Filing a bankruptcy case gives you a fresh start to recover after a financial crisis without the burden of debts you cannot pay hanging over your head. By filing a Chapter 7 or Chapter 13 bankruptcy case, you can get out of debt, protect retirement savings, and keep your property. In most cases, debtors can eliminate most, if not all, unsecured debts without losing any property.
While filing a bankruptcy case is usually not as stressful or difficult as many people believe, the process is not something that most people want to repeat. However, lawmakers realize that some individuals may experience more than one financial crisis during their lifetime that requires the assistance of the bankruptcy court to resolve. Therefore, lawmakers included a provision within the Bankruptcy Code that allows debtors to file bankruptcy again if they find themselves in another financial situation in which they cannot pay their debts.
However, filing a bankruptcy case and receiving a bankruptcy discharge are two separate matters. The distinction between a bankruptcy filing and a bankruptcy discharge becomes very important when you are considering filing bankruptcy again
Individuals throughout Florida file for bankruptcy relief for numerous reasons. Regardless of the underlying reason for filing a Chapter 7 or a Chapter 13 case, the common factor in all cases is that the person cannot afford to pay his or her debts. Reasons, why a person cannot afford to pay debts, include:
Many different life events can precipitate the filing of a Chapter 13 or a Chapter 7 case. Unfortunately, someone may experience several financial hardships. While some financial hardships may not require filing for bankruptcy relief, a person may find that he or she needs to file another bankruptcy case.
For that reason, the Bankruptcy Code does not prevent a person from filing bankruptcy again, but it does limit the number of bankruptcy discharges a person can receive during a specific period.
The goal of filing a Chapter 7 or Chapter 13 case is to obtain a bankruptcy discharge. The bankruptcy discharge eliminates your legal responsibility to repay a discharged debt. Creditors are prohibited by law from taking any actions to collect a discharged debt, including wage garnishments, filing debt collection lawsuits, or sending collection letters.
If you file a bankruptcy case but do not receive a bankruptcy discharge, your legal liability to repay debts remains and your creditors may continue legal actions to collect the debt when the bankruptcy case is closed. Therefore, filing a Chapter 7 or Chapter 13 case without receiving a bankruptcy discharge is useless if your intention is to get out of debt.
There are no restrictions on the number of bankruptcy cases you can file or when you can file another bankruptcy case within the Bankruptcy Code. However, it does limit the number of bankruptcy discharges you may receive during a certain period. The easiest way to remember when you are eligible for another bankruptcy discharge is to use the 2-4-6-8 Rule.
The 2-4-6-8 Rule helps you remember how long you must wait between bankruptcy filings to receive another bankruptcy discharge. Below are the time frames for receiving another bankruptcy discharge:
The time you must wait between Chapter 13 cases is two years to be eligible to receive another bankruptcy discharge by filing Chapter 13 again.
If your previous bankruptcy case was filed under Chapter 7, you must wait four years between filings to receive a bankruptcy discharge under a new Chapter 13 case.
If your previous bankruptcy case was filed under Chapter 13, you must wait six years before filing a Chapter 7 case to be eligible to receive a bankruptcy discharge.
The time you must wait between Chapter 7 caseshttps://www.law.cornell.edu/uscode/text/11/727 is the longest to receive another bankruptcy discharge. You must wait eight years between Chapter 7 bankruptcy cases to be eligible for another bankruptcy discharge under Chapter 7.
In some cases, factors may complicate the calculation of the time required between bankruptcy filings to receive a bankruptcy discharge. For instance, your circumstances might qualify you for a hardship discharge even though the time between bankruptcy files does not meet the requirements under the 2-4-6-8 Rule.
It is best to consult an experienced Orange Park bankruptcy attorney if you believe you need to file bankruptcy again. A Florida bankruptcy lawyer can analyze your current financial situation, explain your various bankruptcy and non-bankruptcy options for debt relief, and help you choose the best debt
The decision to file a Chapter 13 or a Chapter 7 bankruptcy case should only be made after careful consideration of all debt relief options. If you are struggling to pay debts each month, filing for bankruptcy relief may give you the fresh start you need to recover after a financial crisis.
Bankruptcy Attorney Tony Turner represents individuals, couples, and businesses in Orange Park, Jacksonville, Lake City, Deland, Augustine, and the surrounding areas as they seek affordable solutions to debt problems.
If you are ready to explore bankruptcy options to get rid of debt, contact The Law Office of Tony Turner by calling (904) 679-2020 or by using the online form to schedule your free consultation with a Florida bankruptcy lawyer.
