by LawGina | Dec 1, 2023 | Bankruptcy, Debt & Bankruptcy
There is something called a right to set off. This means that a banking institution can take money from your checking or savings account to make a payment on another debt such as a credit card or car loan that you owe the bank. If you are behind on your payments the terms of the contract will allow the bank to do that. It is completely legal. If you are filing for bankruptcy and cannot afford the credit card payments, it is advisable to get a new account at a banking institution where you don’t owe them any money. That is one reason why banks offer credit or incentives to use their bank.
Once a bankruptcy is filed, the automatic stay under the bankruptcy code should limit the bank’s right to a set off. Once your bankruptcy is filed, the law prohibits a setoff of any debt that arose prior to the filing of your bankruptcy petition from any creditor. However, it is still a safe practice to use a bank where you have no credit lines. There are still occasions where creditors violate the automatic stay and while we can get it corrected, it can take some time to do so. There are so many banking options, it is better to be safe than unable to pay your bills or mortgage payment because the bank took their offset. .
If you have any questions about whether a creditor took inappropriate action, reach out to us for assistance and we are happy to evaluate the circumstances.
by LawGina | Oct 31, 2023 | Bankruptcy
This becomes very relevant because your ability to file a chapter 7 is based upon your income and expenses. That threshold varies due to your household size. As of October 2023, the Florida chart for the median income to qualify for a Chapter 7 is as follows:
One person household $60,429
Two-person household $74,131
Three-person household: $83,396
Four-person household: $100,476
Five-person household: $110,376
Six-person household: $120,276
Those numbers typically get adjusted twice annually for inflation. A dependent can be anyone age 18 or younger residing in your house at least 50% of the time. College age children are still considered dependents, as long as, they are between the ages of 18-24 and are full-time students.
If you have a partner, disabled or elderly family member who resides in your household they may qualify as dependents if they don’t work and you are providing more than half of their financial support. Two people cannot claim the same individual as a dependent on their tax returns. For example, you have your child and grandchildren living with you.
You are the person really providing more than one half of the financial support for your grandchild, but your child wanted to declare them as a dependent to get a tax refund. If you are counting someone in your household as a dependent, the tax returns should be consistent and reflect that.
Typically, if someone is divorced and they have 2 children 50/50 custody we list one child as the dependent not two. There are situations where it can be tricky so it’s best to consult with an attorney to make sure you are claiming the correct number of dependents.
by LawGina | Sep 20, 2023 | After Bankruptcy
All of your creditors get listed in the bankruptcy petition so as soon as the bankruptcy petition is filed, the court will mail your creditors the 341 meeting of creditor’s notice. The notice has your case number is located on the notice so they can log on and review all pleadings that get filed in the case.
If you have an active state court case where a lawsuit is pending against a creditor we file what is called a Suggestion of Bankruptcy in the underlying case. That alerts the Judge and all the parties in the State Court case that there is an automatic stay in effect, the litigation must stop because of the active bankruptcy. If you have any co-debtors they also receive a notice from the court.
People often ask if their employer gets notified of the bankruptcy. Your employer will not get notice of your bankruptcy filing. Similarly, people also ask if their landlord on a residential lease gets notified. You do have to list any leases/contracts so they do ordinarily receive notice.
This usually does not present an issue as long as, you are making your rent payments on time to your landlord. If you are involved in a domestic violence type of situation, we can get the court to seal the address from your file for your protection.
Your bankruptcy will typically not show up in a general google search so don’t be deterred from filing for bankruptcy because you think you people will find out. The case is filed in Federal Court and requires Pacer access to view case information.
by LawGina | Aug 14, 2023 | Chapter 13 Benefits
Situations come up frequently where a potential client is on the deed to their parent’s or another relative’s house to make it easier when that person passes away for it to already be in the debtor’s name.
The client often is not living in the property, has not paid a dollar towards the property, the property may be paid off, or the property has equity. The client has their own debt and now wants to file for bankruptcy. Unfortunately, this presents a problem. If you are not living on the property, it is not protected by the homestead exemption.
If you are renting, certainly you can move back in with your parents once your lease expires to get the homestead exemption on the property when you file for bankruptcy. You will have a problem if you already own a house. You can only declare homestead and be living on property. In that case if there is equity in the property (which is not exempt), you would need to pay that back to the trustee.
Let’s say there is 100K in equity in the property, you would need to pay the trustee 100K. If you had 100K in liquid cash, you probably wouldn’t be considering bankruptcy.
That would make a Chapter 7 not feasible. You other option is to file a Chapter 13 and pay your debts over 60 months and keep the property. There are significant benefits of doing a Chapter 13. You stop incurring interest on your debts. You might be able to pay it off early. You would need enough disposable income to pay the trustee each month.
Some potential clients cannot afford to do a Chapter 13, so they suggest removing their name off the deed or putting the property into someone else’s name. That too will not work since all property transfers from two years from the date we file the petition would need to be disclosed. Usually transferring property before considering filing for bankruptcy results in worse issues and is not recommended.
If you find yourself in this situation, feel free to contact my office to discuss your options.
by LawGina | May 31, 2023 | Chapter 7
There are certain income requirements to file a Chapter 7. That amount typically adjusts for inflation twice per year. That amount varies based on your household size and by state.
In the State of Florida the amounts are as follows:
One person household: $60,429
Two-person household: $74,131
Three-person household: $83,396
Four-person household: $100,476
Five-person household: $110,376
Six-person household: $120,276
Dependents in your household include children under the age of 18. If custody is split, we usually factor in how much time the child spends at your residence and how many children there are. If custody is split 50/50 and there are two children, we would list a two-person household. Children under the age of 24 that are in school full-time can also be considered dependents or any disabled children. If there are elderly parents living in the household, they can be considered in the household size or any other relatives. However, if any person is included in the household size, we need to include their income and expenses as well. Social security does not count towards the income amount.
If you are still over that amount, there is still a potential you could qualify for a chapter 7 if you “pass” the long form of the means test. The means test is required for all those debtors who are over the “median”. The test determines your eligibility for a Chapter 7 or the amount of your plan payment in a Chapter 13. It uses some of your actual expenses and some expenses are determined by the IRS guidelines based on your household size and county where you reside. It can get a bit complicated, so it is good to consult with a bankruptcy attorney to guide you through the process.
