Jacksonville Bankruptcy Lawyer Blog

Published on: April 30, 2015

Can I file a Chapter 7 Bankruptcy?

If you are deciding whether you should file a Chapter 7 Bankruptcy or not, the first question that needs to be answered is do you qualify? Whether a person can file a Chapter 7 Bankruptcy almost entirely depends on their current income and household size. As of April 1, 2015, the current household size to income ratio is as follows:

Household Size	Yearly Income
One	$42,718
Two	$52,421
Three	$57,977
Four	$67,539
Five	$75,639
Six	$83,739

To determine if you qualify for a Chapter 7 Bankruptcy use the following example: You are married with two minor children. This would be considered a household size of four. Your income must equal or be less than $67,539 in order to qualify for a Chapter 7 Bankruptcy.

If you make slightly more than the income allowed, you might still be able to qualify if you have certain types of expenses that can be deducted from your income. If you still make more than the income allowed and still need or want to file bankruptcy, you will have to file a Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy is a reorganization of your debts instead of a strict liquidation as is the case with a Chapter 7 Bankruptcy.

However, whether or not a Chapter 7 Bankruptcy is right for you is more than just a question of if you can qualify or not. If you have a lot of assets, you may want to stay clear of a Chapter 7. Any money sitting in a financial account that does not qualify for an exemption will be take from you by the Trustee and used to pay off your debts. This is also true for personal property and real property that is not your homestead. If you have lots of assets and still want to file bankruptcy and be able to keep them, a Chapter 13 Bankruptcy might be a better choice for you.

In other words, there are a lot of considerations to take in to account before deciding whether or not to file a Chapter 7 Bankruptcy. It is best to meet with a bankruptcy attorney who understands all ways you can qualify for a Chapter 7 and which assets may or may not be protected. The attorneys at the Law Office of David M. Goldman, PLLC are here to help you navigate the confusion that comes along with facing bankruptcy. Contact an attorney today by calling (904) 685-1200.

Published on: April 20, 2015

Your Tax Refund and Bankruptcy

By Kendal Schoepfer

As tax season comes to an end, many of my bankruptcy clients want to know whether they can keep their tax refund. The answer is it depends. It depends on when you filed your bankruptcy, how much your refund is, what bankruptcy chapter you filed, why you need your refund, etc.

Chapter 7 Bankruptcy

If you filed a Chapter 7 Bankruptcy, your tax refund is automatically deemed to be property of your bankruptcy estate and must be turned over to your Trustee ASAP. The Trustee will use the refund to pay off your creditors. You may be able to keep all or part of your refund if you are able to exempt it. When you file bankruptcy, you are allowed certain exemptions you can use to keep some of your property. You can use some of your exemptions to keep your tax refund if you choose.

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Published on: April 14, 2015

Bankruptcy for Small Businesses

By Kendal Schoepfer

If your small business is facing financial difficulty and there is no expectation of reorganization, a Chapter 7 Bankruptcy might be your ideal answer. If your small business is a limited liability company (LLC), partnership or corporation AND you do not want to or cannot continue operating your business, a Chapter 7 Bankruptcy can provide a relatively quick and easy way to close the business and liquidate business assets. The chief disadvantage with filing a business Chapter 7 Bankruptcy is that if you are personally liable for any of the business debts, you will also have to file a personal bankruptcy or remain responsible for those debts. Furthermore, there are no exemptions to protect any of the business’ assets and your business does not receive a discharge of its debts. Instead, the Trustee sells all of the business’ assets to pay its creditors and shuts the business down.

If your small business is a sole proprietor, a Chapter 7 Bankruptcy will not only help you wipe out the business debts, it will also wipe out your personal debt. This is because you and your business are considered to be one in the same. You can also use exemptions to protect business assets and continue to operate the business after bankruptcy.

As a sole proprietor, you can also file a Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy allows a sole proprietor to keep all of its assets and pay back all of your debts through a set repayment plan OR pay back a portion of the debt through a repayment plan. However, LLCs, partnerships and corporations cannot file a Chapter 13 Bankruptcy.

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Published on: March 23, 2015

Bankruptcy and Cosigners

By Kendal Schoepfer

A person who cosigns, or acts as a guarantor on a debt may be affected when primary debtor declares bankruptcy. There are a few ways to protect a cosigner or guarantor during a bankruptcy, but it is important to understand each person’s roll in the process.

A guarantor, or a cosigner, is essentially a person who is responsible for paying back another’s debt if he or she is unable to. Creditors will often require a person to have a cosigner or guarantor if they feel skeptical of the person’s ability to repay the debt. This is why most young adults and those with bad credit scores are required to have a cosigner.