What is the Fair Credit Reporting Act (FCRA)? The Fair Credit Reporting Act (FCRA) details how creditors can collect information and access debtor’s credit reports. It ensures fairness, accuracy, and privacy of the debtor’s information detailed in credit reports. The complete act can be found in the United States Code Title 15, Section 1681.
Some permissible purposes for obtaining a consumer’s credit report include 1) The review of a borrower’s credit profile for a credit application; 2) The release of a credit report for a background check and; 3) The request of a credit report by the consumer. An order from the court, business dealings and child support considerations are other reasons one can access a credit report.
The FCRA also details what information should be included on a credit report and the length of time they can remain on a credit report. Most negative information stays on a credit report for seven years. Bankruptcy can remain on a credit report for ten years.
Debtors are permitted access to their file and a free credit report once a year.
Student loan debt has skyrocketed past credit card debt in the United States. Mortgage debt is the only debt category with a higher amount owed compared to student loan debt. According to one source, over 44 million individuals owe a combined $1.5 trillion in student loan debt. Graduates in 2017 owed an average of $40,000 in student loans. Most students spend over 19 years paying off loans they received for their college education. Sadly, almost 40 percent of borrowers are expected to default on their student loans by 2023. When you consider that most student loan debt is not dischargeable in a bankruptcy case, it is difficult to comprehend what a borrower should do if he or she cannot afford student loan payments.
Student Loans Be Discharged In Bankruptcy
While most student loans are not eligible for a bankruptcy discharge, some debtors may qualify for a discharge of student loans. However, debtors must meet strict eligibility requirements to discharge student loans in bankruptcy. The court must determine that the debtor will experience an undue hardship if the debtor is required to repay the student loans.
In February 2018, The Education Department announced that it would be reviewing the requirements for determining if a debtor qualifies for a bankruptcy discharge of student loan debt. Until the federal government changes the standards, the bankruptcy courts continue to apply the Brunner Test to determine if a debtor qualifies for a student loan discharge in Chapter 7.
The court case of Brunner vs. New York State Higher Education Services Corp. established the three requirements for determining whether a debtor will experience an undue hardship if required to repay student loans. Before a debtor can discharge student loans in Chapter 7, the court must find that the debtor meets all three requirements as outlined in the Brunner case.
The three-prong undue hardship test for student loan debt examines three factors:
The interpretation of the Brunner requirements can vary from one jurisdiction to another jurisdiction.
It is important to work with an experienced Florida bankruptcy attorney who understands the Brunner Test. You will need assistance from a bankruptcy attorney in Florida to prepare and file the necessary documents to request a hearing. You also need an experienced attorney to argue why you should receive an undue hardship discharge of your student loans during the court hearing.
Tony Turner assists clients in Orange Park, Jacksonville, Lake City, Deland, Augustine, and the surrounding areas as they seek affordable solutions to debt problems. If you want to explore bankruptcy options to get rid of debt, contact The Law Office of Tony Turner for a free consultation.
When you file for bankruptcy relief, your goal is to get out debt. For that reason, you want to discharge as many of your debts as possible. While most unsecured debts are eligible for a discharge in Chapter 7 and Chapter 13, several debts cannot be discharged in bankruptcy.
Common debts that are not eligible for a bankruptcy discharge include:
In some cases, a debtor can discharge income taxes if the taxes meet all of the requirements for discharge of old tax debt. Furthermore, some debtors qualify for a hardship discharge of student loans. However, most income taxes and student loans are not dischargeable in a bankruptcy case.
Yes, other debts may not be dischargeable in a bankruptcy case. Creditors may file an objection to discharge to stop the debts from being discharged pursuant to bankruptcy laws. An adversary proceeding is a lawsuit within the bankruptcy court seeking various relief. Creditors who believe that their debts are not eligible for a discharge under bankruptcy laws may file an adversary proceeding in your case.
Defending an adversary proceeding can be expensive and time-consuming. It is always best to disclose all information to your Florida bankruptcy attorney about your debts. Your bankruptcy lawyer can deal with a variety of issues within a bankruptcy case, but he must know about the issues to deal with them effectively.
Three debts that might be allowed if a creditor or party files an adversary proceeding under Bankruptcy Code §523 are:
Under §523 of the Bankruptcy Code, the court may declare a debt non-dischargeable if the debt was incurred under “false pretenses, a false representation, or actual fraud.” The code section does not explain or define these terms. Therefore, the court applies the decisions in previous cases to determine if a debt was obtained under fraud or false pretenses when a creditor objects to discharge based on these grounds.
One of the common types of transactions that fall within this category is the purchase of luxury goods within 90 days before filing your bankruptcy petition. If you incurred consumer debt to purchase $675 in “luxury” goods or services within the 90 days of filing your bankruptcy petition, the court will presume the debt is non-dischargeable unless you can prove that there was no intended misrepresentation or fraud.
