Jacksonville Bankruptcy Lawyer Blog

Published on: February 29, 2012

Personal Property in a Jacksonville Bankruptcy

When you file for bankruptcy in Jacksonville, Florida, a certain amount of your personal property is exempt from collection by creditors. Generally, you are allowed to keep $1,000 in personal property, $1,000 in vehicle equity and then either a qualified homestead or $4,000 dollars in additional personal property.

To be a qualified homestead the property must be under 1/2 acre if within a municipality or up to 160 acres if in an unincorporated area. Abutting lots can qualify as long as the land maximums aren’t exceeded.

The value you assign to your property should be the approximate auction value of the property. That is to say, how much do you think you could get for that property at a bankruptcy auction? My bedroom set may have cost $1,200 ten years ago, but it is certainly not worth that today, especially at an auction. Evaluating your property is difficult and can sometimes require professional assistance. What is more important is that you are thorough in creating a complete list of what you own. Omitting valuable property interests by accident can look like an attempt to commit fraud. There are cases in which an appraiser will be sent to your house to evaluate your property. It is rare, but it does happen. You can, of course, pick and choose which property you keep based on it’s value. If you don’t care for an old, but valuable, wedding present you never use, you can list that property but not elect to exempt it, exempting something else instead.

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Published on: February 28, 2012

Jacksonville Bankruptcy Has No Debt Requirement to File

By David M. Goldman

Jacksonville, Florida debtors often ask me how much debt they must have to qualify for bankruptcy. In truth, there is no threshold requirement of debt to qualify for a Chapter 7 or Chapter 13 bankruptcy case although Chapter 13 does have an upper limit (over a million dollars).

One of the first questions I ask when meeting with someone for the first time is why do they think they need a bankruptcy -what brought them through my door. I then ask them general questions about their income, assets, liabilities and expenses and analyze their financial situation. Sometimes bankruptcy is not the best option for people I meet with. If that’s the case, I tell them what I think and let them decide whether or not they want to file or explore another option. I think too many people (attorneys included), think that attorneys are supposed to make decisions for the client. In reality, we are only supposed to give advice. We tell you what we think and let you make the decisions.

Whether a person owes one hundred thousand or just a hundred, they can file bankruptcy. The question isn’t whether they qualify, it’s whether they should file at all. This is not a decision to be made lightly. Bankruptcy can be embarrassing and stressful. No one really wants to go bankrupt. Unfortunately, there are times when bankruptcy is the only option. For instance, Abraham Lincoln went bankrupt when his grocery store failed. I’m sure he’d have preferred some other option, but bankruptcy was the one that worked best for his situation at the time. He then went on to be one of the most recognized presidents of the United States.

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Published on: February 27, 2012

Jacksonville Sneakers and Jacksonville Beach Sneakers File Chapter 11

By David M. Goldman

Although it’s Atlantic Beach location was rated #1 Best Sports Bar in 2008, Sneakers other two Jacksonville locations have filed for Chapter 11 protection this month.
The Beach Boulevard location reported only $300,000 more in debts than assets were as the the Point Meadows location owed $2.31 million more than it was worth. Both restaurants are owned by the same family.
Sneakers isn’t new to the court system, the Atlantic Boulevard location being sued for allegedly violating the terms of it’s rental agreement stemming back to November 2006. A final judgment for $94,000 having been submitted to the courts for unsatisfied back rent. This request, submitted in January 2012, has not yet been reviewed by the Honorable Jean Johnson of the Duval County Court. Hopefully, Sneakers will resolve this issue soon, otherwise we may see a Chapter 11 filed for the Atlantic Boulevard location as well.

Published on: February 24, 2012

MERS Under Fire by New York Bankruptcy Court

By David M. Goldman

When a bank wants to foreclose or repossess property from someone who has filed bankruptcy protection, that bank must obtain permission from the court for relief from the automatic stay provided by 11 USC §362. If the Judge enters an order granting that permission, the lender can then return to the county court and resume collection activities.

Select Portfolio Servicing (SPS) sought to foreclose on a mortgage held in trust by First Franklin Mortgage Loan Trust which encumbered a property possessed by a debtor in Chapter 7. SPS filed a motion for relief from automatic stay and the debtor objected on the grounds that the Mortgage Electronic Registration System (MERS) could not establish that it held an enforceable right against the property as MERS had no valid and enforceable interest in the mortgage.

States have various recording requirements for secured loans. One of the most common terms is “Perfection”. A lien must be “Perfected” for it to attach to the subject property. “Perfection” is synonymous with “Recorded with the County (or state)”. If a lien is not properly recorded, the lien does not attach to the property and is as unsecured as a credit card, i.e. you don’t pay your mortgage and the lender can’t take the homestead.

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Published on: February 23, 2012

Mortgage Modifications through Mediation and Bankruptcy

By David M. Goldman

Nearly half of Florida homes that have mortgages are worth less than the mortgage debt on the home. This, combined with the nation-wide decrease in incomes has lead to one of the greatest recessions our country has seen.

A home mortgage is essentially a contract. You promise to make payments according to the contract’s terms, and the lender promises to transfer the home’s title to you when you finish making your payments. The government regulates these contracts by creating laws that set out procedures for things like foreclosures. Of course, there is still an element of free contract which allows lenders and borrowers to negotiate the terms of their agreement at any time. The government is limited in how much they are allowed to interfere with contracts so instead of trying to force banks to offer mortgage modifications, they make programs like HAMP, which offers lenders tax deductions or other benefits to make deals with borrowers. Personally, I think that the government isn’t offering the lenders enough in benefits because banks aren’t particularly helpful in getting borrowers into the program. HAMP mods are done in-house by the banks and “can” lower a borrowers mortgage payments to 31% of their gross income if you qualify. But what if you don’t qualify, and what if your payments are already below 31% of your gross income?

