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(305) 891-4055 - Free Initial Consultation - Office: Kendall - Aventura - Bankruptcy Attorney Jordan E. Bublick - 25 Years Experience - www.bublicklaw.com
Chapter 13 and chapter 7 bankruptcy are the types of bankruptcy used by individuals to obtain debt relief. Chapter 13 and chapter 7 bankruptcy each provides for different requirements and relief. In general chapter 13 provides for an opportunity to reorganize your debt and chapter 7 provides for an opportunity to just discharge your debt.
Chapter 13 Chapter 13 bankruptcy is often used by people with higher incomes and substantial non-exempt property to formulate a chapter 13 plan to reorganize their debt while under the protection of the bankruptcy court. Under a chapter 13 plan, you are able to reorganize your secured debt (such as mortgages and car loans) as wells as unsecured debt (credit cards and personal loans). Often you are only required to back only 10% to 20% of you unsecured debt and discharge the rest. A typical chapter 13 plan is over a period of 3 to 5 years.
Chapter 7 Chapter 7 bankruptcy is usually used by people with lower income and little non-exempt property. Under chapter 7 unsecured debt, such as credit cards and loans, is discharged, unless it falls within the categories of non-dischargeable debts, such as student loans and some types of taxes.
Mortgage ModificationChapter 13 bankruptcy is also used by people who are behind with their mortgages and to save their homes from foreclosure. Under a chapter 13 plan, you are able to take various approaches. You may reinstate your mortgage by catching up-to-date your past due payments over a period of up to 5 years.
Totally underwater second mortgages on residential property may be wholly avoided. Maintenance association liens may be avoided to the extent they are not secured by equity in the real estate.
Mortgage Modification MediationYou may use the bankruptcy court's new mortgage modification mediation program ("MMM") [previously called the loss mitigation mediation ("LMM") program] to negotiate with your mortgage company to achieve a modification of your mortgage.
Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
A person finally makes the difficult decision to file bankruptcy. They collect all of their financial information, go through unpaid bills and collection notices, and file a bankruptcy petition in order to obtain a bankruptcy discharge of debts they simply cannot pay. This is one of the most difficult decisions a person will make.
The reason the Bankruptcy Code was established by Congress was to provide the honest but unfortunate debtor a fresh start by providing them with a bankruptcy discharge. The honest but unfortunate debtor the bankruptcy laws were enacted to protect, do not have the ability to pay their debts. Now, banks and other creditors are continuing to harm a person who filed bankruptcy and received a bankruptcy discharge by keeping the bankruptcy discharged debts active on credit reports. This action violates the discharge order and the United States Trustees are investigating banks and other creditors for violations of the Bankruptcy Code. For more information about this practice please read this article in the New York Times.
At The Reissman Law Group, we routinely advise clients to wait approximately sixty days after receiving their bankruptcy discharge to pull their credit report. If the credit report shows any inaccuracies, we advise the client to file a dispute with the credit reporting agency. Usually, the agency will do an investigation and if a debt has been discharged, the credit reporting agency will update the information to indicate the debt was included in a bankruptcy discharge. If the agency does not update their file, then we will contact the creditor directly and provide them with the bankruptcy information and give them an opportunity to correct the issue. If this action fails, we can reopen a case and ask the bankruptcy judge to sanction the creditor for violating the bankruptcy discharge.
If you have filed bankruptcy and you still have debts being reported on your credit report contact us today for a free consultation. The attorneys at The Reissman Law Group will fight for your rights that are being violated after you receive your bankruptcy discharge.
The post No Relief After Bankruptcy Discharge appeared first on St. Petersburg Law Blog.
A person finally makes the difficult decision to file bankruptcy. They collect all of their financial information, go through unpaid bills and collection notices, and file a bankruptcy petition in order to obtain a bankruptcy discharge of debts they simply cannot pay. This is one of the most difficult decisions a person will make.
The reason the Bankruptcy Code was established by Congress was to provide the honest but unfortunate debtor a fresh start by providing them with a bankruptcy discharge. The honest but unfortunate debtor the bankruptcy laws were enacted to protect, do not have the ability to pay their debts. Now, banks and other creditors are continuing to harm a person who filed bankruptcy and received a bankruptcy discharge by keeping the bankruptcy discharged debts active on credit reports. This action violates the discharge order and the United States Trustees are investigating banks and other creditors for violations of the Bankruptcy Code. For more information about this practice please read this article in the New York Times.
