Florida Bankruptcy Lawyer Blog

In Part 1 of this article, I discussed the reasons you should NOT reaffirm a mortgage loan. The decision of whether or not to reaffirm a vehicle loan is more complex. While it is very rarely ever in anyone’s best interest to reaffirm a mortgage loan, it often may be in a Chapter 7 debtor’s best interest to reaffirm a vehicle loan. The main reason for this is that there is a pretty significant chance that your lender has the legal right to repossess your vehicle if you don’t sign a reaffirmation agreement – even if you keep current on all of your payments! If your loan documents specify that filing bankruptcy is itself an event of default (you will need to have an attorney review the documents in order to confirm this), then if you don’t sign a reaffirmation agreement, you are risking losing your vehicle. Now, most people rely heavily on their vehicles for their livelihood: to get them to and from work, to get their kids to and from school, grocery shopping, etc. Not many people are willing to risk losing their vehicle, however small or large that risk may be. So, most Chapter 7 debtors do end up signing a reaffirmation agreement when requested by their lender, and most attorneys will likely support that decision, as long as it does not appear to impose an undue hardship on the debtor to make the monthly loan payments..

Continue reading " Should I Sign A Reaffirmation Agreement Part II " »

I wrote a blog last year entitled “New Check Fraud from Cash Advance Scam.” The basics of the scam are: A debt collector will identify themselves as an investigator investigating the debtors for check fraud arising from a payday loan. The collectors threaten jail unless the debt is paid. In the blog, I wrote that the statements are false as there are no criminal charges for simply not paying debt; debtor’s prison was abolished in the United States in the 19th century. Well, while that is all true, there is a sad trend that debt has a key to the jail’s back door.

Continue reading " The New Debtor's Prisons: How Debt Can Result In Jail " »

After filing a Chapter 7 bankruptcy, you or your attorney may receive what’s called a “reaffirmation agreement” from your mortgage lender, likely accompanied by a letter trying to convince you that you should sign it. What that letter is not going to tell you is the most important piece of information – why signing is NOT in your best interest. That is what I am going to explain to you here.

A reaffirmation agreement is basically a brand new legal contract that revives your personal liability on the mortgage note – a liability that will otherwise be wiped out when you receive your discharge in your bankruptcy case. What this means to you is that if sometime down the road, say, 2 or 5 or 10 years from now, you come upon hard times again and can no longer afford to make your mortgage payments, your lender would not only be able to foreclose and take your home, but the mortgage company can also file a lawsuit against you for the deficiency from the foreclosure sale (ie, the difference between what you owe on the mortgage loan and the amount the property sold for at the foreclosure sale). For example, if you owe $200,000 on your mortgage loan, and your home is worth only $150,000 at the time of the foreclosure sale, then if you sign a reaffirmation agreement now, you could legally owe your lender $50,000 even though you no longer own your home. That is a HUGE risk to take for very little reward.

Continue reading " Should I Sign A Reaffirmation Agreement On My Mortgage After Filing For Chapter 7? " »

As a bankruptcy attorney in Southwest Florida, many times I see clients who think it is best to withdraw all their money from their bank accounts before filing. This is an incorrect assumption for a couple reasons: (1) any amounts held in cash must be disclosed; and (2) exemptions may apply to protect those funds while in the bank account.

Continue reading " Don't Withdraw That Paycheck And Don't Commingle Your Funds " »

Consumer bankruptcy filings are up approximately 14% since the same time last year. The causes of the filings are obviously the recession, unemployment and the housing crisis (the Big Three). In South West Florida, we know the big three all too well. It is expected that over 1.6 million people will file for bankruptcy protection this year.

I have mixed emotions on this issue. First, I think more people should consider the bankruptcy option. I can say this because I understand the bankruptcy process and the benefits it offers. Likewise, I have an open-mind to bankruptcy. I see many people who say that bankruptcy is the worst thing a person can do, and unfortunately, that is not true. Bankruptcy is usually not the worst option.

Continue reading " Consumer Bankruptcies Filings Up 14% " »