This is where lenders will begin the foreclosure process. They may offer you a so called, “in house modification”, but offer or no, the foreclosure process will continue until either you are somehow successful in obtaining an in-house modification or your home is sold on the courthouse steps. This is because the judiciary can’t force a bank to modify your loan. Honestly negotiated terms that were created in accordance with the laws can’t usually be modified by the government due to our rights to free contract as citizens. That being said, a recent program out of Orlando creates an opportunity for people facing Jacksonville bankruptcies and foreclosures.

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Published on: February 22, 2012

Jacksonville Attorney’s Advice on Taking Control of Your Financial Situation

By David M. Goldman

Jacksonville bankruptcy attorneys, and attorneys everywhere have faced record numbers of new clients with debt problems. The last five years have been devastating, with home values plunging and politicians screaming across the country that they have new solutions to help us from drowning in debt. There is no doubt that the economy will be the largest issue of the upcoming Presidential Election.

Statistics are a staggering example of our economic squalor. There were 1.4 million bankruptcies across America in 2011, up about a million cases from 2007. A million extra cases per year in only four years is a motivating factor, but what can we do about it?

Most people aren’t sure what to do. Their jobs have lowered their pay or laid them off altogether, many of them are coasting by on savings and hoping for the economy to pick up. Many are depending on loan modifications that may never be granted. Even the government’s Home Affordability Modification Program (HAMP) has been called a Scam.

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Published on: February 21, 2012

Jacksonville Bankruptcy still linked to Underwater Homes

By David M. Goldman

Although bankruptcy filing rates are down, the primary cause for most bankruptcies at my office is underwater home mortgages and the inability to pay those mortgages.

When someone applies for a mortgage, the bank (or mortgage broker) uses a variety of tools to determine the amount of money the applicant can borrow -and for how long. Of course, one of the factors that weighs heaviest is the borrower’s ability to repay the loan. Although interest rates have varied greatly over the years, the term length of mortgages has generally increased. For instance, mortgages are usually thought to last thirty years, but now I have seen forty year mortgages and have even heard of fifty year mortgages.

Since the average age of a first-time homeowner is 34, a forty year mortgage would leave the buyer at 74 by the time they paid off their house. According to the CIA, the average American lives to be a little more than 78 years. This means that people (often couples) work almost their entire lives to pay off their homes.

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Published on: February 20, 2012

Debt Collectors Calling My Personal Cell Phone

By David M. Goldman

This attorney is getting a lesson on just how annoying having creditors call you can be -and they aren’t even my creditors.

Although I’ve had the same telephone number for over two years, creditors have started to call me looking for a person who I’ll refer to as, “Tony Doe”. Tony apparently gave his telephone number to multiple creditors long ago and has only recently fallen on hard times. Now I am receiving phone messages from a blocked number asking me to call a collection company with my reference number. They were sure to remind me in the message that, “You are now on notice.” Even if I were Tony, I don’t think being “on notice” has any legal relevance, though it was declared in a threatening tone. They left me this message despite the fact that my voice mail states that I am Attorney and who I am.

I quickly dialed the number back and was put on hold, when they finally got back to me I gave them the reference number and explained that I was not Tony Doe but could they please give him my phone number when they get a hold of him so that I could help him defend this debt. The creditor then promised that she removed me from their call list, though only time will tell.

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Published on: February 19, 2012

Bankruptcies, Co-Signers and Authorized Users

By David M. Goldman

Oftentimes when people prepare to file for bankruptcy we find that there are other people who appear to owe debts jointly with them. The rights and obligations of these people vary depending on whether they are Co-Debtors or Authorized Users.

A Co-Debtor is any person who has signed into a debt with someone else. A Co-Signer is a Co-Debtor. All bankruptcy petitions have a section dedicated to Co-Debtors.

While bankruptcy can remove your personal liability from a debt, anyone who is joint on that debt remains liable. Because of this, Co-Debtors are given notice when a case is filed and will be obligated to pay of the person filing bankruptcy doesn’t.

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Published on: February 18, 2012

Co-Debtor Stay in Chapter 13 Bankruptcy

By David M. Goldman

When someone files for bankruptcy an automatic stay is put into place. The stay prevents creditors from making any collection attempts (calling, repossessing, selling) prior to obtaining court permission or, prior to the dismissal of the bankruptcy case.

A Co-Debtor Stay created by 11 USC §1301 occurs when the person filing bankruptcy owed a debt jointly with a non-filing person, typically a spouse. By virtue of being a co-debtor, creditors may no longer make collection attempts against the non-filing person as well. This becomes particularly useful when the creditor has a security interest, such as in a home. For example, if a couple was behind on a jointly owned homestead but one spouse individually owed a large amount of credit card debt, that one spouse could file a Chapter 13 bankruptcy, catch up on the mortgage arrears and simultaneously discharge their unsecured debts. While that spouse was in bankruptcy, the bank could not foreclose on the home as to the non-filing spouse because of the automatic stay protection.

Unfortunately, the Co-Debtor stay does not go into effect as to business assets or function in Chapters 7 or 11, so a conversion from a Chapter 13 to a Chapter 7 would cause problems.

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