Florida Bankruptcy Attorney Blog

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.

Many people are concerned with how bankruptcy will affect their credit. We are often asked this question during our initial consultation with prospective clients. Often those who are thinking of bankruptcy have already missed many payments to more than one lender. These payments have been reflected in their credit report, and have likely already dragged down their credit score. For these people, bankruptcy over time will in fact improve their credit. After you file bankruptcy, your credit report will indicate you've filed for bankruptcy, but you can often expect a credit score increase of up to 100 points within 12 months post filing.

Those who are filing bankruptcy with a high or perfect credit score can expect bankruptcy to negatively impact their credit. However, even in these situations it is likely they would soon be missing payments to their lenders. No matter how they approach their debt issue, their credit score would decline with or without bankrutpcy. It is better to show future lenders and even employers that you responsibly dealt with a debt issue than ignored it and missed payments. Thus, even here, bankruptcy is the more viable alternative for many people.

Whether you file a Chapter 7 or 13 doesn't have an impact on your credit score. Chapter 13 bankruptcies obviously last longer, and your discharge will not be granted until the end of your case (usually 3 or 5 years). As a result, the length of the bankruptcy may affect your ability to obtain new forms of credit and have a longer term impact.

A company in Orlando, Mirabilis Ventures, Inc., pulled off one of the biggest payroll tax frauds in United States history. As a result of the scheme the company was forced to file bankruptcy in 2008. The battle is now being fought in federal court as to who will be recovering the lost money resulting from these schemes of CEO Frank Amodeo. Amodeo pleaded guilty to fraud and was sentenced to 22 years in prison. The case appears to be an interesting combination of federal criminal and bankruptcy law.

Prosecutors and the IRS have been attempting to get the company itself (as opposed to the CEO) to plead guilty to tax fraud, and these ages are fighting the receiver/trustee for this admission in an ultimate fight over who will be controlling the recovery of the fraudulently conveyed funds. Generally this would be an issue for bankruptcy courts to decide but there is a valid argument for the other agencies to have charge of the restitution aspects of this case. A careful analysis of the caselaw and arguments used on both sides is more than can be discussed here, but would prove interesting.

Moving around Orlando, residents will likely have noticed an increase in the road signs offering services such as lawn care and maintenance, and homes for sale. Included among the signs are often advertisements for legal work. These road signs often spell bad news. Not only do they reflect a failing economy, but many of the companies advertising are scams. These signs are also illegal according to Orlando ordinances.

You almost certainly will not talk to a lawyer if you respond to one of these advertisements. There are even signs throughout Orlando that have advertised bankruptcy services. Usually these small road sign advertisements are not lawyers, and the advertiser has no more experience with the bankruptcy code than the typical layperson. The most they could do is sloppily prepare your petition in a way that is inadequate for the bankruptcy legal system. A very high percentage of these petition preparation petitions are dismissed from the bankruptcy courts. None of these services are able to represent you before the bankruptcy judge or the trustee.

We have even had clients come to us asking whether we could sue these services after their bankruptcy was dismissed due to inadequate preparation.

As a result, we invite our readers to beware of these advertisements and seek the services of a competent, licensed, bankruptcy lawyer that will be able to handle your petition and address the numerous problems that could arise. Here are only some of that problems that could arise in a typical bankruptcy: creditor or trustee alleges bankruptcy fraud, creditor files for relief from the automatic stay, creditor seeks adequate protection payments, trustee seeks to seize your assets which could have been saved if exemptions had been properly applied, among numerous other issues. Only a bankruptcy attorney/lawyer can represent you on these issues before the judge and the courts, and these issues are not uncommon in bankruptcies.

It pays to seek out a bankruptcy lawyer for all bankruptcy and foreclosure needs, especially since we offer payment plans and discounts depending on your circumstances.

Retail establishments that specialize in video rentals and sales, as well as CD sales and rentals continue to be beat hard by a combination of recession and technological advancement. As more and more people in every generation continue to grow more savvy about use of the personal computer as well as downloading software and video products, video retail establishments like Blockbuster, Hollywood Video, etc... continue to go out of business or flirt with Chapter 11/7 Bankruptcy. Blockbuster's General Counsel recently announced that the company could not rule out the possibility of such a filing. Electronic and video products, unlike clothing and furniture, are often convenient to the consumer to purchase online. People often need to inspect the clothing and furniture they purchase. Not so for video programs and software. There is nothing in the nature of video to inspect before purchase, as the very experience of watching the video is what is purchased. People obtain information on whether the purchase is worthwhile through critics or other third parties. Clearly, the video industry is probably not a good place to be investing your money, and bankruptcy or corporate dissolution may become prominent in this area for some time to come. Prevailing economic conditions do not help either.

