Miami Bankruptcy Attorney Blog

If a creditor has filed a lawsuit against you and obtained a judgment then they can attempt to collect on the debt by doing a number of things including, wage garnishments, freezing bank accounts, or levying property.  I was recently asked by a client if it is too late to file for bankruptcy once a creditor has frozen your bank account?  The answer to that question is NO,  a debtor can still file for bankruptcy once their account has been frozen.  Furthermore the filing of the bankruptcy will UNFREEZE the bank account and likely give the debtor his or her bank account once again.

If you are thinking of filing for bankruptcy, then the first thing you should do is go see a local bankruptcy attorney to determine your eligibility, options, and consequences of filing.  If you live in south Florida then please contact Shmucher Law, PL at 305.741.5553 or 954.309.5559 to schedule a free consultation.  We offer consultations in our main office in Miami as well as our satellite bankruptcy  offices including Boca Raton, Fort Lauderdale, Plantation, 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.

If you haven’t paid your credit cards or any other debts for approximately nine months then your credit card company or whatever creditor you have will charge off your debt.   What charge off means is somewhat misleading .  When a creditor charges off debt they are really doing one of the following things:

Write Off the Debt –

Once a creditor charges off your debt they can simply write off the debt as “bad debt.”  When a creditor writes off your debt as bad debt what they are basically saying is that the debt is uncollectable and that they would rather get a small tax break on the bad debt, rather than continue spending money attempting to collect it.  Once a debt has been written off then the debtor will no longer be responsible for it.  Too good to be true right?  Well the fact of the matter is VERY few debts are ever written off as bad debt.  Typically only small debts, usually from small a small medical practice will ever be written off as bad debt.

3^rd Party Collections –

A creditor can send your charged off debt to a 3^rd party collections agency, which basically means they are selling your debt for pennies on the dollar to someone.  Once your charged off debt is sold to a 3^rd party collections agency prepare to be bombarded with phone calls to your home,  your work, your neighbors and finally your friends and family.

Turned over to an Attorney –

A creditor can turn over your charged off debt to an attorney.  When the debt is turned over to an attorney the attorney will begin by filing a demand letter.  Failure to make a payment arrangement based on the demand letter will lead the attorney to file a lawsuit against you and potentially garnishing your wages,  levy your property, or even freeze your bank account.

DON’T WORRY, if your debt has been charged off you can still file for bankruptcy.

If your debt has been charged off by your credit card company and you would like to speak with a bankruptcy attorney regarding your options then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553. We offer free consultations in any of our Bankruptcy Law  office locations in Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

You  are relaxing at home on a typical day and then you receive a knock at your door.  You open the door and a process server greets you and asks you if you live there, you say you do, and he serves you with a summons and complaint.  You look at it more carefully and you see it’s a lawsuit from one of your credit card companies that is suing you for your unpaid balance plus interest plus attorneys fees.   You then immediately start to panic.

The filing of a civil lawsuit is just the start of the actions that a credit card company may take against you.  You will have twenty days to answer your complaint or the creditor will be able to get a default judgment against you.  You most likely have no defense to this lawsuit as you probably spent the money and you stopping making payments to collect.  Once they win their lawsuit (and they will), they will begin to attempt to collect on the monies owed.  They will begin their collection attempts by freezing your bank account(s), wage garnishing you if you have a job, or levying and selling your property (not including your home).

Fortunately, the filing of a bankruptcy can and will likely cease any actions against you by your credit card company.  The filing of the bankruptcy will immediately freeze any on going state court actions and in the case of a credit card lawsuit, will likely have the lawsuit be dismissed.  The creditor will not be able to wage garnish you, freeze your bank account, or even levy on your property.

If you have been sued by a credit card company, or believe that a suit against you is imminent and would like to schedule a free consultation to determine if bankruptcy is an option for you, then please contact Shmucher Law, PL at 954.309.5559 or 305.741.5553.  Our office locations include Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.

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.

There are times when people are so overwhelmed by their debts, jobs, family problems or any other type of problem that they may not actually step aside and take a good look at their financial situation.  These people want/tend to think that everything will be ok next month, or if only X happens then everything will be fine.  Sometimes though, everything is not fine and people need to take actions to fix it.  Here are some signs that a person may need to file for bankruptcy.

1. You are paying all of your expenses via a credit card.  Typically we see people who are paying everything they can including utilities, food, gas, car payments, insurance payments, etc. all through the credit card.
2. You are currently collecting unemployment or have been out of work for a period of six months or longer.  Debtors who have been unemployed for a significant period of time have an easier time qualifying for a Chapter 7 bankruptcy.
3. You continually only pay the minimum on your credit cards.  If you are only paying the minimum on your credit cards it will be many years before you begin to actually pay down the debt.  You are basically stuck in the black hole of paying interest  on interest.
4. At your current situation you are unable to actually save any money.  All your money is used to pay the minimums on your maxed out credit cards.
5. You are way behind on your mortgage and you will likely need to surrender your home.
6. You have a wage garnishment or a judgment against you.
7. Your bank accounts have been frozen.

