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Mistakes to Avoid When Preparing for Bankruptcy

If you are considering filing a Chapter 7 or Chapter 13 case, it is essential to understand that there are a few actions you should avoid in order to ensure that your case goes smoothly.

Preparing for Bankruptcy | Melbourne Florida Bankruptcy Attorney

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Preparing for Bankruptcy

Below are a few of the most common mistakes made by debtors that you will want to avoid:

Continuing to Make Charges on Credit Cards

In the months leading up to your bankruptcy filing, you should stop making charges on your credit cards. Any charges that are deemed to be for “luxury goods or services” on your credit card that totals in excess of $600 within the ninety (90) days prior to your case being filed, will be assumed to be non-dischargeable.

A luxury good or service may be anything that is not reasonably required for the maintenance of your household. It is important to also understand that the $600 amount is not for a single charge to your credit card that exceeds $600, but the total amount of your charges incurred within the 90 day time limit.

As a result, it is very important for you to cease all use of your credit cards as you prepare for your bankruptcy filing.

Repaying Family Members

If you have borrowed money from a relative, you may want to pay them back before you file for debt relief. However, this can cause trouble in your case. All debtors are required to disclose any payments in excess of $600 that have been paid to any creditors (including friends and family) within the six (6) months prior to the filing.

The court will look back at payments made within the one (1) year prior to the filing for payments made to “insiders” such as your relatives. If you have repaid a debt to an insider, it will be deemed a “preferential payment.” In other words, you preferred one of your creditors over your other creditors, which is prohibited by bankruptcy law.

If there is a preferential payment, the trustee will demand that your relative refund the money back to the trustee for the benefit of your bankruptcy estate. Failure by your loved one to refund the money could result in the trustee filing a lawsuit against him or her to recoup the funds.

Transferring Assets

It is common for people to think they can protect their assets from being included in the bankruptcy filing by transferring them into another person’s name.

However, the trustee will conduct an investigation for all transfers of property (which includes sales and gifts) that the debtor made within the two (2) years prior to the bankruptcy filing.

Thus, it is essential that you discuss with your lawyer all assets that you want to keep in order to determine if they are protected by an exemption under the law.

Contact Faro & Crowder for a Free Initial Bankruptcy Consultation

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. Our office is located in Melbourne, Florida.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

Will Filing Bankruptcy Stop ALL Lawsuits?

Personal Bankruptcy – Brevard County

If you have lawsuits filed against you, it may be time to consider filing a personal bankruptcy case. A personal bankruptcy case can be an effective way to eliminate certain collection lawsuits. However, it is important to understand that not all types of litigation are halted or eliminated in a Chapter 7 or Chapter 13.

Bankruptcy and Lawsuits Attorney Melbourne Florida

Below are a few examples of suits that are not stopped by your filing:

Family Law Matters

When you are involved in a case that involves a determination of child support, spousal support, or the establishment of paternity, your bankruptcy filing usually will not stop the family law court from proceeding with its case.

Criminal Proceedings

Filing for bankruptcy protection cannot halt a criminal proceeding. However, if the charges against you include a debt that is related to your criminal charges, that portion of the case against you may be halted by the automatic stay.

Tax Proceedings

The law provides that the Internal Revenue Service (IRS) has the ability to continue pursuing certain audits, issuing tax deficiency notices, demanding tax returns, or issuing tax assessments against a debtor in bankruptcy. The automatic stay will prevent the IRS from issuing tax liens, repossessing property, or seizing your income will your bankruptcy case is pending.

Pension Loans

A debtor is allowed to have funds withheld from his or her wages to repay a loan from certain types of pensions.

If you are planning to file a bankruptcy case and you have lawsuits or forms of legal proceedings filed or pending against you, contact us to discuss what will or will not be affected by the automatic stay. We can review all of the cases pending against you and make sure you understand what your bankruptcy filing will mean in each matter. We can also confer with the other parties involved if necessary so everyone is on the same page regarding your case.

Speak with an experienced Attorney at Faro & Crowder, PA 321-784-8158

The above are just a few examples of the types of legal proceedings that are not halted by the automatic stay. If you are interested in learning more about how a bankruptcy filing will impact your debt or the lawsuits pending against you, contact Faro Crowder, PA to schedule an appointment.  Our office is located in Melbourne, Florida.  We serve all of Brevard County and the Space Coast with Bankruptcy and Debt Relief services.

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Briefly Describe Your Legal Concern

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.

