Yes! This question brings into play the venue rules of bankruptcy. In short, the debtor should file in a place where she has been domiciled or has a residence, principal place of business, or principal assets for a period of 180 days prior to the filing date or for a longer part of such 180 days than in any other district (91 days).
Venue is easily confused with the proper usage of exemptions.
In order to use the Florida exemption statutes a person must live in Florida for 2 full years prior to filing. If not, the person will likely use the federal exemption statutes.
Put simply, even if you have recently moved to Florida you will quite quickly qualify to file in your new home.
There is no need to return to your previous home state to file. Remember, bankruptcy is a federal court event and as a result all of those creditors from your old state, or any and all states, must abide by the orders set forth by the federal bankruptcy court.
Call my office at 850-215-3841 or visit www.bankruptcypanamacity.com for more information.
Take my home, please.
I would estimate that slightly over 50 percent of my bankruptcy clients are underwater on the home that they own pre-filing. Most of those clients want to know if they can include the home in the bankruptcy petition and if so, how does the process work?
To begin, a home loan can be included in a Chapter 7 filing. If a client owes significantly more on a home than the market value of that home it might be a wise decision to use bankruptcy to eliminate the problem.
Here's how it works:
Your home is a secured debt. Simply put - if you fail to make payments on the mortgage then the home will be taken from you as it represents security on the loan. Florida is a full-recourse state in regard to home mortgages. This means that after the home is taken as security for the loan the bank may ALSO sue the borrower for additional money owed that was not covered by the value of the home. This amount can be significant.
Bankruptcy fixes this problem. When the home is placed into a Chapter 7 bankruptcy petition and surrendered (or simply not reaffirmed) then the obligation of the debtor to pay the mortgage is eliminated via the bankruptcy.
In addition the lender CANNOT come after the borrower for any deficiency amount. Therefore, even if the home is worth only one hundred thousand dollars and the loan amount itself is two hundred thousand dollars the entire loan amount is discharged.
This is a huge benefit to the debtor and is often favorable to a short-sale where the deficiency amount is still due. If the bank "writes off" the amount and issues a 1099 via the short-sale then the debtor can have a potentially huge tax obligation. Not so with bankruptcy - for which there are no tax obligations to surrendering the home.
The power of a bankruptcy to rid an underwater homeowner of a nightmarish situation is impressive.
To begin, a home loan can be included in a Chapter 7 filing. If a client owes significantly more on a home than the market value of that home it might be a wise decision to use bankruptcy to eliminate the problem.
Here's how it works:
Your home is a secured debt. Simply put - if you fail to make payments on the mortgage then the home will be taken from you as it represents security on the loan. Florida is a full-recourse state in regard to home mortgages. This means that after the home is taken as security for the loan the bank may ALSO sue the borrower for additional money owed that was not covered by the value of the home. This amount can be significant.
Bankruptcy fixes this problem. When the home is placed into a Chapter 7 bankruptcy petition and surrendered (or simply not reaffirmed) then the obligation of the debtor to pay the mortgage is eliminated via the bankruptcy.
In addition the lender CANNOT come after the borrower for any deficiency amount. Therefore, even if the home is worth only one hundred thousand dollars and the loan amount itself is two hundred thousand dollars the entire loan amount is discharged.
This is a huge benefit to the debtor and is often favorable to a short-sale where the deficiency amount is still due. If the bank "writes off" the amount and issues a 1099 via the short-sale then the debtor can have a potentially huge tax obligation. Not so with bankruptcy - for which there are no tax obligations to surrendering the home.
The power of a bankruptcy to rid an underwater homeowner of a nightmarish situation is impressive.
Beware of debt consolidation scams!
Many companies claim to be "debt consolidation" specialists. BEWARE! They often promise to reduce your debt by 50% or more or promise to eliminate late fees and other charges while consolidating your payments into "one low monthly payment." They rarely deliver on these promises.
I have clients each day come to my office after having been ripped off by supposedly reputable companies claiming to be debt consolidation experts. In my experience - debt consolidation does not work.
