Businesses are going bankrupt to deal with the slowdown and loss of revenue.  Many national retailers have filed bankruptcy, or soon will.  J. Crew, Neiman Markus and JC Penney have filed bankruptcy. Just last week, Jacksonville-based Stein Mart filed Chapter 11 and is closing stores. When discount retailers like Stein Mart go under, it does not bode well for the economy.

Corporations have used the bankruptcy code as a way to bail themselves out financial straits for decades.  Individuals can also use bankruptcy law to get a fresh start. In an interview with a then 80-year-old St. Augustine grandmother in 2008, a national news magazine asked:

A recent article in the California Law Review Online declared that, “The coronavirus pandemic is set to metastasize into a debt collection pandemic. This is because while evictions, foreclosures and student loan payments have been stayed by various government  orders and federal regulations, there is no blanket moratorium or order stopping debt collection lawsuits. Many debt collection law firms have ramped up credit card collections lawsuits since they have not been able to bring or finish foreclosure lawsuits. Many credit card collection lawsuits end up with the consumer getting a default judgment entered against them, since they believe there is nothing that they can do to stop these lawsuits. Debt collection law firms nationwide kept filing new cases during the shutdown, consumers be damned. For example, in Maryland, two major debt collectors alone filed over 2,000 suits in April.  These law firms must keep their gravy train rolling, even if many Americans have lost their jobs or part of their income, through no fault of their own.

After a homeowner gets a judgment against him or her, the law firm will usually attempt to get paid–voluntarily at first, and then by using court process to take the homeowner’s income and assets. There are several ways in Florida that a judgment creditor can collect on a judgment.

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.

The debt will have to be repaid.

At first, you might think that it is a good thing that your debt has been charged-off and you might even think that you no longer owe the debt. Unfortunately, when your bank decides your account is uncollectible, that is simply an accounting term. It in no way affects your liability for the entire debt owed. However, there is one caveat. The bank can only collect on the debt until the statute of limitations expires. In Florida, the statute of limitations for a credit card debt is five years.

You should expect your debt to be sold to a debt collector who will try to collect the debt.

In the majority of circumstances, the bank will not try to pursue the debt themselves, but instead, the bank will either hire a debt collector to try to collect the debt or the bank will sell the debt to a debt collector for pennies on the dollar. In either scenario, your payments will most likely be made to a debt collector instead of to the bank. Luckily though, you can usually reach a settlement with the debt collector for less than the full amount owed and then make monthly payments on the settled amount.

Your credit score will take a hard hit.

The charge-off will stay on your credit report for up to seven years and put a bad mark on your credit report. Not to mention the history of missed payments that were already there, which will make qualifying for new credit very difficult. The best thing you can do is to still pay the debt in full. This way the account will be reported as “charged-off, paid in full” instead of “charged off” or “charged-off, settled for less than full balance”. Lenders will prefer to see that the debt was paid in full even though it was paid very late.

If you have a credit card debt that has been charged off by your bank, contact the Law Office of David M. Goldman, PLLC today. By speaking with an experienced Jacksonville attorney experienced in not only debt collection related matters, but bankruptcy as well, you can determine what course of action you should take in order to cure your charged-off debt. Just because your debt has already been charged-off does not mean you are out of options. Speak with a Jacksonville Debt Collection Attorney today.

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.

The good news is that you can definitely file bankruptcy again, but there are very strict time limits that must be followed if you have already received a Chapter 13 discharge. In order to file a Chapter 7 Bankruptcy, you must wait 6 years from when you filed your Chapter 13 Bankruptcy, but you only have to wait 2 years from when you filed your Chapter 13 in order to file another Chapter 13. Therefore, you can usually file for another Chapter 13 immediately after receiving a Chapter 13 discharge, since Chapter 13 Plans generally last between three and five years.

In the above scenario, you filed your first Chapter 13 Bankruptcy on August 15, 2013. Today is October 29, 2015, just over 2 years later. Therefore, you cannot yet file a Chapter 7, but you can file another Chapter 13 in order to receive bankruptcy protection now from your harassing creditors.

1. Are you only able to make your minimum credit card payments or no payments at all?
2. Are your wages being garnished by a Wage Garnishment Order?

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.

When a debtor declares bankruptcy, he or she is not allowed to show preference to any one creditor and must divide their assets equally among all creditors. This means that if a debtor pays one creditor in full (6 months prior to filing bankruptcy if a normal creditor and 1 year if a family member) the creditor may be forced to give the money back to the bankruptcy trustee.

11 U.S.C. § 547 defines preference as: