Miami Bankruptcy Attorney Blog

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.

When you file for bankruptcy you automatically get appointed a trustee in your case.  You also automatically have a court date scheduled for a meeting of the creditors (341 meeting).  At the meeting of the creditors your appointed trustee will be asking you certain questions about your bankruptcy petition in order to determine whether or not you have committed fraud or have attempted to hide assets prior to your bankruptcy filing.   Prior to your meeting your attorney will have to send the trustees office certain documents (including bank statements, tax returns, inventory lists, investment statements, car titles, etc.) for the trustee to review prior to your hearing.

So what is the purpose of the trustee asking you for your bank statements?  The trustee will look at your bank statements to determine whether or not you have depleted your assets prior to your bankruptcy filing.  Did you withdraw large sums of money over the last year?  Did you transfer monies to your friends or relatives account?  Did you transfer lots of money into your 401k or your IRA?  Did you intentionally state your income as X when really your income was Y based on your bank statements.  Things like these put your bankruptcy in serious jeopardy and will likely lead to adversary proceedings (which are lawsuits within a bankruptcy case).

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

When you file for bankruptcy in Florida you need to list all of your assets and all of your debts.  One asset people tend to forget is their tax return.  Your tax return is an asset and should be listed on your bankruptcy schedule.  If you have yet to file you should list the tax return as an asset with amount unknown.  If you filed and you owe taxes then you don’t need to list the tax return as an asset.

So if you are going to be receiving an a refund then you must protect the asset through exemptions.

Part of your tax return is excluded and exempted automatically:

Any part of your tax return that is for Earned Income Credit (children) is exempted, however anything else is subject to the bankruptcy estate and could be lost in the bankruptcy.

How to keep your tax return:

The best way to keep your tax return is to do your taxes, file them, obtain the refund, spend the money (on certain items), and THEN FILE FOR BANKRUPTCY.

Here is a non-exclusive list of items that you can spend the tax refund on prior to the filing of your bankruptcy:

1. Attorney fees
2. Rent
3. Mortgage
4. Groceries
5. Utility Bills
6. Medical and Dental Expenses
7. Food
8. Car Payments
9. Insurance

Things NOT to spend the tax return on:

1. Paying back a friend or family member for a loan
2. Luxury goods (electronics, jewelry, trips)

If you are thinking of filing for bankruptcy and would like to speak with a Florida bankruptcy lawyer then please contact Shmucher Law, PL at 954.309.5559 or 305.741-5553.  We offer free consultations in Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise Florida.

Tax season is probably the favorite season for bankruptcy trustees because they tend to make the most money during this four month period.  How do they make a lot of money ? – Well, your tax returns are ASSETS and in some cases the bankruptcy trustee is entitled to it.

When a person files for bankruptcy they must list all of their assets and their debts.  They then must exempt (protect) certain assets from being taken away from them.   A quick explanation of exemptions allowed in Florida are the following:

Keeping Home: In  Florida if you are keeping your house then you can exempt $1,000 in goods and $1,000 in a vehicle;

Rent or Surrendering Home:  If  you don’t own a home or if you are surrendering your home then you can exempt $5,000 in goods and $1,000 in a vehicle.

Therefore if you are filing for bankruptcy prior to obtaining your refund then you must exempt the potential refund in order to protect it from being taken from the bankruptcy trustee.  If you don’t know how much you are expecting to get then a good indicator is to look at the last two years and use that as a rough estimate.  However you MUST exempt this potential return or it will likely be taken by the trustee.

Certain parts of your tax return may automatically be exempted from the trustee and thus not allowing the trustee to take 100% of the return.  If you have children and your tax return includes and earned income credit (usually $800 or $1000 per child) then that portion is safe.

If you owe money on your taxes then you have no issue!

If you would like to speak to someone regarding the filing of a bankruptcy in South Florida please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559.  Shmucher Law, PL offers free consultations  in our offices located in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise  Florida.

Now that it is 2011 people tend to get ready to file their taxes in hopes of obtaining a refund.  So it is that time of the year that I hear the same question asked repeatedly by clients, “If I file for bankruptcy will I have to pay taxes or a tax penalty on the debts that have been discharged?”  The answer to that question is NO.  You will not be responsible for any taxes or tax penalties for the debt you will be discharging.

However, if you choose to do debt settlement rather than to file for bankruptcy you will be responsible for the taxes on the debt you save.  Here is an example.  You owe 50k on a credit card and you settle it for 20k (a savings of 30k).  The IRS will consider the 30k savings as ordinary income and you will be responsible for the taxes on the saved amount.

The filing of a bankruptcy can help you enjoy a fresh financial start.  If you would like to schedule a free consultation to determine if bankruptcy is right for you, then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  We offer free bankruptcy consultations in Boca Raton, Fort Lauderdale, Miami, Plantation and Sunrise Florida.

On November 1, 2010 the United States Trustees Office revised the median income figures for Florida households.  These new figures will apply to Chapter 7 and Chapter 13 cases filed on or after November 1, 2010.

Below are the numbers for median income in Florida Post November 1, 2010:

1 earner -  $39,393 annually or $3,282 monthly.

2 people – $49,321 annually or $4,110 monthly.

3 people - $53,713 annually or $4,476 monthly.

4 people - $64,084 annually or $5,340 monthly.

5 people – $71,584 annually or $5,965 monthly.

6 people – $79,084 annually or $6,590 monthly.

The numbers above reflect GROSS INCOME or income before taxes and deductions.  If your numbers are higher than the median income then there is still hope that you can qualify for Chapter 7 bankruptcy, however it will involve looking at your expenses in the means test.

If you are thinking of filing Chapter 7, Chapter 13, or Chapter 11 bankruptcy in South Florida (Boca Raton, Fort Lauderdale, Miami, Plantation, Sunrise) then please give Shmucher Law, PL a call at 954.309.5559 or 305.741.5553 in order to schedule a free initial consultation.

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.