potential legal defenses. There may be a legal defense that would require the judge to deny the foreclosure.

How To Cancel a Foreclosure Sale in Florida

Immediately after a homeowner files Chapter 7 or Chapter 13 bankruptcy, an automatic stay will go into effect. See bankruptcy law 11 USC 362. The automatic stay requires all collection activity to stop immediately, including scheduled foreclosure sales. Even if the bankruptcy is filed only a few minutes before the auction, the foreclosure will be stopped. The bank will not be able to resume a foreclosure until the bankruptcy court has lifted the stay.

Consult a 5-Star Foreclosure Defense Law Firm

If you are at risk of foreclosure, contact Florida Law Advisers to speak with a foreclosure defense attorney. We have years of experience in foreclosure defense and hundreds of 5 Star reviews from clients. Every foreclosure and bankruptcy case is different, and our vast experience allows us to cater our services to each client’s individual needs. Our initial consultations are free, and convenient payment plans are always available. Regardless, if you need help preventing foreclosure in Florida, Chapter 7, or Chapter 13 bankruptcy, we can help. Call us at 800 990 7763 to speak with a foreclosure defense lawyer. We are available to answer your calls 24/7.

Coronavirus Stimulus Check for Debt, Mortgage & Forbearance

The coronavirus has had a devastating impact on the lives of countless Americans.  Many have fallen ill, and others have become unemployed and are struggling to meet their financial obligations. Congress has recently enacted new laws to help homeowners struggling to pay their mortgage because of COVID.  To learn more about which option may be best for your specific circumstances, contact a Tampa bankruptcy lawyer to schedule a free consultation.

Mortgage Forbearance

A forbearance is when your lender suspends payments for a limited amount of time. Forbearance does not forgive or eliminate payments; it only delays them. Any missed payments during the forbearance period will need to be addressed when the forbearance ends. When the forbearance ends, the bank may demand the full amount of missed payments be paid in full within 30 days. If missed payments are not paid in full, and no other payment arrangements are made, the bank may file for foreclosure. If you are being threatened with foreclosure, contact a Tampa foreclosure defense attorney right away, time will be of the essence.

CARES ACT Mortgage Assistance For COVID

The CARES ACT was passed by Congress earlier this year to help alleviate the financial hardship caused by COVID. Under the CARES ACT, government-backed mortgages may be eligible for a mortgage forbearance of up to 180 days. In some circumstances, an additional 180-day forbearance may be granted as well.

The CARES ACT also prevents foreclosure until December 31, 2020. No foreclosure case for a government-backed mortgage may be filed until after December 31, 2020. If a foreclosure case was already filed, the CARES ACT would prevent the auction from occurring before December 31, 2020.

The protections granted under the CARES ACT only applies to government-backed mortgages. These include mortgages insured by FHA, VA, USDA, Fannie Mae, and Freddie MAC. Approximately 70% of all mortgages in the U.S. are government-backed loans. If the loan is not backed by the government, the CARES ACT will not require the bank to provide forbearance or delay foreclosure. To confirm if Fannie Mae insures your mortgage, click here. To inquire if Freddie Mac insures your mortgage, click here to access their lookup tool.

What Happens When COVID Mortgage Forbearance Ends?

Approximately 30 days before the expiration of your forbearance, the lender should send a notice describing your options. The options offered may include:

  • An additional forbearance for up to 180 days,
  • A repayment plan,
  • Payment deferral, or
  • Loan Modification

The options made available will be at the lender’s discretion. The CARES ACT does not require the bank to offer any of the above four options. Therefore, your bank may refuse to provide any additional assistance when the forbearance ends and elect to file for foreclosure. If you are at risk of foreclosure, contact a foreclosure attorney in Tampa, you may have options other than the CARES ACT to save your home.

Stop COVID Foreclosure With Chapter 13 Bankruptcy

Chapter 13 can allow homeowners to force the lender to accept a 5-year payment plan for the past due amount. The homeowner won’t have to pay the full mortgage in 5 years, only the amount that is past due. You don’t need to apply for a loan modification; you can force the bank into the 5-year payment plan. See bankruptcy law 1322.

