Florida Bankruptcy Laws

 Do you know the bankruptcy laws in Florida? if you live there and are having financial problems, then you need to find out what your options are if bankruptcy is being considered at all. The laws in Florida are fairly standard and conform to Federal laws, as in most states. However, things have changed a little since the middle of the last decade.
First, new laws have been passed in regards to bankruptcy by the U.S. Congress in 2005. The major changes that took effect are that bankruptcy applicants who wish to file under Chapter 7 must meet certain eligibility requirements which are called a “means test.” This makes it a little harder to file for bankruptcy, especially for those that are guilty of acquiring a lot of debt and then hoping to have it all magically go away by filing for bankruptcy. Under this new “means test,” if your current monthly income is less than the median income in your state, then you can file for bankruptcy under Chapter 7. However, if your current monthly income is greater than the median income in Florida, and you can also afford to pay $100 per month toward paying off your debt, you cannot file under Chapter 7 and must file Chapter 13. Whether you can afford to pay $100 a month is calculated on a formula that includes your monthly income, expenses, and the total amount of your debt. Another thing is that if you have not paid your income taxes over the last few years, then filing for bankruptcy is not an option until you do so.
Another thing you must do is go through some type of credit counseling. There are government approved programs set up in the state of Florida to help educate bankruptcy candidates about spending and buying habits. This is designed to assist those who have had a lot of trouble in the past with spending money, but many filing for bankruptcy have other debt issues such as medical bills or a loss of job. Another thing to keep in mind is that your debts may not be wiped clean until you also participate in a government approved financial management education program. These are setup through a court-appointed trustee, who will look at your individual circumstances and decide whether you are able to finish the bankruptcy conditions made by the court.
In Florida, you can keep your home and other possessions if you are current on the payments. There are other certain exemptions, such as insurance, pensions, intellectual property, wages, and certain benefits such as social security. Also, if the property is secured by a loan such as a car or home, and you are current on the payments, the equity is covered by your exemptions, and you wish to keep making payments on the loan you normally can keep this property.

Florida Foreclosures in Disarray?

As many as 100,000 foreclosure cases in the state of Florida have been put in a state of flux with the undoing of the David J. Stern law practice. March 31, 2012 was the end of the road for Stern’s involvement in more than 100,000 foreclosure cases in which he is listed as the attorney of record. Some have speculated that many thousands of cases could be dismissed, unless lenders quickly hire another lawyer.

The David J. Stern law firm, founded in 1994, became one of the largest in the state of Florida by 2009. Most of its business was handed out by Fannie Mae and Freddie Mac, in which the Stern Florida Attorney handled many thousands of foreclosures. By its peak, the South Florida lawyers were handling one out of every five foreclosure suits in the state of Florida.

But for much of his legal career, Stern has always been associated with allegations of unethical conduct. He had trouble in 1999, when he agreed to pay $2.1 million to borrowers who were overcharged for legal expenses and the subsequent cover-up by the firm via fraudulent documents. The straw that broke the camel’s back was in 2010, when allegations of illegal shortcuts, including robo-signing, became the center of attention across the nation. Stern’s firm was associated with these allegations, and as a result, the firm was fired by both Fannie Mae and Freddie Mac.

Stern, in a letter back in the beginning of March, wrote the firm is basically out of business. What is left is a mess in the Florida court system.

Over the last few weeks, progress has been made in cleaning up matters after the collapse of the Stern law firm. The Florida court system is paying more attention to these fraud allegations. But it’s a long road ahead.

Frank Albear, a West Palm Beach lawyer for LaBovick Law Group, stated that repairs to the Stern files, where necessary, leave stronger legal claims that could protect future home buyers from having to defend title to their home.

Only time will tell how this legal mess will play out. Do you have an opinion? Leave a comment below and let us know your thoughts .

Banruptcy Law - A Look Back at Anna Nicole Case

Bankruptcy courts in the U.S. have always been reliably fast. A recent ruling by the U.S. Supreme Court may change all of that and spur other big changes. The 5-4 decision, Stern v. Marshall, revolves around the case that was originally started by the late Anna Nicole Smith. Smith was married to millionaire J. Howard Marshall II when he passed away. Despite her own death in 2007, the case has continued to wind its way through various courts until reaching the Supreme Court.

The claim by Smith's estate for $88 million in damages is finally resolved, and the estate of the late E. Pierce Marshall, son of her late husband, wins all of his father’s $1.6 billion estate despite Smith's claims for fraud.

