Chapter 13 Bankruptcy & Chapter 7 Bankruptcy in Melbourne, FL | Our Blog

Question:

I was thinking about going bankrupt on a sub s corporation.  I am no longer in business.

Practice area: Bankruptcy

-          Business Bankruptcy 

Additional Details 

I still have about $ 30,000 in debt.  We have no investors or assets.  But my wife does have a annuity in her name.  Will they go after her annuity?

Answer

As stated previously, a corporate chapter 7 may not make sense.  However, if you personally guaranteed the debts of the business you may want to consider a personal bankruptcy.  Your wife does not have to file bankruptcy with you if she did not also guarantee the $30k in debt.  If she did also guarantee the debts, Florida has an exemption for annuity contracts.  You will need to speak with a local bankruptcy attorney, try www.NACBA.org to find one in your area.  Here is the statute section you may want to review. 

Florida Statute 222.14 Exemption of cash surrender value of life insurance policies and annuity contracts from legal process.

In Bankruptcy, each creditor is required to file a Proof of Claim to be entitled to any disbursements in Chapter 13 and Chapter 7 if the case is an asset case.

In a Chapter 13, every creditor in your case no matter if you are continuing to pay the debt (your first mortgage for example) or getting rid of the debt (your second mortgage for example) has until a certain deadline to file a “proof of claim.”  A proof of claim consists of documents that substantiate you actually owe the debt the creditor says you owe.  If a creditor does not file a proof of claim by the deadline then for an unsecured claim such as a credit card, they will receive no money from your bankruptcy case; for a secured debt (mortgage, automobile) if they do not file a claim, your attorney may file one on their behalf.

In almost every bankruptcy, a mortgage company will hire an attorney to ensure all deadlines are met as well as to monitor the progress with each case.  During a Chapter 13 bankruptcy, the trustee pays the mortgage payment each month.  Once the bankruptcy is complete, you will then immediately resume making your regular mortgage payment because the term of the mortgage will last longer than a bankruptcy reorganization plan.

After the deadline to file a “proof of claim” passes, your bankruptcy attorney is required to review all claims to ensure they were filed properly and will object to any claims not filed properly.  If the proof of claims are not corrected by the creditor, then the creditor will receive no funds from your trustee under your Chapter 13 Plan.  Also at this time, the Trustee assigned to your case is reviewing your case to see if it is ready for confirmation if the plan has not already been confirmed at the initial confirmation hearing.  Once the trustee has thoroughly reviewed your case, a date will be set for a confirmation hearing.  Unless there is something out of the ordinary most debtors will not need to attend this hearing here in the Orlando Division of the Middle District of Florida.  The Confirmation Order is an order by the bankruptcy Judge stating your Chapter 13 plan is acceptable.

My answer on @Avvo to: Florida chapter 7 bankruptcy, when filing jointly can you double the wild card expemt… http://t.co/EJdSzYBL

Florida chapter 7 bankruptcy, when filing jointly can you double the wild card exemption?

It says online in our research deciding whether to file or not, that if no home exemption claim you can file a wild card for property.  It says you can double the 1,000 claim FOR PROPERTY I JOINT FILES, so can you also double on the wild card?  Going from $4,000 to $8,000?  Also in all these information websites I cannot find a statute for a “wild card”, what is it?  Or is it not real?

 Yes, each Debtor receives the $4,000.00 exemption.  §222.25(4) Other individual property of natural persons exempt from legal process.

My answer on @Avvo to: Should I file bankrupcy fast?… http://t.co/sbAk98ov

Should I file bankruptcy fast?

Could I do chapter 7 bankruptcy to prevent hoa from taking home in FL?  I am trying to do a modification with bank.  They want the hoa taken care of before approval.  I’m running out of time, 3 weeks.  I also have many bills due to a medical situation so would do at some point.