The creditor does not need to prove that you did not intend to pay the debt to win the case because of the automatic presumption that you knew you would be filing for bankruptcy relief within three months and would not be required to repay the debt.
“Luxury” goods or services do not need to be high-dollar, brand name, or designer goods and services. Goods and services may fall into this category if they are not reasonably necessary for your maintenance or support or the maintenance and support of your dependents. Convincing the court what is “reasonably necessary” could be an uphill battle.
Credit card debt that is not incurred through fraud, misrepresentation, or other illegal circumstances is typically dischargeable in bankruptcy. Most debtors discharge all credit card debt when they file for bankruptcy relief. However, a creditor may object to your discharge if you used your credit cards to pay debts that would otherwise be non-dischargeable in your bankruptcy case.
For example, domestic support (alimony, spousal support, and child support) is non-dischargeable in a bankruptcy case. Most student loans and income tax debts are also non-dischargeable in Chapter 7 and Chapter 13 cases. If you use your credit cards to pay these debts before filing a bankruptcy case, the creditor may successfully challenge the discharge.
The theory is that a debtor should not be allowed to use credit that is typically dischargeable to get rid of debts that the debtor is legally liable to pay regardless of whether the debtor obtains a bankruptcy discharge.
Section 523(a)(6) prohibits a debtor from discharging debts that are incurred because of the “willful and malicious injury” to another person. These acts are known as “intentional torts,” including personal injury judgments and settlements.
A common example of a debt that is typically not eligible for discharge under this section would be a personal judgment related to a drunk driving accident or a drugged driving accident. Another example would be if the debtor intentionally caused another person injury by assaulting the person physically.
For example, if a debtor has a personal injury judgment arising from a DUI accident for $50,000, that debt would probably not be dischargeable in a bankruptcy case.
Even though you may owe a debt that is potentially non-dischargeable, there might be a way to file for bankruptcy relief to get rid of the debt. For instance, the timing of your bankruptcy filing may be adjusted to decrease the chance the creditor may file an adversary proceeding objecting to discharge. However, your attorney must be aware of the issue to develop a strategy for dealing with any potential problems.
Being honest and upfront with your bankruptcy attorney is the best way to avoid problems in your bankruptcy case. Your attorney is your legal advocate to protect your best interest. Help your attorney by disclosing all information, even if you do not think it may be relevant.
Bankruptcy lawyer Tony Turner assists clients in filing bankruptcy and exploring other debt relief options. If you want to discuss ways to eliminate your debts, Contact The Law Office of Tony Turner for a free consultation. Call (904) 679-2020 now to speak with an experienced bankruptcy lawyer in Orange Park, Florida.
It’s safe to say that no one wants to file for bankruptcy. Deciding it’s something you must do is incredibly painful, humbling and embarrassing. Often the hardest part is committing to retaining a bankruptcy attorney and the recovery or financial healing process.
From what I have seen, the most common causes of financial hardship is the loss of a job, divorce, death of a spouse or being sued. Rarely has someone retained me and filed because of medical bills. Doctors almost never sue you to collect, credit cards companies sue often.
Once a debtor realizes and decides they must file bankruptcy, they consult with Mr. Turner. Afterward, they express relief and are confident the decision is the right one. They understand bankruptcy is not “the end,” but rather the beginning. The beginning of financial recovery, reduced stress a fresh financial start for the debtor and their family, a much needed and well deserved second chance.
The financial and emotional healing has begun, the embarrassment dissipates, and they realize the misconceptions and stereotypes perpetuated by the media and the credit card companies is foolish. Bankruptcy is not a “necessary evil” but a God-send to those drowning in debt.
Once the debtor understands that often they have paid the credit card companies more money than they have ever borrowed, the decision is a no-brainer. Keep in mind that Bankruptcy is a right The United States Government has given to you. Take full advantage of any rights the government provides its citizens. Do not let people who do not have to live with the consequences of their decisions and opinions persuade you to pay for the debt you cannot afford or use “debt settlement companies” that rarely work. You have earned the right to a fresh start.
Below are some common questions Clients ask me when considering filing for bankruptcy protection
Of course, you will. The lenders want you back in debt. They know you can’t receive another discharge in bankruptcy for several years. You will receive offers of credit cards often before you’re out of bankruptcy. I receive letters often from car dealerships asking my clients to call them for a new car loan. Getting into debt is easy. Getting out is the hard part.
Should you apply for loans? Maybe. My suggestion is to be very careful. Maybe take out a “secured loan” at their bank. Use your money and not someone else’s. Rebuild your credit wisely. If done right, you can have a good credit score within 24 months.
