Miami Bankruptcy Attorney Blog

I see many clients who have attempted to stay afloat by taking out loans against their 401k retirement plans.  Basically the clients have X saved in a work retirement plan and they have borrowed against it, usually to receive a lump sum payment, and then the client is required to make monthly repayments back on the loan.  These clients typically ask me the following “what happens to my 401k loan if I choose to file for bankruptcy.”  The answer is NOTHING.

If you file for bankruptcy in Florida and you have a 401k loan the loan will not be affected in bankruptcy and the debtor will need to continue to pay the 401k loan.  The 401k loan cannot be discharged or wiped out in a bankruptcy.

If you are thinking of filing for bankruptcy and would like to schedule a free consultation then please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559. We offer consultations in any of our Florida office locations located in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

Shmucher Law, PL is a Florida bankruptcy law firm that handles individual and business bankruptcies.  For immediate assistance or to schedule a free consultation please contact our office at 305-741-5553 or 954-309-5559.

Over the last few months I have met numerous clients who have had the following happen to them:   The clients at one point owned a home that had more than one mortgage (either a 1^st and a 2^nd or a 1^st and a home equity line) on it.  The client loses the house to foreclosure and they think nothing of it, unfortunately sometime in the future the second mortgage (or home equity line) creditor decide to take action against the debtor.  The action usually involves suing on the promissory note of the mortgage or the home equity line.  The lawsuit is for the amount owed on the second mortgage, so you can imagine getting sued for 30, 50 or even one hundred thousand dollars.  Once a judgment is entered against the debtor, by the mortgage holder, they can begin to attempt to collect either by freezing a bank account, levying personal property, or garnishing wages.

So then next question would be what can you do if you get sued by a second mortgage or a home equity line creditor on a home that was already fore closured.   There are two options that a debtor can pursue:

Settlement – The debtor can attempt to negotiate a settlement with creditor.  This option may be tough because the creditor would probably only be willing to settle if the debtor can provide a payment of between 30-50% of the debt payable in one shot.  Not many debtors will be able to come up with that much money.

Bankruptcy – The more feasible option for a debtor would be to file either a Chapter 7 or a Chapter 13 bankruptcy.    When the debtor files for bankruptcy he or she will include the amount owed to the judgment creditor as a debt owed and that debt will be discharged in the bankruptcy.  If the debtor is eligible and files a chapter 7 bankruptcy then the debtor will likely not have to pay anything back on the owed amount.  If the debtor doesn’t qualify for chapter 7 and is required to file a chapter 13 bankruptcy then he or she will likely have to make a monthly payment (pennies on the dollar) for the amounts of debts owed.  Furthermore the filing of a bankruptcy will also prevent a future deficiency judgment by the original mortgage.

If you are thinking of filing for bankruptcy and would like to schedule a free consultation in any of our office locations including Boca Raton, Fort Lauderdale, Miami, Plantation, or Sunrise Florida then please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559.

When you file for bankruptcy in Florida you need to list all of your debts and assets.  Your debts are usually automatically generated from  a credit report that your attorney will run for you.  However sometimes debts don’t show up on your credit report and it is your responsibility to provide those debts to the bankruptcy attorney handling your case.

Every once in a while a debt is not listed on your bankruptcy and you don’t know it until sometime in the future when you receive a bill from that creditor.  What are you supposed to do now?  Don’t panic, likely you won’t have to do anything, and there is a good likelihood that the debt of the creditor you failed to include is discharged anyway.

Usually Chapter 7 bankruptcy cases are declared “no asset” cases which basically means that creditors in this case will not get anything back.  If your case was a no asset case and you failed to omit the creditor then the debt will be discharged anyways.

However if you intentionally or fraudulently failed to list a creditor then it becomes a whole new story.

If you are thinking of filing for bankruptcy and would like to schedule a free consultation with a bankruptcy attorney then please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559.  We offer free consultation in any of our office locations including  Miami, Plantation Boca Raton, Fort Lauderdale, and Sunrise, Florida.

If you are thinking of filing for bankruptcy in Florida and you are married here is what you need to know:

There are three types of way that a married person can file for bankruptcy in Florida:

Both Spouses File For Bankruptcy – The first option would be that both spouses file for bankruptcy.  In this instance each spouse can include his or her debt whether owed jointly or solely.  Debtors will be allowed to take double the allowed bankruptcy exemptions.  When filing jointly BOTH INCOMES are included in the bankruptcy as well as their combined expenditures.

Married and not Filing Jointly  Same Household-  The second option on filing for bankruptcy when married is “not filing jointly without declaration of separate household.”  What that basically means is that you are married and you live in the same house as your spouse, however your spouse will not be filing for bankruptcy with you.   Because the spouse still lives with the filing debtor BOTH incomes must be included as well as both expenditures.   In this instance the filing debtor will be able to discharge his or her debt but not the debt of the spouse.  The non-filing spouse’s credit will not be impacting by their partners’ bankruptcy.   The benefit of not filing jointly is that any asset that is titled in both names or is owned jointly is fully exempted in the bankruptcy.

