Bankruptcy Law

Knowing When to File for Bankruptcy

Making the decision to file for bankruptcy is never an easy one. Many times, it can be difficult to know when the time is right or when it is better to wait.  

A bankruptcy case allows a consumer to receive a much-needed financial fresh start by discharging his or her outstanding consumer debts. The types of debts that are discharged in a bankruptcy case include credit card debt, mortgages, car loans, medical debt, and other unsecured loans.  

Bankruptcy Law

The Pros and Cons of Filing Chapter 7 Bankruptcy in 2020

For someone struggling financially, a Chapter 7 bankruptcy case can offer him or her a fresh start and freedom from insurmountable debt. The year 2020 has pushed many consumers to the brink financially, and bankruptcy can offer the help a person needs to start the New Year debt-free.  

Pros of Filing Chapter 7  

As soon as a Chapter 7 bankruptcy case is filed, the consumer receives immediate protection from his or her creditors. This protection comes from the automatic stay that is issued by the court upon filing. The automatic stay puts a pause on all collection actions, including collection phone calls, legal proceedings to collect on a debt, wage garnishments, evictions, and foreclosures. The automatic stay also gives consumers a chance to breathe and work with the court and bankruptcy trustee.   

Bankruptcy Law

Tips to Keep in Mind Before Filing for Bankruptcy in Florida

Many people view bankruptcy as this great unknown and truly do not understand the process before filing. However, it helps to understand what is involved when filing for bankruptcy and what to expect during the process.

What Is Bankruptcy?

Bankruptcy is a legal proceeding that basically provides the filer a fresh financial start. While it does involve putting the filer’s financial situation in the hands of the bankruptcy court and bankruptcy trustee, it can give the person a chance to breathe and get back on his or her feet. Bankruptcy will put all collection proceedings and foreclosure cases at a stop through the automatic stay and will also stop creditors from continuing to contact the consumer.

Bankruptcy Law

Important Factors to Keep in Mind When Filing for Bankruptcy

When filing for bankruptcy, certain factors should be kept in mind, including the type of bankruptcy being filed, property exemptions available to the filer, and the various laws and legal regulations that accompany filing for bankruptcy.

The type of bankruptcy being filed.

The most common types of consumer bankruptcy are Chapter 7 and Chapter 13 bankruptcies. A Chapter 7 bankruptcy allows filers to receive a total discharge of their qualifying debts and is an option used mostly by filers whose debts are particularly high compared to their level of income. To file for Chapter 7 bankruptcy, filers must qualify under the bankruptcy means test. Chapter 13 bankruptcy allows the consumer to enter a repayment plan to pay all or part of his or her debts over the course of three to five years.

Bankruptcy Law

Steps for Filing Chapter 7 Bankruptcy in Florida

If someone is considering filing for Chapter 7 bankruptcy, the path that person needs to take may not always be clear. While everyone’s situation differs in some respects, certain steps must be taken when it comes to proceeding with Chapter 7 bankruptcy.

Review Your Financial Situation

Before proceeding, it is always recommended that the filer sit down with an experienced bankruptcy attorney and go over what types of debt the person has, as well as what property would be protected by Florida’s bankruptcy exemptions.

Bankruptcy Law

Converting a Chapter 13 Bankruptcy to a Chapter 7

On occasion, a Chapter 13 bankruptcy case may need to be converted to a Chapter 7 case. This transition may be on the request of the individual filer or the bankruptcy court. Many bankruptcy filers will decide to convert their Chapter 13 case into a Chapter 7 case in the event their financial situations have changed after the initial filing, or if the filer had originally chosen to pursue a Chapter 13 case to protect property that no longer needs protection.

The Conversion Process

Florida bankruptcy courts have specific guidelines that must be followed for converting a case from Chapter 13 to Chapter 7.  Unless the filer has already received a Chapter 7 bankruptcy discharge within the most recent eight years, he or she should be able to convert a Chapter 13 case into a Chapter 7 at any time.

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Why You Should Never Use Your 401(k) to Pay Down Debt

When someone is facing a large amount of debt, it can be tempting to want to use all available resources to pay off that debt. Even if it means taking money out of retirement accounts. However, this could end up costing more than anticipated, delay retirement- and oftentimes the inevitable.

