Miami Bankruptcy Attorney Blog

Sometimes I have potential clients who have had friends or family members that have previously filed for bankruptcy and that family member or friend may have had a good/bad experience with their bankruptcy trustee.  So the potential client will ask me if it is possible to know who your bankruptcy trustee will be prior to filing your case?  The answer depends on what type of bankruptcy you file.

Chapter 7 Bankruptcy

When you file for Chapter 7 bankruptcy in Broward, Dade or Palm Beach county you will automatically be assigned a bankruptcy trustee at random.  So there is no way of knowing who your bankruptcy trustee will be until the actual case is filed.

Chapter 13 Bankruptcy

There is only one standing Chapter 13 bankruptcy trustee for Broward and Palm Beach County and there is only one standing Chapter 13 bankruptcy trustee for Miami-Dade County.   So in a Chapter 13 bankruptcy you will be able to know who the trustee is prior to your bankruptcy filing.

If you are thinking if filing for either Chapter 7 or Chapter 13 bankruptcy in South Florida and you would like to speak with a local bankruptcy attorney  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 Miami Office or any of our satellite offices (by appointment) including Boca Raton, Fort Lauderdale, 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.

Some of my clients have recently asked me if they can include their 401k loans into the bankruptcy. Typically clients dip into their 401k as a last resort, in an attempt to pay off debts they owe, but they fail to realize the consequences of doing so. Unfortunately the filing of a bankruptcy, whether chapter 7 or chapter 13, in Florida will have no affect on your 401k loan and you will still be required to pay for them.

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

Clients come see me in my Miami or Fort Lauderdale bankruptcy offices and they easily qualify for Chapter 7 bankruptcy in Florida, however they have assets, and their assets are not going to be fully protected in a Chapter 7 filing.  The clients don’t qualify for the Chapter 13 bankruptcy and so they ask me the following question:  “What happens if I file Chapter 7 bankruptcy in Florida and I am over the allowed exemptions?”

Here are some possible answers/suggestions to the question above:

Surrender the over-exempted assets:

Your first option and probably the easiest option would be to surrender your over-exempted property to the bankruptcy estate.    This may be surrendering your car, jewelry, liquidating a bank or a stock investment account, or turning over any asset you may have.  While this sounds like a bad idea, and my clients tell me they read online that “they can keep all their assets,” from a business stand point this makes perfect sense.   If you think about it, in your bankruptcy you are wiping out thousands, tens of thousands, even hundreds of thousands of dollars worth of debt, and in exchange you may need to give up an asset worth a fraction of the amount that you owe.

Buy Back the over-exempted asset:

Some trustees will give the debtor the option to buy back the items that are not exempted.   This is a win-win for both parties because the trustee doesn’t have to hire someone to sell the item and the buyer can just pay the amount they are over-exempted by and keep their belongings.    While some trustees will allow the debtors to enter into a payment plan to keep the over-exempted belongings (payment plans can range for one to six months), I must stress that the bankruptcy trustees are not “IN THE COLLECTIONS BUSINESS.”  The trustee has the right to do whatever he or she wants, including not allowing you to enter in a payment plan and giving you the option to pay by the end of the week or they will sell the item.  If you are thinking of buying back your over-exempted assets I suggest you call a family member or a friend and ask them if they will be willing to help you out if the trustee will not enter into a payment plan with you.

If you are thinking of filing in South Florida and would like to schedule a free consultation with a local bankruptcy attorney then please contact Ofer Shmucher at Shmucher Law, PL by calling 305.741.5553 or 954.309.5559.  Consultations can take place in our Miami office or any of our satellite offices (by appointment) including Boca Raton, Fort Lauderdale, and Sunrise Florida.

If you have a judgment against you then one of the remedies your creditors can seek is to wage garnish you up to 25 (twenty five) percent every paycheck until the amount of the judgment plus interest and fees is paid back.  If a wage garnishment order is granted against you then there really aren’t too many ways to have it cease.  However the filing of a bankruptcy in Florida will automatically cease a wage garnishment.

When a person files for bankruptcy in Florida, whether it is Chapter 7 bankruptcy or Chapter 13 bankruptcy the automatic stay comes into play.  The automatic stay is basically a freeze of all other proceedings or actions against the debtor, and in order to continue any of those proceedings or to start a new one a creditor is required to get permission from the bankruptcy court.

So in the case of a wage garnishment, the filing of the bankruptcy would automatically stop the wage garnishment and prevent the creditor from getting any monies from the debtor’s paycheck.

If you are currently going through a wage garnishment or recently have had a judgment granted against you and you would like to speak with a local bankruptcy attorney then please contact Ofer Shmucher at Shmucher Law, PL by calling 305-741-5553 or 954-309-5559.   We offer free consultations 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 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.

When you file for bankruptcy in Florida you need to list all of your debts and all of your assets.  The jewelry you own is considered an asset and in some instances could have significant value.  I often get asked how much jewelry can I exempt in Florida or what are the Florida exemptions specific to jewelry.

Value your Jewelry

If you own any jewelry the first thing you want to do is to go get it valued.  To value jewelry the best thing to do is to first itemize what you own and then take it to your local pawnshop/jeweler.  Have them tell you how much one they would give you for each item.  This will give you an idea of how much to list on your bankruptcy schedules.