Often clients begin paying the debt consolidation company a monthly fee to "service" the debt. This fee is in addition to the actual money paid to the company to pay down your debt. The rub? If you miss one payment you are right back where you started from in terms of interest and penalties and you are out the money paid to the debt consolidation company as well! Usually without any principal reduction.
Your credit score is not improved and your debt is not eliminated. You've simply thrown your needed cash to a company that you did not owe money to before.
There are other problems as well - debt consolidation companies often take a high percentage of your monthly payment as a servicing fee and only pay a very small amount to your creditor. Most clients actually would be better off paying the creditors a small amount without the "help" of the debt consolidation company.
The lesson? If you're in a position where you are considering attempting to consolidate debt you would likely benefit from a free bankruptcy consultation. You can be secure in knowing that if you call my office you will speak directly to me - a Florida licensed bankruptcy attorney - and that my advice to you will be in your best interest.
Only chapter 7 bankruptcy eliminates unsecured debt and ceases all collection efforts forever.
I have clients each day come to my office after having been ripped off by supposedly reputable companies claiming to be debt consolidation experts. In my experience - debt consolidation does not work.
Often clients begin paying the debt consolidation company a monthly fee to "service" the debt. This fee is in addition to the actual money paid to the company to pay down your debt. The rub? If you miss one payment you are right back where you started from in terms of interest and penalties and you are out the money paid to the debt consolidation company as well! Usually without any principal reduction.
Your credit score is not improved and your debt is not eliminated. You've simply thrown your needed cash to a company that you did not owe money to before.
There are other problems as well - debt consolidation companies often take a high percentage of your monthly payment as a servicing fee and only pay a very small amount to your creditor. Most clients actually would be better off paying the creditors a small amount without the "help" of the debt consolidation company.
The lesson? If you're in a position where you are considering attempting to consolidate debt you would likely benefit from a free bankruptcy consultation. You can be secure in knowing that if you call my office you will speak directly to me - a Florida licensed bankruptcy attorney - and that my advice to you will be in your best interest.
Only chapter 7 bankruptcy eliminates unsecured debt and ceases all collection efforts forever.
Have you been sued by a credit card company?
If you have outstanding credit card debt in Florida you may be served with a Summons and a Notice to Appear in court on the debt. If you are served with these documents and if you fail to appear to defend yourself then a judgment will be entered against you for the amount claimed in the suit.
Why is it important to avoid a judgment since you owe the money anyway? Because at the point a judgment is entered against you the credit card company can garnish your wages, attach to assets and property you own, and can even place liens on your property!
My law firm represents anyone who is being sued in court on a debt. Sometimes, but not always, we end up wiping out the debt via bankruptcy.
IMPORTANT: If you're being sued on a debt that is more than five years old then the statute of limitations on the debt may have been exhausted. This statute is a consumer protection statute but it can be defeated if you decide to make a partial payment or if you agree in writing that the debt belongs to you. Don't do that! Call my office for help.
Why is it important to avoid a judgment since you owe the money anyway? Because at the point a judgment is entered against you the credit card company can garnish your wages, attach to assets and property you own, and can even place liens on your property!
My law firm represents anyone who is being sued in court on a debt. Sometimes, but not always, we end up wiping out the debt via bankruptcy.
IMPORTANT: If you're being sued on a debt that is more than five years old then the statute of limitations on the debt may have been exhausted. This statute is a consumer protection statute but it can be defeated if you decide to make a partial payment or if you agree in writing that the debt belongs to you. Don't do that! Call my office for help.
They took your home and they STILL want more money?
Florida is a full-recourse state in regard to mortgage loans. This means that a mortgage default can result not only in the bank taking back the home but also suing for any deficiency.
In fact, the filing of a lawsuit to collect the difference between the home value and the mortgage note after foreclosure is becoming more and more common.