For some, not at all. Most debtors were already delinquent on their debt, facing foreclosure, garnishment, lawsuits, and repossession. Bankruptcy improves their financial position and their credit score. Typical your credit score is used to get credit. Creditor rather debt from the loan was the problem. Don’t get caught up in your credit score. Focus on your liquidity. How much money do you have left over every month now that the debt is gone? Save that money and increase your net worth.
Most of the time NO. The Bankruptcy Code allows you certain exemptions which can get tricky and complicated. You need to consult with an experienced bankruptcy lawyer to determine how to proceed. Often debtors ask with me too late, they have sold assets or liquidated retirement accounts needlessly. They wasted away what money they had left that I could have protected, and they could have kept.
Sometimes clients retain me but do not file bankruptcy for a year or so. Planning and timing can save your house, retirement and thousands and thousands of dollars. It could be the difference between filing a Chapter 7 and getting a discharge in 80 days while paying nothing and keeping all your assets versus being in Chapter 13 for five years and spending thousands of dollars.
Most bankruptcy attorneys will provide an initial consultation for free. Please take advantage of that and utilize their knowledge.
Probably not, unless you owed them money. Although Bankruptcy filings are public record, they are difficult to locate. The average person will not be able to find your petition. Even if they do, so what.
Bankruptcy means you have discharged your debt and are in a better financial position than you were.
Absolutely! Your employment status will not affect your ability to file for bankruptcy protection. Although, your income may change what Chapter you file, 7 or 13. You can ask for bankruptcy protection whether you’re working or not.
I hope you have found this helpful and if you need an experienced bankruptcy lawyer, I hope you consider retaining The Law Office of Tony Turner.
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4475 US 1 ST. AUGUSTINE FLORIDA 32086
As a Bankruptcy Lawyer in St. Augustine and Orange Park Florida, I realize deciding whether to file a Chapter 7 or a Chapter 13 case can be confusing to most clients.
First, you will want to schedule a conference with your bankruptcy lawyer to discuss in great detail you financial situation and the assets you own. This will help your attorney determine which chapter of bankruptcy will be the best for you. The goal is to discharge your debts in the most affordable and effective manner.
The Law Office of Tony Turner has offices in Orange Park, St. Augustine, Deland, Jacksonville, & Lake City, Florida to meet with clients and provide them with the appropriate legal advice and guidance. Most clients want a “bankruptcy lawyer near me”, hopefully one of these offices is conveniently located.
Your Bankruptcy Lawyer must be concerned, aware and take into consideration which Chapter of the United States Bankruptcy Code protects your property from the United States Trustee the best. The Trustee is assigned by the Bankruptcy System to oversee and review your bankruptcy petition. The Bankruptcy Trustee is charged with the responsibility of determining if there are any assets to recover and sell. The proceeds will then be used to pay your creditors. An experienced Florida Bankruptcy Lawyer will know which Statutory exemptions to apply to protect your assets. This is a must. A mistake in applying the proper exemption could be devastating to a debtor financially.
A Florida Bankruptcy Lawyer should thoroughly review your financial records including: tax returns; bank statements; pay stubs; retirement accounts; automobiles and the loans attached; liens and any other assets whether liquid or not to determine which Chapter of Bankruptcy is right for you or whether you should even file for bankruptcy or can file.
The Law Office of Tony Turner offers free consultations so that you he can educate you about the Bankruptcy Law, the Exemptions available and advise you what to do and what not to do before you file for bankruptcy. Attorney Turners clients learn about the debt relief options available and whether they qualify for bankruptcy without worrying about how to pay attorney fees for the consultation. It’s free.
SO WHAT’S THE DIFFERENCE BETWEEN A CHAPTER 13 & CHAPTER 7?
A Chapter 13 bankruptcy case is a reorganization. You can reorganize your debts into an affordable bankruptcy plan.
A Chapter 7 bankruptcy case is a liquidation bankruptcy. Chapter 7 takes less time and costs less than a Chapter 13.
But Chapter 7 is not the best choice for every person. In addition, you must meet income requirements to be eligible for a bankruptcy discharge under Chapter 7.
Let’s look at each bankruptcy chapter closely to weigh the pros and cons of each debt relief option.
What is Involved in Filing Chapter 13 in Florida?
As discussed above, a Chapter 13 case is a reorganization of your debt through a repayment plan. With a Chapter 13 bankruptcy case, you can get rid of unsecured debts for a small fraction of what you owe. Instead of paying the full balance owed to each unsecured creditor, you pay a percentage of the debt. In some cases, debtors may pay pennies on the dollar, depending on their financial situation.