Answer

Yes, a Chapter 7 will allow you to discharge pre-petition homeowner’s association fees assuming that the association has not yet obtained a secure claim/lien on the real property.  However, as you may be aware, a Chapter 7 bankruptcy takes several months to complete and during this time, your loan modification may be held up in the process.  In addition, in our Firm’s experience, your loan modification file will be transferred to a “bankruptcy department”, which means that the loan modification file may change hands from the people currently reviewing your financials.  If you are stating that you have 3 weeks to “take care” of the homeowners association fees, you should be aware that a Chapter 7 filing will effectively stay collection of pre-petition fees, but your discharge will take several months to be granted by the Court.  Accordingly, I would urge you to seek legal counsel right away and contact your lender with counsel to assess exactly what is required of you, and if needed, your attorney should intervene to ensure that your issues are properly raised with the lender. 

As a separate consideration, please note that a Chapter 7 bankruptcy will not discharge post-petition homeowners’ association fees.  It appears that you are looking to keep the home, and not “surrender” it through your case, so this may not be relevant to you.  If you were looking to “surrender” the home, you would want to consider the “super-discharge” abilities of a Chapter 13 in connection with the dischargeability of post-petition homeowners’ association fees. 

Regarding your medical situation, from the facts, you may also discharge those debts in either a Chapter 13 or a Chapter 7.

Joseph Paul Middlebrooks Shapiro

Answer

I believe Mr. Sharpiro answered your questions very well.  I just want to add one additional comment about lien avoidance.  You may avoid the pre-petition homeowners’ association fees personally through bankruptcy; however, if you are unable to strip the lien of the homeowners’ association through §506 of the bankruptcy code the homeowners’ association may attempt to seek in a rem foreclosure action against your property.  You will need to speak with an experienced bankruptcy attorney in your area.

 Paul F. Daley

The 11th Circuit Federal Court of Appeals decided recently that a second mortgage could be avoided in a Chapter 7 bankruptcy.  Previously the stripping of a second mortgage was only done in a Chapter 13 bankruptcy.  It required the property to be worth less than the balance owed on the superior mortgage(s).

Now if the facts are correct a Chapter 7 Debtors can do the same without having to complete the bankruptcy reorganization that is part of Chapter 13.

The 11th Circuit Appeals Court, the Appeals Court of Florida, issued it opinion in In re: McNeal, which allows unsecured second mortgage to be stripped in Chapter 7.  This helps many debtors to reduce the amount of time needed to receive the discharge, which strips the second mortgage.  In a Chapter 13, it could be 3 to 5 yrs, whereas, in Chapter 7 it is about 90 days.  There are less attorney’s fees and less court related costs involved in a Chapter 7, than Chapter 13.

Writ of garnishment was issued but was not provided notice within 5 days.  I can also claim head of family exemption

What is my next step, file a motion to dismiss?  But where do I include my exemption.  I would like to put them on notice of my exemption so that they may think twice before they file again.

The Florida statute in section 77.041 requires the plaintiff to provide notice of the garnishment within 5 days of the issuance of the writ or 3 days after it is served on the garnishee, whichever is the later.  The motion you would want to file is a motion to dissolve the writ.  You can get the form to claim exemption from garnishment from the Florida statute section 77.055 or the clerk of court Pro Se coordinator may have a form.  You must pay attention to deadline to file a response, 20 days, claiming the exemption.

77.055 Service of garnishee’s answer and notice of right to dissolve writ.—Within 5 days after service of the garnishee’s answer on the plaintiff or after the time period for the garnishee’s answer has expired, the plaintiff shall serve, by mail, the following documents: a copy of the garnishee’s answer, and a notice advising the recipient that he or she must move to dissolve the writ of garnishment within 20 days after the date indicated on the certificate of service in the notice if any allegation in the plaintiff’s motion for writ of garnishment is untrue. The plaintiff shall serve these documents on the defendant at the defendant’s last known address and any other address disclosed by the garnishee’s answer and on any other person disclosed in the garnishee’s answer to have any ownership interest in the deposit, account, or property controlled by the garnishee. The plaintiff shall file in the proceeding a certificate of such service.