Chapter 7 bankruptcy is a powerful tool that can be used to wipe out this type of debt - even if the amount is as much as several hundred thousand dollars. Chapter 7 is available to relieve this type of debt because at the point the home is taken the leftover debt becomes "unsecured" and therefore able to be dissolved by a knowledgeable bankruptcy lawyer.
Bankruptcy is not just for credit card debt. Sometimes, the wisest thing a person can do is wipe out a foreclosure debt and start over. Call me for details.
In fact, the filing of a lawsuit to collect the difference between the home value and the mortgage note after foreclosure is becoming more and more common.
Chapter 7 bankruptcy is a powerful tool that can be used to wipe out this type of debt - even if the amount is as much as several hundred thousand dollars. Chapter 7 is available to relieve this type of debt because at the point the home is taken the leftover debt becomes "unsecured" and therefore able to be dissolved by a knowledgeable bankruptcy lawyer.
Bankruptcy is not just for credit card debt. Sometimes, the wisest thing a person can do is wipe out a foreclosure debt and start over. Call me for details.
Miscellaneous personal property exemption
When a debtor files for Chapter 7 bankruptcy he or she is allowed an exemption of $1,000 dollars ($2,000 for joint filings) for miscellaneous personal items including: cash, household furniture, clothing, and jewelry among other items.
These items are valued based upon the resale value of the item rather than the original cost. In other words, a dining room table purchased for $500 in 1999 might only be worth $100 dollars today. The table would be valued at today's value.
In 2007 the Florida legislature introduced a new "wild card" personal property exemption for the benefit of those debtors who do not claim a Homestead exemption. This personal property exemption is quite large - $4,000 ($8,000 joint filing.)
The presence of these exemptions means that most debtors filing Chapter 7 bankruptcy cases are non-asset debtors who will owe little or nothing to the trustee at the end of the case.
These items are valued based upon the resale value of the item rather than the original cost. In other words, a dining room table purchased for $500 in 1999 might only be worth $100 dollars today. The table would be valued at today's value.
In 2007 the Florida legislature introduced a new "wild card" personal property exemption for the benefit of those debtors who do not claim a Homestead exemption. This personal property exemption is quite large - $4,000 ($8,000 joint filing.)
The presence of these exemptions means that most debtors filing Chapter 7 bankruptcy cases are non-asset debtors who will owe little or nothing to the trustee at the end of the case.
What happens to my car when I file bankruptcy?
I get asked this question pretty often: what happens to my car when I file for Chapter 7 bankruptcy? The answer is - it depends.
If you own the car outright then we must use the bankruptcy exemptions to protect as much of the value of the automobile as possible.
You are allowed a $1,000 equity exemption on one vehicle. If you are filing jointly then your spouse may add his or her exemption for a total of $2,000. Generally, the trustee of the bankruptcy court values automobiles based upon KBB or NADA values taking into account wear and tear on the car.
We can also utilize any unused personal property exemptions (up to $8,000 for a non-Homestead filing couple) to further protect the value of the automobile.
If you are making payments to a bank then the vehicle is secured property and is dealt with a bit differently. The amount of money owed on the vehicle is subtracted from the market value of the vehicle. If this is a negative number then there is no equity and you can choose to reaffirm the note and keep the vehicle - or simply give it back.
If there is equity then this amount can be exempted using the process described above.
If you own the car outright then we must use the bankruptcy exemptions to protect as much of the value of the automobile as possible.
You are allowed a $1,000 equity exemption on one vehicle. If you are filing jointly then your spouse may add his or her exemption for a total of $2,000. Generally, the trustee of the bankruptcy court values automobiles based upon KBB or NADA values taking into account wear and tear on the car.
We can also utilize any unused personal property exemptions (up to $8,000 for a non-Homestead filing couple) to further protect the value of the automobile.
If you are making payments to a bank then the vehicle is secured property and is dealt with a bit differently. The amount of money owed on the vehicle is subtracted from the market value of the vehicle. If this is a negative number then there is no equity and you can choose to reaffirm the note and keep the vehicle - or simply give it back.
If there is equity then this amount can be exempted using the process described above.
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