Additionally, you can apply for a traditional loan modification as part of the Chapter 13 case. Chapter 13 modification applications are usually much different than when a homeowner applies. In Chapter 13 mortgage modifications, the U.S. Trustee is appointed to supervise the process. With much more oversight, the bank is less likely to cause unnecessary delays and wrongfully deny modification requests. Additionally, the Court can appoint a mediator and require the mortgage company to attend mediation with you. Mediation is a settlement conference with the bank, your attorney, and a mediator. A mediator is an independent person appointed to help with settlement negotiations.

How To Cancel a Foreclosure Sale in Florida

Immediately after a homeowner files for bankruptcy, an automatic stay will go into effect. See 11 USC 362. The automatic stay requires all collection activity to stop immediately, including scheduled foreclosure sales. Even if a bankruptcy is filed just one minute before the auction, the foreclosure will be stopped. The bank will not resume a foreclosure until the court has lifted the stay.

Foreclosure Defense Law Firm in Tampa

At Florida Law Advisers, P.A., we understand that these are challenging 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, our professional legal team can help. Call us now at 800 990 7763 to speak with a foreclosure defense attorney in Tampa. Our initial consultation is free and can be done over the phone.

Chapter 7 bankruptcy law book with a gavel on top

Chapter 7 bankruptcy is designed to eliminate debt and give borrowers a fresh start. The Chapter 7 process is the shortest termed bankruptcy that you can file.  A Chapter 7 case typically takes about 90 days, depending on how many assets and creditors you have.  There are a lot of potential benefits to Chapter 7, but without solid legal advice, there may be unwanted consequences. If you are considering Chapter 7 bankruptcy, you should contact a Tampa bankruptcy law firm for a consultation.

Automatic Stay

As soon as your Chapter 7 case is filed, an automatic stay will be enacted. The automatic stay requires all collection activity against borrowers to stop immediately. See 11 U.S. 362.  Creditors will not be able to pursue any collection actions while the stay is in effect. Therefore, all phone calls, lawsuits, garnishments, and other collection activities must immediately stop. The automatic stay even stops garnishments and foreclosure auctions already scheduled to occur.

Any actions that violate the Chapter 7 bankruptcy stay are seen by the court as ineffective.  For example, if a creditor tries to secure his claim after the debtor has filed for bankruptcy, the Court will act as if the action never happened. Moreover, certain violations of the stay can result in the creditor being forced to pay your attorneys’ fees. Additionally, contempt charges may also be brought against the bank.

Chapter 7 Discharge of Debt

The goal of the Chapter 7 Bankruptcy case is to give borrowers a fresh start. The new start is obtained by discharging debt so that the borrower can move one without the lingering debt.  If a debt is discharged in bankruptcy, the borrower will be released from personal liability on the debt. The discharge is a permanent court order releasing the borrower from the responsibility of having to pay the debt. Further, the discharge prohibits a creditor from taking any collection action against the borrower. See 11 U.S. 727. In most cases, obtaining a discharge will be the primary reason why a borrower files for Chapter 7 bankruptcy.

Objections to Discharge of Debt

Two laws can be used to prevent a discharge of debt, Section 523 and Section 727. Section 523 deals with the discharge of individual debts. Therefore, a denial under 523 only affects that specific debt. Any remaining debts included in your bankruptcy may still be eligible for discharge.

Conversely, a denial of discharge under 727 would preclude all the debts included in the bankruptcy from discharge. Thus, a preclusion of discharge under 727 is a lot more severe. An objection to discharge under 727 can be made by any party to the bankruptcy case. Most often, the party filing the objection will be either the bankruptcy trustee or a creditor included in the bankruptcy. The party filing the objection has the burden of proving the grounds for the objection.

The objecting party must provide sufficient evidence to prove the denial beyond a preponderance of the evidence. See In Re Brooks. This standard only requires the objecting party to prove the grounds for denial are more likely than not to have existed. Proving the objection is justified will depend on the specific facts and circumstances of each case. If you are concerned about objections to discharge, you should retain a bankruptcy attorney in Tampa.

