The Bankruptcy Law Clinic Blog

Wednesday, December 12, 2012

What will happen to my car loan in a bankruptcy

Anyone who is considering bankruptcy will likely be concerned about its effect it will have on car loans, since such loans are considered secured loans, with the vehicle as collateral.  Florida has bankruptcy exemptions that allow most people to keep their vehicle but what if you aren't sure if you want to.  So how do you know what will happen to your car before you make the choice to file?

Read more . . .

Friday, November 9, 2012

How much do you need to owe to do a bankruptcy?

At least twice a week I get a phone call that asks the question “How much do I have to owe to qualify for bankruptcy”.  It’s a fair question, but not the right one.  The real question is about your ability to pay.  If you are unemployed, even a minimal payment can lead to ruin.  Sometimes, even if you can make the minimum credit card payment, you may be better off filing bankruptcy.

Read more . . .

Friday, October 12, 2012

Will I Lose My Security Clearance if I File for Bankruptcy?

This question is common among members of the Armed Forces or Federal employees and can often cause hesitation when making the decision of whether or not to file bankruptcy.  While each situation is different, the answer in most cases is no.  The reason for this is simple:  when someone is in a difficult financial situation, they are more likely to make a poor decision or accept a bribe in order to remedy the situation.

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Friday, October 12, 2012

More real thank you letters from clients

These always makes us feel good.  One great thing about being a bankruptcy law firm is that almost all our clients love us!...


From website
From website


We wiped out over 65 thousand dollars for this lady.  Awesome!



Thursday, September 27, 2012

How Disability Income Can Affect your Bankruptcy Filing

Florida has a statute that keeps this income safe from creditors who seek judgment against you.  This means that most creditors cannot garnish your disability wages-but there is an exception....

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Monday, August 13, 2012

Foreclosure Rescue Scams - Don’t be a Victim!

“Stop foreclosure now!”  Ever seen a handmade sign bearing these words on the side of the road?  Or perhaps you’ve received an email from someone who promises to work with your bank and keep foreclosure from happening?  Foreclosure defense and “avoid foreclosure now” promises are everywhere....

Read more . . .

Thursday, July 12, 2012

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation


According to IRS regulations, when debt is canceled or forgiven by a lender, the amount that has been canceled is considered income for the debtor during tax time and must be reported as income.  In light of the recent housing and foreclosure crisis, this regulation would be especially frightening for the thousands of Americans who are going through loan restructuring and modification processes, or having their mortgages canceled due to foreclosure. 

However, when the economy took a turn for the worst, and right before the housing bubble burst, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007, which allowed homeowners who were already having financial trouble to avoid having to pay taxes on their forgiven or foreclosed mortgages.  In fact, according to that Act, if part or all of your mortgage debt is forgiven in any tax year from 2007 to 2012, you might be able to exclude a substantial amount of that forgiven debt from your taxable income when tax time rolls around. 

The debt that qualifies for this must have been incurred for your principle place of residence (not a vacation home), and can include debt that has been canceled through foreclosure or debt from mortgages that were reduced through restructuring or modifying the loan.

From the IRS website, here are a few additional facts about Mortgage Debt Forgiveness.

   1.  The limit is $1 million for a married person filing a separate return.

   2.  To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

   3.  Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

   4.  Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.

Friday, June 22, 2012

Should 401k Loans Be Used to Avoid Bankruptcy?

What's better for me in the long run- filing bankruptcy or taking a 401k loan to pay off my debts? In Florida, more times than not, a bankruptcy is the better option. Here's why.....

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Thursday, February 2, 2012

A real client thank you letter

Sometimes a picture is worth a thousand words, but how about a picture of a thank you letter? 

Read more . . .

Thursday, January 19, 2012

One of my top ten favorite bankruptcy cases

 I recently received a discharge notice for Miguel C. that caught my eye.  His was an especially rewarding case.  He had been a law enforcement officer for ten years and had partial ownership in a business.  He earned over 80k a year but had over 50k in credit card debt and a growing family, that made meeting his monthly obligations impossible.

Read more . . .

Thursday, November 17, 2011

Rebuilding your American Dream

Eliminate your second mortgage, home equity line and credit card bills and keep your house!

South Florida is ground zero for the worldwide housing crisis.  By some estimates, 20% of homes in Dade county are in foreclosure.  In the past two years, there have been over 350,000 foreclosure filings in Dade county alone. 

In addition, thousands of South Floridians are trying to get loan modifications, but relatively few are getting any meaningful reductions in the principal of their loans.  Did you buy a house a few years ago and owe $350k? Is it now worth only $150k?  Too bad, maybe the bank will temporarily reduce your  payments and stick the difference on the end of your loan.  Maybe they’ll change the loan from a 30 year to 40 year loan (and make even more money off of you), but actually reduce the principal of the loan?  Forget about it!

So, what to do?  Well for those who have second mortgages, bankruptcy may be the ultimate loan modification through a process called lien stripping. 

Lien stripping is a very powerful and helpful tool within Chapter 13 Bankruptcy Law for homeowners in or near foreclosure.  Second mortgages and Home Equity Lines of Credit can be completely eliminated in chapter 13 bankruptcies as long as the value of your home is less than the amount you owe on your first mortgage.

Chapter 13 is a debt repayment plan that gives you up to five  years to get caught up on back mortgage payments and other debts by repaying creditors what you can afford. After you have successfully finished your Chapter 13 bankruptcy, the mortgage company must remove the junior mortgage(s) from your property and the arrears on the mortgage(s) do not have to be paid back. This can be enormously helpful with keeping your home!

The reason behind this is that the lien stripped loan will be converted from a secured debt that is required to be paid in full to an unsecured debt through the bankruptcy. Unsecured debts are not required to be paid in full in a Chapter 13. In fact, most of the time, the unsecured debts are paid next to nothing. This is completely legal and is done with Court approval. This can be a great benefit for you as the second or third mortgages can be removed and NOT paid according to your Chapter 13 Plan.

There are many ways a bankruptcy can help people with only one mortgage or who cannot afford to make any payments.  Please call us at 305-663-3281 24 hours a day for a free consultation to learn how.

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