SERVICES

CHAPTER 7

Chapter 7 Bankruptcy

To qualify for relief under Chapter 7 of the U.S. Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. Chapter 7 is different from other bankruptcy chapters because the debtor can eliminate most debts without paying back money to their creditors (this includes medical debts, lawsuits/judgements, credit cards, balances owed on car repossessions, etc)

CHAPTER 13

Chapter 13 Bankruptcy

Chapter 13 of the U.S. Bankruptcy Code allows individuals with regular income to develop a plan to repay all or part of their debts over a three to five-year plan of reorganization. This chapter generally provides protection on assets that are behind (ie, protection on a house that is behind on the mortgage, or protect a car that is behind on the car payments, etc.) Chapter 13 is also an alternative for individuals that exceed the income requirements for a Chapter 7. The portion of debt paid back to creditors is determined by debtor's disposable income which is based on what is called the “Mean test.” The Means Test is essentially a formula for determining where your past 6 months of income determines that you have extra income extra paying for necessary essentials (like food, water, clothing, etc.)

CHAPTER 11

Chapter 11 Bankruptcy

Chapter 11 of the U.S. Bankruptcy Code permits a business, whether a corporation or sole proprietorship and some individuals, to restructure and repay debt under a plan of reorganization. Control of regular business operations remains with the filer, but is now under the jurisdiction of the Bankruptcy Court.

Debt Settlement section

At The Finley Law Group, we assess each client’s situation to determine the best course of legal action.  Bankruptcy may certainly be a very effective tool for the right situation.  However, if your situation warrants, your solution may necessitate debt settlement.  Hiring a Florida Bankruptcy Attorney may be effective if you have relatively few creditors.  The fewer creditors, the more likely all of your creditors will settle, especially with the creditor knowing you are being counseled by a bankruptcy attorney who could help you explore bankruptcy alternatives if the creditors don’t reach a reasonable settlement. 

DO YOU NEED LOAN MODIFICATION HELP?

Mortgage Modification section

Working with lenders on a mortgage loan modification can be complicated and time consuming. More importantly, if you are behind on your mortgage, each month that passes during the loan modification process may further damage your credit, adding late fees, junk fees, and legal fees, and ultimately pushing you closer to foreclosure while your paperwork is being”processed.” In addition, mortgage loan modifications are often temporary, meaning that you are under a trial period with a lower or sometimes higher payment for a temporary period. After this period has ended, you may have to re-apply or not be approved. This can go on for months and even up to a year or two, before you know what your permanent loan modification payment will be. In some cases, if you knew the final modification payment, you may have agreed to the trial payments.

Mortgage loan modifications have recently increased in popularity as mortgage companies have become more willing to work out payment reductions for those overburdened by their monthly payments. Rather than see borrowers face foreclosure or abandon their homes, lenders are inclined to offer a mortgage loan modification. The new payment is calculated a variety of ways. Mortgage companies may use their own guidelines and/or government programs such as HAMP, to evaluate and determine your ability to pay. Remember . . . Your mortgage company does not have to modify your loan.

If you are considering a mortgage loan modification, whether behind or current on your loan, our attorneys can help you evaluate your options with your lender.

CHAPTER 7 COMBINED WITH A LOAN MODIFICATION

  • Often the need for a loan modification stems from being overburdened with other debt, meaning it is not only difficult to pay your mortgage, but you are also paying credit card and other debt making the payment even more difficult. Someone at this crossroad may choose to try and modify their mortgage loan AND file a Chapter 7 to eliminate their other debt. If you are not happy with the mortgage modification, then the Chapter 7 can provide an opportunity to walk away from the property without owing the balance as well as eliminating other debt.

  • Walking away from your home can be extremely difficult, but getting a fresh start, rebuilding your credit, and owning a home with a reasonable payment in the future, is a motivating goal of Chapter 7 bankruptcy for many clients.

CHAPTER 13 COMBINED WITH A LOAN MODIFICATION

Traditional Chapter 13 bankruptcy offers a plan to catch up on past due mortgage loan payments and avoid foreclosure, and it continues to successfully do just that. But one size doesn’t fit all, especially when income has changed or houses are not worth what they once were. How can you catch up on your home if you can’t afford your mortgage payment? Chapter 13 bankruptcy now offers an alternative option in our district, Mortgage Modification Mediation through the bankruptcy court. The two biggest benefits of modification through the Chapter 13 process are: 1) a judge signs an Order specifying the guidelines for your mortgage company to engage in mediation, including enforceable timelines and procedures; and, 2) you are protected by bankruptcy during this process. Clients are finding success in this program not only with HAMP loans, but with other types of modification programs offered by their mortgage companies. Especially when previous attempts to modify your loan have failed, Mortgage Modification Mediation through a Chapter 13 bankruptcy shows a homeowner means business. This is also great way to take advantage of the bankruptcy court's power to strip second and third mortgages. Call the Finley Law Group for your FREE consultation to discuss a Chapter 13 bankruptcy with a Mortgage Modification Mediation and see if it is right for you.