Married and not Filing Jointly, with Declaration of Separate Household – The third option for filing for bankruptcy when married is “with declaration of separate household.”  What this option basically says is that the debtors are separated and live in separate households.  The debtor must be willing to swear in court that the information is correct.  This third option allowed the debtor to only include his or her income and doesn’t require the debtor to provide the income of the spouse that is not living with them.

If you are married and thinking of filing for bankruptcy in Florida then please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559 to schedule a free consultation in any of our office locations including Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise Florida.

If you haven’t paid your credit cards or any other debts for approximately nine months then your credit card company or whatever creditor you have will charge off your debt.   What charge off means is somewhat misleading .  When a creditor charges off debt they are really doing one of the following things:

Write Off the Debt –

Once a creditor charges off your debt they can simply write off the debt as “bad debt.”  When a creditor writes off your debt as bad debt what they are basically saying is that the debt is uncollectable and that they would rather get a small tax break on the bad debt, rather than continue spending money attempting to collect it.  Once a debt has been written off then the debtor will no longer be responsible for it.  Too good to be true right?  Well the fact of the matter is VERY few debts are ever written off as bad debt.  Typically only small debts, usually from small a small medical practice will ever be written off as bad debt.

3^rd Party Collections –

A creditor can send your charged off debt to a 3^rd party collections agency, which basically means they are selling your debt for pennies on the dollar to someone.  Once your charged off debt is sold to a 3^rd party collections agency prepare to be bombarded with phone calls to your home,  your work, your neighbors and finally your friends and family.

Turned over to an Attorney –

A creditor can turn over your charged off debt to an attorney.  When the debt is turned over to an attorney the attorney will begin by filing a demand letter.  Failure to make a payment arrangement based on the demand letter will lead the attorney to file a lawsuit against you and potentially garnishing your wages,  levy your property, or even freeze your bank account.

DON’T WORRY, if your debt has been charged off you can still file for bankruptcy.

If your debt has been charged off by your credit card company and you would like to speak with a bankruptcy attorney regarding your options then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553. We offer free consultations in any of our Bankruptcy Law  office locations in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

Generally when you file for bankruptcy you want to include all of your debts, so that you can get them discharged, and eventually obtain a fresh start.  When you meet with a bankruptcy attorney they will likely run your credit through their computer system.  My computer program runs the clients credit on three major credit bureaus and it lists the account numbers, amounts owed, and addresses for every creditor that the debtor owes money to.  However more often than not medical bills, especially ones under $500 will not show up on credit reports.  The fact that they don’t show up on credit reports doesn’t mean that they are not owed money.   What I tell my clients to do is to take home the credit report and review it, if there is something missing I request that my client find out the name and address, account number and debt amount for the missing creditor.  While this may require the debtor to do some leg work by calling their doctor’s offices or hospitals, it will allow the debt to be discharged though the bankruptcy.

If you are thinking of filing for bankruptcy and would like to speak with a bankruptcy lawyer for a free consultation then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer free consultations in any of the following offices Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

When a debtor files for Chapter 7 bankruptcy in Florida they are allowed to exempt certain assets.  Exemptions are protections used on assets,  that  protect/prohibit the bankruptcy court from taking away the assets from you.  Here is a quick breakdown on exemptions in Florida:

Own a Home:

$1,000 in anything you own

$1,000 in a vehicle

Don’t own a Home:

$5,000 in anything you own

$1,000 in a car

So say for example you qualify and want to file for Chapter 7 bankruptcy but your assets exceed the exempted amounts.  Here is an illustration.

No home:

Vehicle worth $10,000, all other goods worth $1,000.

In this case when you use your exemptions you can exempt the following:

Goods: $1,000

Vehicle: $1,000 (vehicle exemption)  plus ($4,000 left over) for a total of $5,000.

In this case if the debtor chooses to file Chapter 7 bankruptcy then their car will be OVER the exemption limit by $5,000.   So here is what they can do if they file for Chapter 7 bankruptcy.

Buy back the asset:

If the debtor is over exemptions then the trustee will give the debtor to buy back the asset in two different fashions.

One Time Payment:

First the debtor can make a one-time payment to keep the asset.  This usually requires the debtor to have a friend or family member be willing to contribute the required amount to purchase the asset.   Usually if the debtor agrees to a one-time payment , then the trustee will probably give a 10% discount on the amount to be paid.  In the case above the trustee will likely allow the debtor to keep the vehicle with a one-time payment of $4,500, usually due 10 days after the meeting of the creditors.

Monthly-Repayment:

A debtor who cannot provide for a one-time payment may be able to setup a monthly repayment plan with the trustee.  There is no guarantee that a trustee would be willing to do a monthly repayment plan (be warned), however if the trustee agrees to a monthly repayment plan it will likely not exceed three to six months.

Therefore if you are contemplating filing for Chapter 7 bankruptcy and your assets exceed the allowed exemptions then don’t think that Chapter 13 bankruptcy is the only option for you.  If you are able to come up with the money that you are over exemptions then you may be able to file a Chapter 7 bankruptcy and keep your assets.

If you are thinking of filing for bankruptcy and would like to schedule a free consultation with a Florida bankruptcy lawyer then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer free consultations in any of our office locations including Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise, Florida.