At The Reissman Law Group, we routinely advise clients to wait approximately sixty days after receiving their bankruptcy discharge to pull their credit report. If the credit report shows any inaccuracies, we advise the client to file a dispute with the credit reporting agency. Usually, the agency will do an investigation and if a debt has been discharged, the credit reporting agency will update the information to indicate the debt was included in a bankruptcy discharge. If the agency does not update their file, then we will contact the creditor directly and provide them with the bankruptcy information and give them an opportunity to correct the issue. If this action fails, we can reopen a case and ask the bankruptcy judge to sanction the creditor for violating the bankruptcy discharge.
If you have filed bankruptcy and you still have debts being reported on your credit report contact us today for a free consultation. The attorneys at The Reissman Law Group will fight for your rights that are being violated after you receive your bankruptcy discharge.
The post No Relief After Bankruptcy Discharge appeared first on St. Petersburg Law Blog.
If you’re angling towards qualifying for public service loan forgiveness, you should enroll your federal student loans into income-based repayment. If you don’t, you’re probably leaving money on the table.
Public Service Loan Forgiveness is a program for federal student loan relief commonly called part of, “The Obama Plan,” in spite of the fact that it was part of The College Cost Reduction and Access Act, passed by Congress and signed by President Bush in 2007.
Under the program, Federal student loans were made eligible for tax-free forgiveness as a way to spur more college graduates to enter public service. To be eligible, Federal loan borrowers are required to make 120 eligible loan repayments on their eligible Federal loans while employed in eligible employment. After 120 qualifying payments are made, any remaining balance can be forgiven.
Under the program, you must be employed full-time by the federal, state or city government or a 501(c)(3) non-profit organization. You must make your 120 payments while employed full-time by one of these qualifying employers.
Only Federal Direct Loans or loans owed directly to the Federal Government are eligible for forgiveness.
Choose Your Repayment Option Wisely
For payments to count towards your eligibility, you must make those payments under Income Based Repayment, Income Contingent Repayment, Pay As You Earn or the Standard (ten-year) Repayment Plan. Payments made under any of the extended or graduated repayment plans don’t count towards public service loan forgiveness.
If your federal student loans are under either the extended or graduated repayment options, you need to call your federal student loan servicer immediately and get into a different repayment option. If you don’t, you’re wasting your time and money.
Income-Based Repayment Works Best
If you qualify, opting for income-based repayment will save you the most money in federal student loan payments (I’m using income-based repayment as a catch-all for IBR as well as Pay-As-You-Earn, by the way – use whichever one you qualify for).
Under IBR, your federal student loan payments will adjust annually based on your income (15% under IBR, 10% for newer borrowers who qualify for PAYE). If your income rises, your federal student loan payments will go up – but if it goes down, so will your payments.
At the end of 25 years (20 years if you’re a newer borrower and qualify for PAYE), the unpaid balance of your federal student loans is forgiven. That balance may result in a tax liability based on your financial situation at that time.
Public Service Loan Forgiveness Cuts IBR Short (And Tax-Free)
If you qualify for Public Service Loan Forgiveness, the unpaid balance of your federal student loans is forgiven after 10 years of payments (120 months). The forgiven amount is tax-free, so you don’t have to worry about a potential tax burden.
In that way, Public Service Loan Forgiveness effectively cuts IBR down from 25 years (or 20 under PAYE) to 10 years. That’s a significant savings, both in time and money.
IBR Is An Insurance Policy
Let’s say you’re working in a qualifying job and decided to go the usual route of forbearance for as long as possible on your federal student loans. After 3-4 years, you run out of forbearances so you start making payments based on the standard repayment plan because your income is high enough that you don’t qualify to enter IBR or PAYE.
Your monthly federal student loan payment is higher than it would be under IBR or PAYE. Plus, you’re locked into that public service job for a full 10 years.
If you’d chosen IBR the day you got out of school, however, you would have a choice of either staying in public service for 10 years or going out to get a better paying position. Or you may decide to leave the work force for other reasons such as starting a family or trying your hand at self-employment.