Some benefits of a Chapter 13 bankruptcy case include:
* Allows you to get rid of unsecured debt for a fraction of what is owed to the creditor.
* Can stop foreclosures and repossessions so that you can keep your home and vehicles.
* In some cases, a debtor may be able to get rid of a second mortgage for a fraction of what you owe the lender.
* You may be able to lower your car payments by modifying the term of the loan and the interest rate through a Chapter 13 plan.
* You have up to 60 months to pay back due taxes in a Chapter 13 case.
* If you owe alimony or child support, you can stop a contempt action and pay the past due support through your Chapter 13 plan. However, you must pay all future support payments on time.
* If you have equity in an asset that exceeds the allowed bankruptcy exemptions, you can protect that asset by filing a Chapter 13 case.
* Some disadvantages of a Chapter 13 bankruptcy case include:
* A typical Chapter 13 plan is a 60-month repayment plan. Therefore, you are in Chapter 13 for over five years.
* During your Chapter 13 case, you cannot transfer substantial assets, refinance loans, or incur new debt without court approval.
* The percentage you must pay toward unsecured debts is based on several factors, including your income, assets, and certain recent financial transactions.
* A Chapter 13 case can help you save your home, car, and other assets. It can also help you get out of debt for less than you owe right now.
Your Florida Bankruptcy attorney also checks to see if you are eligible to file under Chapter 7.
What is Involved in Filing Chapter 7 in Florida?
You may have heard stories about people losing everything they own when they file for debt relief under Chapter 7. This bankruptcy myth is not true. Most debtors do not lose any of their property when they file a Chapter 7 case. Let’s look at the pros and cons of a Chapter 7 bankruptcy case to help you understand what is involved in filing under this chapter of bankruptcy.
Some benefits of a Chapter 7 bankruptcy case include:
* Most Chapter 7 cases are completed within four to six months after the filing of the bankruptcy petition.
* You are not required to repay any portion of unsecured debts that are eligible for a bankruptcy discharge.
* Bankruptcy exemptions typically protect all your property, so that you do not lose any property if you file a Chapter 7 bankruptcy case.
* You can surrender collateral in full satisfaction of a lien without worrying about the lender obtaining a deficiency judgment for any remaining balance owed after the collateral is liquidated.
* Some disadvantages of a Chapter 7 bankruptcy case include:
You could lose an asset if the bankruptcy exemptions do not cover the equity in the asset and you cannot afford to “buy back” the asset from the Chapter 7 trustee. Again, most Chapter 7 cases filed in Florida do not result in the loss of property to the Chapter 7 trustee.
You must remain current on your mortgage and car loan payments to keep the assets. A Chapter 7 bankruptcy case stops foreclosures and repossessions for a short time. You must catch up the payments and remain current to keep the collateral.
Likewise, you do not have 60 months to pay back taxes or unpaid support payments when you file a Chapter 7 case.
You must meet strict income requirements to be eligible for a bankruptcy discharge under Chapter 7. If you “fail” the Means Test, you are not eligible for a bankruptcy discharge in Chapter 7.
Before you file a Chapter 7 bankruptcy petition, you need to consult with a Florida bankruptcy attorney. Once you file a Chapter 7 case, you are not entitled to dismiss the bankruptcy case voluntarily without court approval.
You can also find more information about filing for bankruptcy relief on the FAQ section of our website.
Seek Advice From an Experienced Florida Bankruptcy Attorney
If you are struggling with debts that you cannot pay each month, you may benefit from filing for bankruptcy relief. However, filing a bankruptcy case is a complex matter. You should only file a Chapter 7 or Chapter 13 case after consulting with a bankruptcy lawyer. A bankruptcy case gets rid of debt; however, you need to consider all debt relief options before choosing bankruptcy as your path to eliminate debt.
Tony Turner represents clients throughout Orange Park, Jacksonville, Lake City, Deland, Augustine, and the surrounding areas. If you need an affordable solution to your debt problems, call now for a free case review.
