Florida Bankruptcy Attorney Blog

Peter Ferrara in a recent foxnews piece indicated that America may be a "ticking bankruptcy bomb". According to Ferrara this is the result of politicans in America failing to adequately represent the American people with responsible policy. He promotes that there be dramatic changes at all level of government, substantial reform of entitlement programs, and cites Florida as one of those states that is existing just fine without state income taxes. He questions the need for state income taxes in general.

He notes that federal spending has soared and the entire United States is possibly facing default. With Orlando, Florida area homes alone facing foreclosure and bankruptcy rates far higher than the national average, areas like our own are what is driving part of this crisis. Now with an oversupply of foreclosed homes, without massive influx of and new movement soon the entire country may be seeing double dip recession. Perhaps temporarily good for bankruptcy lawyers and a few other niche areas, ultimately this spells bad news for the entire economy.

Just to demonstrate the power that even bankruptcy judges have to decide national policy (at least until it is appealed), a bankruptcy judge in the Central District of California has gone too far so as to declare the Defense of Marriage Act Unconstitutional. It is my manifest opinion that this bankrutpcy judge has overstepped bounds in this case. However, it is amazing exactly what areas of law bankruptcy problems and claims can touch from time to time.

In our new modern interconnected world the power of a unique American fiscal and montary policy to influence the direction of our local economy here in Orlando and the rest of Florida becomes ever more tenuous. With Wall Street now increasingly nervous about the financial state of European countries first and foremost, but also the debt situation here at home in America, it may be some time before the massive unemployment being experienced in the central Florida area is put under control.

While it is true that bankruptcy filings were slower in the first half of the year here in Orlando, it is possible these filings may increase as a new wave of decline in home values, or at best a longer than anticipated time before home prices begin to increase again, makes it increasingly untenable for people to remain in their homes or pay exhorbitant principal and interest payments on mortgages that are twice the actual value of their homes.

Great Depression may still be seen by many as an alarmist phrase with regard to the current situation, but there can be no doubt that there is the most serious financial crisis since the Great Depression of the 1930's. We wish all of our fellow Orlando and Florida citizens sound financial health. If you are experiencing a financial crisis in your personal life right now, similar to what is being experienced by so many of these large countries, please come to us and consult with a lawyer. Sometimes bankrutpcy is the answer, and sometimes it is not. But what is clear is that there is usually something that can be done to solve your problem, or at least alleviate it- wheter it is bankruptcy or not.

The Bartlett Law Firm doesn't just file bankruptcies. Besides litigating and practicing many other areas of law besides bankruptcy, we also settle debts with your creditors, attempt to assist you in repairing your credit where possible, and put you on a sound path back to financial fitness through proper counseling and advice.

What is this you may be asking yourself, and more importantly how can you still take advantage of it? This Act is important to homeowners throughout Orlando, who are facing mortgages where their home is worth less than the principal balance of their first mortgage. Often the financial situation for these homeowners is untenable, and as the economy appears to be possibly entering a double dip recession, this Act will be important to many. The Act states that a debtor who will or has had their mortgage forgiven, partially or entirely, through settlement or Bankruptcy with a value less than 1 million dollars, if single, or 2 million dollars, if married, will NOT be taxed on the forgiven portion of that debt. Normally, without the act, debtors would be taxed by the IRS and have to pay a percentage of that settlement. This is extremely important for our local residents of Orlando and throughout the state of Florida. In Florida, Orlando and Central Florida especially, the amount of foreclosures and bankruptcy filings are still very high.

The Mortgage Debt Forgiveness Act only applies to your primary residence or home. It does not apply to second homes, investment properties, vacation homes, car loans, credit cards, equity loans, lines of credit, personal loans, student loans, collections, judgments or liens.

So don’t hesitate any longer if Bankruptcy, Foreclosure, Modifications, Refinancing, Restructuring, or Short Sale is eminent. You have one more year left in this act to not be taxed. The Mortgage Debt Forgiveness Act will expire in 2012.

Did you know that bankruptcy can actually improve your credit score? Believe it or not, it can. This is definitely true especially in the Orlando area where many houses are underwater, and debtors have often already defaulted on their home or business mortgage payments. This is because by the time most people decide to file bankruptcy, they have already found themselves unable to pay their outstanding obligations. Their failure to pay these debts has already reduced their beacon/credit score considerably. By filing bankruptcy, you show the credit agencies that you are taking proactive steps to address your debt situation. This newfound regard to your financial state signals that, even if your creditors are not going to be completely paid, you are trying your best to handle your financial situation. Within twelve months of filing bankrutpcy, you will find that your credit score will have actually increased from its present level due to any recent defaults in your loan payment obligations. This is as true for missing payments on credit card debt as it is for your home mortgage or any other debt that is secured by collateral- such as a vehicle.

You might wonder why the credit score would increase, given that bankruptcy signals often creditors won't get paid. Well, the fact is that they probably wouldn't have been completely paid even if you hadn't filed bankruptcy. While they would have retained their rights to collect on their debts if you ever came into money, it is often the case that debts (especially credit card type debts), are written off by these companies long before you are able to pay it back completely. Even so, it would take years for them to write the debt off, and in the meantime they will do what they can to garnish your accounts and seize your assets to attempt to satisfy any outstanding and delinquent balances.