If you’re in IBR, you remain in the program even if you leave public service. Once you’re in, you’re in. Count to 25 years (even those years when your income is so low that your monthly payment is $0) and you can wipe out the unpaid balance of your federal student loans.
Plan For The Future
When you finish school you don’t know where you’ll be in the next 10 years (or, for some people, even the next 3 years). By making the right long-term decisions that account for any possibilities, you open yourself up to the greatest number of student loan debt relief options.
Exemption Amounts Every homeowner who is considering filing chapter 7 bankruptcy, understandably wants to know whether or not their house is going to be protected if they file for bankruptcy. In most cases, the home is going to be protected through the process. This is mostly due to the fact that there is not significant+ Read More
The post Can I Keep My Home And File Chapter 7? appeared first on David M. Siegel.
Dendreon Corp, the maker of the world’s first cancer vaccine, filed for bankruptcy protection this Monday.
The Chapter 11 bankruptcy has been filed as Dendreon faces an outstanding $620 million in convertible debt that is due in 2016. The Seattle-based company listed over $664 million in total debts and $364.6 million in assets.
The arrangement requires a recapitalization of Dendreon, or a sale of the company and all its assets, according to a statement released today. The company also indicated it had agreed on financial restructuring terms with several bond holders.
Provenge was approved in 2010 as the first immunotherapy and was intended to treat patients with advanced-stage prostate cancer. Drug sales never met its expectations as Provenge is difficult to administer and cost $93,000.
The treatment requires a patient’s extraction of white blood cells to be mixed with vaccine components. The combination is then provided as an infusion.
The high cost of manufacturing Provenge specifically hurt Dendreon and allowed several competitors to surpass the company.
Dendreon reported only $283.7 million in revenue in 2013, significantly smaller than 2012’s $325.3 million.
"The business is fundamentally unprofitable so, without a change to efficiencies in the manufacturing process, it's really difficult to see them coming back as a standalone company," according to Wedbush Securities analyst David Nierengarten.
Dendreon dispensed several staff and cost-cutting actions over the past years after the company realized revenue growth would take much longer than expected.
By summer 2014, it was clear that cost cutting alone would not make Dendreon "independently viable with its existing capital structure," according to general counsel Robert Crotty.
Shares of Dendreon plummeted Monday, dropping 70 cents to 24 cents in one afternoon of trading. The stock posted below $1 earlier this quarter, as compared to $2.99 at the close of 2013.
Dendreon said it plans to resume operations during the restructuring and will continue to provide Provenge to patients.
The post Cancer Vaccine Maker Dendreon Files for Bankruptcy appeared first on The Bankruptcy Blog.
When you leave school, you won’t have to begin repaying your federal student loan right away. That doesn’t mean you shouldn’t do just that.
Stafford Loans come with a six month grace period that starts when you leave school or drop below half-time enrollment. During that six-month window, you won’t be required to make payments on your federal student loans.
But consider this: if you apply for income-based repayment, your student loan payment is set at 15% of your discretionary income (the difference between your adjusted gross income and 150 percent of the poverty guideline amount for your state of residence and family size, divided by 12). Under Pay-As-You-Earn, your payment is 10% of your discretionary income.
Disposable income is determined by your income for the previous calendar year – a year in which you likely weren’t making very much money. And if you made very little money, your federal student loan payment may be as little as $0 per month.
That amount resets each year when you do your taxes, so you’d likely have that low payment until February of next year.
Still, you may be wondering why you shouldn’t simply ride out the grace period or take some forbearance time to give yourself a little breathing room.
The reason why that’s a bad idea is that you qualify for IBR or PAYE only if you’re experiencing a financial hardship that doesn’t allow you to repay your federal student loans on your current salary. Once you’re in the program you no longer need to qualify, and can’t be kicked out of it so long as you make your regular payments.
If you wait until you’re making a decent salary then you may not qualify for IBR or PAYE at all.
Once in repayment under IBR or PAYE, the clock begins to tick on the discharge of your student loan balance. If you’re in IBR, the unpaid balance of your student loans is discharged after 25 years; if you qualify for PAYE, the balance disappears after 20 years. It makes sense to start that clock ticking now rather than waiting for six months or more.
