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Credit Counseling is a pre-filing a requirement under 11 U.S.C. § 9(h) for all people who have filed for bankruptcy. Debtor Education is also required under 11 U.S.C. § 727(a)(11). These courses are available online, over the phone or in person and typically take about two hours. Only Credit Counseling Agencies approved under 11 U.S.C. § 111 can offer a valid course.

Douglas W. Neway, the Chapter 13 trustee, offers a free debtor education course to all Chapter 13 filers in the Jacksonville Division. These courses are held on every Monday (Holidays excluded) and run from about 2:00 PM to 4:30PM. At the commencement of the course the debtors are handed a Certificate of Debtor Education which their attorneys must file with the court. Considering that this course typically costs debtors about $30.00, I think it’s a fantastic idea to take it with the Trustee’s department for free (they let lawyers sit in for free too).

Now, not only does the course provide debtors with the necessary certificates at no cost, it also gives them the opportunity to ask the trustee (or members of his office) questions regarding practice and policies going forward. The trustee will not give legal advice to the debtors, but he can tell them what his office policies are. Considering that the debtors will be having direct contact with his office for five or so years, it only makes sense for them to be familiar with their office’s policies and procedures.

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The Claims Bar Date is vitally important in any bankruptcy because it establishes the date by which all creditors must make a claim on your estate or be barred from collecting their debt. This date first appears on your Notice of Filing, which is automatically generated when your case has been filed. Any creditor who received notice of the bankruptcy must provide a claim within 90 days or be barred from collecting the debt owed. If a creditor is not properly noticed, they may be allowed to bring a late claim. Governmental Units are provided additional time to bring claims, but have a claims bar date as well.

Despite the fact that the creditors receive a Notice of Filing that comes with a claims form and instructions, some creditors never file their claim or file their claim improperly. You or your attorney can object to claims that are unfounded, incorrectly filed or state inaccurate sums owed. Knocking out claims can save Chapter 13 debtors significant amounts of money and can sometimes create the possibility of ‘paying out’ of a bankruptcy. Paying out occurs when all creditors who have filed claims get paid every penny they’re owed. When this happens, and there is no one left to pay, the case is closed.
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Under the Fair Debt Collection Practices Act (FDCPA), a debt collector cannot communicate with any person other than the you without that your permission. There are some exceptions, such as situations if you gave permission to the collector to speak to other people or when the debt collector is speaking with your attorney.

A debtor cannot tell your neighbor that you are behind on your mortgage without your prior permission. If this has happened to you, it is a violation of the FDCPA and we may be able to sue the creditor on your behalf.

If you think that a creditor is doing something unethical in an attempt to collect a debt, it may be illegal. Contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.

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When a home is foreclosed on and sold for less than the amount owed, the bank has two options:

1. Sue the ex-homeowner for the deficiency (an amount the bank knows they’re not going to get) or 2. Write the loss off on their corporate taxes.

When a bank writes a loss off on corporate taxes, the amount of the write off becomes Debt Forgiveness Income to the ex-homeowner. The IRS says that when someone’s debt has been forgiven, their total worth has gone up, therefore this counts as income. When this happens, the ex-homeowner will actually get a 1099-C for the difference and will owe income taxes on the new amount.

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Recently, a small debate has been brewing in the legal world about whether a person facing foreclosure should file bankruptcy before or after their foreclosure comes to a close. First of all, bankruptcy is not always the best option for someone facing foreclosure.

If filing bankruptcy is right for you, some attorneys recommend filing after your home has been foreclosed on. This should allow you to discharge the debt and will help you move on with your life. But this may also limit your options.

It has been suggested that filing bankruptcy before foreclosure may give you the option to fight the foreclosure post bankruptcy. You would “Surrender” your interest in the property to the Trustee, which gives him the option to liquidate the property subject to the mortgage. However, because the mortgage is often higher than the house is worth, the Trustee disclaims any interest. It is then up to the bank to continue the foreclosure process either during or after the bankruptcy. While the bankruptcy goes on you may still be able to remain in your home (this may effect your bankruptcy exemptions). Theoretically, you will remain there essentially rent-free, as you will not be making your mortgage payments during this time. This could mean saving thousands of dollars in unpaid mortgage payments, depending on how long the bankruptcy takes. At the end of the bankruptcy you should have no unsecured debt and would have savings to use in negotiations with the bank. What’s even more interesting is that you would no longer be personally liability for the mortgage, so if negotiations failed, you could just walk away.