The filing of a bankruptcy can also stop the garnishment.  If you have multiple debts and this is only the first of many you may want to speak with a bankruptcy attorney to find out your options.

The Marital Offset – Bankruptcy’s Affect on the Non-Filing Spouse

A bankruptcy where one spouse files and the other doesn’t can be complicated.  The non-filing spouse’s income must be included in the Means Test, Form 22A or 22C.  This is true even if a divorce is pending and they couple is living apart.

In the Means Test, you must calculate the current monthly income by averaging the gross income for the six months prior to filing bankruptcy.  This includes the non-filing spouse’s gross income.  The bankruptcy court then adjusts for the non-filing spouses expenses by what is called the Marital Offset.  For example, the non-filing spouse’s car payment, credit cards, taxes, and other expenses that does not contribute to the household or are for the non-filing spouses benefit only removed from the calculations using the Marital Offset.  The non-filing spouse can also deduct expenses that a Debtor, the spouse filing bankruptcy, cannot such as student loan payments and retirement contributions.

During Chapter 7, payments continue for student loans.  In Chapter 13, student loan payments are deferred during the pendency of the bankruptcy and those payments are not calculated as an expense when determining the Disposable Income.

The trustee can object to the marital deductions so you should limit the expenses to actual and reasonable expenses.  The Debtor is trying to discharge their debt.  That is why it is important to consult an attorney in these situations.  An experienced bankruptcy attorney can make sure that all of the non-filing spouse’s expenses are accounted for and excluded from the household expenses.

A single Debt Collector- Called me 30 times in 10 days-Did not identify me of what company they were when I answered the phone…

Yet wanted me to verify date of birth upon answering…..Is this legal? I am faxing off a do not call-only contact me by mail letter tomorrow and let them know that I recorded the phone contact…..

Ms. Stage and Mr. Dauval have addressed your concerns about harassment and the failure of the creditor to identify themselves.  You must also consider they cannot communicate with third parties about your debt.  Therefore, they must verify you are the correct person they are attempting to collect against.  You also might want to review the laws about recording telephone conversations.

Can law firms work payment plans to get the HOA fees paid before the court date?

Last year my mother became very ill and I feel behind on my HOA fees because I did not have automatic payment from my checking account.  I got a letter in the mail stating that I owed three times the amount of my HOA fees.  I did not realize I was behind and I paid the amount.  Two days later, I got a letter that stated I owed 4000 more.  I do not believe this is reasonable because I drained my savings account to pay the first amount and they are saying I need to show up for court.  If I owe the money, I do not have a problem working something out.  But I can’t afford to pay all of this money up front.  They law firm has not returned my email and the date is Tuesday.  I have never missed a payments in the past and it seems like they HOA and the law firm are trying to make a quick buck.

I agree with Ms. Golant, bankruptcy may be an option, especially if you have additional debts.  I agree with Mr. Dauval, you need to know your rights as a home/condo owner are under your bylaws.  You also need to remember you have a board that runs the condominium association and the law firm works for them.  If your fellow condominium owners who sit on the board are being unreasonable then you should get involved and try to remove them and put members that are more reasonable on the board.

I’m trying to settle a judgment & can’t seem to get in touch with the attorney.  Do I need to retain an attorney to settle?

Judgment was in 2006.  Have attempted multiple times to contact the attorney and have only reached her once.  I would like to settle this debt and clear my credit report.  Would it be best if I used another attorney to facilitate this?

A agree with Mr. Dauval that is may be necessary in the end to hire an attorney.  However, I would recommend first attempting to contact the attorney writing or by an appointment.  Attempting to contact the attorney during a random call is very difficult, whereas, setting a telephone conference time or sending your offer in writing will allow the attorney to reply at her own time and fit it into her schedule.  In addition, if you contact her in writing with an offer to settle that has a deadline, say 30 days, she will have a duty to notify her client.