Orlando Bankruptcy Attorney focusing on loan mods, chapter 13, chapter 7, foreclosure defense, debt harrasment http://www.robertjpellegrino.com Loan Mod, Chapter 7, Chapter 13 Bankruptcy Advice - By Appointment, Call or Online No Appointment Necessary! Tue, 27 Jan 2015 15:00:11 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.5 Recent US Supreme Court Case defines “Disposable Income” http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/recent-supreme-court-case-defines-disposable-income/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/recent-supreme-court-case-defines-disposable-income/#comments Mon, 07 Jun 2010 15:07:16 +0000 http://robertjpellegrino.com/?p=1175 Related posts:
  1. How to determine “Current Monthly Income”
  2. Florida Bankruptcy Lawyer: What are “Claims” filed in my case?
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Recent US Supreme Court Case defines “Disposable Income”

HAMILTON, CHAPTER 13 TRUSTEE v. LANNING

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Florida Exemptions Update – Which Chapter Am I Eligible For? http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-exemptions-update-which-chapter-am-i-eligible-for/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-exemptions-update-which-chapter-am-i-eligible-for/#comments Mon, 01 Mar 2010 17:44:59 +0000 http://robertjpellegrino.com/?p=1073 Related posts:
  1. Florida Bankruptcy Lawyer: Chapter 13 limitations to eligibility
  2. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1
  3. Florida Bankruptcy Lawyer: Which Chapter can I file?
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On April 1, 2010, Debt limits for Chapter 13 increase to $360,475 of unsecured debt and $1,081,400 of secured debt. This change increases the debt ceiling in effect prior to the change of about 7%. Congress limited the amount of debt owed by the debtor in a Chapter 13 case but adjustments to the debt limits are scheduled to occur every three years on the first day of April in the year of adjustment beginning April 1, 1998. Bankruptcy Code section §109(e) prohibits use of Chapter 13 by individuals with debts that exceed specified limits. The adjustments are required by §104(a) of the code and an adjustment is due this year.

The dollar amounts are rounded to the nearest $25 increment and apply to a number of different dollar limits impacting Chapter 7, 11, 12 and 13 cases. The adjustment of various dollar amounts specified in the bankruptcy code is intended by statute to reflect the change in the Consumer Price Index for All Urban Consumers, published by the Department of Labor, for the most recent 3-year period ending on December 31 of the prior year. These limits are per person filing, so a couple filing together would be allowed double these amounts and still remain eligible for Chapter 13 relief. The change, therefore makes it a little easier for people with large debt loads to file under this chapter where it is more of a streamlined process than would be under Chapter 11.

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Florida Bankruptcy Lawyer” What Property Can I Keep? Part 3 http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-property-can-i-keep-part-3/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-property-can-i-keep-part-3/#comments Mon, 25 Jan 2010 15:12:37 +0000 http://robertjpellegrino.com/?p=986 Related posts:
  1. Florida Bankruptcy Lawyer: What property can I keep? Part 2
  2. Florida Bankruptcy Lawyer: What property can I keep? Part 1
  3. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1
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Will you lose all your property if you file bankruptcy? NO! You will most likely get to keep most if not all your property. When someone files bankruptcy, they can keep certain “exempt” property. In a chapter 7 case, the amount of property is limited yet includes many large assets such as a persons home, some equity in their car if fully owned and their qualified retirement account.

A Chapter 13 bankruptcy is a re-organization and the amount of property that can be kept is broader. A significant difference between a Chapter 7 and the Chapter 13 limitations as to how much property someone can keep is most significant to the self-employed. In the Chapter 7, the value of the stock or worth of the company must be surrendered to the Trustee, or bought back, once the exemption limitation is exceeded. In a Chapter 13, since it is a re-organization, there is surrender of the value that exceeds exempt amounts but is repurchased from the trustee at the fair value of the stock or liquidation value which is significantly lower than ongoing profit potential of the business. The business can then operate as it normally would and any buy back can be put in the plan.

This does not mean that all property can be kept. The Trustee would likely object to someone trying to keep “luxury” items. These items include timeshares, extra vehicles not needed for the business, motorcycles, watercraft – can’t keep that yacht and non-homestead land or buildings.  There is one important distinction when looking at buildings other than a person’s homestead which is when these buildings or land are leased. The Trustee looks upon these as a business, producing income that would help support the plan. They are, therefore, exempt. However vacant land or second investment properties would have to be forfeited. Proper planning prior to filing a bankruptcy can save these properties. Unfortunately, while in the Chapter 13 plan period, you will also forfeit your tax refund except that portion that is earned income credit.

