However, for individuals, the “stigma” of having gone bankrupt has stuck around a little longer. This seems to be changing now that people realize that bankruptcy is a tool to survive economic downturns.  I just got off the phone with a potential client who called to say that a credit union had sued her. She called asking what she could do about it. She started her call by saying, “I do not want to file bankruptcy.” I asked her why not. She said that she would lose all of her property, ruin her credit, ruin her reputation and lose her job if she filed bankruptcy. I spent 45 minutes with her on the phone. She retained me to handled her Chapter 7 bankruptcy case. I dispelled the myths of bankruptcy and I made her laugh–a lot–which she said took away some of her stress from the collection calls, letters and lawsuit.

MYTH NO. 1:  I WILL LOSE MY PROPERTY IF I GO BANKRUPT

Our lives have changed in a flash.  The Associated Press warns that Americans must brace for new life of no school and growing dread.  We now spend more time in line at Walmart buying toilet paper than we do lining up for Black Friday sales. Parents worry about their jobs while they wonder who’ll watch their children while they are at work since schools have extended spring break or shut down for weeks.

The world has changed.  We are told to practice “social distancing” and not come within so many feet of our fellow human beings. People are wearing medical masks and gloves when they go out. Some people walk around with Lysol bottles.

6 to 8 Years Before Filing a Jacksonville Chapter 7 Bankruptcy:

If you filed a Chapter 7 Bankruptcy before AND received a discharge of your debts, then you will not be eligible to file a new Chapter 7 Bankruptcy before eight years after you filed your previous Chapter 7 Bankruptcy.

If you filed a Chapter 13 Bankruptcy AND received a discharge, you might be able to file a Chapter 7 Bankruptcy after six years if you paid a minimum of 70% of your unsecured claims.

1 Year Before Filing:

Your Bankruptcy Trustee can look back as far as one year for debts paid back to relatives or close business partners. What this means is that a payment made to a relative or business partner could be construed as a preferential payment over your other creditors. If this should happen, the Court could take the payment back from them in order to distribute it evenly to all of your other creditors.

This same concept holds true if you have tried to hide your assets from your creditors by transferring, destroying or hiding any of your property within one year of filing Bankruptcy. In this situation, the Trustee might deny a Chapter 7 Bankruptcy discharge and/or recover the property.

However, your Jacksonville Bankruptcy Attorney may prefer that you wait two years to ensure there are no issues when you do file.

90 Days Before Filing:

You must have residence status in the state in which you intend to file your bankruptcy.

If you have not lived in your present state for a minimum of 90 days, then you must file your bankruptcy in the state you have lived or where your principal assets were located for the majority of the 180 days before filing your bankruptcy.

Also, do not pay back any of your creditors and do not incur new debts of $500.00 or more for unnecessary things such as luxury goods.

Once your Jacksonville Bankruptcy has been filed:

The Automatic Stay is immediately put into place. This means your creditors can no longer try to collect a debt from you or harass you with telephone calls.

The Court will then draft a Notice of Commencement, which it will mail to your creditors to give your creditors notice that you have filed bankruptcy.

The Notice of Commencement will also tell you when your Meeting of Creditors is scheduled, the deadline in which your creditor’s much file claims, and who your Trustee will be.

30 Days After Filing your Jacksonville Bankruptcy:

You must tell the Court what secured assets you intend to keep or reaffirm by filing a Statement of Intentions with the Court. The Statement of Intentions will also tell the Court which secured assets you wish to turn over to your Bankruptcy Estate.

Approximately 3 to 6 Weeks After Your Jacksonville Bankruptcy is Filed:

Your Meeting of Creditors is held. You must provide your Trustee all financial documentation requested at least seven days before your Meeting of Creditors is held.

30 Days After the Meeting of Creditors:

Your Jacksonville Bankruptcy Trustee and your creditors must file any objections they have within 30 days after your Meeting of Creditors has been held.

90 Days After the Meeting of Your Creditors is held:

Your creditors must file their Proof of Claim with the Court. The Proof of Claim tells the Court how much you owe them. A creditor will only receive payment from your Bankruptcy Estate if they have filed a Proof of Claim.

If you are thinking about filing a Jacksonville Chapter 7 Bankruptcy, you most likely still have many more questions about the Jacksonville Bankruptcy Process. Contact the Law Office of David M. Goldman, PLLC at (904) 685-1200 today for a free initial consultation. The experienced attorneys at the Law Office of David M. Goldman, PLLC can help you feel your best about the difficult decision of filing for a bankruptcy.

Creditor Harassment During Bankruptcy

When you file a Chapter 7 or Chapter 13 bankruptcy, something called an automatic stay is put in place as soon as you file. This Automatic Stay prevents your creditors from continuing to try and collect a debt from you, but unfortunately your creditors will most likely not stop harassing you and trying to collect from you the moment you file for bankruptcy. This is because it takes the Bankruptcy Court a few days to prepare your Notice of Bankruptcy and to then mail it to all of your creditors. If, however, your creditors continue to harass you after a reasonable time has passed for them to receive notice of your bankruptcy from the Bankruptcy Court, then they are most likely in violation of the Automatic Stay, provided the debt falls into one of the very limited exceptions: criminal matters, child support, alimony, taxes, certain evictions, ect.