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On October 15, 2011, I attended Clark Howard’s “Clark in the Park” at the Nocatee Welcome Center. At this meet and greet Clark gave a small speech, answered individual questions and autographed copies of his new book, Living Large in Lean Times.

Clark’s book has some refreshing ideas about how to save money and is written in an approachable and non threatning manner. Though there were a few things I was already employing in my day to day life (such as using mint.com for free personal financial management), I was enthusiastic to learn the interesting new techniques to stretch dollars. There are even some unexpected tips that help extend the life and usefulness of razor blades.

The point Clark makes is simple: saving a dollar is like earning an extra dollar. The more dollars you save, the more stable and wealthier you become. I recommend this book for anyone looking to rebuild after a bankruptcy. After all, there is little benefit in getting a financial fix in bankruptcy if the habits that got you there aren’t fixed as well.

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On October 1st, 2011, the Honorable Karen S. Jennemann became the Chief Bankruptcy Judge for the Middle District for a four year term. Judge Jennemann, a graduate of William & Mary has been practicing law in Florida for over 25 years. She presides in Orlando, Orange County, Florida.

Jennemann replaces the former Chief Judge, the Honorable Paul M. Glenn who presides here in Jacksonville, Duval County, Florida. Judge Glenn, who was appointed to the bench in 1993, has over 40 years of legal experience having graduated from Duke University in 1970.

Both Orange and Duval counties are in the Middle District bankruptcy court, so cases decided in either location are persuasive authority to one another when deciding new cases with similar facts. However, cases decided by the Chief Judge are generally considered to be more persuasive than those of a non-chief. This means that arguably, the most powerful decisions arising out of the bankruptcy court are now made in Orlando, not Jacksonville.

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If you have filed a bankruptcy in Jacksonville and have had debts discharged in the Florida bankruptcy court, a creditor cannot make an attempt to collect on that debt. If the creditor does, they are likely violating 11 USC §524. §524 serves as an injunction preventing the creditor from contacting the discharged debtor. This is similar to an injunction in family law commonly known as a Restraining Order. However, while a violation of a Restraining Order can lead to imprisonment, violation of a bankruptcy discharge injunction often leads to money being awarded to the client.

Discharge violations occur often and are sometimes overlooked by clients who just want to move on with their lives. The amount of money a client can be awarded depends on the severity and frequency of the collection attempts. Generally, the cost to bring an action against the creditor is paid for by the money collected from them. That means that a client could pay nothing out of pocket and could still walk away with cash.

If you are being contacted by a creditor who should have been discharged in your bankruptcy and would like them to stop, please contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.

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A gay couple was permitted to file a joint petition for Chapter 13 despite the Trustee’s argument that the Defense Against Marriage Act (DOMA) made their marriage illegal. Only legally married couples can file joint bankruptcy petitions.

On June 13, 2011 a California court ordered that a joint Chapter 13 case would not be dismissed for the sole reason of the debtors being a homosexual couple. 11 USC 302(a) permits a single petition for a debtor and such debtor’s spouse.

The court stated:

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Before spending a single dime from your IRA or 401k in an attempt to make ends meet, you should meet with an attorney. Most retirement plans are exempt from the reach of creditors in a bankruptcy, even those not subject to Employee Retirement Income Security Act (ERISA).

Many people I meet have used up or begun to use their retirement accounts before considering bankruptcy. The thought in mind is, “I’m going to lose it anyway, I might as well use it, even if in vain.” Unfortunately, some of these people are even assessed non-dischargeable tax penalties for early withdraw of funds.

Federally, 11 U.S.C. 522(d)(12) sets out retirement exemptions, but because Florida has opted out of the federal exemptions, so we must use Florida state law. The Florida state law provision protecting qualified retirement plans is Fla. Stat. Ann. § 222.21 (2) .

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