Objections by the Trustee

The most common objections raised involve acts by the borrower to hinder, delay, or defraud a creditor. An example of this may include, gratuitously transferring assets to a family member within 1 year of filing for bankruptcy. See In Re Emmett. To deny a discharge under these grounds, there must be proof the debtor acted with fraudulent intent. Merely proving the events occurred is not enough. The court must provide sufficient evidence the debtor acted with the intent to hinder, delay, or defraud a creditor. See In Re Miller. In determining whether or not the debtor acted with the requisite intent, the court will consider many factors, such as:

  • Lack or inadequacy of value received by the debtor in exchange for the assets given
  • Relationship between the parties (i.e., family, close friends)
  • Financial condition of the debtor both before and after the transaction
  • Existence of a pattern or series of suspicious transactions
  • General chronology of the events and transactions

Chapter 7 Bankruptcy Trustee

The United States Department of Justice appoints the Trustee for the Chapter 7 case.  The trustee must ensure all of the assets, debts, and expenses are correctly accounted for.  The trustee will also be on the lookout for fraudulent transfers and other improper acts by borrowers or creditors.  See Granfinanciera, S. A., et al. v. Nordberg.

Fraudulent Transfers

Fraudulent transfers occur when borrowers transfer assets with the intent to deceive a creditor. A typical example is transferring money to family members. If money is disguised as a gift but in reality is intended to be a loan repaid after the bankruptcy is over, it may be treated as a fraudulent transfer. Another common fraudulent transfer is to disvalue assets. For example, underestimating the value of an asset may be considered a fraudulent transfer.  Bankruptcy fraud and related crimes are investigated by the Federal Bureau of Investigation and may have stiff penalties. You should consult with a bankruptcy law firm before filing your case.

Chapter 7 Means Test

To be eligible to file Chapter 7 bankruptcy, you must pass the means test. The means test is designed to weed out those who “need” bankruptcy from those who don’t.  It was developed to keep people from abusing Chapter 7’ bankruptcy.  You only have to pass the means test for Chapter 7 bankruptcy. Borrowers seeking relief under Chapter 13 will not be required to pass the means test. Additionally, the means test may not be applied in your case if you are a disabled veteran. Also, you may be exempt if your debt is primarily business-related debts, as opposed to consumer debts.

The First Step to Pass the Means Test

When evaluating the means test, the borrower’s average income will be a significant factor. Under some circumstances, the spouse’s income may be considered as well. The Court will look at the average income earned over the last six months. Next, the trustee will multiply the amount by twelve (to account for one year of income).  The Court will then compare that number to the state median income.  If your income is below the median income, you will finish, and there would be no presumption of abuse.  See bankruptcy law 707(b)2.

The median income used for the means test is derived from the Census Bureau. The income levels are broken down into family size by geographic region. Recently, the median income has been increasing each year. Therefore, if you were not eligible last year, you may be eligible now.

What is Florida’s Median Income?

Below is the U.S Trustee’s determination of the median income in Florida, effective November 1, 2019. These amounts are used to determine eligibility for Chapter 7 bankruptcy in Florida

  • Household of 1 person = $50,641
  • 2 people = $61,619
  • 3 people = $67,717
  • 4 people = $81,091
  • 5 people = $90,091
  • 6+ people = Add $9,000 per each individual

How to Pass the Means Test If Your Income is Above the State Median Income

If your income is above the national median, you would need to continue with the means test.  At this time, the Court will evaluate your income after considering some allowable deductions.  This part of the test is very complicated. Some of the permissible deductions are established through the IRS code, others through the census bureau.  This is where it becomes crucial to consult not just with an attorney, but an experienced Chapter 7 attorney.  An experienced attorney can use the IRS Code, bankruptcy law, Census data, and other information to help pass the means test.

Presumption of Abuse

Part-Two involves the Court trying to uncover your true disposable income. See Ransom v. FIA Card Services.  If the income is over the state-median income after deductions, there will be a presumption of abuse.  A presumption is like an assumption, but one with legal ramifications. The presumption must be overcome with evidence; without evidence, a presumption will stand as if fact.  Should there be a presumption of abuse in your case, you will be required to give details about an exigent or special circumstance that justifies your need for Chapter 7. You may need to provide specifics about your financial situation (income, debts, or assets) to satisfy the Trustee.  Additionally, you may be required to attest to the accuracy of this information.  See Official Form 122A-2.

Even if you find yourself in a situation where the presumption of abuse applies, you may still pass the means test. For instance, a recent loss of employment may be sufficient to overcome the presumption of abuse. Usually, a one-time bonus affecting income which is not likely to continue, can also be disregarded. There may be many other examples as well. For advice about a specific case, contact a bankruptcy law firm.

