Fort Lauderdale Bankruptcy Lawyer Blog

Florida Statute 222.25(1) allows you to protect up to $1,000 of equity in a motor vehicle. This exemption can only be used on a car. If your car is only worth $600, you cannot use the remaining $400 to protect any other asset. Additionally, the statute states that you can only use it on a "single vehicle."

That doesn't mean that you automatically lose your car if you have more than $1,000 in equity. Under Florida law, you also have $1,000 in personal property exemption money available that can be used for any type of persona property - including a car. If you do not own a home or otherwise "claim or receive" the benefit of homestead exemption, you also get an additional $4,000 of personal exemption money that you can also use towards any kind of personal property. Once again, that can include your car.

Most people have cars that are financed and between the $1,000 vehicle exemption and their personal exemptions, they find that they have enought to protect their car.

If you have more equity in your car then you can protect, do not despair! If you file a Chapter 7 bankruptcy in Broward County, the trustee may either abandon their interest in your car if there is not enough equity to justify the expense of selling the car. If they don't abandon their interest, they will usually give you the option of purchasing your equity from them so you can keep your car.

A Fort Lauderdale bankruptcy attorney can look at your specific situation and advise you on what your particular outcome may be.

Continue reading "Hollywood Florida Bankruptcy: Do I Lose My Car If I File Chapter 7 Bankruptcy?" »

The most common question I am asked by those that are interested in filing a Chapter 7 bankruptcy is "How soon will it take to rebuild my credit score after filing bankruptcy?" Most are surprised to learn that they will beging to receive credit offers within months of receiving the order discharging their debts. I always tell them that with a word of caution though.

There are many companies who charge outrageous fees for their credit cards. I saw one offer where they were giving the person a $250 credit line. A careful reading of the fine print, however, showed that there was a hefty fee for "processing" the card, a large annual fee, and a monthly recurring charge. All told, these fees and charges totaled just under the $250 credit limit that was being offered. Their first statement after receiving the card was already at the credit limit! Stay away from those offers!

Most of the major banks offer secured credit cards to those wishing to establish credit. These banks operate in a straightforward manner. You open up a savings account with the bank and they issue a credit card equal to the amount of money you have on deposit. Your money earns interest while you are rebuilding your credit. Those are the type of cards that I reccommend to my clients and those should be the only type of cards that you should consider. Check my website for a list of banks that offer secured cards and beware of the mail.

You've done your research and read everything you can on the internet about Chapter 7 bankruptcy. The forms don't look too difficult. Why not do it yourself? After all, representing yourself in court proceedings is a fundamental right, isn't it?

Having the right to do something doesn't mean that doing so is always the wisest thing to do. I've sat through many 341 meetings where the debtor represented themselves and although they were good enough in filling out the forms to get to the 341 meeting - once there, the result wasn't exactly what they thought it would be. I've seen cases get dismissed for a variety of reasons that had nothing to do with filling out the forms. In most cases, do-it-yourselfers get through that part okay. They are able to put the correct information in the right box. But there's more to filing a Chapter 7 bankruptcy than that.

Filing Chapter 7 bankruptcy is a major decision that will impact your life for years. What many people overlook is the law behind the forms that will dictate many things such as when you file your case (timing can sometimes be very important); how to list certain assets; what assets to list; what is exempt and what isn't; how to allocate exemption money; are you missing exemptions that you don't know about? The list goes on and on.

Just this week, I saw someone get their case dismissed for failing to provide the trustee with supplemental documents. We do have very good trustees in this district and many times I have heard them suggest to non-lawyer filers that they consult with an attorney. Usually that means that their bankruptcy filing has major problems and they should take the trustee's advice to heart. They're only trying to help them.

So what should you do? You should take the time to discuss your financial situation with a qualified Broward County area bankruptcy attorney. In most cases, the cost of hiring an attorney is small in comparison to the amount of debt you will be getting rid of.

Continue reading "Should I Hire a Fort Lauderdale Chapter 7 Bankruptcy Attorney Or File It Myself?" »

Unscrupulous debt settlement companies may be a thing of the past when new rules go into effect in September, 2010. The new laws have three major changes:

1. The debt settlement companies will not be able to collect service fees unless they have
successfully negotiated or settled at least one of your debts. Additionally, they must
also spell out their fees in formal written agreements.

2. The agencies must also keep your money in a federaly insured bank. As an added
protection, your money must be placed in a dedicated account that is in your name
and which you have control over.

3. Debt settlement companies will now be required to tell you the negative consequences
of their services. One of the strongest advertising pitch of debt settlement is "avoid
bankruptcy" - but what they don't tell you is that debt settlement will impact your credit
score similarly.

