Florida Bankruptcy Lawyer Blog

What is the “automatic stay”?

When a debtor files for bankruptcy, the debtor is covered by an umbrella of protection called the automatic stay. It is a stay imposed by bankruptcy law that prohibits most creditors from taking action against the debtor or the debtor’s estate. As can be deduced by its title, the protection is automatic and the debtor need not take any action other than filing bankruptcy for it to take effect in most circumstances.

What does the automatic stay protect the debtor and the debtor’s estate from?

The automatic stay protects the debtor and the debtor’s estate from all debt collection activity including collection calls, sending bills or invoices, and even prevents foreclosure sales and pending civil court hearings. The automatic stay has protected a countless number of our clients from losing their home, having to attend a deposition, having a judgment placed against them, and losing a vehicle to repossession.

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As we are all aware, the job market in Southwest Florida has been tough, to say the very least. Fortunately, I have met with a number of individuals recently whose times may be changing for the better. Some have just finished up their respective scholastic endeavors and some have obtained employment in a new industry after learning a new skill. However, while times may be improving on the job front, these individuals may still be straddled by the debt that was helping keep them afloat over the last few months. For these individuals to whom a Chapter 7 bankruptcy may help, I explain the necessity of understanding the timing of filing a bankruptcy.

Continue reading " Jobs, Wages, Bankruptcy and the Means Test " »

Debtors in Chapter 13 bankruptcy often wonder how their chapter 13 trustee payment is calculated. There are several factors that can determine one’s payment.

At minimum, the payment to the trustee must be the Debtor’s entire monthly disposable income, as well as enough to pay unsecured creditors what they would receive in a chapter 7 bankruptcy. Some bankruptcy plans also contain car or house payments. Other plans pay priority debt such as certain IRS debt. Priority debts must be paid in full over the life of a bankruptcy plan.

Continue reading " What Is A 100% Chapter 13 Plan? " »

Recently, I have seen an upswing in the amount of people seeking advice concerning taxes owed to the Internal Revenue Service (IRS). While IRS debts are not generally dischargeable in a bankruptcy, a Chapter 13 may be beneficial to those seeking to pay the IRS in full without any interest or penalties accruing.

Continue reading " IRS Debts And Bankruptcy " »

The answer to the question: Can a State Declare Bankruptcy? is No. As of today, January 22, 2011, the answer is No. That is the good news. However, I'm sure many people who work in the budget offices in California and Illinois wish they could. A quick fix would be nice for these and other States plagued by debt.

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A couple of months ago my colleagues David Lampley and Carmen Dellutri both wrote about the importance of protecting 401(k)’s and IRA’s and not taking money from them to pay bills if you can at all avoid it. Their advice continues to be extremely valuable and more important than ever in this economy, but I would like to expand on it here: Don’t take out cash surrender value from life insurance policies to pay your bills either!

Continue reading " Cash Surrender Value of Your Life Insurance Policy Is Probably Protected " »

The Supreme Court’s most recent opinion on bankruptcy, Ransom v. MBNA, issued on January 11, 2011 deals a major blow to above median consumer debtors in a Chapter 13 bankruptcy that do not have a car payment. The issue before the court was whether a Chapter 13 debtor may take a vehicle ownership expense under the Means Test when a vehicle is owned free and clear of any liens and no payment is being made. The Court, in an 8-to-1 opinion written by Justice Kagan, answered a flat no. Justice Scalia was the sole dissenting judge.

Continue reading " Ransom v. MBNA United States Supreme Court Deals A Blow To Consumer Debtors " »

As of December 22, 2010, there is a new bankruptcy law. Technically it is just an amendment rather than an all out reform such as that seen in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). BAPCPA has been described by legal scholars, practitioners, and the courts as poorly drafted and ambiguous. On December 22, 2010, the President signed H.R. 6198: Bankruptcy Technical Corrections Act of 2010 (BTCA) into law to correct technical errors – though I would hardly say an error in the law is technical.

Continue reading " The New Bankruptcy Law for 2011 " »