Recently, I have been receiving inquiries from clients regarding filing bankruptcy after having already filed a Chapter 7 Bankruptcy and receiving a discharge. If you have already received a Chapter 7 Discharge, you can most definitely file bankruptcy again. BUT, you must obey some very specific time limits.
If you filed a Chapter 7 Bankruptcy and received a discharge, you:
In Florida lien stripping is the practice available through bankruptcy, which allows you to remove liens that are entirely unsecured from your homestead property. An entirely unsecured lien is referred to as a “wholly unsecured lien” in bankruptcy. If a lien on your property would not receive any proceeds from a foreclosure sale because there would not be any proceeds remaining after the first lien holder was paid, then the lien is wholly unsecured. In other words, if you owe more on your first mortgage than your property is worth and you also have a second or third mortgage, your second and third mortgages would be wholly unsecured. Who your first mortgage holder is depends on when each mortgage was recorded in the public record.
If filing a Chapter 13 Bankruptcy and you ask the Court to strip your wholly unsecured mortgage, then your wholly unsecured mortgage becomes an unsecured debt. Unsecured debts are debts such as credit cards, medical bills, utility bills, etc.; any debt that is not secured by an asset such as a car or home. Just like all other unsecured debts, your stripped lien receives little or no money through your Chapter 13 Plan. Once your Chapter 13 Plan is completed and you receive your discharge, then the stripped lien is also discharged and the lien holder must remove their lien from your property.
Unfortunately, lien stripping is not available when filing a Chapter 7 Bankruptcy due to a recent ruling from the United States Supreme Court.
A short sale can be a great solution for a homeowner who is having trouble making his or her mortgage payments. A short sale is when a bank agrees to accept a sale price that is less than the full mortgage amount owed in order to avoid foreclosure. However, homeowners that complete a short sale are often surprised to find out months or even years later that their lender is seeking a deficiency judgment against them.
What is a deficiency judgment? Since the sale price is less than the full amount owed on the mortgage, the difference between the total debt owed and the sale price is known as the deficiency. In some states, the lender can seek a personal judgment against you after the short sale to recover this deficiency amount. If this judgment is entered against you, then the lender may collect this from the borrower by garnishing wages or levying the debtor’s bank account; Florida is one of these states.
The good news is there are ways to avoid a deficiency judgment after a short sale. One of the best methods is to negotiate a full waiver of the lender’s right to seek a deficiency judgment while negotiating the short sale with your mortgage holder. If the lender agrees, then the provision will be included in your short sale agreement. The agreement must state the transaction is in full satisfaction of the debt and that the lender waives its right to the deficiency.
One concern that seems to be unanimous for almost all those who are thinking about filing bankruptcy is when and/or will they be able to use their credit again. Each person’s ability to use their credit after filing bankruptcy depends on their unique situation, but the passing of time seems to be the one undisputed determining factor of when credit can be used again.
Credit After a Chapter 7 Bankruptcy
At first it will be hard to get credit, but it will not be impossible. It will be even harder to get credit with favorable terms since those with bad credit or no credit simply have to pay more in order to borrow money. This means higher annual fees and interest rates, but you will have majorly lowered your debt to income ratio and eliminated your ability to file another Chapter 7 Bankruptcy for the next 8 years. Both of which make you a more favorable borrower to creditors.
In 2013, a Jacksonville resident traveled to Venezuela for a vacation where his family claimed he passed away from a heart attack. The U.S. embassy confirmed his death in the local seaside tourist town of Rio Chico, and he was reportedly cremated. But it turns out he has been very much alive. This was confirmed recently by his appearance in a federal courtroom in Asheville, North Carolina.
Jose Lantigua’s death was all an apparent ruse; an alleged plan that would allow him to escape more than $9 million of debt that included fraudulent insurance claims. Lantigua is a 62-year-old from Jacksonville, Florida and was arrested next to his wife’s home in North Carolina. He was charged with many crimes in Florida, including 7 counts of filing fraudulent insurance claims and other fraud charges.
