Bankruptcy Category Archives — Florida Bankruptcy Lawyer Blog Published by Jacksonville Bankruptcy Attorneys — Florida Foreclosure Defense Lawyers

January 24, 2017

Can Student Loans Be Discharged in Bankruptcy?

by Chip Parker

student loan bankruptcy If the debt from your student loans is overwhelming you, you’re not alone. According to the Institute for College Access & Success, an independent non-profit organization, 68% of students who graduated from both private and public colleges in 2015 had student loan debt. The debt average had risen 4% since 2014 to a whopping $30,100 per borrower in 2015.

While it can be challenging, it is not impossible to have student loan debt discharged in bankruptcy. In order for your student loan to be discharged, you must be able to prove that it is causing undue hardship. Courts use certain tests to make this determination. The most common is called the Brunner Test, in which courts will look for you to meet the following three criteria:

You are unable to maintain a minimal standard of living for you and your dependents if you are required to continue paying your student loans.

January 11, 2017

How Do I Stop Harassing Phone Calls from Creditors?

by Chip Parker

When you f how to stop creditors from calling ace the unfortunate situation of falling behind on your credit card, mortgage, auto loan or other bills, you may also find you’ve become the victim of debt collection harassment. The goal of this type of harassment is to annoy, intimidate or bully a consumer into paying off a debt.

Debt collection harassment can come in different forms—email, direct mail or texts—but it is most often done by constant, repetitive phone calls. These phone calls are often designed to annoy and belittle not only the person who holds the debt, but also whoever happens to answer the phone. At worst they may contain profane language and threats. They might even contact your friends and neighbors about your debt, seeking to humiliate you.

Fortunately, you have rights. While debt collection agencies are legally permitted to collect the debt that is owed to a creditor, they are not legally permitted to use abusive tactics to collect this debt from you. The Federal Trade Commission, the nation’s consumer protection agency, enforces something called the Fair Debt Collection Practices Act. This act prohibits debt collectors from using abusive, unreasonable and/or deceptive practices to collect a debt.

March 7, 2016

Bankruptcy, Retirement, and Your Spouse’s Credit

by Chip Parker

Bankruptcy is an excellent retirement strategy, especially if you are behind in saving for retirement because your credit card debt is robbing you of your ability to save.

Just look at the math:

Let’s say you’re about 10 years away from retirement, and you owe $25,000 in credit card debt at a typical 18.9% interest. Based upon your budget, you can pay no more than $500 per month toward this debt while maintaining your monthly expenses.

August 18, 2015

WHY BANKRUPTCY MAKES SENSE WHEN YOU ARE IN OR NEAR FORECLOSURE?

by Chip Parker

In JACKSONVILLE, foreclosures filings continue to decrease, however there are still thousands of homeowners still struggling with their mortgage companies.

http://jacksonville.com/news/crime/2015-08-07/story/federal-judge-rules-bank-america-hurt-jacksonville-couple-must-pay

Florida courts, specifically Duval, St. Johns, Clay and Nassau counties, areas that affect First Coast Families continue to fast pace foreclosures through the court system, in many cases ignoring homeowner’s due process rights.

May 11, 2015

Relief for Mortgage Borrowers Is Questioned

by Chip Parker

Last August Bank of America agreed to a record $16.7 billion settlement with the Justice Department over their past mortgage practices. Part of the settlement also requires Bank of America to provide $7 billion in consumer relief over the next four years.

As this landmark settlement has faded from headlines questions regarding the payout of consumer relief have surfaced. Bank of America has told a number of borrowers that it intends to ‘forgive’ some loans that have been discharged in borrowers’ bankruptcies. But that debt has already been forgiven.

Our own Chip Parker, has been interviewed by The New York Times and had this to say on the issue: “Releasing a debt that has already been discharged is not in the spirit of the settlement. My concern is that the bank will use these cases to avoid having to give true principal reductions to people who need it.”

October 22, 2014

POST FORECLOSURE HELL

by Parker & DuFresne, P.A.

“Post Foreclosure Hell” describes the latest gift to Americans from the banks, FANNIE MAE and FREDDIE MAC. After the massive bail-outs by the American taxpayer, the banks, FANNIE and FREDDIE are now using “deficiency judgments” to collect on loans years after foreclosed homes were taken and sold. If successful, homeowners who believed the foreclosure crisis was behind them could find a lawsuit at their door and there hard earned wages being garnished. In Florida alone, thousands of deficiency suits were filed prior to July 1, 2014. If you are served with a deficiency lawsuit, do not ignore it. Your assets could be seized or your wages garnished. Contact an attorney immediately. At Parker & DuFresne, P.A. we defend these judgments and we can help you learn your options. Call us today for a free consultation!