Contact The Law Office of Tony Turner for a free consultation. An experienced Florida Bankruptcy Lawyer is a must. Call (904) 679-2020 or use the online form
Many small businesses close within the first 18 months after opening. It is estimated that approximately 80 percent of new businesses fail within the first 18 months. Fifty percent of new businesses fail after the first four years of being opened. Only one in five businesses make it past their five year anniversary. With statistics like this, why would anyone want to open a new business in Florida or anywhere in the United States? Even though the statistics may discourage some people from opening a new business, thousands of entrepreneurs decide that the risk is worth the dream of owning their own business. However, what happens to the debts a small business owner incurs if theirs is one of the businesses that does not make it. Does the business owner owe all the company debt when the company closes? PERSONAL LIABILITY FOR BUSINESS DEBT. If an entrepreneur is a sole proprietor, they are liable for all business debts. In many cases, a small business owner signs personal guarantees for some business debts, even if the owner has incorporated the company to provide some level of protection from personal liability. Sole proprietors and business owners who sign personal guarantees can be held legally liable for the business debt if the company cannot pay the debts. In addition, a creditor can seek a personal judgment against the owner for the business debt so that the creditor can collect the business debt from the owner’s personal income and property. In many cases, a small business owner has no alternative but to file for bankruptcy relief when a business fails. However, some individuals may have too much income to qualify for bankruptcy relief under Chapter 7. Fortunately, Congress included a business debt exemption to the Means Test when it passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). The business debt exemption encourages entrepreneurs to continue to open small businesses by giving them some level of protection in bankruptcy court if the business should fail and they are personally liable for the debts. WHAT IS THE CHAPTER 7 MEANS TEST? The Means Test was added as an income test for Chapter 7 debts when Congress passed BAPCPA. A debtor must meet certain income requirements to qualify for a bankruptcy discharge under Chapter 7. The Means Test was intended to ensure that Chapter 7 was not abused or used by debtors to fraudulently avoid paying creditors when the debtors had sufficient disposable income to pay a portion of their debts through a Chapter 13 repayment plan. A Florida debtor may qualify for a bankruptcy discharge under Chapter 7 if the debtor’s average income is below the median income for Florida. The average income is based on the debtor’s income for the six months before filing the bankruptcy petition. The debtor’s current monthly income is calculated by dividing the total income for the preceding six months by six. The result is multiplied by 12 to arrive at an annualized income to compare to Florida’s median income. If a debtor’s annualized income exceeds the median income for Florida bankruptcy filers, the debtor must complete the second section of the Means Test. The second section subtracts allowable monthly expenses from the debtor’s income to determine the debtor’s disposable income. A debtor who has sufficient disposable income to fund a Chapter 13 plan does not qualify for a bankruptcy discharge under Chapter 7. EXEMPTIONS TO THE CHAPTER 7 MEANS TEST. As mentioned above, there are a few exceptions to the Chapter 7 Means Test, including the business debt exception. A debtor whose debts are primarily business debts is exempt from the Means Test requirements. The Means Test is intended to apply to consumer debtors. Consumer debt is typically defined as debts that are incurred by an individual for household, family, or personal purposes. Debtors whose debts are primarily consumer debts must take and pass the Means Test to qualify for a bankruptcy discharge under Chapter 7. However, Congress did not want to discourage risk-taking by entrepreneurs by severely restricting their ability to file for bankruptcy relief under Chapter 7. Therefore, the Means Test does not apply in cases in which the individual’s debts are primarily business-related debts. Business debts are typically defined as any debts incurred in the operation of your business. For instance, credit cards used to pay business expenses or purchase items for the company are usually considered a business debt. Amounts owed to vendors, suppliers, and creditors who loaned money to purchase business assets (i.e. vehicles, buildings, equipment, etc.) are business debts. When determining if the Means Test does not apply because the individual debts are primarily business debts, “primarily” is usually defined as 50 percent or more of the total debt owed by the debtor. Therefore, a debtor may have a mixture of consumer debt and business debt and still be exempt from the Chapter 7 Means Test if the total of business debts exceeds one-half of the total of all debts. IDENTIFYING BUSINESS DEBT IS NOT ALWAYS SIMPLY. In some cases, the lines between consumer debts and business debts may be blurred when a business owner co-mingles personal and business finances. Working with an experienced Florida business bankruptcy lawyer is strongly recommended if you are attempting to qualify for a Chapter 7 bankruptcy case by using the business debt exemption. An experienced Florida bankruptcy attorney understands how to maximize business exemptions to help a business owner qualify to file for debt relief under Chapter 7. Contact an Orange Park Business Bankruptcy Attorney to Discuss Filing for Bankruptcy Relief If your business is experiencing debt problems, contact The Law Office of Tony Turner by calling (904) 679-2020 for a free bankruptcy consultation with a Florida business bankruptcy attorney. Bankruptcy lawyer Tony Turner assists businesses and business owners throughout Orange Park, Jacksonville, Lake City, Deland, Augustine, and the surrounding areas explore bankruptcy and non-bankruptcy options for eliminating debt problems.