The legal saga began when Smith filed for bankruptcy after the death of her husband. The move was made because her late husband's son, E, Pierce Marshall, was successful in barred her from receiving any money from her late husband's estate.

Tax Relief Measures for Physicians

With all the health care changes what about compensating doctors for care given to indigents? Tax credits and tax deductions are meant to raise money for the community as well as reward good behavior and penalize bad behavior. Uncompensated care is defined as health services that are delivered but not paid for by either public or private insurance our out of pocket payments. Uncompensated care is financed through Medicaid, Medicare type payments, and other supplemental programs. Uncompensated care is also charitable care which is care given with no expectation of repayment. Uncompensated care may also be characterized as bad debt care which is care with the expectation of being paid for but not being received. Data suggests that the amount of bad debt far exceeds that of charitable debt.

Efforts to obtain legislation to enact tax deductions for uncompensated care to the indigent have been successful. One reason being to add a new tax deduction to the federal tax code to reduce revenue would be political suicide. There is also no provision in the tax code to cover such a deduction which would not qualify for a charitable donation afforded when giving to a charity under section 526 of the Internal Revenue Code. Offering this deduction would also create a precedent with which other professionals would seek a similar deduction for uncompensated care.

Targeted tax relief such as tax relief measures for physicians would create more governmental and compliance costs for physicians to be subject to. Most importantly, creating a tax relief policy will go against the time honored tradition of physicians providing for the indigent as a principle. It may be that by requiring more individuals to have health insurance physicians will eventually get paid for more of the care they provide by the shear fact that more people will have insurance for payment.

The Stigma of Bankruptcy

The stigma of bankruptcy is a real concern for many consumers. Faced with foreclosure, huge credit card bills, underwater property and a reduction in pay, clients are still hesitant to use the relief afforded by bankruptcy code. Bankruptcy is often a moral dilemma that is eventually overcome by reality of the situation.

The CEO of American Airlines was similarly confronted with this dilemma. It is not uncommon for corporations to restructure under Chapter 11. The dollars and cents of the matter, and the desire to survive support a board’s decision to enter into Chapter 11 reorganization. Gerard J. Arpey of American Airlines believed that he could not morally justify putting his company into bankruptcy, and he resigned saying that bankruptcy was against his way of doing business.

The question becomes this: should a business survive if, because of outside forces, it has to change its way of doing business through reorganization? Sometimes the debt is so overwhelming it is suffocating, but a viable business still exists. The bankruptcy code was put in place, so a reasonable consumer can get help when faced with economic crisis, whether due to their own negligence or outside forces. The bankruptcy code has regulations that prevent abuse of the system.

There should be no shame in using relief that is available because at the end of the day, bankruptcy affords an underwater debtor a way to start with a clean slate, become more financially savvy and be able to once again contribute to the economy in a more positive manner.

LaBovick Law Group, unlike most other bankruptcy attorney West Palm Beach, produces financial end results in regards to bankruptcy, foreclosures, mortgage modification, short sales and more. For more information regarding bankruptcy and the stigma of bankruptcy, please contact our dedicated financial professionals today.

Drowning In Debt from Medical Bills?

According to a Harvard University study, an estimated 2 million Americans are affected by medical caused bankruptcies each year.

Often times, I have found in my bankruptcy practice that unpaid medical bills make up a large portion of an individual’s debt portfolio. Insurance just does not cover all the medical expenses being incurred by Americans today. It is even the case that a person’s income is above the median income level so that they do not automatically satisfy the Chapter 7 presumption of abuse valuation. However, if you look at their medical expenses, there is no way that they can afford medical bills plus pay the necessary expenses of food, clothing and shelter. Generally, in a Chapter 7 bankruptcy, medical bills will be discharged with most other unsecured debt. If a Chapter 13 bankruptcy is filed then all unsecured debts will be reorganized, and a percentage may be paid out based upon available income.

If a client is not going to use the benefit of a bankruptcy filing then a financial services attorney can negotiate the debt in a number of ways: If the doctor still holds the medical claim then a payment arrangement can be negotiated. If a debt collector has the file then the collector can be negotiated with, or a settlement for a percentage of the debt value can be offered.

Each bankruptcy case is taken on a case by case basis, and it could be that a Chapter 7 bankruptcy filing is still available if it is proven that the medical expenses are extraordinary above the median allowed on the means test.