December 12, 2013

Missing Payments on Your HELOC? You Are Not Alone.

by Chip Parker

In a recent Reuters article, defaults on second mortgages will likely trigger another round of foreclosures.

Homeowners who took out home equity lines of credit during the housing boom are increasingly missing payments. This trend could continue as the time when homeowners will have to start paying the principal down on those loans is fast approaching. Approximately 40% of HELOCs could be affected with a staggering sum of $220 billion.

The housing bubble and its aftermath is still affecting consumers and their families today. As HELOC payments in the billions of dollars jump, consumers still facing a soft job market or stagnant wages won’t adjust to the increased payments demanded by the Banks.

April 24, 2013

Substitution of Collateral in a Florida Bankruptcy: Is it Possible?

by Chip Parker

Often times, Debtors are involved in accidents where personal property is totaled or unsalvageable. Many times these accidents occur while a bankruptcy is pending and the Debtor still owes a secured lender for the property. I must note the strategy detailed below is really only relevant to Chapter 13 and Chapter 11 cases. What is substitution of collateral? What the Debtor is generally looking to do is use the insurance proceeds from the accident, apply them to new property, and essentially substitute the newly acquired property as the former secured lender’s collateral.

You may be asking, what benefit is there to doing this? Well, it may allow a Debtor to purchase a new vehicle outright without new financing terms. It’s likely the Debtor will benefit from not having to pay off a secured creditor in full and worry about being able to afford a new vehicle. If the insurance proceeds are less than what is owed on the vehicle, this strategy will not work. You see this scenario most often with work vehicles. However, the issue is also very common in Chapter 11 business cases where business equipment is damaged and needs to be replaced.

Unfortunately, the strategy does not always work smoothly and the creditor may resist the motion to substitute collateral. The good creditor attorneys, who understand the law, will not object. Generally, the insurance adjuster will not release the insurance proceeds without the title being surrendered by the secured lender. This may put the Debtor in an even tougher situation financially especially if the Debtor is relying on a new piece of property for work purposes. Most Debtors cannot afford to wait months for the litigation to get resolved. Arguably, a creditor’s failure to release the title to the insurance company is a violation of the automatic stay (assuming no stay relief has been ordered).

January 2, 2013

My Personal and Business Bankruptcies: Can I combine them into one Case?

by Chip Parker

A debtor can combine his or her personal and business debts in one bankruptcy filing if he or she is a sole proprietor. However, if the business is incorporated, the debts owed by the business will not be discharged, even if the sole shareholder files a personal bankruptcy discharging the same debt. Only the individual who filed the case discharges the debt (normally a personal guarantee of the corporation’s obligation).

Normally, a Chapter 7 for a corporation is unnecessary. Small corporations usually just liquidate assets and “die.” If the shareholders don’t want to deal with lawsuits against their corporation, they will often file a Corporate Chapter 7 to avoid having to participate in the suit, including appearances at hearings or depositions. In a Chapter 7 business bankruptcy, there is no formal discharge. There is a liquidation of assets and a formal dissolution or “winding down” of the company.

The benefit to filing a Chapter 7 business bankruptcy is having the bankruptcy trustee liquidate the assets and pay the priority debts (IRS, state department of revenue, employee wages, etc.) first. This should help relieve, but may not completely absolve, the owners, shareholders or officers of whatever personal liabilities they may have regarding those debts. Once again, this is usually something the shareholders can accomplish on their own by liquidating corporate assets and using the proceeds to pay priority creditors.

October 25, 2012

What does it mean to “redeem” property in Bankruptcy?

by Chip Parker

As a Northeast Florida bankruptcy attorney, this issue comes up on a daily basis. In chapter 7 cases, many debtors are faced with the issue of either reaffirming debt, surrendering the property that secures the debt, or rolling the dice and pay the debt without reaffirming the loan. The decision comes up most often with motor vehicles and household goods.

In many cases, the debtor is asked to reaffirm a car loan which exceeds the value of the vehicle. Sometimes that excess is substantial and the debtor struggles between having no vehicle, having an excessive debt on a vehicle, or hope to find post-bankruptcy financing for a new vehicle. Furthermore, if the debtor(s) reaffirms the debt, the debtor(s) remains personally responsible for the debt post-bankruptcy. If there is a default post-bankruptcy on the loan, the creditor may be able to pursue the debtor(s) for a deficiency balance if forced to repossess the vehicle.

Redemption allows the debtor to purchase the vehicle at the fair market value from the creditor who currently finances the vehicle. The only drawback is that the debtor must make a lump sum payment before the conclusion of the bankruptcy in order to redeem the collateral.