If any of these warning signs are currently happening to you then consider bankruptcy.  Shmucher Law, PL is a bankruptcy law firm in Miami, Florida.  If you would like to schedule a free consultation to see if bankruptcy is an option for you then please call us at 954.309.5559 or 305.741.5553

There are many commercials on TV today paid for by debt settlement companies offering to settle all of your debts and keep you out of bankruptcy.  These commercials sound too good to be true and often times they are.  They are promising to settle or consolidate all your debts for you, and only require you to make one easy payment a month.  Here is what these companies are not telling you:

1. The fees they charge you are steep.  Debt settlement companies usually have you provide them a monthly fee to “work on your file” and a portion of that monthly fee will put into an escrow account to use to negotiate with your creditors.  A recent client of mine was paying $700 a month to a debt settlement company and only $350 was put into his escrow account the rest was the debt settlement companies monthly fee.
2. Not all of your creditors will settle with the debt settlement companies.  The debt settlement company can’t force any creditor to take their offer (especially when they are offering pennies on the dollar).
3. Debt settlement companies ask you to STOP paying all of your debts, and by doing so the chance of you being sued will be more likely.  Once you are sued and a judgment is obtained against you the creditor can freeze your bank account, wage garnish you, or even take and sell some of your assets.  However if you file for bankruptcy you will be able to eliminate your debts as well as prevent any type of lawsuits to be filed against you.
4. There will be tax implications!!!  Debt settlement companies tend to forget to tell you that any amount that the creditor chooses to forgive in the settlement will be taxed as ordinary income by the IRS.   Here is an example, say you owed $25,000 on a visa card and your debt settlement company negotiates a settlement for $10,000.  At the end of the year the credit card company will send you a 1099 form for the amount of $15,000 and you will be responsible for paying the taxes of the $15,000 at the end of the year.  However if you filed for bankruptcy, any debt that gets discharged will not be subject to taxation.
5. You will need to have money to use a debt settlement company.  The commercials tell you these debt settlement companies can settle your debt for pennies on the dollar, but what they don’t tell you is that you need to have the money ready to go and make one lump payment.

Bankruptcy can usually offer better results and provide an economically better solution than a debt settlement company.  If you would like to find out more about bankruptcy and would like to schedule an appointment with Shmucher Law, PL at one of our five office locations (Boca Raton, Fort Lauderdale, Miami, Plantation or Sunrise) then give us at call at 954.309.5559.

Over the past few weeks I have seen several clients who come to my office because they have a wage garnishment against them.  A wage garnishment occurs after a creditor obtains a judgment against you and then files and obtains a wage garnishment through your employer.  If a creditor obtains a wage garnishment against you, they are able to collect up to TWENTY FIVE (25) percent of your wages, before taxes.  There is one viable defense to the wage garnishment and that is the head of household defense which prohibits a creditor from garnishing your wages if you are the primary wage earner and you have minor children.  If the debtor doesn’t claim this defense when they answer the request of the creditor then the creditor can continue to wage garnish.  The garnishment will last until the entire debt plus attorneys fees are paid.

HOWEVER if the debtor files for bankruptcy the wage garnishment is frozen on the spot and the creditor is NOT allowed to garnish from the moment the bankruptcy is filed.  Also if the creditor continues to garnish after your bankruptcy is filed, they are in violation of the automatic stay and anything that they have garnished will be returned to the debtor.    In a recent case of mine a creditor continued to garnish after my client filed for bankruptcy, but they returned all the monies to my client shortly after being put on notice.

If your wages are currently being garnished then you need to consider if it is worth allowing the wage garnishment to continue until the debt is entirely paid off or if bankruptcy could be an option for you then give Shmucher Law, PL a call.  We offer free consultations in any of our five conveniently located bankruptcy offices in Boca Raton, Fort Lauderdale, Miami, Plantation, or Sunrise.

There are lots of advertisements on TV, radio, and the internet telling people who are severely in debt to “consolidate” their debt rather than file for bankruptcy.  However these companies don’t tell you that filing for chapter 13 bankruptcy in Florida might actually be the BEST means of consolidating your debt.  Here are some of the reasons that filing for  chapter 13 bankruptcy in Florida might be the best bet”

1. Your payment plan will be limited to 3 to 5 years.  Anything that is not paid after 5 years will be discharged (wiped out)
2. Your payment plan is INTEREST free.
3. The only fee that you will have to pay is a small attorney fee and a small fee to the bankruptcy trustee.
4. You get the benefit of the automatic stay which includes the immediate stoppage of all debt collector phone calls.
5. Any current legal lawsuits are automatically stopped.
6. All current wage garnishments are stopped.
7. If you own a home and you have more than one mortgage then there is a chance that a second mortgage or a home equity line can be wiped out.
8. If you are making payments on a car you can reduce the interest rate on your payment.
9. If you are making payments on a car then you can potentially reduce your amount owed to the true value of the vehicle rather than what you owe.
10. If you owe any money in taxes then you can pay it off over five (5) years.

Shmucher Law, PL is a bankruptcy law firm in South Florida that handles Chapter 7, 11, and 13 bankruptcies for individuals and businesses.  If you would like to contact Shmucher Law to make an appointment in one of our many offices located throughout South Florida (Boca Raton, Fort Lauderdale, Miami, Plantation, Sunrise) then please give our office a call at 954.309.5559.