The First Step in Chapter 7 Process

The first step in the Chapter 7 process is to complete a credit counseling course.  This course must be completed 180 days before filing the petition for Chapter 7.  Numerous pre-approved agencies offer this course. You can find a list of approved agencies in Florida by going here: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111. A bankruptcy attorney in Tampa can also provide advice on which local agencies offer the course.

The Chapter 7 Petition

The second step is to file a voluntary petition for Chapter 7 and accompanying schedules. Your schedules are organized and compilation of your assets, debts, income, and expenses, etc.  It is essential to make sure the petition and schedules are done correctly. If you have any doubts about how to complete the documents, contact a bankruptcy lawyer for advice properly.

The Meeting of Creditors

The next step in the Chapter 7 process is to attend a 341 Meeting of Creditors. This is a meeting that your trustee will schedule, and the borrower’s attendance is mandatory. See bankruptcy law 11 U.S.C. § 341.  The meetings are tools for the Trustee to inquire about your creditors and ask borrowers questions. The borrower will be under oath and must answer the trustee’s questions truthfully.

Creditors have a right to attend but rarely appear at the 341 Meeting. Clients typically don’t need to worry about a bunch of bank representatives or attorneys attending.  If any creditors do show up, they are usually individuals ( family member or friend) who you owe money to and want their voice to be heard. You also have the right to have your bankruptcy lawyer present with you at the 341 Meeting.

Proof of Claims

After you attend your 341 Meeting, creditors must file their “proof of claim.”  The proof of claims must be filed within 90 days of your first scheduled 341 Meeting.  Unsecured creditors must complete and file their claims with the court to receive any money from the borrower.  If they do not file a timely proof of claim, then they lose their claim and will not be paid.

Liquidation by the Trustee

The next step in the Chapter 7 process will be for the trustee to start liquidation. The trustee will attempt to locate your non-exempt assets, auction them, and distribute the proceeds from the sale to creditors. Exempt property is the property that you do not have to forfeit when filing for bankruptcy. The trustee will not be allowed to collect and auction exempt property.   Before you file for bankruptcy, it is essential to know which exemptions you qualify for. The number of exemptions may significantly impact your decision on whether or not to file for bankruptcy.

Depending on the circumstances of your case, all of your property may be exempt from the bankruptcy. On the other hand, you may be forced to liquidate precious assets if you file for Chapter 7. Contact a bankruptcy attorney for help in determining what property of yours may qualify for an exemption before filing. You may not have the chance to amend your filings, so it is crucial to get it right the first time.

The Final Step of a Chapter 7 Case

After completion, the debt will be discharged, and there is nothing creditors can do about it.  All phone calls, emails, lawsuits, and collection actions after the discharge are banned. After receiving a discharge, you can choose to pay back any debt voluntarily, but you cannot be forced to pay. If creditors resume collection activity, they may be penalized by the court and be subject to sanctions.

If a debt is discharged in bankruptcy, the borrower will be released from personal liability on the debt. The discharge is a permanent court order releasing the borrower from the responsibility of having to pay the debt. Further, the discharge prohibits a creditor from taking any collection action against the borrower.

How Soon Can I File Chapter 7 Again If I Filed Chapter 7 in the Past

If you previously filed Chapter 7, you must wait eight years from the commencement date of your previous case.  The “Commencement Date” is the day you filed your bankruptcy petition with the court.  For example, if you filed on October 1, 2008, then you would have to wait until October 1, 2016, to file again.

Conversely, if you previously filed for Chapter 13, you only have to wait six years to file Chapter 7.  The waiting period will begin on the commencement date of your previous case. Fortunately, there are some exceptions to the 6-year waiting period. If you paid your previous Chapter 13 payment plan in full, you might not have to wait the entire six years. Additionally, if you paid 70% of your payment plan in good faith, you may not have to wait to refile.

Do I Need a Lawyer for Chapter 7 Bankruptcy?

Bankruptcy law does not require borrowers to hire an attorney for Chapter 7 bankruptcy. However, it is highly recommended to obtain an attorney to assist with the case. Without full knowledge of the law, you may encounter significant pitfalls. For instance, you may be accused of perjury, fraudulent transfers, and denied a discharge of debt.

It is important to highlight that a Chapter 7 case cannot be dismissed by the borrower. Therefore, if consequences arise in your case, you cannot avoid them with a dismissal. For instance, if the trustee wants to liquidate (seize) assets, they can despite your request to dismiss the case.

