Chapter 7

Published on: March 16, 2017

How will my spouse’s bankruptcy affect me?

One thought that many people think about when getting married, is what their future spouse’s credit history is and their ability to obtain new debt. A correlating question is how will their future spouse’s credit history affect their own ability to obtain new debt. Why? Because they most likely, one day in the future, would like to know they have the option to purchase a new home, motor vehicle, or simply just obtain new debt. It can become much more concerning if your future spouse has filed bankruptcy within the last few years. How will their bankruptcy affect your ability to obtain new debt? Unfortunately, there are a lot of factors that can affect the answer to this question. So, regrettably, the answer is that it will depend.

Most importantly, it is crucial to make note that the fact alone that your future spouse filed bankruptcy, regardless of when, is absolutely immaterial to your individual credit report. Your credit report will not merge with your future spouse’s credit report simply because you got married. You both will maintain separate and apart credit reports. In other words, your individual credit report will remain the same as it was before getting married. However, by being married, your spouse may have to sign certain types of contracts. Continue reading →

Published on: March 2, 2017

Bankruptcy News: Personal Injury Claims

By Kendal Schoepfer

When filing for bankruptcy, regardless of what chapter of bankruptcy you are filing, you must disclose in your Petition if you have any pending claims. In laymen’s terms, this means that if you have any reason to file a lawsuit against any person or entity, such as against a business because you slipped and fell while in their store, you must inform the Bankruptcy Court. The reason for this is any money you might be entitled to recover from said person or entity for any harm they caused you will most likely be considered a part of your bankruptcy estate and distributed to your creditors.

Properly disclosing a possible claim was recently considered by the Illinois Second District Appellate Court. Prior to filing bankruptcy, the Debtor in question was visiting a store. While in the store, another customer caused some of the store’s inventory to be knocked over, which then fell onto the Debtor. As a result, the Debtor was injured and later had to have surgery. Shortly after having surgery, the Debtor filed a Chapter 7 Bankruptcy and did not list any pending claims in his Bankruptcy Petition. However, the Debtor later amended his Bankruptcy Petition to include a possible pending claim for around $15,000.00. Continue reading →

Published on: February 17, 2017

Renting after Bankruptcy in Jacksonville, FL

By Kendal Schoepfer

The first and most important thing to keep in mind when trying to rent after filing bankruptcy is the fact that you having filed bankruptcy, in itself, is not going to completely inhibit you from finding an apartment or home to rent. Nonetheless, and of course, a potential landlord will take filing bankruptcy into account as well as the circumstances around your decision to file bankruptcy, as well as where you stand today.

Here are some other items your future landlord is going to look at, some of which might just completely overshadow the fact you ever filed bankruptcy.

Your Rental History

If you have a good rental history, in that you can show that you have always been on time with paying your rent and have not broken any of your leases with previous landlords, then your potential landlord should not be too concerned about the fact you filed bankruptcy. Continue reading →

Published on: February 13, 2017

Bankruptcy: 2004 Examination

By Kendal Schoepfer

Rule 2004 of the Federal Rules of Bankruptcy Procedure, notoriously referred to as the 2004 Examination, is usually used by a Bankruptcy Trustee and is similar to a deposition to a few caveats. 2004 Examinations have famously been referred to as a shipping expedition.

What Is a Rule 2004 Examination?

Rule 2004 of the Federal Rules of Bankruptcy Procedure states that “[o]n motion of any party in interest, the court may order the examination of any entity” regarding “the acts, conduct, or property or…the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor’s estate, or to the debtor’s right to a discharge….”

Rule 2004 is very broad and loose. There are very few procedural safeguards or objections available to improperly posed questions. The main purpose of the 2004 Examination is to discover undisclosed assets, question transactions and determine if the debtor has committed any fraud. Continue reading →

Published on: February 7, 2017

Filing Bankruptcy when owning a Small Business.

