Jacksonville Bankruptcy Lawyer Blog

Published on: August 26, 2015

Jointly Held Property in Bankruptcy

Many people who are considering filing bankruptcy are very concerned about their property jointly owned with a spouse, sibling, or other person. These are real concerns as a bankruptcy filing could cause a joint-owner to lose his or her interest in the property. The exact affect a bankruptcy filing may have depends on who the joint-owner is, how the property is titled, and your state’s exemptions.

The most commonly held joint-property is property held by a husband and wife. In Florida, property owned by a husband and wife is presumed to be by Tenancy by the Entirety unless specifically specified otherwise. This type of joint ownership protects the property from the bankruptcy estate if only one spouse is filing bankruptcy and there are not any unsecured joint debts. Property held by a husband and wife as joint tenants with the right of survivorship is not afforded this type of protection.

The second most commonly held property is property inherited by siblings from a passing parent or other family member. Unless the property can be protected by a bankruptcy exemption, your siblings or other family member could lose their title to the property due to a bankruptcy filing. Unfortunately, the bankruptcy court does not care how you acquired the property. It could be through a gift, inheritance, purchase, etc., but once you have acquired the property, you have acquired it, and it is part of your bankruptcy estate. This means that if it is not protected by an exemption, the trustee could ask the court to order the sale of the property in order to settle your debts. This causes your joint owners to lose their title to the property. This is true for property held as joint tenants, joint tenants with the right of survivorship, and tenants in common.

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Published on: August 19, 2015

Filing Bankruptcy after receiving a Chapter 7 Discharge

By Kendal Schoepfer

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:

CANNOT file another Chapter 7 for eight (8) years from the date of your Chapter 7 filing.

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Published on: August 12, 2015

Lien Stripping: Can I get rid of my second mortgage through bankruptcy?

By Kendal Schoepfer

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.

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Published on: August 7, 2015

I can’t make my Chapter 13 Plan Payments! Can I reduce my payments?

By Kendal Schoepfer

When you file a Chapter 13 Bankruptcy you must remain on a repayment plan for at least 3 to 5 years in order to receive a discharge. However, life happens and the repayment plan payments may become impossible to keep up with. If this happens, you might be able to apply for a modification.

Because a Chapter 13 Bankruptcy lasts for such a long period of time, it is natural that a debtor’s life will go through changes during the duration of the plan. Things can happen such as a job loss, illness, or an unexpected emergency that can have an affect on a debtor’s ability to make their payments. If you find yourself in this situation, you may be able to petition the bankruptcy court for a modification of your monthly payments.

When a debtor begins the bankruptcy process, he or she files with the court and provides to the Trustee lots of information that help you, the Court, and the Trustee figure out your Chapter 13 Plan. Among these documents is your proposed Chapter 13 Plan. Prior to confirmation, your proposed plan is essentially in a temporary probationary period until the Court, the Trustee, and your creditors have a chance to review, or reject to the proposed plan. If no one objects, or the objections are resolved, then the court will finalize the plan. This is known as confirmation.

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Published on: August 4, 2015

How to avoid a short sale deficiency judgment

By Kendal Schoepfer

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.

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Published on: July 31, 2015

Can I keep a credit card out of my bankruptcy?

By Kendal Schoepfer

Another question I get quite frequently from clients considering bankruptcy is whether they can keep a specific credit card or other loan out of their bankruptcy. In today’s world credit cards are a huge part of our daily lives and some have come to depend on them. The thought of not having a credit card can be very scary one.

Whether you can keep a credit card after filing bankruptcy largely depends on whether you are filing a Chapter 13 or Chapter 7 Bankruptcy. If you are filing a Chapter 13 Bankruptcy, you cannot keep a credit card. This is because while you are in a Chapter 13 Plan, you are not allowed to acquire new debt without first obtaining permission from the court.

If you are filing a Chapter 7 Bankruptcy, theoretically, you can keep any credit card you want to as long as the issuing bank allows it. BUT, in most situations, the bank will require you to sign a reaffirmation agreement for your current balance in exchange for allowing you to keep the card open. This means that you must agree to pay back the full amount you owe even though you are filing bankruptcy.

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Published on: July 27, 2015

Credit after Bankruptcy

By Kendal Schoepfer

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.

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Published on: July 24, 2015

Jacksonville resident fakes his own death to avoid debt

By Kendal Schoepfer

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.

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Published on: July 20, 2015

Foreclosure: Bank fails to win Mortgage suit due to lack of standing.

By Kendal Schoepfer

Florida’s second district Court of Appeals recently held in Miltiades v. U.S. Bank N.A., 40 Fla. L. Weekly D1446b, that a trial court erred in substituting a bank as party plaintiff in a mortgage foreclosure action because the bank failed to establish standing. This is a significant ruling because it places the burden on the plaintiff bank to prove they actually posses the ability to foreclose on a home.

What is standing and why does it matter when it comes to foreclosure? Legal standing is a term that means a person or entity has the ability to bring an issue before a court. Generally to have standing, the party bringing the suit must have sustained or will sustain injury or harm that the court can remedy. For example, two people enter into contract together to provide cash for a service and one party fails to perform as agreed. Both parties to the contract would have standing to sue each other for a breach of contract because both would be harmed by the other’s non-performance. But a third person not affected by the contract would not have standing to sue for breach of contract.

Why did standing become an issue in this case? In most instances, lenders sell their promissory notes and mortgages to bigger institutions rather than keeping and servicing the mortgages themselves. The court in Murray v. HSBC Bank USA, 157 So. 3d 355 (Fla. 4^th DCA 2015) held that an entity claiming to be a holder of a promissory note must prove each transfer of the note in order to enforce it. Therefore, in Miltiades v. U.S. Bank N.A. the court held U.S. Bank N.A. did not have standing because it did not possess the promissory note as a holder.

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Published on: July 15, 2015

50 Cent files for Chapter 11 Bankruptcy

By Kendal Schoepfer

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.

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