Many people in Florida get solicited and opt to install solar panels in their home to reduce their electric bills. It’s not uncommon for the cost of the solar panels to be in the $30,000 range with relatively high interest rates.
The contracts usually last for 20 years. With interest, the solar panels end up costing closer to $40,000 once its paid in full. So, it’s not a small investment. There are a lot of customers who end up having buyers’ remorse after that purchase.
Most of the solar panel companies will file what is called a UCC (Uniform Commercial Code) statement with the secretary of state to notify other creditors that there is a secured lien on their property. It creates a lien against the collateral so if your home is sold, their lien gets paid off. It also ensures that their collateral is not sold or not used as collateral for another loan. They typically use language in their financial statement that protects the rooftop solar panels, batteries, cables, wires, support brackets, and ground mounted racking systems and secures the solar system only.
If you no longer want the solar panels, then bankruptcy will afford you some options. You can surrender the solar panels and system and see if the company will come and remove them. Another option would be to see if they send a reaffirmation agreement and try to renegotiate the terms of the loan. Alternatively a Chapter 13 case is where you can file a motion to value the panels so that you are paying back the value of the system instead of what you actually owe on it. This might also reduce your interest rate.
The only way to satisfy the UCC lien is to pay off the debt. UCC filings expire every five years.
There is no minimum threshold amount of debt to be able to file for bankruptcy. My personal recommendation is that it’s probably not worth it for a debt amount under $5,000. If you have debt over $5,000, your minimum monthly payments are causing you a hardship, and you have been paying high interest and minimum payments with little, or no progress in reducing the principal amount of the debt you are a potentially good bankruptcy candidate.
There is no maximum amount of debt to file a Chapter 7, so that amount can be unlimited. If you have hundreds of thousands of dollars in debt, be assured that the trustee will ask how that money was spent. Some people have over hundred thousand dollars just in student loan debt alone. Even though there is no debt limit to file a Chapter 7, there are income requirements which should be addressed during your consultation. Our first analysis is whether you will qualify for a Chapter 7.
There are caps on debt in a Chapter 13 case which might seem illogical because you are actually paying your creditors, through the trustee for 36-60 months and in a Chapter 7 you are not making a monthly payment to the trustee. For a Chapter 13 you are permitted to have $465,275 in unsecured debt. Unsecured debt includes credit cards, personal loans, medical debt, and student loan debt.
You are allowed to have up to $1,395,875 in secured debt which would include items such as a home mortgage or financed vehicle.
There are certain income qualifications for a Chapter 7 bankruptcy. Social security income, including social security disability does not count as income on the means test (the test on the bankruptcy petition that determines which chapter of bankruptcy you qualify for). Similarly, veteran disability benefits do not count as income. For example, if you are receiving social security or veteran disability benefits you could make an unlimited amount per month and still qualify for a Chapter 7 bankruptcy.
Some people are surprised that pensions for government work such as teachers, police officers, military, or firemen still count as income. Workers’ compensation benefits also count as income. Short-term or long-term disability from a private company that is not social security are considered income. Regular wages or income from self-employment are considered income. Child support and alimony are considered income on the means test. Even if the income is not taxable, it could still qualify as income on the means test.
The issue of whether money in your account at the time of filing is exempt is a totally different issue than whether it counts as income on the means test. For example, workers compensation, child support and alimony are generally exempt even though they are considered as income on the means test Any money you have in your bank account from one of these sources in addition to social security or veteran disability benefits would be protected from the trustee.
We can exempt up to 75% of wages in your bank account. However, self-employment income is not exempt. It is important to have an attorney help you evaluate your candidacy for a Chapter 7 bankruptcy and to ensure you maximize your property exemptions.
If you have been living in Florida for over 2 years, the homestead exemption can be used as long as there is less than $189,050 in equity for each person filing. For example, if there are two married people filing a joint bankruptcy, then you can double the exemption amounts so that amount would be less than $371,100 in equity you would be allowed to protect. You can have unlimited equity in your home if you have owned it for 1215 days prior to filing your petition.
This includes another home if you have bought and sold another homestead property within those 1215 days. Typically, this is not an issue since the home equity is usually lower than the allowed statutory amount. If you have moved from another state in the last 2 years, we cannot use the Florida exemptions and would have to perform an analysis on which exemptions apply. Some states allow non-residents to use their exemptions. Other states will require non-residents to use federal exemptions. Most states would not allow you to exempt property in Florida after you have moved from another state.
You must also be residing in your home to be able to claim homestead exemption. The homestead exemption would not protect or apply to an investment property or a property where you are on the deed but are not living in the residence. There are exceptions if you are away from your home temporarily but have full intention of returning. Some examples are being away for medical treatment or being active duty in the military. As long as you intend to return to your home and you are not renting out the property, it can continue to be exempt as your homestead.
There are occasions where I get phone calls from potential clients where either a bank account has been “frozen” or money has been seized by a creditor out of their account or their wages have been garnished out of their paycheck.
This can lead to a very dire situation if you are living paycheck to paycheck and money that you are counting on to buy groceries or pay rent is now gone. When that occurs, our first step is to analyze whether the creditor appropriately garnished your wages or bank account. For example, if the source of the money in your bank account is social security funds, those funds would be exempt from garnishment.
If that is the case, you might be able to file a claim of exemption in the underlying case to see if the judge would reverse the garnishment order and “unfreeze” those funds.
Filing for bankruptcy will immediately stop any collection efforts in the future. If the creditor was entitled to the garnished funds, they are not required to retroactively reimburse you for those funds that were taken before you filed your bankruptcy case. If the creditor garnishes anything after you file your bankruptcy case, you would be entitled to get those funds reimbursed.
Whenever you get served with a lawsuit, it is important to speak with an attorney as soon as possible to determine if you do have any exemptions to the garnishment and to discuss the best timing for filing your bankruptcy case. That way the situation can be handled to ensure that you prevent a garnishment.