Tips for Finding the “Right” Bankruptcy Attorney

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If you are past due on your bills and creditors are harassing you night and day, filing for bankruptcy is a good option to consider. One of the most important decisions you can make in filing a Chapter 7 or Chapter 13 case is selecting the “right” attorney to represent you. Below are a few tips on how you can find the lawyer that is the best to handle your case:

  • Investigation. There are numerous sources available for researching a lawyer or law firm. The internet has a variety of websites that allow you to not only verify an attorney’s credentials, but also to see how other clients have ranked them. For example, Martindale.com, Avvo and the applicable state bar association websites can be searched to discover if the attorney is in good standing and how he or she has been rated by his or her peers. You should also read the lawyer’s own website to determine how much of his or her practice is focused on bankruptcy. It is a red flag if the attorney’s website does not list bankruptcy as a primary area of practice. You should find it comforting if the lawyer has written blogs or articles regarding bankruptcy topics. This is evidence that the lawyer is familiar with bankruptcy law and has the ability and willingness to explain it to others.
  • Referrals. Ask your family, friends and co-workers for recommendations on good lawyers. If somebody you trust refers an attorney, it is a good starting place. Don’t just take the other person’s word for it though. You should always meet with the lawyer and see if you “click” before retaining him or her to represent you.
  • Consultations. Once you have narrowed down the list of potential lawyers you believe will be a good fit for you, see if they offer a free initial consultation. If so, take advantage of the opportunity to meet with the attorney in person. It is important to retain somebody that you trust and feel comfortable working with on your case.

Choosing the right attorney to handle your bankruptcy filing can be the difference between successfully discharging thousands of dollars and wasting your time and money! A little of time and effort to ensure you are working with the right attorney is worth it in the long run.

The legal team at Faro & Crowder is ready to help. Our office is located in Melbourne, but we proudly serve businesses across the State of Florida.

Have Credit Card Debt? Debt Forgiveness vs. Bankruptcy

Many individuals contact us because they are drowning in debt and don’t know which debt relief option is the best for them. We commonly get questions regarding having debt “written-off” by lenders and how it impacts them. Typically, a lender will write-off your debt (also referred to as charging-off your debt) if you have been delinquent on your payments for a long period of time. In fact, many companies have an internal accounting procedure that automatically performs this function because it permits the lender to deduct the loss as an expense. What does it mean to you? If your debt is written-off, it is important to understand that you are still liable to pay it.

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For example, if your credit card company writes-off your debt, it can still continue its collection activity against you. The original lender can attempt to collect it from you or, more commonly, your delinquent account will be sold to a collection agency or a debt-buyer. When a debt-buyer purchases your debt, it is for a substantially lower amount than what is owed. Because your account was purchased at a discount, the collector may be willing to spend the money to file a collection lawsuit against you. If you fail to respond to the lawsuit (which the collector is hoping will occur), a default judgment will be entered against you. Once the collector has a judgment, it can file a garnishment of your bank account and/or wages, as well as take advantage of other collection tactics.

If you are considering filing a Chapter 7 or Chapter 13 bankruptcy, you should be sure to include your debts that have been written-off. As soon as your bankruptcy petition is filed, the automatic stay goes into effect and all collection activity against you must cease. This includes the harassing telephone calls, lawsuits, garnishments and other similar efforts.

If you are hesitant to file for bankruptcy and you have collection lawsuits pending against you, it is important to contact us for help. Do not ignore the lawsuits because they will not just disappear! We can file an answer on your behalf and prevent a default judgment from being granted by the court against you. You may have several defenses available to you as well. We can use this time to negotiate with your creditor and attempt to reach a settlement for a significantly lower amount that what you owe.

Don’t delay any longer. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.

Bankruptcy Palm Bay | Bankruptcy Melbourne | Bankruptcy Attorney Brevard County

If you live in the Palm Bay or the Melbourne area and are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment.  Our office is conveniently located on Sarno Road in Melbourne.  We offer free initial consultations for bankruptcy and foreclosure defense.

Speak with an experienced Bankruptcy Attorney at Faro & Crowder, PA 321-784-8158

We offer a free initial consult for bankruptcy, debt relief, credit card debt and foreclosure defense.  Contact our office to schedule your consultation and discuss your debt relief options.

Name (required)

Email (required)

Phone Number (required)

Briefly Describe Your Legal Concern

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.