Stop Garnishment section

  • Wage garnishment, or garnishment for short, is one of the remedies a creditor can use to “satisfy” or get paid on a judgment. Ordinarily, a creditor can get an order of garnishment (a “writ”) only after obtaining a judgment against you. The garnishment writ will be served on your employer and will direct the employer to take money out of your paycheck to be applied to the judgment. The sheriff will serve the writ on your employer, who will be required to hold back a portion of your wages each pay period and send that amount to the creditor.

  • There are limits to how much a creditor can garnish from your paycheck each month. You may also be able to protect your wages by using “exemptions”. Under Florida law, you are allowed to protect (“exempt”) your earnings completely if you are the head of family. Florida Law, in 221.11 FS defines “earnings” as compensation paid or payable for personal services or labor whether denominated as wages, salary, commission, or bonuses.

    To have your earnings determined to be exempt, you must file an affidavit with the court to prove that you are the head of a household. To qualify as head of family, you must provide more than 50% of the support for a child or other dependent. Even if you are not a head of family, Florida Law states that creditors cannot garnish more than 25% of your wages or the amount that exceeds thirty times the minimum wage, whichever is less.

  • If you owe child support, student loans, or taxes, your wages can be garnished even without a prior court order. Depending on whether you have other dependents and how far behind you are on support, between 55%- 65% of your wages can be garnished to pay child support. Up to 15% of your disposable income can be garnished to pay student loans that are in default. The amount that can be garnished for taxes owed is determined by the number of your dependents and your tax rate.

  • Chapter 7 and Chapter 13 bankruptcy filings will help you to deal with debts from credit cards, personal loans, medical bills and most other types of unsecured debts. Even some types of unpaid tax debt can be discharged in Chapter 7 or a Chapter 13 bankruptcy. This means if your wages are being garnished for any of these types of debts, the wage garnishment will stop when your automatic stay goes into effect.

  • If you file for bankruptcy protection an “automatic stay” comes into effect. The stay prevents a creditor from taking any action to collect on or satisfy a judgment, including garnishment during your bankruptcy case. Your employer will receive a notice from the bankruptcy court, the creditor or from you advising that a bankruptcy has been filed and the automatic stay is in effect, preventing future garnishment deductions. The automatic stay ends when your bankruptcy case ends. However, if you receive a discharge on the underlying obligation for the wage garnishment (such as credit card debt), the creditor can no longer take any action, including garnishment, to collect the debt.

  • Child support and spousal support (alimony) are exceptions to the automatic stay and will not be stopped by the bankruptcy filing. These are considered priority debts that are unaffected by the automatic stay and cannot be discharged by filing bankruptcy. So if your wages are being garnished to satisfy domestic support obligations, the garnishment will not stop if you file bankruptcy.

  • If you file a bankruptcy case shortly after garnishment has occurred, you may be able to get back all or a portion of amounts paid by your employer under the garnishment order. . You can usually get back wages garnished within the 90-day prior to your bankruptcy filing if they were over $600 in aggregate and you have enough “exemptions” (the amount of assets you can keep in a bankruptcy free of creditors claims) to cover them.

  • If you previously filed for bankruptcy and the case was dismissed within one year of your current filing, the stay will last for only 30 days as opposed to the life of the case. You can ask the court to extend this time if you can prove that you made your second filing in good faith. If you previously filed for bankruptcy twice in the past year, the automatic stay will not apply unless you petition the court for the stay and show good cause.

  • If you are the subject of a wage garnishment or have been served a notice of an application for a garnishment, you should immediately consult with a qualified bankruptcy attorney to determine whether a bankruptcy filing is called for and what your remedies may be. Bankruptcy can also terminate attachments and other collection activities. To learn more with a free consultation with experienced bankruptcy lawyers, call Finley Law Group today or fill out the contact form on the right and one of our lawyers will be in touch ASAP.