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Florida Bankruptcy Lawyer: What property can I keep? Part 2 http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-property-can-i-keep-part-2/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-property-can-i-keep-part-2/#comments Fri, 22 Jan 2010 14:53:05 +0000 http://robertjpellegrino.com/?p=977 Related posts:
  1. Florida Bankruptcy Lawyer: What property can I keep? Part 1
  2. Florida Bankruptcy Lawyer” What Property Can I Keep? Part 3
  3. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1
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Many clients ask me if they will lose everything when they file bankruptcy. The answer is a resounding NO! It is likely that they will keep most, if not all of their property.  Florida has exemptions which is property that is not included in the bankruptcy estate.  The debtor who files bankruptcy can keep this exempt property.

Chapter 7 is a “liquidation” bankruptcy.  Debtors are eliminating all their unsecured debt – debts usually comprised of credit cards, medical bills or judgments not based on intentional acts.  They may choose to walk away from secured assets as well.  Secured assets are any property that is protected by some form of agreement that keeps ownership of the property in the creditor until it is paid for.  Homes, leased or financed vehicles or even expensive TVs and the like are examples of secured assets.  These assets can be forfeited in bankruptcy and the debtor is relieved of any deficiency or liability on the debt.

In exchange for this “liquidation”, debtors can only keep a certain limited amount of property.  Florida allows $1000.00 dollars applied to any personal property of each debtor filing; $1000,00 dollars of equity in one vehicle titled in each debtor; their home, if it is current in it’s payments or $4000.00 dollars in additional exemption applied to any property the debtor wishes if they do not keep their home.  Their qualified retirement funds are exempt as well and client’s are cautioned never to touch these funds for any reason.  Death benefits, annuity contracts, disability benefits and life insurance cash values are also exempt.  Exemptions exist for Alimony and child support as well as crime victims funds, public assistance and social security.

For the self employed, unfortunately, tools of the trade are not exempt nor is the value of their company.  The business has value and the Trustee will likely seize the value of the stock or what the company is worth if that value exceeds the exemption limits.  For those businesses that have significant value, debtors can turn to Chapter 13 for relief as that bankruptcy is a re-organization and debtors are allowed to continue their normal business activities, thereby keeping business assets.

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Florida Bankruptcy Lawyer: What property can I keep? Part 1 http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-property-can-i-keep-part-1/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-property-can-i-keep-part-1/#comments Thu, 21 Jan 2010 15:03:49 +0000 http://robertjpellegrino.com/?p=973 Related posts:
  1. Florida Bankruptcy Lawyer” What Property Can I Keep? Part 3
  2. Florida Bankruptcy Lawyer: What property can I keep? Part 2
  3. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 2 Lien stripping
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Many clients ask me if they will lose everything when they file bankruptcy. The answer is a resounding NO! It is likely that they will keep most, if not all of their property.

When someone files, an “estate” is created and all property belonging to the debtor becomes property of the estate, which is then administered by the US Trustee. However, certain property is exempt which vests back to the debtor. The one question that seems to be the most important to my clients is whether they will be able to keep their home.

Most States have homestead exemptions and Florida has one of the strongest protections in the country when it comes to protecting the home from creditors. Obviously, if there is a Note and Mortgage on the home, the creditor holding that note owns the home until it is paid for. They have superior rights to the house, should the debtor not adequately protect it, and can foreclose as the home is a secured asset. If the home is current, the homestead in Florida works to protect the home if it sits on 1/2 an acre or less when located in a municipality or 160 acres or less when located elsewhere. If the house is owned by tenancy by the entirety (two people who are married) and only one has a creditor seeking relief against the property, then homestead works to protect the entire property.

The homestead exemption protects unlimited equity in the home so long as the home is owned for at least 40 months prior to filing the bankruptcy. If owned less than that time, then only $137,000.00 per person is protected. In the event the home is not current, people can use the Chapter 13 plan to catch up on the deficiency and still claim the homestead exemption, saving their home from all creditors, including the secured creditor that holds the Note!

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Florida Bankruptcy Lawyer: What are “Claims” filed in my case? http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-are-claims-filed-in-my-case/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-are-claims-filed-in-my-case/#comments Mon, 18 Jan 2010 17:12:00 +0000 http://robertjpellegrino.com/?p=962 Related posts:
  1. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1
  2. Florida Bankruptcy Lawyer:The Meeting of Creditors
  3. Florida Bankruptcy Lawyer: Filing Bankruptcy Petitions and Schedules
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The Trustee, in the bankruptcy Chapter 13 case, must pay all allowed claims and creditors must file proof of their claims to get paid. Debtors and the Trustee may also file claims to insure that certain creditors get paid. Once the petition for bankruptcy is filed, there is a claims bar date set when once past, prevents further claims to be filed against the estate.
The date is 90 days from the 341 meeting of creditors unless the Court orders otherwise.