Tips for Discussing Bankruptcy with your Children

bky talk with kids pic

It is a natural reaction for parents to attempt to shield their children from dealing with financial troubles. However, if you are considering filing a personal bankruptcy case, it is wise to discuss it with your entire family, including your children. You can tailor the conversation to fit the age of your children, but it is important that they hear it directly from you.

So, how should you go about discussing filing a Chapter 7 or Chapter 13 case with your kids? There is no magic formula, but below are a few considerations:

  • You should be open and honest about your financial situation. This may mean different things depending upon the age of your children, but the primary focus should be on how the bankruptcy filing will be beneficial for the family. It is essential that your entire family understand how adjustments in your finances will need to be made.
  • One of the most important ways you can make your family feel secure while going through bankruptcy is to have a plan for your housing situation. When your kids know that they have a safe place to live, it makes them feel more secure. Thus, even if you intend to surrender your house back to your mortgage lender during the bankruptcy case, having a plan for new housing will help the family feel more comfortable about your circumstances.
  • Try your hardest to keep your normal schedule and routine while your bankruptcy case is pending. Children feel secure when they know what to expect. The less you disrupt their daily lives, the better they will feel about the process.
  • Finally, if possible you should strive to keep your kids in the same schools. Having to change schools, especially in the middle of the school year, can be very disconcerting. However, if it is necessary for your children to switch schools, be sure to make an effort to keep them in-touch with their established friends.

We understand that filing for bankruptcy can be stressful for everyone involved. We assist families every day in obtaining the debt relief they need in the least disruptive way possible. Let us help you get the financial help you need and ensure that the process goes as smoothly as possible.

The legal team at Faro & Crowder is ready to help. Our office is located in Melbourne, but we proudly serve individuals, families and businesses across the State of Florida.


Options to Consider when a Judgment is Entered Against You

Many people who fall behind on their bills feel overwhelmed when creditors start filing collection lawsuits against them. In fact, it is not uncommon for people to simply ignore the lawsuits and hope they will simply go away. This tactic never works! As soon as you are served with a petition or complaint against you, confer with an attorney so you understand all of your options.

Options when a judgment is entered against you - Brevard County Bankruptcy

Once a creditor has obtained a court judgment against you, it is important to understand there are still different ways to deal with it. While no two cases are identical and you should always seek legal advice regarding your specific situation, below are a few options to consider:

Personal bankruptcy. If you are feeling overwhelmed by your debt, filing a Chapter 7 or Chapter 13 bankruptcy may allow you to discharge or cancel a collection entered against you. Again, you should consult with a debt relief lawyer to confirm that the type of judgment entered against you will be discharged, but this could save you thousands of dollars!

Wait and see. If you are reluctant to file a personal bankruptcy, you may consider waiting and seeing what actions the creditor pursues after obtaining the judgment against you. Of course, there is substantial risk involved depending upon your unique situation. In fact, this course of action (or inaction) is only suggested if you are considered to be “judgment proof.” In other words, you do not own any non-exempt property or other means for the creditor to be able to collect the judgment from you. Additionally, if the creditor fails to take any action to enforce or renew its judgment against you, it will eventually expire.

Negotiate and settle. Don’t make the mistake of believing your settlement options are over once a judgment has been entered against you. Many creditors are still willing to settle your debt post-judgment in order to avoid incurring the expenses associated with trying to collect from you. Thus, you may be able to pay off the judgment for less than the full amount. In some cases, you may be allowed to set-up a payment plan to satisfy the judgment. Just remember, you must obtain a court-stamped satisfaction of judgment in order for the unpaid judgment notation to be removed from your record!

Contact Faro & Crowder, PA today for a free initial consultation

Call us today to schedule your initial consultation. Our office is located in Melbourne on Sarno Road, but we proudly serve individuals and businesses across the State of Florida.


What you need to know about Credit Card Debt in Bankruptcy

credit card in bky pic

Credit card debt is one of the most common factors that contribute to individuals filing for bankruptcy protection. If you are overwhelmed by your credit card bills, filing a Chapter 7 or Chapter 13 may be the solution. In a typical Chapter 7, the majority (if not all) of your credit card debt will be discharged or eliminated. In a typical Chapter 13, you will pay a percentage (typically a very low percentage, if anything at all) of what is owed on your unsecured debts.