Many have been asking how likely it is that British Petroleum will declare bankruptcy. As with individuals, often corporations have other options to exhaust before filing in Chapter 11. Large oil companies like British Petroleum often have an enormous amount of assets, which is of course also reflected in their market capitalization. BP could sell its debt, could reduce capital expenditures, it could curtail its 10 billion a year in dividends, or tap into its tangible assets. As a result, Chapter 11 is not likely for a company as wealthy and established as BP. Chapter 7, which is straight liquidation of its assets, is likely not even on the radar screen. Contrast this with GM where the balance sheet and available resources were far more scarce, making a reorganization of that company necessary.

Bankruptcy is hardly ever an option for most people or entities until liabilities vastly outweight assets, because assets can be used to develop systems, programs, or opportunities for reorganization prior to the additional legal helps that are available. Especially with large corporations, lack of confidence may also result from the filing of the petition itself.

The judge of the General Motors bankruptcy noted today that the officers of the company were now spending more time on focusing on consumer needs, rather than in bankruptcy efforts, and efforts at Chapter 11 reorganization. This likely represents a step forward for the financially strapped and strained company. Meanwhile, General Motors still has significant reorganization to complete, including (unfortunately) possibly removing up to an additional ten thousand employees from payroll in order to make the company viable. Consumers are giving the new product lines a positive response.

As the recession continues and more people are being saddled with significant debt burdens and increasing rates of default, the question continues to arise whether student loans should be discharged in bankruptcy. Prior to amendments a few years ago, it was common and acceptable for people to discharge their private student loans after seven years if they were unable to make the monthly payments. Unfortunately, due to changes resulting from BAPCA, it became virtually impossible to discharge your student loans unless you could prove to the court that you would be undergoing an inordinate hardship. The requirements to show the court that you had this kind of hardship are very strenuous and most people simply do not fulfill the required conditions. It takes a good lawyer to put on a good case for those facing student loan defaults. The Bartlett Law Firm, P.A. has experience handling student loan defaults in bankruptcy cases, for all chapters. Hopefully, though, with more and more people realizing the incredible burden student loans can create for those who are trying to restart their lives on a proper footing, legislation will eventually be passed making it easier for normal people to discharge their student loans like any other debt.

When you file a bankruptcy the Court imposes an automatic stay on all actions against you, with certain exceptions. Any one who has what is called a claim, or cause of action for damages, can no longer pursue you for those particular damages until the stay is lifted. Thus, if you owe alot of money on a credit card, when you file bankruptcy the credit card company is no longer permitted to come after you. This happens when you file the initial paperwork, and as long as the paperwork is filled out properly and the action is not dismissed, this stay will last for approximately 3 to 4 months in a Chapter 7 case, and even longer in a Chapter 13 case.

The Bankruptcy Courts have the power to impose these measures pursuant to federal statutes and the supremacy clause when dealing with state courts.

There are exceptions to the automatic stay, usually involving a request to preliminarily lift the stay.

The automatic stay can be very useful for those who are attempting to calm the waters and get their lives back together through the bankruptcy process, and most importantly it stops those annoying phone calls!

Economic indicators appear to be mixed at this time, and the direction of the economy remains uncertain. In the midst of this uncertainty, Chrysler appears to be about to declare bankruptcy. It will be interesting to see what plan Chrysler will file and how they will reorganize to remain a viable concern. This is especially interesting considering that, last year, with the "bail out" extravaganza, bankruptcy was deplored as the least viable option by many. Perhaps now it is realized by more and more people to be the only acceptable way to handle Chrysler's difficulties.

The promise of a bill to handle delinquent first mortgages through the bankruptcy process died a quiet death. Meanwhile, the government appears to be relying more on the regulatory mechanism to handle the economic malaise that has swept the country since the end of 2007. By most estimates, this recession actually began a long time ago, but the full impact of it has not really been felt by most people until recently. With consumer spending down 1% this past March, any recent optimism may be false hope for the time being. Also, unemployment continues to climb.