The definition of bankruptcy is the legal status of a person or other entity that cannot repay it’s debts and files a bankruptcy petition with the appropriate Court requesting the debt be discharged. In Florida, thousands of debtors file for bankruptcy every month. For most it is a measure of last resort. Many debtors try for years to pay their debt before succumbing to the realization that it virtually impossible.
A recent trend is that older debtors are beginning to file bankruptcy with more frequency. The rate is more than double what it was in the early 1990’s. The rate of debtors over the age of 65 filing for bankruptcy increased over 200% from 1991 to present. This increase is caused in part by the medical bills as well as the lower incomes they receive and the nationwide decline in pension, retirement pay and interest rate earned on money saved or the death of a spouse. Many resort to living with their children or doing without necessities to pay their bills.
Medicare does pay some health care costs, but it does not cover extensive care, hearing aids, dental procedures, eye exams, foot care and some other treatment. Sometimes there are co-pays, coinsurance and deductibles. The skyrocketing medical costs are just too much. Sometimes Churches, friends or family will help. However, once they get behind on their bills, the constant calls from bill collectors are just too stressful and they contact a bankruptcy attorney for help.
Most debtor’s over 60 are reluctant to file for bankruptcy. They have a stronger sense of a moral obligation to pay. Some have parents that grew up during the Great Depression or were part of the “Greatest Generation”. The decision to file for bankruptcy takes place over time.
Most debtors struggle for years in what’s know as the “sweat box”. Most deplete all their assets when it wasn’t necessary. The assets could have been protected and kept under the bankruptcy laws. It’s a very difficult and painful decision, but one that ultimately leaves them in a better financial position for their Golden Years. The over 60 year old clients are some of the most appreciative clients I have. They are respectful, compliant and will bake you a cake from scratch for your birthday. At least one I’ve represented does.
According to a report published on www.uscourts.gov website on October 31, 2018, Bankruptcies fell by 2.2 percent for the 12-month period ending September 30, 2018, compared with the year ending September 30, 2017, continuing a series of slight annual declines in new cases.
The September 2018 annual bankruptcy filings totaled 773,375, compared with 790,830 cases in the previous year, according to statistics released by the Administrative Office of the U.S. Courts. The number of bankruptcy cases filed was the lowest for any 12-month period since the year ending June 2007.
A national wave of bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.
Business and Non-Business Filings,
Year Business Non-Business Total
2018 22,103 751,272 773,375
2017 23,109 767,721 790,830
2016 24,457 781,123 805,580
2015 24,985 835,197 860,182
2014 28,319 935,420 963,739
Total Bankruptcy Filings By Chapter
7 11 12 13
2018 477,248 7,014 468 288,550
2017 486,542 7,052 508 296,599
2016 498,367 7,450 458 299,150
2015 550,036 7,040 383 302,642
2014 642,366 7,658 372 313,262
AUTHOR – George Basharis, JD
DATE – 27 September 2018
The U.S. Supreme Court earlier this year approved amendments to the Federal Rules of Bankruptcy Procedure that are expected to become effective on December 1, 2018. Many of the amendments are technical and are intended to conform the Bankruptcy Rules to recently amended rules of appellate and civil procedure. Bankruptcy Rules affected by the amendments include Rules 3002.1, 5005, 7004, 7062, 8002, 8006, 8007, 8010, 8011, 8013, 8015, 8016, 8017, 8021, 8022, 9025, and new Rule 8018.1 and Part VIII Appendix.
Rule 3002.1. Bankruptcy Rule 3002.1 requires creditors with claims secured by a debtor’s personal residence to provide notice of all post-petition payment changes, fees, expenses, and charges incurred. The proposed amendments to the rule would create flexibility regarding notice of payment changes for home equity loans, include a procedure for objecting to payment changes, and expand the category of parties who can seek a determination of fees, expenses, and charges that are owed at the end of a bankruptcy case.
Rules 5005 and 8011. Rules 5005(a)(2) and 8011 authorize individual courts to mandate electronic filing or to make it optional. Most courts require attorneys to file electronically, subject to reasonable exceptions. The proposed amendments would make electronic filing mandatory in all districts for all parties represented by an attorney. Paper filing would be allowed for good cause, and individual courts by local rule could permit paper filings for other reasons.
The proposal would permit pro se debtors to file electronically only if authorized by individual court order or local rule. Individual courts that mandates electronic filing for all pro se debtors must provide reasonable exceptions.
Rule 7004. The technical amendment to Rule 7004 would update a cross-reference to Federal Rule of Civil Procedure 4.