In order to take advantage of this tactic, you need to request a shorter grace period by contacting your loan servicer. Once that’s done, you can be on your way to repayment … and to ultimately wiping out a bigger chunk of your federal student loan.
By the way, this applies to federal student loans only. There is no IBR or PAYE for private student loans.
Jordan E. Bublick is a Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055
In the recent case of Guillermo A. Morales, Case No. 07-16284-BKC-RBR, (Bankr.S.D.Fla. January 2, 2008)(Ray, J.) the Bankruptcy Court was given the opportunity to interpret new section 222.25(4), Florida Statutes which allows a debtor to exempt personal property not to exceed $4,000 if he does not "claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution." Based on the particular facts of the case, the Court held that the debtor had not proven that he had not received the "benefits" of the homestead exemption and the trustee's objection to the debtor's exemption under section 222.25(4), Florida Statutes was sustained. But the court did state that if a debtor properly abandons his entire interest in his homestead at the start of a case or and does not claim his homestead exemption or does so by proper subsequent schedule amendments, then he would be able to claim the $4,000 section 222.25(4) personal property exemption.
F.jpg "Exemption of Florida Personal Property from Seizure or Levy")
In his chapter 7 schedules, the debtor listed one piece of real property with two mortgages. He did not claim the real property as exempt in his schedule C. In his original statement of intentions, the debtor set forth his intentions to reaffirm the two mortgages. Later he filed an amended statement of intentions where he indicated that his intentions were to surrender the real property to one of the mortgagees and reaffirm [sic] the other mortgage. The debtor claimed the use the $4000 personal property exemption under section 222.25(4), Florida Statutes (2007) and the trustee filed an objection to this claim of exemption.
The issue before the court was the meaning of section 222.25(4)'s phrase "receive the benefits of a homestead exemption." The trustee argued that the debtor was not eligible for the section 222.25(4) exemption as by owning a homestead, the debtor receives the benefit of the homestead exemption whether or not he makes use of it. The debtor contended that he had abandoned his interest in the real property, had not claimed it as exempt in his schedule C, and was not receiving any "benefits" of a homestead exemption.
The court looked to the language of the statute and found that it was written in the present tense. The court stated that the fact that a "debtor may have claimed or received the benefits of a homestead exemption in the past would appear to have no bearing on the application of the statute to a debtor's present situation." The court reasoned that even if a debtor had in the past received the benefits of the homestead exemption, he would qualify for the $4,000 section 222.25(4) personal property exemption if he does not claim it [the real property] as exempt and ceases to receive the benefits of a homestead exemption.
The court noted that in this case, that although debtor did not claim the homestead exemption, it was not clear whether he had derived any "benefits" from the exemption. The debtor argued that his amended statement of intentions to surrender the real property constituted an "abandonment" of the real property and that he was no longer receiving any "benefit" of the homestead exemption.
The court stated that the debtor was correct in his statement that under Florida law, abandonment of a homestead is one way that the protection of the homestead exemption may be lost. However, the court concluded that the debtor had failed to clearly indicate his intention with respect to the real property and that the court could not conclude that he had abandoned his homestead. The court noted that at the beginning of the case, the debtor had filed a statement of intentions indicating his intention to reaffirm the mortgages and retain the real property. The debtor only later changed his mind. The court also found "incompatible" with an abandonment the debtor's stated intention in his amended statement of intentions to surrender the real property to only one of the two mortgage holders and reaffirm the debt owed to the other mortgage holder.
Although the court failed to find an abandonment of the homestead in this case which led to the court's denial of the debtor's claim of exemption under section 222.25(4), the court stated that if a debtor "properly abandons his entire interest in his homestead at the start of a case and does not claim his homestead exemption" then he would be able to claim the $4,000 section 222.25(4) personal property exemption. The court even left open the possibility of a subsequent amendment of the debtor's schedules to indicate an abandonment of all interest in his homestead and to claim the $4,000 section 222.25(4) personal property exemptions.