Where does this leave you, the strapped homeowner, delinquent on your mortgage payments. It may be that you also took out a second home equity line of credit, which by now has been entirely spent. Depending upon the value of your home, your second mortgage may be removeable, you might be able to both lower your total mortgage payment and pay back your delinquent payments through the bankruptcy process. Don't discount bankruptcy as a possible valid option in your case.

Depending upon the jurisdiction in Florida or elsewhere, it may be better for a client to declare either a Chapter 7 or Chapter 13 for a client to protect his home. For those behind on their payments, a Chapter 13 bankruptcy is often touted as the best solution. But this is not necessarily the case. Sometimes it is better to fight and renegotiate your mortgage and then declare a Chapter 7, even though there is an element of risk doing this. Much of this kind of decision rests upon the amount of income you are generating. Factors to consider include things as minor as Trustee collection fees. For these and other complicated reasons it is always good to consult with a bankruptcy lawyer and not engage in this process without professional help.

There are various indications that the commercial real estate market may be about to collapse, similar to what was seen in the residential and consumer housing markets. If this occurs we could probably expect a slew of Chapter 11 filings and other mayhem to the economy in this sector. So far though, things appear to be holding somewhat steady.

New Mortgage Crisis Looms

A new crisis looms, but hopefully this won't impact things in January, right as consumers are about to get slamed with an apparent round of consumer credit line cuts by the lenders.

It was recently reported that the post Thanksgiving shopping day had another high turn out as in every other previous year. While it is good to see that people are getting things for their family and friends to give as gifts this holiday season (or perhaps splurging on the deals for themselves), one has to wonder whether Americans are truly addicted to spending beyond their means. Given the record low levels of available credit, and various reports that credit card companies will be slashing their high limits across the board on various consumer loans, one wonders how prepared consumers and the economy will be after the holiday season and come January. Bankruptcies may go higher once again as the economy seems to be remaining in a downward slump for the time being.

The economy continues to tailspin as retail numbers make their largest decline in years. People often have no idea of the power of the consumer. Consumer spending is one of the largest portions of domestic GDP every year. The power resides not with corporate america, but with your average consumer. Forget about Wall Street being spooked. If your average consumer is spooked and not spending appropriately, the entire economy will begin to feel the harshest bite of a recession. Most of our clients are typical consumers, and we rely on the good faith of our consumer clients for our own bankruptcy business. Most Chapter 7 bankruptcies are consumer bankruptcies, and involve little to not distribution of any actual assets because most of the consumers that come are not able to make even basic credit card payments. Every consumer should have the right, once every eight years, to this kind of fresh start. Do not underestimate the power of the consumer to get back on his feet and get the economy running again.

As the continuing recent economic decline begins to move out of the financial sector and into the other main sectors of the economy, the question has begun to be raised whether we should "bail out" the Big Three automakers or let them fall into Chapter 11. The traditional remedy in these cases is certainly the Chapter 11, which was designed for situations like this. However, recent policy arguments have been raised that without government intervention into these broad sectors the entire economy will collapse. But what will happen if the Government's credit rating drops below AAA, and the United States itself begins to suffer from the economic malaise? One has to wonder how this would restore confidence in the economy as a whole. Redistributing the problem may have little to any impact. Bankruptcy may in the end prove the most viable solution. It would also force the domestic car manufacturers to improve their product line.

In recent months Florida has recorded an unemployment rate higher than the national average, and one of the highest unemployment rates it has had in years. Unemployment is presently hovering around 7.1 percent. Last year it was around only 4 percent. This is certainly something that could impact bankruptcy filings. The Bartlett Law Firm has seen the number of bankruptcy consultations rise. Much of the problem in Florida likely stems from its higher than average economic reliance on the real estate market, where prices have plummeted in percentage terms at rates not seen in decades. The Orlando area, while critically impacted, does not appear to have been impacted as greatly as certain cities along the Florida coastlines, especially Miami-Dade and north along the east coast, and portions of Tampa. During these stressful times for many, our firm has been instrumental in helping many people not only file for bankruptcy, but also save their homes, and protect their cars from repossession.