A Chapter 7 attorney in Tampa should have a full understanding of the law and a working relationship with your trustee. While it is not required, an attorney can help to ease the burden and ensure you obtain a fresh start. If you are considering bankruptcy, contact a lawyer to schedule a consultation.

Consult a 5 Star Tampa Bankruptcy Law Firm

At Florida Law Advisers, P.A., we understand that the Chapter 7 process can be very confusing and intimidating.  That is why we work so hard to make the process as easy as possible for our clients. We understand that these are challenging times and we are here to help. When you hire Florida Law Advisers, P.A., you get an experienced Tampa bankruptcy lawyer by your side throughout the case. To schedule a free consultation with a bankruptcy lawyer in Tampa, call us today at 800 990 7763.

Scrabble board spelling bankruptcy for an article about discharging your debt with a Florida Bankruptcy

In most cases, obtaining a discharge will be the primary reason why a borrower files for bankruptcy. If a debt is discharged in bankruptcy, the borrower will be released from all personal liability on the debt. Further, creditors will be restricted from taking any collection action against the debtor for debts discharged in bankruptcy. Creditors will not be allowed to call, sue, send letters, garnish wages, or take any other collection action.

Most unsecured loans are eligible for discharge in bankruptcy. Unsecured loans are debts that don’t have collateral. For instance, credit cards, student loans, and medical bills are usually unsecured loans. On the other hand, secured loans give the lender collateral for the loan. For instance,  home mortgages and car loans are typically secured debts.

Not all types of debts are eligible for a discharge in Chapter 7 or Chapter 13 bankruptcy. You should consult with a bankruptcy law firm in Tampa before taking action. An experienced attorney can help get the most out of bankruptcy and obtain the fresh start you need. Bankruptcy law is complex, and the circumstances will depend on the unique facts of each case.

The Discharge

Bankruptcy law 11 U.S.C. 524(a) prevents creditors from holding borrowers personally liable for a discharged debt. For instance, threatening to garnish wages or sue borrowers can be a violation of debt collection laws. A willful violation of the ban on collection activity can lead to sanctions being imposed on the creditor. These sanctions can include an injunction, fines, reimbursement of funds paid by the debtor, and even punitive damages. Additionally, the creditor may be responsible for reimbursing fees borrowers paid their lawyer to fight the case. See bankruptcy case In Re Burson

In order to obtain sanctions, the collection action must be a willful act by the creditor. Voluntary payments made by the debtor will not expose the creditor to sanctions for illegal debt collection activity. However, the payment must indeed be voluntary and not a response to the creditor’s actions to induce payment. For instance, paying a creditor to end harassment of the debtor’s family is not a voluntary payment. Voluntary is viewed in an “objective sense as referring to repayment that is free from creditor influence or inducement.” See In Re Hudson.

Common Examples of Debts Eligible for Discharge

  • Car repossession judgments
  • Wage garnishments
  • Credit cards
  • Medical bills
  • Foreclosure deficiency judgments
  • Personal loans
  • Cash advances
  • Payday loans

Discharging Student Loans in Bankruptcy

In Brunner v. NY State Higher Educational Services, the Undue Hardship Test was established for student loans in bankruptcy. Under the Brunner test, in order to have student loan debt discharged, the debtor must meet four conditions. First, he or she cannot maintain a “minimal standard of living.” Secondly, the borrower is undergoing special circumstances beyond their control, and those conditions are likely to continue throughout the student loan repayment period. Additionally, the borrower has, in good faith, tried to repay the loan.

If you can satisfy all three of the above requirements, a judge may declare your student loans dischargeable.  Passing the Brunner Test to discharge student loans can be difficult. It is rare that a student loan will be discharged in bankruptcy. If you need assistance with discharging student loans, contact a Tampa bankruptcy attorney.

How to Discharge IRS Tax Debt in Bankruptcy

If all four of the conditions below are satisfied your IRS tax debt may be discharged in bankruptcy. If the debt is discharged, the penalties and interest on the taxes will also be discharged in the bankruptcy.