If bankruptcy is in your foreseeable future, the last thing you want to do is use assets that would otherwise be protected in bankruptcy to pay off debts that could be discharged in the bankruptcy case. Unsecured debt, such as credit card debt, personal loans and medical bills, end up being discharged at the end of a bankruptcy case, so it would not be worthwhile to use retirement savings to pay off these debts only to file for bankruptcy later.

Funds in your 401(k) are protected by federal bankruptcy law. While many assets can be used to pay off debts, retirement account funds are protected and cannot be touched under the Employee Retirement Income Security Act (ERISA). This law sets minimum protection standards for anyone who voluntarily contributes to a retirement account in the private sector. Florida also allows for exemptions for IRA accounts in bankruptcy.

The problem is many individuals try to avoid bankruptcy at all costs, and they see using assets, such as retirement savings, as an easy way to pay off debt.  But this does not come without consequences. Taking money out of retirement accounts too early can have some negative tax implications. If you take money from a retirement account and are under the age of 59 ½, you can incur some tax penalties as a result, including a 10 percent early withdrawal penalty. Money should never be taken prematurely from your retirement accounts without first consulting a financial advisor and accountant.

If you are struggling to pay off debt, including credit cards, medical bills or personal loans, you should consult with an experienced bankruptcy attorney to discuss the real possibility that bankruptcy may be the best option for you. It is recommended that you consult these professionals before taking the money out of retirement accounts. We have filed bankruptcy petitions for clients with more in their retirement accounts than on their credit card statement. A Chapter 7 bankruptcy allows you to hold onto all of your retirement savings and keep every penny of your 401(k).

However, this is only the case if the money remains in your 401(k) retirement account.  Removing funds from the 401(k) or any retirement account before filing for bankruptcy turns the funds from a protected asset to an unprotected asset.  It is important to speak with an attorney, especially if you have recently lost your job and have considered pulling from your retirement savings to help pay for day-to-day living expenses.

Click here to read more.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

 

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Understanding the Bankruptcy Process in Florida

Making the decision to file for bankruptcy is never an easy one. The steps taken during a bankruptcy case vary depending on the type of person or entity filing for bankruptcy. Once you decide to file for bankruptcy, it is important that you avoid mistakes that could impact your case or jeopardize your debts from being discharged.

Business filers are limited normally to a Chapter 11 bankruptcy, unless the business is a sole proprietorship. In this situation, the business may be able to proceed with a Chapter 7 or Chapter 13 bankruptcy. If the filer is an individual, depending on qualifications, he or she may be able to do either a Chapter 7 or Chapter 13 bankruptcy.

To qualify for a Chapter 7 bankruptcy case in Florida, the debtor needs to pass the means test. The means test takes into account your income, expenses and family size to determine whether you have enough disposable income to repay your debts. If the debtor does not pass the means test, the next option is a Chapter 13 bankruptcy, which is also known as a repayment or reorganization bankruptcy. In Chapter 13, the debtor works with the bankruptcy trustee on a three-to-five-year-long repayment plan whereby the debtor’s debts are negotiated down and consolidated into one single monthly payment. The debtor will normally get to keep all of his or her assets in this type of bankruptcy.

Many people fear that filing for bankruptcy will result in them losing everything they own. Do not believe this myth.  Many Chapter 7 cases are “no-asset” cases, which means that the debtor gives up no possessions due to the allotted bankruptcy exemptions.  Florida has one of the most generous homestead exemptions in the country. To use Florida’s exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.

The state also allows the filer to exempt personal property up to $1,000, education savings and health savings, tax credits and refunds, and up to $1,000 in motor vehicle equity if the filers are married and filing jointly. Additionally, Florida allows for wages of the head of family to be exempt for up to $750 weekly or the greater of 75 percent or 30 times the minimum wage. Florida exemptions also cover different types of pensions and retirement funds, as well as annuities and insurance policies.

If a debtor passes the means test and is able to file a Chapter 7 bankruptcy case, the next question is whether the filer’s debt is dischargeable. For the most part, bankruptcy involves debt that is unsecured and not connected to collateral, such as medical bills or consumer credit card debt. Other debt, such as child support payments, tax debt and spousal support are not dischargeable. If the filer’s debt is mainly unsecured, Chapter 7 bankruptcy can be the better option for him or her to discharge the debt. If the filer’s debt is connected to another asset that the filer wishes to keep, a Chapter 13 filing may be the better option.

