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Miami Bankruptcy Law Blog

Do I qualify for Chapter 7 or Chapter 13 bankruptcy?

If you are considering filing for bankruptcy but are not sure of your eligibility, the quickest and best way to figure it out is to meet with a lawyer. That said, there are guidelines that can give you a general idea as to whether you qualify.

Chapter 7 bankruptcy is means-based, while Chapter 13 looks at certain caps for secured and unsecured debt and at criteria such as whether your income is regular.

Lawsuit filed over repossession of vehicle

One man has filed a suit against a Chase Bank after it allegedly failed to apply his payments and send him proper notification about his car loan. He is suing the financial institution over the repossession of his vehicle, asserting that a bankruptcy case should have kept that from happening. While this case is pending in another state, similar cases are taken to court in Florida each year.

The man sued back in July, claiming that the institution had failed to apply payments and committed breach of contract, among other mistakes. He alleges that he was the co-buyer of the vehicle and that the buyer had filed bankruptcy, listing the car as exempt from the proceedings. The buyer apparently received a bankruptcy discharge, at which point the co-buyer purportedly informed the bank that he would like to continue making payments through direct debit.

Florida debt relief business allegedly stole $70M across the U.S.

Approximately 15,000 people were ripped off by three telemarketers who based their operations out of the state. The Federal Trade Commission, the Attorney General's Office of Florida, and an attorney working to get back lost assets claim that these men milked their victims out of around $70 million. The men allegedly sought out victims who were struggling with debt by offering them some sort of debt relief.

Both the Federal Trade Commission and the attorney general's office filed a complaint in federal court concerning these schemers. According to that complaint, the telemarketers told customers that they would pay off their personal debts. They also offered to obtain dismissals, consolidate, or pay off the debts of their victims.

A state's largest debt collector to pay $1M restitution for fraud

The largest debt collection agency in another state has agreed to pay $1 million in a consent judgment entered into with the state's attorney general's office. According to the lawsuit, the debt collectors had filed massive amounts of lawsuits per year, tens of thousands of them, which later proved to be inaccurate or unsubstantiated. They were accused of filing over 200,000 lawsuits in that state. False collections from a debt collector have become a problem in many states, including Florida.

According to the suit, the debt collection firm had issued demands on consumers for debts that they did not owe. The firm had no proof that these debts existed or that they were owed by the people who they pursued. They are accused of filing false pleadings, and for demanding payment for debts which had been dismissed or were outside of the statute of limitations. The firm also took payments from sources that were legally exempt, such as a person's Social Security check.

Questions answered for those struggling with debt

The subject of debt is often considered to be a taboo one. Those who are struggling with debt are sometimes too embarrassed to seek help and try to carry their financial burden on their own. But debt is just like any other subject -- one can learn by asking questions. For those in Florida who are worried about the status of their finances, here are a few questions and answers that are often asked about the subject.

One of the first questions that people may have about their debt is whether or not time will erase it. The short answer is no. Although some debts, such as medical bills and credit cards, have a statute of limitations, the person still owes the money. Even though the debt collector cannot sue a person after their state's statute of limitations is up, they can still seek to collect the money owed.

Abandoning a home during bankruptcy and foreclosure proceedings

The two main types of bankruptcy for homeowners are Chapter 7 and Chapter 13. Of course, both have a different outcome for the homeowner. With Chapter 7, homeowners often ask the courts to discharge their mortgage debt altogether, while with Chapter 13, debt is reorganized and the home is usually kept. In either form of bankruptcy, however, abandoning a Florida home may not be a good idea, whether foreclosure has occurred or not.

As mentioned, when a person files Chapter 13, he or she usually sets up a way in which most of the debt owed is reorganized and paid over a period of three to five years. When that time is up, the filer has a clean slate and is caught up on any bills that were behind. The person continues to make mortgage payments if needed and stays in the home.

Overcoming reservations with facts regarding Chapter 7 Bankruptcy

The burdens of debt have placed many individuals in Florida and elsewhere under significant financial strain. Those who are constantly dealing with similar struggles could be suffering a lesser quality of life during this period, and many may wish to know more about the available options for relief. When weighing the options, such as Chapter 7 bankruptcy, one might want to use caution, as any misleading information could interfere with achieving a viable solution.

There are some common myths surrounding bankruptcy that could, unfortunately, influence a person's decision. Some may be under the impression that a similar path for relief indicates some form of failure, or that attempting to continue with debt payments is ultimately a better option. However, not all debts are avoidable, and struggling with monthly dues for prolonged periods could leave a person in a never-ending cycle of financial stress, whereas bankruptcy might help one overcome these issues and begin moving toward a brighter financial future.

$11M foreclosure fraud lands 3 people in prison

Three residents from another state have found themselves facing prison time after engaging in an $11 million scheme. According to the report, these people claimed to be a from a non-profit program that offered help to homeowners who were facing foreclosure. Instead of helping, however, they kept the money for themselves, leaving the homeowners with nothing. Although this case was not in Florida, it is an all-too-familiar story.

The three people were convicted of a number of crimes. They were said to have committed wire fraud, mail fraud and conspiracy to commit fraud. Homeowners who get caught up in foreclosure fraud schemes like this one often spend everything they have trying to keep from losing their home. Unfortunately, not only do they end up losing all of their money, but their homes end up in foreclosure as well.

How bankruptcy affects 401(k) retirement savings

When people are considering bankruptcy, one of the first concerns that they may have is how this decision will affect their future. For example, many may ask whether retirement savings is exempted under bankruptcy law and if creditors can take their 401(k)s. Here is a look at how bankruptcy can affect a person's 401(k) retirement plan in Florida and other states.

In most cases, 401(k) retirement plans cannot be touched by creditors during a bankruptcy case. That is because of a law known as the Employee Retirement Income Security Act, or ERISA. This law gives protection to a person's retirement assets if they go through financial hardships. Any 401(k) plan that does not fall under the Internal Revenue Code 401a, or is sponsored by the person's employer, is exempt in bankruptcy.

How does Chapter 13 bankruptcy affect your credit?

Filing for Chapter 13 bankruptcy allows you to reduce the amount of debt you owe and still retain certain assets. Despite these benefits, you may still feel unsure about pursuing this route out of fear of what it will do to your credit.

The good news is that the effects on your credit will not last forever, and the consequences (both good and bad) of Chapter 13 outweigh the consequences of not declaring bankruptcy.

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