Exempting you Jewelry

Florida unlike most states has no specific  exemption  for jewelry.  Instead Florida has a bankruptcy exemption of $1,000 for personal propert/;y.  Personal property includes bank accounts, clothes, cash, investment accounts,  and jewelry.    If it is a joint filing then the number is doubled to $2,000.  As you can see Florida’s personal property exemption is not very debtor friendly.

Surrendering a home

If you don’t own a home or are surrendering your home in a bankruptcy then Florida allows you to use an additional $4,000 wildcard exemption which can be applied to anything including jewelry.   Again if it a joint filing (husband and wife) you get double the wildcard or $8,000.

As you can see Florida doesn’t provide too many exemptions for debtors assets.  If a debtor has numerous assets worth significant value then it may be in the debtors best interest to file a chapter 13 bankruptcy whereby the debtor would be able to keep all their assets so long as they create a payment plan for either three or five years.

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

Ok, so you have decided that perhaps bankruptcy might be a good option for you, you found an attorney who offers a free consultation (be weary of attorneys who don’t offer a free consultation for bankruptcy).  So now you are wondering what you can expect to get out of the free consultation.

Determine whether you are a good candidate for bankruptcy at all, and if yes which chapter would be best for you.

Be prepared to explain your story and how you got into your financial problem to the bankruptcy attorney.  Make sure not to leave out any critical parts because they could have a huge impact on your case.  Also be prepared to explain to the attorney any monies that you have received over the last year and more specifically the wages you received over the last six months.   The attorney will ask you questions about your assets as well.  Assets will include anything you own (bank accounts, cars, houses, jewelry, furniture, investment accounts, etc.)   If your name is on a title of something but you don’t think you own it, be sure to inform the attorney that you are on the title.  Based on these answers your attorney will be able to determine which type of bankruptcy would be right for you.

Bankruptcy No-No’s

Your attorney should ask you questions on whether or not you have transferred any assets in the last few years, whether you have paid off any debts to family members, or whether you have committed fraud for bankruptcy purposes.

Your Debts

You will need to explain to the attorney about the debts you have.  You don’t have to be too specific as to the amount but you need to be specific as to the type of debt, when it was incurred, and whether or not you made any repayments towards that debt.

Differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy

Your attorney will be able to explain the difference between the two bankruptcy options as well as help you determine which one is better suited for your case.    The attorney can make that decision based on your assets and your income.

The Bankruptcy process

Your attorney will be able to explain the bankruptcy process to you in a manner that you can understand.  He or she will be able to inform you of the costs, the documents you will need, as well as the court process.

The Meeting of the Creditors

The attorney will need to explain to you about the meeting of the creditors (341 meeting).  This is your one “court” appearance.   You should ask the attorney about what questions will be asked of you and how you should answer them.

Life after bankruptcy

Make sure to have your bankruptcy attorney explain to you how your life will be post bankruptcy.  Ask questions about getting credit cards, getting a car loan, or getting approved for a home loan.

If you would like to schedule a free consultation with a bankruptcy lawyer then contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer consultations in our main Bankruptcy Office in Miami or in our satellite offices (by appointment) in Boca Raton, Fort Lauderdale, Plantation, or Sunrise Florida.

When many people purchased a home in Florida they obtained two mortgages (an 80/20 split).   A great number of other people obtained home equity lines of credit on their homes as well.  Did you know that by filing for bankruptcy in Florida it is possible to wipeout or discharge a 2^nd 3^rd or even home equity line on your primary residence?

If you file for a Chapter 13 bankruptcy in Florida you may be eligible to wipe out a 2^nd, 3^rd, home equity line of credit on your home, allowing you to keep your home with only one mortgage.  Here is a simple breakdown of how it works.

First – Determine the value of your home.

We first must determine the value of your residence.  For court purposes we use the Broward, or Miami-Dade property appraiser websites found here:

For Broward – http://www.bcpa.net/search.asp

For Dade –  http://www.miamidade.gov/pa/property_search.asp

For Palm – http://www.pbcgov.com/papa/aspx/GeneralSearch/GeneralSearch.aspx

Look at the “Market Value” that is given by the property appraiser.

Second – Determine the value owed on your first mortgage

You next need to determine the value owed on your first mortgage.  This can be done either by looking at your last statement or by calling your mortgage company.

Third – Compare the market value of your home to the amount owed on the first mortgage

Compare the market value of your home (from the property appraiser website) to the amount owed on your first mortgage.  If the value of the first mortgage exceeds the market value of your home then a chapter 13 bankruptcy will be able to help you remove, wipeout, or discharge any 2^nd, 3^rd, or home equity line of credit on the residence.  Here is an illustration:

Home Value (per property appraiser) = $200,000

First Mortgage = $280,000

Second Mortgage = $50,000

Home Equity Line = $45,000

In this example the first mortgage greatly exceeds the value of the home.  A filing of a chapter 13 bankruptcy could wipe out BOTH the second mortgage and the home equity line of credit, leaving you owing only $280,000 on the home.

Home Value (per property appraiser) = $300,000

First Mortgage = $280,000

Second Mortgage = $50,000

Home Equity Line = $45,000

In this example the value of the home exceeds the first mortgage.  Unfortunately when the value of the home exceeds the first mortgage there is nothing that can be done to remove the second mortgage or the home equity line.  If you purchased your home in the last seven years this  example will most likely not be the case.

If you would like to sit down and discuss your home situation with a bankruptcy lawyer then contact Ofer Shmucher at Shmucher Law, PL. We offer free consultations in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.