Unless objected to, all claims will be allowed. Your plan may even allow late filed claims, but if a claim is filed late, after notice and a hearing, the Court must (usually) sustain the objection. Claimants can try to extend their deadlines, but unless they can demonstrate that they fit within the exceptions provided for under the Code, their request will be denied.

Once the deadline passes, your attorney as well as the Trustee will review the claims and objections will be made where appropriate. Claims should be filed with supporting documents, such as a note or contract. If not, an objection will likely follow. Supporting documents show the claim to be valid as prima facie evidence but not necessarily wholly undisputed. A creditor may show a claim to be higher than what is really owed. Debtors may still challenge a claim based on standing – which is the right the creditor has to file the claim in the 1st place, the amount owed, interest, fees and costs assessed, the type of supporting documents used and the nature of any amendments filed. The dispute of any creditors claims may be resolved by evidentiary hearing or may turn into an adversarial proceeding.

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Florida Bankruptcy Lawyer: What does Plan Confirmation mean? http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-does-plan-confirmation-mean/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-what-does-plan-confirmation-mean/#comments Sat, 16 Jan 2010 14:45:34 +0000 http://robertjpellegrino.com/?p=960 Related posts:
  1. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1
  2. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 2 Lien stripping
  3. Florida Bankruptcy Lawyer: What property can I keep? Part 1
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When a debtor files Chapter 13 Bankruptcy relief, they are seeking a confirmation of a plan which is basically a pathway that is proposed by their attorney to reach his/her goals, obtaining an Order from the Court for confirmation of the plan which will then establish the rights of all the parties involved, including creditors.
This Order of confirmation, establishes the rights, duties and obligations of all parties and bind the debtor and each creditor even if any particular creditor is provided for, has objected to or has accepted the plan. When a Petition for bankruptcy is filed, the law establishes an estate of all property belonging to the debtor that is managed by the Trustee. The confirmation of the plan reinvests all the property of the estate back to the debtor which, unless specifically provided for within the plan, becomes free and clear of any claim or interest of any creditor provided for within the plan.

The plan must be filed in good faith and comply with all bankruptcy laws which mandate certain requirements but maintains the flexibility so that debtors may formulate a plan that enables them to keep property, stop foreclosure, repossessions, garnishments, attachments, catch up on missed payments, reduce interest rates on certain creditors, in specific circumstances, strip off liens and reduce the amount of unsecured debt being repaid over a period of time.

So long as the plan complies with the aforementioned and is feasible, meaning the debtor has the funds necessary to comply with the terms of the plan, it would likely get confirmed. It is also possible, with changed circumstances for the debtor to request a modification of the plan, such as when there is a substantial change in income.

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Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 2 Lien stripping http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-the-chapter-13-plan-part-2-lien-stripping/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-the-chapter-13-plan-part-2-lien-stripping/#comments Fri, 08 Jan 2010 19:58:29 +0000 http://robertjpellegrino.com/?p=935 Related posts:
  1. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1
  2. Florida Bankruptcy Lawyer: What property can I keep? Part 2
  3. Florida Bankruptcy Lawyer: What property can I keep? Part 1
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The plan created by your attorney is the most important document of the case. When confirmed, it binds all parties and creditors and may only be modified with Court approval. While there are certain requirements which a plan must contain, there are also things that a plan “may” do. A debtor can choose to designate classes of creditors, such as secured and unsecured and must treat each class fairly.
However the debtor has the right to designate classes such as consumer debts differently than other unsecured claims. The debtor may modify the rights of secured claims, other than the security interest in the debtors principal residence, or of the unsecured creditors or choose to leave any particular class unaffected and provide for the curing of any default.

As a practical matter, debtors who have certain secured claims with exorbitant interest rates can present a plan that reduces the interest rate that the creditor has applied against the property. Unsecured creditors are paid a small percentage of their totals, based on disposable income.

The most interesting aspect of the debtors power in the plan is the strip off or lien-stripping power. When an evaluation is done by the attorney, we look to see if the primary home, like many in Central Florida as well as around the United States, has lost value so that the value is proven to be worth less than what is owed on the first mortgage and note. If this turns out to be the case, then any other secured interest in the property, such as an equity line of credit or second mortgage, is now reclassified as unsecured debt and is treated in that class like any other unsecured creditor. Only a fraction of that debt is repaid and the remaining balance will be discharged at the conclusion of the plan.