Further, there is a difference between a cosigner and a guarantor. A creditor can pursue a cosigner at any time if payments are not being made. With a guarantor, creditors must usually attempt to collect from the primary borrower first before going after the guarantor. If bankruptcy is declared, there is no longer a distinction and both classifications will be obligated to pay back the debt.

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Published on: February 5, 2015

Bankruptcy: what debts are non-dischargeable?

By Kendal Schoepfer

Most debts can be liquidated through a Chapter 7 bankruptcy, or reorganized through a Chapter 13 bankruptcy. However, there are a few debts that can altogether be non-dischargeable.

Some types of debts are always non-dischargeable, unless a debtor can demonstrate extraordinary circumstances to convince a court otherwise. One such debt includes any debt the debtor fails to list on his or her bankruptcy petition; unless the creditor had actual notice or knowledge of the bankruptcy.

Other debts that are generally always non-dischargeable include certain taxes, such as federal tax liens, payroll taxes or fraud penalties. Child support debt and other debts owed to a former spouse that arise from divorce are also non-dischargeable. Student loans, injury caused by DUI, and homeowner association fees are also included in this list.

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Published on: January 29, 2015

Can you sell your house during bankruptcy?

By Kendal Schoepfer

Once a debtor files for bankruptcy, his or her home and other possessions become part of their bankruptcy estate. While creditors cannot automatically foreclose on the property because of bankruptcy protections, the debtor is likewise not allowed to sell a house without first obtaining permission from the court.

During a Chapter 7 bankruptcy, it can be difficult to sell a home. The debtor must first convince the court that the sale will not prejudice ay creditor. A trustee must also obtain the court’s approval to sell a home in order to generate cash for creditors.

However, in a Chapter 13 bankruptcy, a debtor is allowed to sell his or her home as long as the sale does not cause financial harm to the mortgage lender.

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Published on: January 15, 2015

Bankruptcy: What does Preferential Payment mean?

By Kendal Schoepfer

Creditors have hounded you for months. Your bills have been piling up, but you have finally saved enough money to pay off one of your debts in full. You feel some relief because you have finally made a step towards getting out of debt. However, something happens and you are forced to file bankruptcy just three months later. Your bankruptcy trustee may now consider the payment you made a preferential payment, because you paid one debt off in full while giving nothing to your other creditors.

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:

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Published on: January 6, 2015

Can a Debtor keep an inheritance during a Chapter 13 bankruptcy?

By Kendal Schoepfer

During bankruptcy, most of a debtor’s property becomes part of the bankruptcy estate. Debtors who file a Chapter 13 bankruptcy are required to repay their creditors through a three to five year repayment plan. If a debtor receives an inheritance during their repayment plan, he or she may be required to amend their plan to account for the inheritance.

In a Chapter 13 bankruptcy, the debtor gets to keep his or her property, but must pay back a certain amount of their debt through a repayment plan. A debtor will usually make monthly payments to the bankruptcy trustee who distributes the money to the debtor’s secured and unsecured creditors. After this three to five year period, the court will discharge the debts.

Any property a debtor acquires during their Chapter 13 bankruptcy most likely will become property of the bankruptcy estate as well. This means an inheritance received during this period can become part of the estate.

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Published on: November 26, 2014

Filing Bankruptcy to stop Car Repossession

By Kendal Schoepfer

Lenders can be prevented from repossessing a car owned by a debtor if he or she files for a Chapter 7 or Chapter 13 bankruptcy. However, the lender may still be able to repossess the car with the court’s permission.

Once a debtor declares bankruptcy, the debtor is granted an automatic stay. An automatic stay prevents a creditor from taking certain properties from a debtor.

The only way a creditor can get around an automatic stay is to be granted court permission. To do this, a creditor must file a motion “for relief from the automatic stay” with the court. The motion must convince the court the creditor has a high interest in the property and a right to repossess the car. The creditor must also stress through the motion that its interests are not adequately protected because the debtor is not making timely loan payments or are otherwise in default.

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Published on: September 18, 2014

Can you sell property before you file your bankruptcy?

By Kendal Schoepfer

A debtor who sells or transfers property shortly before filing bankruptcy could be putting his or her bankruptcy and property at risk. Depending on the circumstances, a trustee may be allowed to recover the transferred property as part of the bankruptcy estate.

There are a few factors that determine whether a person may be allowed to perform a pre-bankruptcy transfer of property. Those factors include:

1. Whether the property was exempt or nonexempt;

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