Sometimes, the best thing for a client is actually not to file for bankruptcy. We have had clients come to us for our free consultation almost demanding bankruptcy, and in all honesty we had to inform them they were simply not a good candidate. This is part of our job as a lawyer, to assess what is in the best interest of our clientelle.

Sometimes the better solution was to work out a negotiation with their mortgage lender, or defend a foreclosure proceeding that was already instituted against them. We have been successful in helping our clients negotiate better terms on their loans, and in vigorously defending their possessions from seizure. Our goal is to make our client ultimately happy with the results they obtain, and advise them on how to get there.

We would like to remind Florida voters in and outside of our community that this election will likely impact your rights under the United States Bankruptcy Code. For example, Barak Obama and others have proposed substantial reforms that would make it easier to cram down and reduce total outstanding indebtedness on mortgage obligations. There are both positive and negative arguments regarding this new proposal. Back in 2005, when new legislation was passed under President George Bush, reforming the code, many people were surprised by how these changes affected their ability to file and their rights under the code. We encourage our clients and all consumers to be aware, before you take large financial risks, of the consequences for you if that financial risk ends up not working in your favor. Bankruptcy laws are changing, and it is always good to refer to a qualified Florida bankruptcy lawyer for advice- a lawyer who knows not only the Florida state statutes regarding creditor and debtor disputes (which often play into a bankruptcy), but also knows of course the Bankruptcy code and applicable rules.

The Bartlett Law Firm does not officially endorse any candidate but encourages all voters to go out and vote after being informed on the issues.

Bankruptcy lawyers look upon the 2005 revisions to the bankruptcy code generally with angst and apprehension, but also acknowledgment that the bankruptcy code is largely a politically driven thing. While obviously one of the goals of the code is to offer the debtor a fresh start, it's clear that when you look into the intricate exceptions many of them make no sense outside of understanding them as the result of political wrangling in Congress. The 2005 revisions clearly put many debtors, especially Chapter 7 filers, at a distinct disadvantage. One wonders, in light of the new presidential election and the present economic slump (many saying recession, a few even depression), how the bankruptcy code will change in the near future. Will it become more debtor friendly? Likely.

This is a big time for bankruptices. One of the oldest investment banking names in the world has fallen under Chapter 11. This time the Feds refused bailout. While this kind of bankruptcy is outside of the realm of most bankruptcy attorneys, it still speaks volumes concerning the dire economic conditions that are now defining the lives of most normal middle class people, the kind that are now thinking of filing your typical Chapter 7 or Chapter 13 individual plan. With all of Lehman's employees now without work, one wonders about the kind of impact this would have not only on large corporate restructurings and liquidations, but on the financial lives of the typical employee who works 9 to 6 and now has no money to bring home. With the massive credit extensions on homes and credit cards reported in the media for the last 2 years, the situation of many of these people cannot be that grand. Of course, we are not considering the investment bankers raking in the dough, but your typical secretary or assistant or clerk, many of whom are also employed by these institutions.

Florida bankruptcies have risen from one year ago but fallen over the past two months according to a recent article in the Miami Herald. Orlando bankruptcy lawyers have seen serious business lately. It seems there was a huge wave of bankruptcies in the summer, but this would be an indication that the most serious of the troubles for those contemplating bankruptcy would have been happening in late 2007 through the spring of this year. It could be that the tax rebates and similar federal initiatives temporarily have provided a boost and that the bankruptcy rate may rise again as we approach late fall and winter. Obviously some of this will depend on prevailing economic conditions.

Continue reading "Florida Chapter 7 Cases Rise From Year Ago, But Down From Month Ago" »

Florida Bankruptcy is a complicated subject. This is why The Bartlett Law Firm, P.A. has decided to begin an informative blog to help clients, both current and potential, to understand the ins and outs of the bankruptcy process. Whether it be Chapter 7, Chapter 13, or Chapter 11, chances are you can find lots of helpful information here. My name is Philip Bartlett, an attorney with The Bartlett Law Firm, P.A. and the author of this blog.

I hope this blog will help you solve your potential bankruptcy problems. Obviously, the best way to get the best help is to hire a lawyer. If you are interested in our services to help your specific needs, please contact us and we will be happy to assist you in your adventure to get back on your feet as a debtor.

Whether debtor or creditor, we will keep you appraised of current bankruptcy events, changes in the law, judicial trends, and more.