The Bankruptcy Law Clinic Blog

Friday, January 11, 2013

Filing Bankruptcy Can Stop Your Wage Garnishments

Garnished wages are something no one wants to deal with, especially when a too-tight budget makes living paycheck to paycheck a common occurrence.  However, if you find yourself in this situation, it is important to know that filing bankruptcy stops all garnishments except child support and alimony...

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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?

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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.

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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!...


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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....

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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? 

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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.

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