Articles Posted in Chapter 7

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There is current legislation before both the US Senate and US House of Representatives that would allow private school loans to be discharged in bankruptcy, as most of them were before the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Legislators are reasoning that there is a strong interest in not allowing federally backed student loans to be discharged in bankruptcy, but these reasons do not apply to private school loans and so they are rethinking the laws. The New York Times wrote an interesting article on the topic.

To see if your loans qualify for discharge, contact a Jacksonville Bankruptcy Attorney today to discuss your situation.

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In a Florida bankruptcy case stemming from a divorce, a husband’s lawyer argued that an alimony obligation was in part dischargeable by showing that it was not completely of a supportive nature. There are several kinds of alimony in the state of Florida, such as temporary, rehabilitative or lump sum. In this case, the alimony was labeled as rehabilitative. Rehabilitative alimony is usually intended to aid or help educate the person receiving it so they can increase their income to what it would have been had they not lost time and educational opportunities while helping their ex-spouse reach their career goals.

In general, alimony is considered to be for the support of another, making it non-dischargeable in bankruptcy under section 523(a)(5). As a result, family law attorneys will sometimes label what is actually a property settlement “alimony” so their client won’t have to worry about their ex-spouse discharging the debt. However, in the case of In re Harrell, the Judge found that an alimony award can be either supportive in nature or a property settlement and that it is the distinction between that those two that indicates the portion that can be discharged. In that case, only $500.00 of a monthly alimony obligation of $1,150.00 was found to be support and the remainder was discharged.

Many bankruptcy clients are mistakenly advised by their own family law attorneys who say that alimony is always a support obligation and that support obligations are non-dischargeable in bankruptcy. Although it is accurate to say that true “support obligations” are non-dischargeable, I would take a serious look at any alimony obligation before determining it to be untouchable in bankruptcy.
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Yes. You must disclose all sources of income on your bankruptcy schedules. You can, however, put on the schedules that this support is not likely to continue in the future, but you must disclose any monies received in the prior six months from any source. Some income, however, is exempt from counting towards your Current Monthly Income calculation as reported on the means test. Some social security income, unemployment income, pension income, etc. will not count towards your Current Monthly Income. Your Ponte Vedra Bankruptcy Attorney will know how to list your income so it will be most beneficial to you. Contact us today at 904-685-1200.

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Whether or not you qualify for a Chapter 7 bankruptcy does not depend on what type of job you have, what your profession is, whether it is full-time or part-time, or whether it is seasonal employment or not. The question is not what type of job you have, but rather what your income is. To qualify for a Chapter 7 bankruptcy, your Jacksonville Bankruptcy Attorney will look at your income over the prior six months and compare it to the median income for your area. This is called the means test. If you pass the means test, your income is less than the median. If your income is over the median, then you still can qualify for a Chapter 13 bankruptcy. To see if you qualify for a Chapter 7 bankruptcy, call a Jacksonville Bankruptcy Attorney today at 904-685-1200.

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The average student loan debt for a four-year degree is over twenty-three thousand dollars. Many people understandably want to get rid of this debt. However, student loan debt is very difficult to discharge in bankruptcy.

Generally, student loan debt is nondischargeable unless the debtor can prove he or she would suffer an “undue hardship”. Whether or not you are suffering an undue hardship is up for the court to decide, but it’s important to realize that this is a relatively high standard to show. Courts often look at whether you made a diligent effort to pay the debt, find a good paying job, and reduce your living expenses. In actual practice, almost the only way that you are going to get your student loans discharged through bankruptcy is if you are permanently disabled, with no opportunity or ability to get a job to repay your student loans.

If you are in debt and are thinking of filing bankruptcy, contact a Jacksonville Bankruptcy Attorney to discuss what debts can ben discharged and whether filing is right for you.

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If the debt was properly listed on your bankruptcy schedules and subsequently discharged, the creditor no longer has the right to collect that debt from you. If the creditor is continuing to harass you, you should have your Jacksonville Bankruptcy Attorneywrite a cease and desist letter to the creditor. This usually cures the problem and the creditor will stop contacting you. If, however, the creditor continues to try and collect the debt, this is illegal and your Jacksonville Bankruptcy Attorney will file a complaint against them for possible discharge violations, FDCPA violations, FCCPA violations, and/or FDUTPA violations. Often times attorneys will take these cases on a contingency basis, meaning that you and the attorney would each get a share of the monies recovered, so that you would not have to pay any legal fees up front. If a creditor is harassing you, contact a Jacksonville Bankruptcy Attorney today to discuss your options.