By Kendal Schoepfer

Filing bankruptcy is a very scary process with a lot of unknowns. Throw in owning a small business, and it can be extremely overwhelming. The three most common types of small businesses are sole proprietorships, corporations and limited liability companies. The main characteristic of a sole proprietorship is that there is not a legal distinction between the owner and the business. What this means when filing a personal bankruptcy is that if the sole proprietorship has any assets, those assets will be considered the owner’s when filing bankruptcy.

If your small business is a corporation or a limited liability company, then the business is a completely different entity that is separate and apart from the owner(s). Outside of bankruptcy, this means that the debts of the owner are not the debts of the business, and the debts of the business are not the debts of the owner. This also means that any assets the business has only belongs to the business and not to the owner(s).

However, inside of bankruptcy things are little different. When you file a personal bankruptcy and are the owner of a corporation or limited liability company, the debts of the business are still not the debts of the owner and vice versa. What is different is that the assets of the business will be considered the assets of the owner for bankruptcy purposes. Whether the business assets are safe will depend on whether you file a Chapter 7 or a Chapter 13 Bankruptcy and whether the business has any assets. If the business does not have any assets, then the business should not be affected by the owner filing a personal bankruptcy, regardless of which bankruptcy chapter is being filed. Things can get a lot more difficult if your business has assets. Continue reading →

Published on: January 20, 2017

What to expect at my 341 Hearing in Jacksonville?

By Kendal Schoepfer

Roughly about 30 to 45 days after you file bankruptcy in Jacksonville, Florida, whether it is a Chapter 7 or a Chapter 13 Bankruptcy, you will be required to appear at the Meeting of Creditors, a/k/a the 341 Hearing, along with your attorney. At this meeting, your assigned Trustee places you under oath and asks you a series of questions about your Bankruptcy Petition and the supporting documents that you provided to him or her.

However, very recently I have had a lot of clients come to me very concerned and worried about this meeting. They want to know what to expect. The best thing you can do to be prepared is to know what types of questions the Trustee might ask you.

Here are a few sample questions of what your Trustee might ask you and things you should keep in mind when under oath at your 341 Meeting in Jacksonville:

1. Once you have been placed under oath, your Trustee will have you state your full legal name and your current residence and/or mailing address? Continue reading →

Published on: January 13, 2017

What is an asset when filing a Bankruptcy?

By Kendal Schoepfer

When you file a Jacksonville Bankruptcy, you are required by the United States Bankruptcy Code to list all of your assets in your Bankruptcy Petition. The reason being is to assist the Court, and your appointed Trustee, in figuring out which of your assets you are allowed to keep, and which of your assets you must turn over to your Bankruptcy Estate. The assets surrendered to your Bankruptcy Estate are liquidated to pay your creditors. If there is an asset you wish to keep, then you must accurately list that asset in your Bankruptcy Petition as well as the exemption (if applicable) that allows you to retain the asset.

The biggest hurdle is figuring out what your assets are and what exemptions are available to you. By definition, an asset is anything that has a value and that which can be sold or liquidated in order to pay your debts or commitments. The most common looked over assets are whole life insurance policies, as well as insurance policies in which you are the named beneficiary, accrued or unused vacation pay, timeshares, season tickets, unpaid insurance claims, security deposits, class action lawsuits, trademarks, liquor licenses, divorce settlements and tax refunds.

I cannot stress to you enough the importance of disclosing all of your assets. One accidental omission could have devastating consequences. Take this situation as an example:

Continue reading →

Published on: January 6, 2017

Can I keep my car if I file bankruptcy in Florida?

By Kendal Schoepfer

While it is true that the exemptions allowed in Florida only allow you to keep $1,000.00 of equity in a motor vehicle, most people who file bankruptcy in Jacksonville, Florida get to keep their vehicles. This is because financed or leased vehicles can just about always be kept by simply continuing to make your normal monthly payments as if the bankruptcy was never filed. This is of course as long as the vehicle is a reasonable necessity for your, or your dependents’, care and support.

What if my vehicle has equity?

A different set of rules applies however when your vehicle has equity that is above the $1,000.00 exemption that is allowed in Florida. For example, when you owe your vehicle free and clear. In such a situation, you might be able to use a wild card exemption to protect the rest of the equity. However, if you are unable to exempt all of the equity, then you may be forced to surrender the vehicle or pay your Trustee the un-exempt equity amount in order to keep the vehicle. Most of the time, your Trustee will allow you to make monthly payments for the equity.

