Florida Bankruptcy Attorney Blog

One of the most important parts of the bankruptcy code involves the homestead exemption. Florida homeowners usually qualify for this exemption, provided they are living in the home as a primary residence. The exemption allows you to keep your home even if there is equity in the home. At the current time there are many Orlando homeowners that can be described as "underwater" in their home. In fact, many throughout Florida have the same problem in our current economic situation. "Underwater" means that the mortgage principal balance on the home (or "balances" in the case of a home secured under two mortgages) exceeds the value of the home. In this case the bankruptcy debtor will not worry about applying the homestead exemption, and instead exempt greater amounts of their other property. For awhile the ability of homeowners to take advantage of expanding their personal exemptions when a home was "underwater" was unclear. But recent cases have clearly suggested this is the case, and we have incorporated this into all of our bankruptcy petitions. Homeowners throughout Orlando and beyond can therefore be sure they are obtaining maximum exemptions and the ability to keep the most property possible when they come to consult with us.

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.

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.

(a) The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. (b) Notwithstanding subsection (a) of this section, a court may not appoint a receiver in a case under this title.

Section 105(a) and (b) above outline the powers of the bankruptcy court. The powers of the bankruptcy court, as with other federal courts, are largely delineated by statute. As one can see from the statute above, the powers of the bankruptcy court are quite broad, and the court may issue any order necessary to carry out any of the provisions of the bankruptcy code itself. This includes the Bankruptcy Court acting on its own initiative, even without a motion filed by the attorneys (sua sponte).

One particular power the Court does not have is the ability to appoint a receiver over the bankruptcy proceeding. This is logical, since the entire point of a reorganization proceeding is to allow the reorganization to be either overseen by the debtor-in-possession or the United States Trustee. There is no point to having a receiver run the debtor organization in such a circumstance. Additionally, the duty of the receiver is mainly to preserve the assets of the debtor for the duration of a litigation, rather than institute liquidation as in a Chapter 7. The functions of a receiver may overlap with those of the debtor-in-possession during a reorganization.