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.

With a high unemployment rate in the state of Florida, many residents are having a fairly difficult time landing jobs.   These residents, without jobs, are likely also to be the same residents who have debt issues.   At least once a week I have a potential client ask me the following question:  I am currently unemployed and applying for jobs, will the filing of my bankruptcy hurt my chances of gaining employment?

Unfortunately, if you are APPLYING for a job in the PRIVATE SECTOR (non-government), then the address is Yes.  If you are applying for a job in the private sector, the employer has the right to discriminate you based on your credit/bankruptcy history.   Whether or not the employer runs a credit check on you and discriminates against you, because of your bankruptcy filing, is only determined on a case by case basis.  More likely than not, jobs in the financial sector or any job requiring entrustment with monies will likely run a background check on the potential employee.

The Bankruptcy Code has an anti-discrimination policy and it applies to government entities and current employers only.   The Bankruptcy Code’s anti-discrimination provision does not prohibit a private employer from denying employment to an individual on the ground that he is or has been in bankruptcy

If you are thinking of filing for bankruptcy in South Florida and you would like to schedule a free consultation with a local bankruptcy attorney, then contact Ofer Shmucher at Shmucher Law, PL by calling 954.309.5559 or 305.741.5553.  Shmucher Law, PL offers free consultations in any of the following office locations 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…