In this case, the court found that the debtor failed to clearly indicate his intentions with respect to the real property and was denied use of the section 222.25(4) exemptions. Since the rendering of the court's decision, the debtor filed an amended statement of intentions setting forth a surrender to both mortgagees and has moved the court for a rehearing. In his motion for rehearing, the debtor refers to this amended statement of intention and points out that he did not oppose the motion for stay relief filed by one of the mortgagees.Jordan E. Bublick - Miami Bankruptcy Lawyer - Kendall & Aventura Offices - (305) 891-4055 - www.bublicklaw.com
One of the most difficult decisions for a bankruptcy filer involves surrendering a home. Nobody wants to take this step, but sometimes there is just no choice. Home ownership involves not only a mortgage payment, but it also includes repair expenses, homeowners association dues and utility bills.Giving up your home will be traumatic – even if you recognize the financial realities. Your family life will be disrupted, the kids may have to change schools, and you will have to sell or store furniture and other personal property that may not fit into a rental.One of the questions that I get whenever a client has to surrender his home is “when will I be able to qualify for a mortgage so I can buy another house.” Many people are under the misconception that home ownership will be delayed five or ten years or more. The reality is much less harsh.The answer to the question of when you can again qualify for a mortgage will depend on two factors – one, of course, has to do with your credit worthiness. If you use your bankruptcy to eliminate debt and reduce expenses, you will be in a much better position to manage credit. Obtain a secured credit card, arrange for a loan with a credit union, remain employed and within 6 months to a year after your Chapter 7 discharge, your credit score will bounce back enough to make you a viable borrower.The second factor has to do with the loan program you choose:
- Conventional loans require a wait of four years from date of Chapter 7 discharge or four years of consistent Chapter 13 payments.
- FHA loans and VA loans require a two year wait from the date of your Chapter 7 discharge or two years of consistent Chapter 13 payments.
- An FHA program called the FHA Back to Work Program (which is set to expire on September 30, 2016) allows a borrower to purchase a primary residence just 12 months after Chapter 7 discharge or 12 months into a Chapter 13 plan, if you can document the economic reasons for your financial hardship.
So, as a practical matter, most bankruptcy debtors who have given up their homes in bankruptcy can be eligible for a new mortgage as early as one to two years after their bankruptcy has been discharged or a year or two into a Chapter 13 repayment plan.As difficult as it may be to walk away from your home, take comfort in the realization that your return to home ownership will not be unduly delayed.The post How Soon After Bankruptcy Will You Qualify for a Mortgage? appeared first on theBKBlog.
One of the most difficult decisions for a bankruptcy filer involves surrendering a home. Nobody wants to take this step, but sometimes there is just no choice. Home ownership involves not only a mortgage payment, but it also includes repair expenses, homeowners association dues and utility bills.Giving up your home will be traumatic – even if you recognize the financial realities. Your family life will be disrupted, the kids may have to change schools, and you will have to sell or store furniture and other personal property that may not fit into a rental.One of the questions that I get whenever a client has to surrender his home is “when will I be able to qualify for a mortgage so I can buy another house.” Many people are under the misconception that home ownership will be delayed five or ten years or more. The reality is much less harsh.The answer to the question of when you can again qualify for a mortgage will depend on two factors – one, of course, has to do with your credit worthiness. If you use your bankruptcy to eliminate debt and reduce expenses, you will be in a much better position to manage credit. Obtain a secured credit card, arrange for a loan with a credit union, remain employed and within 6 months to a year after your Chapter 7 discharge, your credit score will bounce back enough to make you a viable borrower.The second factor has to do with the loan program you choose:
- Conventional loans require a wait of four years from date of Chapter 7 discharge or four years of consistent Chapter 13 payments.
- FHA loans and VA loans require a two year wait from the date of your Chapter 7 discharge or two years of consistent Chapter 13 payments.
- An FHA program called the FHA Back to Work Program (which is set to expire on September 30, 2016) allows a borrower to purchase a primary residence just 12 months after Chapter 7 discharge or 12 months into a Chapter 13 plan, if you can document the economic reasons for your financial hardship.
So, as a practical matter, most bankruptcy debtors who have given up their homes in bankruptcy can be eligible for a new mortgage as early as one to two years after their bankruptcy has been discharged or a year or two into a Chapter 13 repayment plan.As difficult as it may be to walk away from your home, take comfort in the realization that your return to home ownership will not be unduly delayed.The post How Soon After Bankruptcy Will You Qualify for a Mortgage? appeared first on theBKBlog.
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Learn more about how Bankruptcy works and what you need to know.