It helps to have the assistance of an experienced bankruptcy attorney to guide you through the process. A bankruptcy attorney can review the debtor’s situation, advise him or her on the best route to take with respect to bankruptcy and can ensure that all paperwork is completed correctly to avoid any unnecessary delays.

Please click here for more information.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

 

Bankruptcy Law, Credit, Debt Relief, Foreclosures, Timothy Kingcade Posts

If you are facing foreclosure, Bankruptcy can help.

Every month, there are a number of Americans who fall behind on their mortgage payments. Some homeowners are able to work out loan modifications with their lenders, but many are not. It may seem counter-intuitive, but when someone is facing foreclosure and is in the middle of a major financial crisis, bankruptcy can be a viable option to help save that person’s home. Ultimately, it depends on your specific financial situation and the type of bankruptcy you file – but bankruptcy can be used as a tool to help keep your home.

The Power of the Automatic Stay

If your home is already set for a foreclosure sale, you may be asking, “how can I make it stop?” Filing for bankruptcy can put a stop to the process or at the very least postpone it. As soon as a petition for bankruptcy is filed, the court issues an order called an “automatic stay,” which puts an immediate halt to all collection activities that were happening to the homeowner before the petition was filed. This automatic stay also applies to foreclosure cases.  Creditors (including your mortgage lender) must immediately cease collection attempts. Even if the mortgage lender has the home scheduled for a foreclosure sale, the sale will be postponed during a pending bankruptcy.

How a Chapter 7 Bankruptcy can Help:

Chapter 7 bankruptcy cancels all the debt secured by the home, including mortgages and home equity loans. This type of bankruptcy also goes a step further, thanks to a new law, Chapter 7 also forgives the homeowner for tax liability for losses the mortgage or home-improvement lender incurs because of the homeowner’s default.

How a Chapter 13 Bankruptcy can Help:

If you want to stay in your home and do whatever possible to get caught up on past-due mortgage payments, a Chapter 13 bankruptcy may be the best option. A Chapter 13 bankruptcy is also known as a reorganization bankruptcy. It allows you, as the bankruptcy filer, to work with the bankruptcy trustee to create a repayment plan to catch up on qualifying payments. Chapter 13 bankruptcy plans normally last anywhere between three to five years.

Florida’s Bankruptcy Exemptions

Florida has one of the most generous homestead exemptions in the country and allows homeowners to claim an unlimited value of their primary residence (if the property is not larger than half an acre in a municipality or 160 acres in a non-municipality). To use Florida’s exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition.

Although bankruptcy and foreclosure can be damaging to your credit, sometimes filing for bankruptcy can be the start of rebuilding your credit because it allows you to obtain a fresh start.  Foreclosure not only damages your credit, but you are left with the mortgage debt, which will likely result in creditors not considering you for future mortgages.  If you find yourself facing foreclosure and are concerned about your financial future, remember that filing for bankruptcy may help save your home.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

 

 

 

Debt Relief, Foreclosures, Timothy Kingcade Posts

Clarifying Contested Foreclosures After Bankruptcy – Florida Governor Rick Scott Signs off on New Law

When going through the bankruptcy process, filers must declare their intentions toward any property securing their debt, which can include their home. This can involve surrendering the property to the lender or retaining it and making payments to reduce the debt.  If you agree to surrender the property in order to clear the mortgage debt, can you contest the foreclosure to try and delay the process while remaining in the home?

Senate Bill 220, a new law addressing the property rights of defendants pertaining to bankruptcy and foreclosure proceedings, recently signed by Florida Governor Rick Scott says no. The bill is consistent with the ruling in the Florida Middle District Case In re Metzler, a 2015 case that ruled debtors cannot raise defenses once a subject property has been surrendered in bankruptcy. However, the law does allow defenses to be made based on the conduct of the lender after surrendering the property.

Florida has one of the most generous homestead exemptions in the country. To use Florida’s bankruptcy exemptions, you must have resided in Florida for at least 730 days before filing your bankruptcy petition. To claim the full value of the homestead exemption in Florida, you must have owned the property for at least 1,215 days before the bankruptcy filing.

Click here to read more on this story.

Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.