There are two tests that the Trustee will do in deciding if you should keep your vehicle. The first is to determine whether it is feasible. Meaning, if the monthly payments are reasonable and affordable for you. The second and more significant test when keeping the vehicle is whether it is in the “best interest of your creditors.” United States Bankruptcy Code 11 U.S.C. § 1129(a)(7)(A)(ii) states that in a Chapter 13 Bankruptcy, your creditors must receive, at the very least, the amount they would have received had you filed a Chapter 7 Bankruptcy. As an illustration, if you own a motorcycle and wish to keep it in your Chapter 13 Bankruptcy, then if that motorcycle would have been liquidated in a Chapter 7 Bankruptcy, then you will either have to surrender the motorcycle or pay the value of it through your Chapter 13 Plan. Continue reading →

Published on: December 20, 2016

Jacksonville Bankruptcy Fables

By Kendal Schoepfer

Just like all other legal processes and proceedings, bankruptcy can not only be difficult to navigate, but it can also be a little bit scary. Luckily, most of the things about bankruptcy that make it seem like a scary and difficult process happen to be nothing other than misinformation. This is why it is so important to speak with an experienced Jacksonville Bankruptcy Attorney who can aid you in weighing your options, assist you in deciding if bankruptcy is right for you, help you understand exactly what to anticipate when filing bankruptcy, and inform you on how filing bankruptcy will affect your today as well as all of your tomorrows. The more knowledge you have and the more you are prepared the easier it will be to make filing bankruptcy as easy and smooth of an experience as possible. Here are some of the biggest bankruptcy fables debugged:

Fable 1: Those who file bankruptcy are fiscally irresponsible.

Of course, there will always be individuals who are irresponsible and abuse the right to file bankruptcy. But in reality, the majority of people who file bankruptcy are good people with good intentions who have suffered a job loss, a divorce or illness. All of which have either lowered their income or increased their expenses, which in turn, have prevented them from being able to pay all of their expenses.

Fable 2: If I file for bankruptcy, everyone will know.

Yes, who files bankruptcy is public knowledge, but that is only because most bankruptcy documents are a public record, which is the same with the majority of all other legal proceedings. However, the fact that you filed bankruptcy will not be published in your local newspaper. In order for someone to find out that you have filed bankruptcy, they will most likely have to run a background check or pull your credit report. The other exception is for attorneys. Most attorneys have usernames and passwords that allow them to search the bankruptcy court dockets. Continue reading →

Published on: December 16, 2016

Do I pass the Chapter 7 MEANS Test in Florida?

By Kendal Schoepfer

Every six months, specifically in May and November of each year, the United States Department of Justice updates the Median Family Income figures in every state. In turn, these figures determine whether an individual or a couple qualify to file a Jacksonville Chapter 7 Bankruptcy. More specifically, if your income is below the median income for your household size in your state, then you most likely qualify for a Chapter 7 Bankruptcy; however, if your median income is above the income allowed for your family size in your state, then you will have to file under Chapter 13 of the United States Bankruptcy Code.

How do I know if my income qualifies for a Chapter 7 Bankruptcy in Jacksonville, Florida?

You will have to pass something called the MEANS Test in order to qualify for a Chapter 7 Bankruptcy in Jacksonville, Florida. The MEANS Test is more or less a comparison between your income over the last six months and your household size.

The Median Family Income in Florida as of November 1, 2016 are:

Family size of 1: $3,668 per month, or $44,021 per year;
Family size of 2: $4,555 per month, or $54,655 per year;
Family size of 3: $4,990 per month, or $49,881 per year;
Family size of 4: $5,957 per month, or $71,480 per year;
Family size of 5: $6,657 per month, or $79,880 per year;
Family size of 6: $7,657 per month, or $88,280 per year,
Family size of 7: $8,057 per month, or $96,680 per year.

For each additional family member you have, you can add $7,500 per year. Continue reading →