Miami Bankruptcy Attorney Blog

I have been meeting with numerous clients who have told me what “other attorneys” have told them regarding their vehicles and if they will lose them when they file for bankruptcy.  The answer to this question really depends on whether there is equity in your vehicle and whether you can exempt that equity in the vehicle.

A recent client told me that another attorney told her that bankruptcy trustees will not seek to take possession of cars if they are over five years old.  This advice is completely false, and following it would potentially yield the debtor from losing their vehicle.

The bankruptcy trustees job is to recover money and use that money to pay some of your creditors.   Also the bankruptcy trustee gets paid a percentage of the money that they recover in every case.  While you think that you may have a sad story and that “it’s your only car,” you must remember that your bankruptcy filing is VOLUNTARY and that once you file you understand that ramifications.  If your attorney doesn’t inform you of the consequences of filing for bankruptcy when you are over-exempt then I suggest you see a different bankruptcy attorney.

How much over-exempt is “safe” for a car:

A trustee is allowed to request the debtor to pay any amount that he or she is over-exempt on any asset, so there is no “safe” amount.  Whether the trustee acts and requests a debtor to make a payment on the amount they are over-exempt depends on the trustee (and bankruptcy trustees are assigned at random).

How long will I have to pay for an asset that is over-exempt:

A bankruptcy once told a debtor in a meeting of the creditors that he “is not in the collections business,” and that he would rather take a little less money by selling the vehicle now, rather than wait for the debtor to pay it over an extended period of time.   So the answer to how long a bankruptcy trustee will give you to repay debts really depends on the bankruptcy trustee.  Some bankruptcy trustees will give the debtor a week, while others will allow repayment plans of upwards of six months.

Before you decide to file for bankruptcy it is in your best interest to meet with a bankruptcy attorney who will give you a worst case scenario and a realistic answer as to what will happen in your case.  No bankruptcy attorney will give you a guarantee on your case but most will give you an opinion based on their experience in the district in which you are filing in.

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

If you are in a situation where you are looking to file for bankruptcy then you probably were going through some difficult times when you needed money.  The first place any person looks to get money is from family members.  Debtors routinely borrow money from family members to stay afloat in an attempt to avoid bankruptcy.   Sometime in the future the debtor may come across some money (tax return, bonus at work, etc) and the first thing they want to do with the money is payback the family members who lent them money.  This may seem to be the most rational way of thinking, in the bankruptcy world this is a bad idea.

The bankruptcy code attempts to treat all creditors on the same level, which basically means the money you borrowed from your aunt is treated the same as the money you owe on your credit card.  When you choose to pay your aunt back the money you owe her, but not to pay the credit card you owe you are PREFERING your aunt over your other debts.

So what happens if you file for bankruptcy and you paid a family member back money?  The bankrupt cy court can look back 12 months to see how much money you paid your family members.  The court will then likely sue the family member for the amount of money they received because it was considered a PREFERENCE.

Example:  If you paid your aunt $2,000 a few months before you filed for bankruptcy then she will likely be sued to return the $2,000 prior to the bankruptcy.

Don’t let the fact that there may be a preference suit prevent you from filing for bankruptcy, if you or a relative has to return a few thousand dollars in exchange for discharging tens of thousands or hundreds of thousands of dollars in debt may be a trade that a debtor is willing to make.

Make sure to inform your bankruptcy attorney of ANY PAYMENTS YOU MADE TO FAMILY members during your initial consultation.  If you haven’t made any payments to family members then don’t pay them until after your bankruptcy case is over.

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

If you have already met a bankruptcy attorney or are planning on meeting one you can expect the attorney to use the word equity multiple times during your consultation.  Unfortunately most bankruptcy lawyers assume that you already know what the term means and how it applies, this is probably not the case.

Equity is one of the most important factors that a debtor must consider if they are thinking of filing for bankruptcy.  If you have too much equity then you may lose your probably or have to pay back the equity amount to keep your property.  So what does equity really mean?

Equity is basically a math formula, it is the difference between what the market value is (on the current item) and how much is owed (on the same item).    Market value is how much you could get for it if you sold it.  For vehicles market value is easy to determine because you just look at NADA Values, Blue Book values or Black Book values.    Here is an example of equity in a vehicle:

Market Value = $14,000

Outstanding Loan amount  = $7,000

Equity = Market Value ($14,000) minus Owed Amount ($7,000)

Equity = $7,000

The same formula would be applied to houses, transportation, land or anything of value.

Here is another example where there is NO EQUITY in a vehicle:

Market Value = $14,000

Outstanding Loan amount = $17,000

Equity = Market Value ($14,000) minus Owed Amount ($17,000)

Equity = -$7,000  (negative)

If you have an asset that has zero or negative equity then it is worthless in the bankruptcy world.

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

A few years ago when people purchased homes and those homes increased in values the banks offered the homeowners an equity line of credit, which was a way to borrow against the home.  These equity lines of credit ranged from just a few thousand to several hundreds of thousands, depending on the valuation of the home.   When the homeowners obtained an equity line of credit they are basically obtaining another mortgage on the home and they must continue to pay on the equity mortgage.  So a question I receive is what happens when a homeowner, who has an equity line of credit, files for bankruptcy.  Here are a few scenarios:

Filing Chapter 7 and surrendering the home:

If a debtor is filing for chapter 7 bankruptcy in Florida and is surrendering the home then the debt of the mortgage, including the debt of the home equity line of credit will be discharged in the bankruptcy.  HOWEVER if the debtor took out a significant amount of money with the home equity line, the bankruptcy trustee will question the debtor to determine what the debtor did with the funds.