In Jacksonville, Lantigua seemed to be a business success. He was a former executive for Fidelity National Information Services and bought two furniture stores in 2008, which were lauded as a local favorite in a 2013 edition of the Jacksonville Business Journal. The truth about Lantiua’s death became evident after one of the insurance companies that were to pay out life insurance proceeds hired an investigator to look into the man’s death.
The rapper 50 Cent, also known by his birth name Curtis James Jackson III, filed for a Chapter 11 bankruptcy on Monday. The bankruptcy petition was filed in a Connecticut bankruptcy court, and the documents showed Jackson’s total assets were valued in the range of $10 million to $50 million. What is unique about 50 Cent’s filing is that he filed under Chapter 11 rather than filing a Chapter 13 bankruptcy.
So what is a Chapter 11 bankruptcy? A Chapter 11 Bankruptcy is mainly filed by small businesses and allows the business to restructure its finances through a repayment plan approved by the court. Large businesses like General Motors and Carmike Cinemas have also filed for this type of bankruptcy. Generally, a Chapter 11 repayment plan allows a debtor to balance its income and expenses, regain profitability, and continue to operate as a business in the mean time.
When a business declares bankruptcy it must follow the rules and requirements of the bankruptcy court to discharge its debts. A Chapter 11 bankruptcy may also be filed by a “small business debtor,” which is a person or entity who: 1) is engaged in business or other commercial activities; and 2) owes no more than $2,490,925 in total claims.
Bankruptcy often comes with a negative social stigma, but bankruptcy is not a moral choice. Bankruptcy is an important financial planning tool that allows debtors a legal option to get out of a desperate situation. Studies by the Federal Reserve Bank of New York have shown that people in debt who file for bankruptcy do better financially than those who do not. So declaring for bankruptcy can be a great way to get back on track; however, there are some things that a person in debt should not do before declaring bankruptcy.
Do not create new debt.
If you plan on filing for bankruptcy, try to avoid creating new debt. The consequences of creating new debt can be severe, as a new creditor can claim the debtor took out a new loan, opened a credit card, or acquired a new debt without the intent of paying it back. A creditor could argue this is fraud because the debtor never intended to pay it back. If the court agrees the act was fraudulent, the debt will not be discharged in bankruptcy and the debtor will still owe the whole debt.
If you are deep in debt and facing the foreclosure of your home, bankruptcy might be able to help you save your home or relieve you of the debt depending on which type of bankruptcy you declare.
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.
Filing for a Chapter 7 or 13 Bankruptcy is a great way to start over and free yourself from overwhelming debt. A question I often receive is how does the discharged debt appear on my credit report after the bankruptcy court has officially granted me a discharge. This article will explain what information should and should not appear on your credit report once your debt has been discharged through bankruptcy.
The Fair Credit Reporting Act.
The Fair Credit Reporting Act, or FCRA, is the act that controls how creditors, buyers of credit, and credit reporting agencies may report debt. This act was enacted to ensure creditors and the like maintain accurate information regarding a person’s credit information. Creditors are required to truthfully and accurately report information to consumer reporting agencies.
First, it is very important to note that Florida does not legally recognize “legal separation.”
However, the current bankruptcy laws allow a debtor to file an individual bankruptcy regardless of whether he or she is married or in the process of getting a divorce. A debtor is allowed to file a joint or individual bankruptcy during a marriage or during an ongoing divorce.
Generally, when a person is married and filing bankruptcy, either individually or jointly, the income of both spouses determines what type of bankruptcy a debtor can file; either a Chapter 7, 13 or 11. This is known as household income in bankruptcy. Even if only one spouse is filing bankruptcy, the income of the other non-filing spouse will be taken into consideration and must be disclosed to the trustee and court.
Jacksonville Bankruptcy Lawyer Blog