Rules 7062, 8007, 8010, 8021, and 9025. These rules address the entry, enforcement, and appeal of judgments entered in adversary proceedings. Rule 7062 incorporates the whole of Federal Rule of Civil Procedure 62, which provides an automatic stay for the enforcement of judgments entered by a district court. The current stay is 14 days, but a proposed amendment to Civil Rule 62 would increase the stay to 30 days to coincide with the 28-day deadline for filing post-judgment motions in district court. The proposed amendment to Bankruptcy Rule 7062 would still incorporate Civil Rule 62 but would retain the 14-day duration for the automatic stay of judgments since the deadline for post-judgment motions in bankruptcy cases is only 14 days.
The proposed amendments to Rules 8007, 8010, 8021, and 9025 would allow a party to stay the enforcement of a judgment in an adversary proceeding by posting a “bond or other security.” This is not a substantive amendment; it is intended only to “broaden and modernize” the terms “supersedeas bond” and “surety” that are used currently in the rules.
Rule 8002; Official Form 417A and New Director’s Form 4170. Rule 8002 addresses the timeliness of appeals. Rule 8002(a) provides that a notice of appeal must be filed within 14 days after the entry of a judgment. The proposed amendment to Rule 8002(a) would add a new subparagraph (5) that defines the term “entry of judgment” for purposes of calculating the time for filing the notice of appeal.
Rule 8002(b) lists the types of post-judgment motions that toll the deadline for filing appeals. The proposed amendment to Rule 8002(b) would require the filing of post-judgment motions within the times specified by the rules under which the motions are authorized. A similar amendment concerning the timeliness of tolling motions was made to Federal Rule of Appellate Procedure 4(a)(4) in 2016.
Rule 8002(c) establishes filing and service requirements for inmate appeals. Under the proposed amendments to Rule 8002(c), an inmate’s notice of appeal is timely if deposited in the institution’s mail system on or before the last day for filing. The notice must include a declaration or notarized statement by the inmate stating the mailing date of the notice and attesting to the prepayment of first-class postage. A new Director’s Form, Form 4170 (Declaration of Inmate Filing), sets out a suggested form for the declaration. An amendment to Official Form 417A would direct inmate filers to the Director’s Form.
Rule 8006. Rule 8006(c) establishes the manner by which litigants can file a joint certification for direct appellate review. The amendment would add a new subsection that would allow the bankruptcy court to file a supplemental statement about the merits of the parties’ joint certification. The new subsection is intended to be the counterpart to existing subsection (e)(2), which authorizes the parties to file a similar statement when the court certifies direct review on its own motion.
Rules 8013, 8015, 8016, 8022, and New Part VIII Appendix; Official Form 417C. Rules 8013 (motions), 8015 (briefs), 8016 (cross-appeals), and 8022 (rehearing) establish length limits for motions, briefs, and other pleadings filed in bankruptcy appeals. The proposed amendments convert current page limits to word-count limits for documents prepared using a computer. Similar length limits were made to Federal Rules of Appellate Procedure in 2016. A new appendix to Part VIII of the Bankruptcy Rules lists all of the length limits in one chart. A conforming amendment is made to the certificate of compliance in Official Form 417C.
Rule 8017. Rule 8017 addresses the filing of amicus curiae briefs. The proposed amendments would permit a district court or bankruptcy appellate panel to prohibit or strike an amicus brief if the filing would result in the disqualification of a judge. The amendments address the scenario in which an amicus brief is filed before a judge or appellate panel is assigned to a case and amicus curiae could not predict whether the filing of its brief would result in a recusal. A similar amendment has been proposed for Federal Rule of Appellate Procedure 29.
Rule 8018.1. New Rule 8018.1 is the latest installment of rule amendments intended to address the impact of the Supreme Court’s decision in Stern v. Marshall, 564 U.S. 462 (2011) on bankruptcy court jurisdiction to enter final judgments. The proposed rule would authorize a district court to treat a bankruptcy court’s judgment as proposed findings of fact and conclusions of law if the lower court did not have the constitutional authority to enter a final judgment.
Official Forms 411A and 411B. The use of Official Forms is mandatory. The Bankruptcy Rules do not require the use of Director’s Forms; their use is optional unless local court rule or general order mandates their use. At its September meeting, the Judicial Conference approved reissuing the bankruptcy general and special power of attorney forms, currently Director’s Forms 4011A and 4011B, as Official Forms 411A and 411B to conform to Bankruptcy Rule 9010(c), which requires execution of a power of attorney on an Official Form. Bankruptcy cases commenced after December 1, 2018, must use the new forms. Cases pending on December 1 must use the new forms “insofar as just and practicable.”
Effective date. The Judicial Conference approved the rule amendments last fall at its annual meeting. The Supreme Court adopted the proposed amendments and transmitted them to Congress in April 2018. If Congress takes no action, the amendments will become effective on December 1, 2018.