Miami Bankruptcy Attorney Blog

Clients always ask me the following question “Can I go max out my credit cards and then come back and file for bankruptcy?”  The answer to that question is NO and it could lead to severe consequences including having the credit card companies sue you while you are in bankruptcy, and if they win the debt incurred will survive bankruptcy.

What do the credit card companies look for?

When you file your bankruptcy each credit card company, that you owed money to, will look back 90 days to determine whether or not you made charges on their card during that period.  Credit cards will look at the charges and determine if any of the charges are considered luxury goods.  A good rule of thumb is that anything other than food and gas is probably going to be considered a luxury good.  The credit card companies can sue you on anything they deem a luxury good. 

What do the courts look at to see if the debtor intended to defraud the creditor?

This is a non-exclusive list of factors that the court may use to determine whether or not the debtor, while using their credit card within the 90 day period before bankruptcy, intended to defraud the credit card.

1. 1.      The length of time between the charges made and the filing of bankruptcy
2. 2.      Whether or not an attorney has been consulted concerning the filing of bankruptcy before the charges were made
3. 3.      The number of charges made
4. 4.      The amount of the charges
5. 5.      The financial condition of the debtor at the time of the charges
6. 6.      Whether the charges were above the credit limit of the account
7. 7.      Whether the debtor made multiple charges on the same day
8. 8.      Whether or not the debtor was employed
9. 9.      The debtor’s prospects for employment
10. 10.   Financial sophistication of the debtor
11. 11.   Whether there was a sudden change in the debtor’s buying habits; and
12. 12.   Whether the purchases were made for luxuries or necessities

If you are thinking of filing for bankruptcy in the greater Fort Lauderdale-Miami area 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.  We offer free consultations in our main Miami office as well as our satellite offices (by appointment) including Boca Raton, Fort Lauderdale, Plantation, and Sunrise Florida.

I spend a lot of time looking at my website data, and one of the most common questions people type into Google is: what is the average price of a bankruptcy attorney in Boca Raton, Florida?  Here is a breakdown of the fees required to pay in a Chapter 7 bankruptcy:

Filing Fee:
The filing fee is mandatory, unless a client gets a waiver (not likely), and is $299.00

Credit Report Fee:
Your attorney will need to run a credit report for you, and the fee varies by credit bureau but you can expect to pay anywhere from $35-50. 

Pre-Filing Course Certificate:
Each debtor, prior to the filing of a bankruptcy, is required to take a budget and credit counseling course.  This course can range anywhere from $30-50, depending on where you take it online. 

Post-Filing Course Certificate:
Each debtor, after the filing of a bankruptcy, is required to take a financial management course.  This course can range anywhere from $15-50, depending on where you take it online. 

Those are the only mandatory fees that a debtor must pay for when filing for Chapter 7 bankruptcy in Boca Raton, Florida.  However an attorney will likely charge you for their time, and usually this is a FLAT FEE.

Attorney Fees:
If you scour the internet, and make numerous phone calls, then you will find the prices for a local Boca Raton bankruptcy attorney to range drastically.   This is likely because attorneys will quote on their website, one price, but then they forget to tell you about the other fees, listed above, or inform you that your case is a lot more complicated than that of a regular case and thus they will need to charge you more.  Prices in Boca Raton range from $1,000 to $3,000, depending on the law firm.

Shmucher Law, PL Fees:
Our website fees are located directly on the main page of the website and are as follows:  For the majority of our cases (individual (not-joint), don’t own a business, one home, and don’t foresee anything exciting in a bankruptcy) then the attorney fee is $1,200 plus $30 credit report plus $299 filing fee for a grand total of $1,530.00 . 

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.   Shmucher Law, PL has a satellite office in Boca Raton (by appointment only) as well as in other cities including Fort Lauderdale, Miami, Plantation and Sunrise Florida.

Approximately 30 days after a debtor files for bankruptcy in the greater Miami or Fort Lauderdale area they are required to appear at meeting of the creditors (the “341 meeting”).  The 341 meeting is a scheduled court appearance in Florida where the debtor will be asked questions regarding his or her assets and debts.  Typically the only person that will ask the debtor questions about their case are the Bankruptcy Trustees but in rare occasions creditors will show up to ask questions.  Here are examples of typical questions that a debtor will be asked in the 341 meeting:

1. Did you review your bankruptcy petition with your attorney?
2. Do you remember signing your bankruptcy petition?
3. Is your bankruptcy petition correct with regards to your assets?
4. Do you owe any alimony or child support?
5. Have you given or transferred any assets in the last year?
6. Do you owe anyone money that you didn’t list on your bankruptcy petition?
7. Specific questions regarding your assets including
   1. When you purchased your home
   2. How long you have lived in your home
   3. If you own your own business – what the business does, and if it owns any assets?

Typically it is best for a debtor to answer every question with a simple yes or no and only supply additional information when the trustee requests.  The trustee’s questions are not intended to trick or deceive the debtor but rather they are questions that the debtor should be able to easily answer.  If the debtor doesn’t know the answer to a question it is ok.

If you are considering bankruptcy, contact Shmucher Law, Pl to schedule a free consultation.  Managing attorney Ofer Shmucher will personally meet with you in a confidential setting and help determine if bankruptcy is the right option for you.

A client from Miami came into my office this week and explained to me his situation.  His mother-in-law has been paying the first mortgage on her house but has failed to pay her 2^nd mortgage for a considerable period of time.  Her loan modification attorney told her to modify the first mortgage and worry about the second later.   Bad advice.

Traditionally if a homeowner failed to pay his or her mortgage the mortgagor, such as Florida Bank, would just foreclose on the home and take it back, however due to the drastic decreases in home prices in South Florida, some mortgagors are getting creative.  Rather than foreclosure on the property the 2^nd mortgagors sue on the note, obtain a judgment and then wage garnish the note holder.  Here is an example:

Client owns a home in Naples, Florida:

1^st mortgage $250,000

2^nd mortgage $30,000

Current home value $175,000

In this case if a debtor fails to pay the 2^nd mortgage, then the 2^nd mortgage can foreclose on the property, but economically speaking it would do them no good.  If the house is sold at auction the monies received wouldn’t even cover the 1^st mortgage, leaving the 2^nd mortgage with zero.  By suing on the note, rather than on the property, the 2^nd mortgagor can wage garnish the debt holder, up to 31% of their gross wages, until the debt is paid off.

A great way to stop a wage garnishment is to file bankruptcy.  Upon the filing of a bankruptcy the wage garnishment is immediately frozen and the debt will likely be discharged in a Florida Bankruptcy Court.  Alternatively the filing of a Chapter 13 bankruptcy could wipe out a 2^nd mortgage and or home equity line in your home.  If you live in the greater Miami or Fort Lauderdale area and would like to discuss your situation with a bankruptcy attorney feel free to give our office a call: 954-309-5559