  1. Income Taxes: The taxes owed must be federal, state, or local income taxes.
  2. 3 Year Requirement: To be eligible for discharge, the tax debt must have become due at least 3 years prior to the bankruptcy filing. See Bankruptcy law 11 USC 507. If you received an extension to file taxes, the 3-year clock begins when the extension expires, not the initial due date.
  3. 2 Year Rule: The income tax returns must have been filed at least 2 years prior to the bankruptcy petition. Tax returns that are filed late will still be eligible, as long as they were filed at least 2 years prior to the bankruptcy petition. See Bankruptcy law 11 USC 523.
  4. The 240 day Rule: The taxes must have been assessed at least 240 days prior to the bankruptcy filing. It is important to note, if the debtor files an amended tax return the 240-day clock starts over again, beginning the date the amended return is filed.

If the tax returns were filed with a willful attempt to defraud the IRS, the debt would not be discharged. There is no time limit for fraudulent taxes, and the debt won’t be discharged regardless of when they were filed. To be excluded from eligibility for discharge, the IRS must prove three elements. First, they must prove the borrower had knowledge the tax returns were false. Secondly, they must show the borrower had the intent to avoid paying taxes. Additionally, there must have been an underpayment of taxes. See In Re Kirk.

Eliminate Judgments with a Discharge

Under Bankruptcy law, a discharge will eliminate judgments in bankruptcy, “to the extent that it is a determination of the personal liability of the debtor.” Any action to collect money from the debtor will be barred. Most types of judgments are eligible for a discharge in Chapter 7 or Chapter 13 bankruptcy. However, there are some types of judgments that are excluded from being discharged. Therefore, you should contact a bankruptcy attorney in Tampa to review your judgment before filing bankruptcy.

Most types of judgments are eligible for discharge; however, some judgment debts you can’t discharge in bankruptcy. For instance, alcohol-related injury judgments are non-dischargeable. Similarly, judgments for malicious or wanton conduct resulting in serious bodily injury or death cannot be discharged. If you have debts that are not eligible for discharge all hope is not lost, there may be other options. A bankruptcy lawyer in Tampa can help provide some options for relief.

Restitution judgments are also often excluded from a Chapter 7 or Chapter 13 bankruptcy Discharge. Restitution is often money owed in response to injuring a person or damaging property while committing a crime. See Bankruptcy Law 11 US 727. A common example is causing a car accident while driving drunk.

Child Support and Alimony in Bankruptcy

Child support and alimony will be the first of the unsecured claims to be paid among all your other unsecured creditors. Keep in mind that child support and alimony obligations cannot be discharged through either Chapter 7 or 13 bankruptcy. See bankruptcy laws 11 U.S.C. § 727 & 1328. You will be required to continue payments to your former spouse during your bankruptcy case and after your discharge.

If you receive child support or alimony, you can protect that income in bankruptcy. See bankruptcy law 11 U.S.C. § 522. The entire amount that you receive for child support or alimony will be protected. Therefore, the bankruptcy trustee cannot take that income away from you.

if you are behind on child support and/or alimony obligations, filing Chapter 13 may help.  You would be required to pay all child support and alimony in full through the Chapter 13 repayment plan. However, this can be beneficial to the debtor filing bankruptcy. Including child support or alimony can reduce the amount you have to pay the banks and other creditors.

Secured Debts in Bankruptcy

The discharge removes a borrower’s personal liability on the debt. However, the discharge does not remove liens from property. If the debt is discharged in bankruptcy, the creditor may still repossess the collateral used for the loan. For instance, if a car loan is discharged the borrower will not owe the bank any money personally. However, the car loan lender can still repossess the car because it was given as collateral for the debt. See Johnson v. Homestate Bank.

The value of secured debt on personal property is determined by the replacement value of the collateral. The valuation is based on the value, as of the date of filing. See bankruptcy law 11 U.S.C. 506(a)(2).  Secured debts may be discharged but a lien will likely remain on the collateral securing the loan.

Priority Unsecured Debts

Priority unsecured debts are loans without collateral, which bankruptcy law gives special protection to. In these instances, bankruptcy law intends to protect the creditor. These loans will be paid first among all the other unsecured creditors. See bankruptcy law 11 U.S.C. § 507. Examples of priority unsecured debts are child support, alimony, taxes, and FDIC claims. Most often, priority unsecured debts will not be discharged in bankruptcy.

Bankruptcy Law Firm in the Tampa Bay Area

If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A. may be able to help. We are a customer service oriented Tampa bankruptcy law firm, committed to providing personalized attention and dedicated legal counsel. All of our initial consultations are free and convenient payment plans are always available. 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. Call us now at 800 990 7763 to speak with a Tampa bankruptcy lawyer.