So what should you do if a creditor is still harassing you? The first thing you should do is to let the creditor who is harassing you know that you have filed bankruptcy. You can do this verbally over the phone, or by writing. For example, you can write that you filed bankruptcy on their bill and mail it back to them. Letting the creditor know you have filed bankruptcy stops the contact in the majority of instances. These initial contacts from your creditors shortly after filing bankruptcy are generally just mistakes, which is often due to the creditor’s system not having been updated with the Notice of Bankruptcy they received. It is not yet time to be alarmed, but it is important to keep a log of their contacts with you.

What is Wage Garnishment and how does it work?

Wage garnishment is a court order that compels your employer to deduct a certain amount of money from each paycheck you receive and send it directly to your creditor until your creditor is paid in full. Luckily there are limits set by law on the amount of money that can be garnished from each paycheck.

Florida requires your creditor to first obtain a judgment from a court before they can request a wage garnishment. Once a judgment order has been obtained, your creditor files a Motion for Continuing Writ of Garnishment with the Court. The Court then provides a Continuing Writ of Garnishment Against Salary or Wages, which is served on your employer. Your employer then has 20 days from receiving it to file a response with the Court. Your employer’s answer must state whether or not they are in fact your employer, as well as the frequency of your pay periods and the amount of your salary and wages. The writ then directs your employer of where to send the withheld money and how much shall be withheld. The only instances where your paycheck can be garnished without a judgment from the court is when it is for debt owed for income taxes, child support, or student loans.

For those not familiar with foreclosure, foreclosure usually begins when a homeowner falls significantly behind on his or her mortgage payments. The lender then begins the legal process within the court system of obtaining a Judgment of Foreclosure, which allows the home to be sold through a public auction. The process is usually lengthy and includes many steps.

Since the foreclosure process generally does not begin until a homeowner has missed several payments, the owner may have some time to try alternative methods to foreclosure first. Alternative methods include but are not limited to a modification, loan forbearance plan, short sale, or deed in lieu of foreclosure. If these methods have already failed, it may be time to consider bankruptcy.

Why are child support payments not included in a bankruptcy?

The federal government has decided that some debts are too important to be erased by bankruptcy.   Congress decided that it would be too fundamentally unfair to allow a person to get out of their obligation of paying child support by filing for bankruptcy. A child support payment is court ordered and the money is spent on a child’s welfare.

A guarantor, or a cosigner, is essentially a person who is responsible for paying back another’s debt if he or she is unable to. Creditors will often require a person to have a cosigner or guarantor if they feel skeptical of the person’s ability to repay the debt. This is why most young adults and those with bad credit scores are required to have a cosigner.

Further, there is a difference between a cosigner and a guarantor. A creditor can pursue a cosigner at any time if payments are not being made. With a guarantor, creditors must usually attempt to collect from the primary borrower first before going after the guarantor. If bankruptcy is declared, there is no longer a distinction and both classifications will be obligated to pay back the debt.

The act of filing bankruptcy enables the court to enact an automatic stay. The automatic stay goes into effect immediately upon filing, and prevents creditors from contacting the debtor or continuing their collection process. However, there are exceptions where a landlord can still evict a tenant.

In 2005, bankruptcy law was revised to add the Bankruptcy Abuse Prevention Consumer Protection Act to give landlords more power to evict tenants who file for bankruptcy. Before, if a tenant filed bankruptcy, the tenant would be granted an automatic stay even if there was already a judgment for possession. Under today’s bankruptcy law, when a judgment for possession is issued before a tenant files bankruptcy, the landlord does not have to comply with the automatic stay and may continue the eviction process. Another exception to the automatic stay rule is when a tenant is being evicted for endangering the property or using illegal substances on the rental property.

Under U.S. Law, when a debtor files for bankruptcy one benefit he or she receives is creditors must stop all collection efforts against the debtor. Creditors who try to collect a debt during a bankruptcy or after a discharge is in violation of Federal bankruptcy law. When a bankruptcy is filed, an automatic stay prevents most creditors from continuing collection actions against a debtor. A debtor who continues to be contacted by a creditor, should contact their attorney’s office so the attorney can warn the creditor of a potential violation of the debtor’s automatic stay. The debtor should keep the mailing received or make a record of the phone call.

If the creditor continues to send notice of the debt to the debtor after being warned, the creditor can be dragged in front of a bankruptcy judge. This form of harassment is illegal, and no judge will be happy a creditor continued to contact a debtor after being notified of a bankruptcy filing. A judge will often order the creditor directly to stop.