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In the majority of Florida bankruptcy cases including those in Jacksonville bankruptcy court, debtors do not have to appear in court for every hearing. However, debtors do have to attend a proceeding called the “meeting of creditors” or a “341 meeting”. At this meeting the debtor meets with the Florida bankruptcy trustee and any present creditors (who rarely attend). In Jacksonville the trustee and any present creditors ask the debtor a few questions about the financial documents the debtor filed with the court. The process takes just a few minutes and is normally pain-free if you are prepared for the questions and have discussed your answers with a Jacksonville Bankruptcy Lawyer.

The only time the debtor may have to appear in court is if a creditor or the bankruptcy Trustee files a motion or an adversary action, or if the debtor’s Jacksonville Bankruptcy Lawyer chooses to dispute a debt.

Normally these hearings are not included in a standard bankruptcy fee and you should discuss the costs with your Jacksonville Bankruptcy Lawyer.

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bankruptcy-thumb-250x186-1907.jpgThere are many reasons that it would be advantageous to file for bankruptcy, but here are some of the most common reasons:

1. The first reason to file for bankruptcy is to stop a foreclosure sale. Filing for bankruptcy immediately stops a halts a foreclosure suit against you. This can give you time to reorganize your finances, try to sell your home, negotiate a modification, or find another place to live. Your chapter 13 Plan can let you catch up on your arrearages over a 5-year time span and so cure your default. If your home has been foreclosed upon, bankruptcy might be a good option for you.

2. Filing for bankruptcy not only stops a foreclosure suit, it halts almost all legal actions taken against you, such as a garnishment or auto repossession. If your auto is in danger of being repossessed, filing for bankruptcy will keep the creditor from doing so. You can value your auto in the bankruptcy and pay only fair market value to the creditor. This means that if you owe $20,000 on your auto and it is only worth $10,000. you can pay the $10,000 to the creditor through your bankruptcy and own the vehicle outright after your Plan is completed.

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Many people considering bankruptcy have religious concerns and wonder if they can still be a good Christian or Jew and simultaneously file bankruptcy. Very few people know that the origins of bankruptcy actually come from Deuteronomy 15:1-2 which reads:

“At the end of every seventh year you are to cancel the debts of those who owe you money the Lord himself has declared the debt canceled.”

This is the reason why people can only file a Chapter 7 bankruptcy every eight years (eight years being the end of the seventh year). To take things further, the United States Bankruptcy Code permits a substantial tithe contribution to qualified charities if made under certain circumstances.

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When people consider bankruptcy they often wonder if they’ll be able to keep their car, home or even personal belongings. Fortunately, the bankruptcy laws are designed to help you get a fresh start and in the spirit of a fresh start they allow you to keep more than the shirt on your back with “Exemptions” i.e. property that you’ll be able to keep through the bankruptcy.

Exemptions come in two forms: State or Federal. Once you’ve lived in Florida for two years you must use our state exemptions. If you haven’t lived here quite that long you will need to use either your previous state’s exemptions or the federal exemptions.

Every state that has opted to create their own exemptions has it’s own nuances. For example, a bankruptcy debtor in Texas is allowed to keep a gun as well as a certain amount of homestead property. Maine allows a debtor to keep a wedding ring of unlimited value and one of each type of farm equipment needed to raise and harvest crops. Florida allows you to keep $1,000 in vehicle equity, $1,000 in personal property (beds, jewelry, televisions, etc.) and either $4,000 of additional personal property or the benefit of a homestead of any value. Back when homes were worth more than was owed on them, the unlimited homestead exemption was a huge benefit to people in bankruptcy. The unlimited homestead allows you to file a Chapter 7 bankruptcy, keep a three million dollar homestead and discharge three million dollars in credit card debt. Unfortunately, not a lot of people have three million dollars in household equity these days. In fact, as stated in our Jacksonville Report Rate of Florida Mortgages Underwater Down, 46 percent of home-owners currently owe more on their mortgages than those homes are worth. As a result, more people than ever are entering bankruptcy with homes that have no equity at all. When choosing between a house with no equity and keeping an extra $4,000 in personal property, the right decision is not always clear. Economically, it makes sense to take the $4,000 and give up the house, but for many people a home means more than bare dollars and cents. Fortunately, a new case from the Florida Supreme Court Osborne v. Dumoulin allows some people who have filed bankruptcy to keep both the $4,000 exemption for personal property and keep their homestead. This gives them the best head start in their life after bankruptcy without having to move out and it helps keep their children in the same school district.

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