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.

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.

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.

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.

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.

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.

Student Loan Relief: Is Change on the Horizon?

Student-loan relief has recently become a hot topic.  Several studies suggest that student-loan debt now exceeds $1 trillion – or what the National Association of Consumer Bankruptcy Attorneys calls, the next “debt bomb.”

The federal student loan program provides those who cannot afford to go to college a unique opportunity to finance their education.  The typical student-loan customer is an 18-year-old, generally with only a limited credit history.  Student loans are unusual in that the student provides nothing in the loan application to prove his or her ability to repay the loan.  Some would say student loans are secured – on the student’s future, that is, since the loans are non-dischargeable in bankruptcy.  Student-loan debt relief, if passed, thus has the potential of becoming a major economic stimulator, according to consumer law advocates such as the National Consumer Law Center and National Association of Consumer Bankruptcy Attorneys.

Currently, under the Bankruptcy Code, it is difficult if not impossible to discharge student loans.  Prior to 1998, student loans were dischargeable; but in 1998 the Bankruptcy Code was amended to make federally guaranteed student loans non-dischargeable.  The 1998 changes, however, still allowed for the discharge of private student loans not guaranteed by the federal government.  After the 2005 revisions to the Bankruptcy Code, federally guaranteed loans and private loans were treated the same, and all student loans today are non-dischargeable unless an “undue hardship” exists.

Some argue the steadily increasing federal student loan limits help feed runaway tuition costs. Tuition costs have been on a steep incline, with no ceiling or rollback in sight.  Government provides a “good” with guaranteed student loans, but then gains revenue from the interest on the large loan balances when they enter repayment.  Does anyone think a traditional bank lender would provide an 18-year-old $46,000 in unsecured credit for one year and then wait three more to begin collecting on the debt? 

The spotlight is on student loans right now; Congress saw it shining or turned on the light.  The subject has become a pillar of the economic recovery talks.  Representative Hansen Clarke (D-MI) proposed H.R.4170, the “Student Loan Forgiveness Act of 2012,” which has received a lot of buzz and appears to be the most comprehensive proposal for student loan relief.

“Our bill recognizes that many American students and graduates now owe more on their student loans than their degrees are, in dollar terms, worth.  The bill seeks to fix this situation by lowering Americans’ debt burden and making future student loan repayment both simple and fair.  In doing so, it would give millions of Americans more purchasing power, jumpstarting the economy and creating jobs,” said Representative Clarke. 

The “Student Loan Forgiveness Act” would cover both federal and private loans.  The basic premise is that borrowers would be required to pay 10 percent of their discretionary income for 10 years, with the remaining federal student loan debt being forgiven.  Interest would be capped at 3.4 percent, with additional provisions if the borrower pursues a career in public service.

H.R. 2028, the “Private Student Loan Bankruptcy Fairness Act of 2011,” proposed by Representative Steve Cohen (D-TN), is yet another piece of proposed student loan legislation garnering attention.  The “Private Student Loan Bankruptcy Fairness Act” would modify the Bankruptcy Code to allow the discharge of qualified educational loans.  Senator Dick Durbin (D-IL) has also proposed a bill, S. 1102, “Fairness for Struggling Students Act of 2011,” which will allow private loans to be discharged in bankruptcy. 

Short-term relief is being offered right now.  Special Direct Consolidation Loans are being offered by the Department of Education, though only between January 1, 2012 to June 30, 2012.
 
Student-loan relief legislation has been proposed many times in the past, but never with as much media attention as we have seen in the past couple of months.  It will be interesting to see if this time change really is on the horizon.

By: Deirdre Carey Brown
McGinnis, Lochridge & Kilgore, LLP
Austin, Texas

I often wonder what happens to clients who shop all around Brevard County looking the cheapest bankruptcy attorney.  Why would someone base their selection of legal counsel for such a significant event in their life on price?  Remember, you get what you pay for.  This sign I saw on the side of van today at a red light says it all.

Don't let price decide your legal future

If I marry my girlfriend and she filed bankruptcy in 2010 will it hurt my credit.

Court making her pay back half the money.

One person’s bankruptcy should not affect another person’s credit.  The only question is did you co-sign or guarantee any of the debts listed in her bankruptcy?