So what do you do if you can't pay your debts? LInda Sherry, director of Consumer Action, suggests that your best bet is to get counseling from a non-profit credit counseling firm. In some cases, the best option really is bankruptcy because your debts are wiped out permanently. "I think a lot of people are afraid of bankruptcy, but for some people, it's the best option."

FHA has announced that it will begin offering FHA-insured mortgages to qualified non-FHA borrowers that are underwater on their mortgages. This new refinance program will begin on September 7, 2010 and is targeted to help homeowners who are current on their mortgage payments and whose lenders agree to write off at least 10 percent of the unpaid principal balance.

As we all know, lenders have been very reluctant to write off principal on existing loans. The logic behind that has always eluded me since most homeowners that I speak to would be more than willing to continue making payments even if the final balance is still reasonably more than the house is worth. The key word there is "reasonably." It would make sense for lenders to secure a new income producing mortgage for more than what they could get at a subsequent foreclosure sale and the homeowner would be happy staying in their home and making a payment they can afford! But logic rarely rules the day anymore when it comes to banks.

FHA has just sent lenders a mortgage letter explaining the details of the new "negative equity" program.

To be eligible for a new loan, the following criteria applies:

Continue reading "Hollywood, FL Mortgage Principal Reduction: FHA Announces Principal Reduction Program" »

On my website, I wrote an article about the FICO score and drew a comparison of the pros and cons between credit counseling (a.k.a. debt settlement) and filing bankruptcy. One of the cons against credit counseling agencies was the fine print in the contracts that allowed the agency to keep most if not all of the money that you pay to them if you decide to drop from the program. This issue is being addressed in ground-breaking congressional legislation that will put an end to the abusive and deceptive practices of the debt settlement industry.

The Debt Settlement Consumer Protection Act of 2010 would limit fees charged to consumers, require that credit card accounts be actually settled before the company can collect fees for providing the settlement and allow states greater power in protecting consumers in this area.

Debt settlement companies have sprung up everywhere since the current economic crisis began. Their sales pitch is simple and attractive to those that may not have all the facts about bankruptcy and think that debt settlement is the only way out. The consumer is told to stop paying their credit cards and make monthly payments to the debt settlement company instead. The debt settlement company places the money in an escrow account and when enough money is accumulated, the debt settlement company tries to negotiate a payoff with the credit card company.

Sounds great but the reality is that not all credit card companies participate in these programs and most of the debt never settles at all.

Continue reading "Ft. Lauderdale Debt Settlement: New Legislation Could Shut Down Unethical Credit Counseling Firms" »

As a Fort Lauderdale bankruptcy attorney, I often meet with homeowners who are facing a scheduled foreclosure sale. During their free consultation, the main question they have is "how will a bankruptcy stop the sale of my home?" There are a couple of options available under the bankruptcy laws on how to stop a foreclosure sale.

First, either a Chapter 7 or a Chapter 13 bankruptcy filing will invoke an "automatic stay" and stop a foreclosure sale from happening as long as you file the bankruptcy case with enough time to submit a Suggestion of Bankruptcy notice to the Clerk of Court that is conducting the sale. Although you could technically show up the morning of the sale and do this, that's never a good idea. You should try and file your case at least 2-3 days before the sale to allow time to notify the Clerk's office of the bankruptcy filing. Ideally, you should file your bankruptcy case at least a week before but if all you have is a few days, it will suffice.

A Chapter 7 bankruptcy filing will stop the sale for you and eliminate all your debts, but it probably won't do much towards saving your home. After the case is over and the automatic stay is lifted, the foreclosure proceeding will start up again and a new sale date will be scheduled.

In a Chapter 13, aside from stopping the sale, you also have a couple of options that might help you stay in your home long term. In a Chapter 13, you can submit a repayment plan to the court that includes your mortgage arrearages (all the money that you're behind in your mortgage) and your current mortgage payment. The banks are forced to take your payments over three to five years and allow you to catch up with your mortgage. If you complete your plan, at the end of the repayment period, you are current with your mortgage and your payment goes back to what it was before you fell behind.

In Broward County, the Chapter 13 trustee, Robin Weiner, is working diligently towards offering a loan modification program within Chapter 13. Due largely to her efforts in bringing the lenders and debtor attorneys together to agree on guidelines that are acceptable to everyone, homeowners will soon be able to apply for HAMP modifications through mediation during the Chapter 13 process. Certain restrictions apply for this program but it's a great opportunity for Chapter 13 filers to speak directly with their lenders and see if they can get their mortgage modified. More on this later.