As an example, say your home has a 1st mortgage on it for $200,000.00 dollars, a second mortgage for $68,000.00 and a $20,000.00 dollar equity line of credit. The market crashed and now your home is worth $174,000.00 dollars. In this case, so long as you prove its worth less than 200k, you can strip off both the second mortgage and equity line of credit but may not modify the 1st mortgage. You would therefore still owe the entire 1st mortgage but pay only a fraction of the second and equity line as unsecured debt, called a “cram down”, then discharge the balance.

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Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 1 http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-the-chapter-13-plan-part-1/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyer-the-chapter-13-plan-part-1/#comments Thu, 07 Jan 2010 18:46:41 +0000 http://robertjpellegrino.com/?p=933 Related posts:
  1. Florida Bankruptcy Lawyer: The Chapter 13 Plan, Part 2 Lien stripping
  2. Florida Bankruptcy Lawyer: What property can I keep? Part 2
  3. Florida Bankruptcy Lawyer: What does Plan Confirmation mean?
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The most important document filed with the bankruptcy Court when pursuing Chapter 13 relief is the plan. It is the document, that once confirmed, binds all parties to the proceedings. The plan must provide for the submission of all or part of a debtors future income to the Trustee as may be necessary for the execution of the plan. A plan must pay all priority claims unless
that particular creditor agrees to different terms. It must provide for the same treatment for each claim within any particular class of claims if “classes” are designated and may provide for less than full payment of all amounts owed for a claim if all debtors disposable income is being applied to making the payments under the plan. Common classes used would normally appear as secured and unsecured creditors. Secured creditors would hold security instruments such as a mortgage, leases or other instruments demonstrating creditors rights to the property involved. Unsecured creditors would normally be credit cards, medical bills and money judgments (not based on intentional acts). Certain claims must be paid in full such as domestic support obligations.

It’s critical that the debtor have enough income to fund a plan if it will be successful.

Plans typically fail when debtors try to keep property that is simply too expensive for them to own, when unforeseen circumstances arise or when there is a drastic change in income. The Chapter 13 bankruptcy still works to protect the debtor as it is a re0organization of their finances. Motions can be made to the Court to amend the plan and adapt to the changed circumstances as the need arises. If the debtors income changes by more than $10,000.00 dollars up or down, then the plan must be changed.

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Florida Bankruptcy Lawyer:The Meeting of Creditors http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyerthe-meeting-of-creditors/ http://www.robertjpellegrino.com/orlando-bankruptcy-lawyer-blog/florida-bankruptcy-lawyerthe-meeting-of-creditors/#comments Tue, 05 Jan 2010 21:17:44 +0000 http://robertjpellegrino.com/?p=927 Related posts:
  1. Florida Bankruptcy Lawyer: Petition gets Automatic Stay Crushes Creditors
  2. Florida Bankruptcy Lawyer: What are “Claims” filed in my case?
  3. Florida Bankruptcy Lawyer: What property can I keep? Part 2
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After filing a bankruptcy petition, all clients must attend the 341 meeting of creditors. The meeting is presided by the Trustee and creditors may attend and ask questions of the debtor about his/her petition, schedules,statements and finances. Typically, only the Trustee does the questioning and it is rare that any creditor shows at all. The meeting is usually recorded and is held under oath.
Debtors must produce a form of identification such as a driver’s license and their social security card to the Trustee.

Documents are submitted to the Trustee before the meeting which usually include proof of income and tax returns. Additional documents may be requested by the trustee to clarify potential discrepancies in the petition or other supporting documents. It is not a time where the debtor will be intimidated or be asked embarrassing or humiliating questions.

The Trustee usually asks about the debtors background, assets and liabilities as well as income and expenses. They will inquire whether the debtor realized he filed his documents under the penalties of perjury; whether the documents were reviewed for their accuracy, completeness and truthfulness; whether anything needs to be added or changed regarding the petition, schedules or statements; if they have any interest in any real estate; if any transfer of property occurred in the year preceding the bankruptcy; if anyone holds property that belongs to the debtor; if they are owed any monies or are a party to a lawsuit or anticipate receiving funds in the near future. In the event of the debtor being self employed, the Trustee will look into the financial aspects of the business as well. Though this sounds like it may take a while, the typical meeting is concluded in 5 to 10 minutes.

When the meeting is concluded, creditors then have a limited time to object to the debtors claimed exemptions.

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