“Prevent Foreclosure” section

○     To stop foreclosure, you must first understand what a foreclosure consists of. Foreclosure is the method by which a lender repossesses a home or other piece of real estate. Florida is a judicial foreclosure state. This means that the bank or private lender must go through the Florida court system to take a home or piece of real estate.

○     Filing for Chapter 7 or Chapter 13 Bankruptcy may prevent or postpone the foreclosure of your home depending on what your goals are and what your financial resources allow.Read on to learn more about how to stop foreclosure and when you are ready for your free consultation contact Finley law Group.

Filing Chapter 7 Bankruptcy to Stop Foreclosure

If you file Chapter 7 to stop foreclosure, you can usually count on buying an extra four to six months worth of time in your home. There are factors that may shorten or lengthen this time frame, but, generally speaking, this is what the average is. After the Chapter 7 Bankruptcy has ended and you receive your discharge, you are no longer personally liable for the money you owed the lender on the house. However, your name is still technically on the deed as owner so the bank still has to go through the foreclosure process to reclaim the deed.

Many clients find that the banks are more likely to work with a homeowner who is no longer personally liable for the mortgage when it comes to making arrangements to save the home.  This means you may be able to obtain moving expenses or even a loan modification. If you can obtain a loan modification after a chapter 7 discharge, that means you’ve wiped out all of your dischargeable debt AND you save your home. Learn more in your free consultation from Finley Law Group.

Filing Chapter 13 to Stop Foreclosure

If you file Chapter 7 bankruptcy to stop foreclosure, it may come with an entire range of benefits.

First and foremost, Chapter 13 Bankruptcy may allow you to reinstate your mortgage. Reinstating your mortgage means you agree to pay the regular monthly mortgage payment plus the amount that you are behind over the next three to five years. Assuming the rest of your Chapter 13 Bankruptcy plan complies with the bankruptcy code, this is a relatively surefire way to save your home. Then, after the bankruptcy is over, you are legally current on your mortgage payment and there is a federal court order to prove it. Moreover, Chapter 13 Bankruptcy may also allow you to get rid of second and third mortgages leaving you with only your primary mortgage to pay. Perhaps most compelling is that you may even be able to completely pay off your mortgage through a Chapter 13 Bankruptcy.

One of the main benefits of filing the Chapter 13 Bankruptcy to save your home from foreclosure is to place the entire account under the supervision of your attorney and the Bankruptcy Court.  This way, any penny or dime that the mortgage company tries to charge you comes under scrutiny. Where you might have been jerked around by the mortgage company before, that all ends the day you file your Chapter 13 Bankruptcy. They comply with the federal laws regulating the Chapter 13 Bankruptcy or they face sanctions and fines. Learn more in your free consultation from Finley Law Group

Obtain a Loan Modification

Obtaining a mortgage modification to stop foreclosure means the bank agreed to change the terms of your loan. This normally results in you now being current on payments. To accomplish that, they can reduce your interest rate, reduce your principal, extend the length of your mortgage, or even put the amount you are behind on the back end of your loan as a balloon payment. Then, when that balloon payment comes due at the end of your loan, it basically forces you to refinance your loan to pay off the balloon payment.

Obtaining a loan modification typically involves a process very similar to the one you went through to purchase your home to begin with. The bank will require proof of income, bank statements, tax returns, proof of occupancy (utility bill) as well as information about your other assets and debts. Then the bank makes a determination as to whether they can offer you a modification to save your home. Many, but not all times, these offers result in a lower monthly payment which helps you to afford your mortgage going forward. Obtaining a loan modification means the bank now has no motivation, or legal grounds, to move forward with the foreclosure. You simply need to ensure that you comply with all other provisions of the mortgage documents including maintaining property insurance and paying your property taxes. The bank’s attorney will then likely file a notice of voluntary dismissal thereby ending the foreclosure. Learn more about how a loan modification can prevent a foreclosure in your from Finley Law Group.

Foreclosure Defense

If you need to avoid bankruptcy but would like to still stay in your home, foreclosure defense may achieve your goal. Foreclosure defense consists of defending against the bank in the state court action.The success of actually stopping foreclosure with foreclosure defense depends on your specific situation. Oftentimes, foreclosure defense simply buys you time to either obtain a loan modification or move out of your house.

It is important to know that when you hire an attorney to represent you, that attorney has a duty of candor and honesty to the court. He or she cannot file motions or pleadings in your foreclosure case simply to buy you time. There must be a legal, factual basis for the attorney to sign and file the document. Each person’s situation differs but we often find that foreclosure defense only serves to draw out the inevitable. Contact us Finley law Group to learn more about foreclosure defense at your free consultation