Filing a Chapter 7 and retaining the home:

If the debtor chooses to file a chapter 7 bankruptcy and is retaining the home, then there is nothing that can be done with the equity line of credit.  The equity line of credit will not be dischargeable and the debtor must continue to pay on the equity line of credit or they could potentially be foreclosed on.

In Florida a debtor is not allowed to strip off a second mortgage or an equity line of credit in a chapter 7 bankruptcy filing.

Filing a Chapter 13 bankruptcy and retaining the home:

If a debtor chooses to file a chapter 13 bankruptcy in Florida then he or she has the ability to strip off or wipeout the second mortgage and or home equity line of credit on their residence.  In order for a debtor to strip off the second mortgage he or she must show that the value of the first mortgage exceeds the value of the home.  Example:

House 1 – value $240,000

First Mortgage – $300,000

Equity line of Credit – $100,000

In the case above the debtor would be able to strip off the equity line of credit because the value of the first mortgage exceeds the value of the home.

House 2 – value $240,000

First Mortgage – $200,000

Equity line of Credit – $100,000

In the case above the debtor would not be able to strip off the equity line of credit because the value of the home exceeds the value of the first mortgage.

Filing a Chapter 13 and surrendering the home:

If a debtor is filing for chapter 13 bankruptcy in Florida and is surrendering the home then the debt of the mortgage, including the debt of the home equity line of credit will be discharged in the bankruptcy.

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

I recently met a client who due to religious reasons gives ten percent (10%) of her income to her church, however due to the economy she is thinking of filing for bankruptcy.  She asked me if it will look bad or if she will be prevented from filing for bankruptcy because of her tithing.  The answer is NO, a debtor will be able to continue to tithe if he or she is considering filing for bankruptcy and the tithing will not preclude a debtor from filing for bankruptcy.

The only caveat is that the debtor may be required to show a history of tithing or donating money to the church in order to allow that expense.  Also there may be a limitation on the percentage of income that you will be able to use as an expense.

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

If a creditor has filed a lawsuit against you and obtained a judgment then they can attempt to collect on the debt by doing a number of things including, wage garnishments, freezing bank accounts, or levying property.  I was recently asked by a client if it is too late to file for bankruptcy once a creditor has frozen your bank account?  The answer to that question is NO,  a debtor can still file for bankruptcy once their account has been frozen.  Furthermore the filing of the bankruptcy will UNFREEZE the bank account and likely give the debtor his or her bank account once again.

If you are thinking of filing for bankruptcy, then the first thing you should do is go see a local bankruptcy attorney to determine your eligibility, options, and consequences of filing.  If you live in south Florida then please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559 to schedule a free consultation.  We offer consultations in our main office in Miami as well as our satellite bankruptcy  offices including Boca Raton, Fort Lauderdale, Plantation, and Sunrise Florida.

This is a common question that is asked by people who are looking to file for bankruptcy in Florida.  Their main concern is that their friend/relative/neighbor/etc. co-signed on a debt that the client will be discharging in bankruptcy.  So they will always ask, will my co-signer be liable for the debts that I am discharging in bankruptcy?  The answer is Yes, the bankruptcy will only discharge the personal liability of the person who files, not co-signers, whose obligations remain.  What does this mean for the person who is filing, not much because they will likely be able to discharge their debts through the bankruptcy, however their bankruptcy will likely have an adverse effect on the co-signer.

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

Some people are ashamed that they have filed for bankruptcy and want to keep it private, and so they ask me if there is anything they can do to keep their bankruptcy filing private.  Unfortunately the filing of a bankruptcy is a public filing and is a matter of public record.

What is a public record? 

A public record is any information that is maintained by a government agency.   When a bankruptcy case is filed it is assigned a district in the United States Bankruptcy Court.  For clients filing in the Broward, Dade, or Palm Beach Counties the district is the Southern District of Florida.   While most of your bankruptcy petition is available as a public record, information such as social security numbers, credit card numbers, or any sensitive information will not be made public.

Will family members find out that you filed for bankruptcy?

More likely than not, your family members will not find out that you have filed for bankruptcy UNLESS you owed them money and listed them on your bankruptcy petition.    Family members that you owe money to must be listed on your bankruptcy petition and they will receive notice

Will my bankruptcy filing be reported in the newspaper?

Depending on the district where you file your case, there is a chance that your bankruptcy case may be published in a local newspaper.  Published in the local newspaper basically means that it will display Jones, Tom case: 11-49944 Southern District of Florida.   If you file for bankruptcy in the Southern District of Florida then your filing will be reported in the Daily Business Review public records section.

If you are thinking of filing for bankruptcy and would like to speak with a local bankruptcy lawyer then please contact Shmucher Law, PL by calling 305.741.5553 or 954.309.5559.  We offer free consultations in our main Miami office, as well as at any of our satellite offices (by appointment) including Boca Raton, Fort Lauderdale, Plantation, and Sunrise Florida.

If you are thinking of filing for bankruptcy in Florida and you own real estate then you will need to know the value of the real estate to determine what, if any, equity you have in your properties.  The easiest way to determine the value of your home is to look at the property appraiser website for the county you live in.  Each year your home is appraised for tax purposes by the property appraiser, so when you go to the website, look for the corresponding year and valuation for the property.  Alternatively you could go www.zillow.com and type in your address for another valuation based on comparable real estate sales in your area.  Finally, and probably the most effective way to value real estate is to get a true appraisal of the property by hiring a licensed appraiser to come out to your property to review it and value it accordingly.

If you are thinking of filing for bankruptcy and would like to schedule a free consultation with a local bankruptcy lawyer, then please contact Ofer Shmucher at Shmucher Law, PL by calling 305-741-5553 or 954-309-5559.  We offer free consultations in our main office in Miami or in any of our satellite offices (by appointment) including Boca Raton, Fort Lauderdale, Plantation, and Sunrise Florida.