Miami Bankruptcy Attorney Blog

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.

One of the biggest mistakes a debtor can do, before filing for bankruptcy, is to repay debts owed to the debtors’ relatives or friends.

When a debtor files for bankruptcy a trustee is appointed in the case.  The trustee’s job is similar to that of a referee, whereby the trustee reviews the debtor’s bankruptcy schedules and makes sure everything looks normal.  The trustee also reviews the debtor’s tax returns, bank statements, and any other financial documents.  The trustee will review your financial documents to see if you have made any illegal transfers.

Under the bankruptcy code, any transfer repaid to a relative or other “insider” within twelve (12) months prior to filing a bankruptcy case can be recovered by the Trustee in that case.    That means that the Trustee can (and, depending on the amounts involved, will) sue that relative to recover the money or property repaid to them during that period.    This is known as a “preferential transfer” and the bankruptcy statute is 11 U.S.C. 547.  Furthermore the bankruptcy trustee can piggyback onto Florida state law and extend the fraudulent transfer period for an insider for upwards of four years.

Payments made to non-insiders (non-relatives) follow the same law, except the look back period for those transfers is only 90 days prior to the bankruptcy filing.

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 Read more…

One of the biggest fears, for anyone is thinking of filing for bankruptcy, is that they have go to court.  They are expecting someone to yell at them or give them a hard time for filing for bankruptcy, likely that is not the case.  Most of the time your court hearing will only take between three and five minutes and you will be asked a few simple questions.

Here is the best way to prepare for your meeting of the creditors.

1.  Provide all the documents the trustee asks for, to your attorney.

• Tax returns, bank statements, canceled, checks, vehicle information, etc.

2.  Review your documents

• Know what the large checks you wrote were for, what you withdrew money from the bank for, etc.

3.  Review your bankruptcy petition

• The trustee is going to ask you questions about your bankruptcy petition and its contents so BE familiar with them.   It is best to review your petition with your bankruptcy attorney a day or so before the meeting of the creditors.

4.  BE TRUTHFUL

• When asked a question at the 341 meeting, answer truthfully.  Don’t be vague and ask the question answered.

5.  I DON’T KNOW

• It is ok to answer I don’t know at a 341 meeting, however it is not recommended.  If you answer I don’t know then you should follow it with I will provide you that information within seven days.

If you are thinking of filing for bankruptcy in South Florida and 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.  Shmucher Law, PL offers free consultations in any of the following office locations: Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise Florida.

I hear stories from my clients telling me that one day they had $2,000 in their bank account and the next day it was all gone.  They always ask me if it is legal for the bank to do this, and most of the time the answer is yes.  If you owe the bank some money (i.e .you had a credit card with chase bank) and you bank with Chase, then Chase can exercise their rights to a setoff.

Once you are in default on any loan/credit card that you have with the bank, the bank will not be required to sue you or give you advance notice, rather they can just take the money in your account.

If you have credit cards or loans that have gone into default then it may be time to see your bankruptcy attorney.  The filing of the bankruptcy can prevent the creditor from taking your money in the account, and with the proper bankruptcy exemptions you may be able to keep the money in your account after bankruptcy.  If you would like to schedule a free consultation with a Miami / Fort Lauderdale bankruptcy lawyer then give Ofer Shmucher, at Shmucher Law, PL a call at 954.309.5559 or 305.741.5553.

If you have had a judgment against you then the judgment creditor may be able to freeze your bank account to collect on the money you owe them.  A creditor may be able to freeze your account up to two times the amount that you owe them.  Once your account is frozen you will not be able to use the money, and any additional money you deposit into that account will also be frozen.

The filing of a bankruptcy in Florida, either a Chapter 7 or a Chapter 13, will instantly cause the automatic stay to come into effect.  Once the automatic stay is in effect your creditors cannot call you nor can they take any measures to collect their debts, including suing, wage garnishments, or freezing your bank accounts.  If your bank account was frozen prior to the bankruptcy filing, it can be unfrozen by the filing of a bankruptcy in Florida.

If you live in South Florida and had your bank account frozen or your wages garnished, we can help.  Contact Shmucher Law, PL  and bankruptcy lawyer Ofer Shmucher to schedule a free consultation in one of our five office locations, Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

If you have decided it is time to see a bankruptcy attorney and you have already scheduled your first appointment, then you will need to gather some documents to bring to your consultation.  The following is a list of documents that you should bring:

1. Your paystubs – You should try to find the last six months of paystubs from your employer and bring them to the consultation.  The paystubs are used to determine your qualification for different types of bankruptcies.  If you are self-employed then you will need to provide how much money you have distributed to yourself over the same period of time.
2. Your bank statements – You should try to bring the last six months of your bank statement(s) to your initial consultation.  This applies for any type of bank or investment account that you have.  The monies and types of accounts will help determine whether or not the assets are partially, entirely, or not exempt from the bankruptcy court.  Also reviewing the bank documents will help determine whether or not the debtor has to worry about any fraudulent transfer or preferences.
3. Your Tax returns – In order to file for bankruptcy we require the last two years of tax returns you have filed.  Some trustees will require the debtor to provide upwards of five (5) years of tax returns.
4. Vehicle information – Providing copies of your registration, title, and proof of insurance is again helpful to determine whether or not the vehicle you own is exempt partially, entirely, or not at all.
5. Debts – typically most debts can be obtained through a credit report, however debts from small medical offices, payday loans, or other small entities may not show up on a credit report.  You don’t need to bring in a list of all your credit card debt.
6. Assets – Providing a list of any other assets you own would be extremely helpful and used to determine which bankruptcy chapter is right for you.  Assets can include anything from household goods, stocks, boats, paintings, or jewelry.

The non-exhaustive list above provides the debtor a head start for their initial consultation.  The documents will be very helpful for any attorney to easily determine the right path for the debtor.  If you would like to schedule a free consultation with Shmucher Law, PL in any of our Florida office locations then please give us a call at 954.309.5559 or 305.741.5553.