It is important to understand, however, that there are exceptions to the general rule. Pursuant to 11 U.S.C. §523(a), there are a few exceptions to the rule of dischargeability. The two most common types of credit card debt to be excluded from discharge, include:

  • Credit obtained by lying. When a debtor puts false information on his or her credit application in order to qualify for the credit card, the lender can seek to have all of the purchases made on the credit card to be non-dischargeable. If the court agrees with your lender, you will remain liable to pay the debt even after your bankruptcy case has concluded. The most common occurrences of lying to obtain credit include significantly over-estimating income or under-estimating debt.
  • Fraudulent purchases. Many people incorrectly believe that they can make purchases on their credit card in the days leading up to their bankruptcy filing and discharge the debt. Any charges that are incurred by fraud or false representations can be held to be non-dischargeable. If the court holds that you used your credit card to buy items with no intent to pay for them, you will remain liable to pay the debt. Additionally, if a debtor buys frivolous items, maxes out the limit on the credit card, or even drastically increases credit card use just prior to filing bankruptcy, the creditor can challenge the dischargeability of the debt.

If you have questions about filing for bankruptcy protection, we have the answers. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


Read This BEFORE you sign a Reaffirmation Agreement

If you are planning to file a Chapter 7 case and you have secured debts, you should be prepared to disclose to the court how you intend to handle your secured loans. In other words, you must decide whether you will surrender the asset you pledged as collateral (house, vehicle, boat, etc.) to the lender, or if you will keep the asset and continue to pay for it. If you want to keep the asset and pay for it, your lender may request that you execute a pleading called a “reaffirmation agreement.”

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A reaffirmation agreement is a new contract signed by the debtor and the lender. It often sets forth new contract terms and the debtor agrees to pay all (or an agreed-upon amount) of the debt, even though the debt could have been discharged in the bankruptcy filing. This means that if you sign a reaffirmation agreement, you are giving up your right to discharge the debt that otherwise qualifies to be discharged in your case. Thus, if you sign the reaffirmation and later default on your payments, your secured lender has the legal right to repossess the collateral.

The applicable statute for reaffirmation agreements is found at 11 U.S.C. §524(c). A standard reaffirmation contract sets forth that the debtor can keep possession of the collateral as long as he or she makes timely payments as set forth in the new agreement.

The lawyer for your lender typically drafts the reaffirmation agreement. The terms may remain the same as the original loan or they may be changed. You should be aware that reaffirmation agreements can have blanks that the debtor is required to fill-in, such as the financial information needed by the court to understand whether or not the debtor can afford to reaffirm the debt. Also, the debtor and your attorney are required to sign the reaffirmation.

Deciding whether or not to sign a reaffirmation agreement is very important. You should confer with a knowledgeable bankruptcy attorney to discuss your unique circumstances. Waiving your right to discharge a debt is a big decision that should only be made after conferring with your legal counsel.

If you have questions about filing for bankruptcy protection, we have the answers. Call us today to schedule your initial consultation. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.


How the Automatic Stay is Impacted by Multiple Filings

If you have previously filed for bankruptcy protection and you are considering filing another case, it is important to understand that there are certain guideline for when and how you can do it.

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The court looks at what type of case you filed the first time and whether you received a discharge of your debts to determine whether you qualify to file a second bankruptcy case,. In the majority of the cases, you can file a new bankruptcy case at any time if your prior filing was dismissed and you did not receive a discharge order from the court.

If your first case was a Chapter 7 and you obtained a discharge order from the court, you can:

  • file another Chapter 7 case and receive a discharge after 8 years from the petition date of your first case.
  • file a Chapter 13 bankruptcy and receive a discharge order after 4 years from the petition date of your first case.

If your first case was under Chapter 13 and you received a discharge from the court, you can:

  • file a Chapter 7 bankruptcy and receive a discharge order after 6 years from the petition date of your first case.
  • file another Chapter 13 bankruptcy after 2 years have passed from the time you filed the petition in your first case.

You should also be aware that if you have filed two or more bankruptcy cases that were dismissed within one year, the automatic stay will not be effective upon the filing of a subsequent case in the same year. This means that although you have filed bankruptcy, collection actions against you can continue until you have met certain requirements.

It is important to note, however, that there are consequences for filing more than one personal bankruptcy. A little-known penalty is that if you have had two or more bankruptcy filings dismissed within one year, the automatic stay does not go into effect in a subsequent case filed in that same year. In other words, none of your creditors are barred from continuing their collection efforts against you….at least until you meet certain conditions. To learn more, please read our blog titled “Serial Bankruptcy Filers – What You Should Know.”

If you have previously filed for bankruptcy relief and you are considering filing against, let us help. The legal team at Faro & Crowder is ready to help. Our office is located in Melbourne, but we proudly serve businesses across the State of Florida.


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