Tag Archives: Chapter 13

Can I Keep my Wedding Rings in Bankruptcy?

 

Individuals who are struggling to make ends meet often turn to bankruptcy to take control of their finances. When you file for bankruptcy, the court requires you to list all of your assets. Many clients get concerned when they learn that they must list their wedding rings on the list of assets. However, the Bankruptcy Code provides numerous exemptions that can be applied to exclude certain types of property from being included in your bankruptcy estate. Wedding rings are usually covered by exemptions.

wedding rings pic

Federal law provides an exemption for wedding rings. Additionally, each state has its own set of bankruptcy exemptions and most allow a debtor to keep wedding bands and engagement rings. In fact, they are often considered fully exempt, which means you can keep them regardless of their value.

In Florida, you are required to use the state bankruptcy exemptions. Florida does not provide a specific exemption for jewelry, but it does have a general personal property exemption. It allows you to keep any type of personal property (wedding rings, clothing, furniture, etc.) up to $1,000. This amount is doubled if you are married and file a joint bankruptcy case. Additionally, if you don’t need to use the homestead exemption to protect your house, you can exempt up to $4,000 of personal property.

It is important to understand that for bankruptcy purposes, the value of your rings will be significantly lower than what you paid for them. You will use the liquidation value (what you could sell the rings for) or their replacement value. One of our seasoned bankruptcy attorneys can assist you with determining the appropriate value of your rings before you file your case.

You should also understand that in many cases, the administrative expenses associated going after a low-value, non-exempt asset is not worth it to the trustee. They understand the sentimental value of your wedding rings and are typically reluctant to seize them. Thus, unless your rings are extremely high-value, it is likely you will be able to keep them in your bankruptcy filing.

To learn more about filing for bankruptcy protection and how it will impact your various different assets, contact the legal team at Faro & Crowder for help. Our office is located in Melbourne, but we proudly serve individuals and businesses across the State of Florida.

Why You Should File Chapter 13 Bankruptcy

Hopefully you have read our prior blog discussing the various benefits of filing a Chapter 7 bankruptcy case.

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This blog will focus on the advantages of a Chapter 13 bankruptcy. In most instances, filing a Chapter 13 provides you more flexibility in restructuring your debt and the following benefits:

  • Automatic stay. As soon as you file a bankruptcy case, the automatic stay is effective. It prohibits creditors from taking any collection actions against you while your bankruptcy is active. The stay halts all collection calls, lawsuits and garnishments.
  • Debt consolidation. Your Chapter 13 plan allows you to reorganize your debt and consolidate it into one monthly payment that you make to the trustee, who then disburses the funds to your creditors as set forth in the terms of your plan.
  • Elimination of debt. Your unsecured debt, such as credit cards and medical bills, is paid a percentage of what is owed under your repayment plan. The percentage depends on your income and debt, but most debtors pay pennies on the dollar owed, if anything at all.
  • Cure delinquencies. If you have fallen behind on your mortgage loan payments or your vehicle loan payments, you can include small payments in your Chapter 13 plan to be applied to curing your delinquencies. A Chapter 13 case lasts three to five years, which typically gives you plenty of time to cure your payment defaults and get your secured loan back on track.
  • Lien stripping of inferior mortgages. If you have a second or third mortgage on your home, you may be able to “strip” the lien and treat it as an unsecured debt. To qualify, the value of your home must be less than what is owed on the first mortgage. To learn more about lien stripping, please read out blog titled Stripping Off Junior Mortgages in Bankruptcy.”

The above are just a few examples of the benefits offered by filing a Chapter 13 case. If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment.


Is my 401K Safe in Bankruptcy?

When you are struggling financially and being harassed by creditors, the idea of getting safe refuge in bankruptcy can be quite appealing. However, most people are afraid to take this step because they fear what will happen to their assets. A significant assets for most individuals is their retirement account. Fortunately, federal bankruptcy law provides protection for qualified retirement accounts. In fact, the law sets forth an exemption that removes a qualified 401k, pension, profit sharing or Individual Retirement Account (IRA) from being included in your bankruptcy estate. Most state bankruptcy laws have a similar exemption as well.

401k pic

When it comes to protecting an IRA, the maximum amount that can be exempted is $1,245, 475 per individual. This is a substantial sum and most debtors have accounts that are well below this amount, so they are protected fully. However, if your IRA account exceeds the cap, you should consult with your bankruptcy lawyer to discuss your options.

In fact, if you are planning to file a personal bankruptcy, you should consult with an attorney to verify that all of your retirement accounts qualify for the exemption. This is also true if you have taken a loan against your 401k account. A loan against your retirement account may add some complexity to your filing, so it is important for you and your attorney to be prepared to address the issues.

Claiming all of the applicable exemptions to safeguard your assets is essential to having a successful bankruptcy case. When you have your initial consultation with your bankruptcy attorney, you should provide all of the records regarding each of your retirement accounts to confirm that the funds will be protected.

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: The Good, The Bad & The Ugly

Deciding whether to file for bankruptcy protection is a difficult decision. There are numerous factors that must be considered and it is important for you to understand all the pros and cons of a Chapter 7 or Chapter 13 case. Although no two cases are the same, below are a few things you should be aware of before filing your bankruptcy petition.

Bankruptcy Attorney Melbourne, Florida

Bankruptcy: The Good, The Bad, and The Ugly

The Good When Filing Bankruptcy

  • All, or almost all, of your debts will be eliminated (discharged)
  • All collection activity (harassing calls, lawsuits, garnishments, etc.) against you will immediately stop
  • Bankruptcy is the most comprehensive means for dealing with your debt because all of your creditors are included
  • Depending on what chapter of bankruptcy file, you probably will be allowed to keep all of your assets
  • If you file a repayment plan, you can make your payments over a period of three to five years
  • You may be allowed to remove or “strip” inferior liens from your home
  • You emerge from bankruptcy with a fresh financial start and you can immediately begin rebuilding your credit score

The Bad When Filing Bankruptcy

  • Until you have had time to rebuild your credit and improve your credit score, you may have a difficult time qualifying for a mortgage or other loan after bankruptcy
  • You will need to learn from your financial mistakes because you cannot file another bankruptcy for several years
  • There is a small risk the trustee will seize your non-exempt assets to pay creditors

The Ugly When Filing Bankruptcy

  • Filing for bankruptcy protection will negatively impact your credit score, but in most cases, the debtor’s credit is already damaged by past due payments, lawsuits and other negative financial events

The above is a very brief outline of the consequences of filing for bankruptcy protection. Let us review your individual circumstances and provide you with an honest assessment of how filing a Chapter 7 or Chapter 13 would impact you.

Contact a Bankruptcy Attorney at Faro & Crowder, PA

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

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.

What Will I Pay in a Chapter 13 Case?

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If you are struggling to pay your bills and your household income is higher than the applicable median income, filing a Chapter 13 case may the answer to your problems. In a Chapter 13 bankruptcy, you will submit a repayment plan that sets forth how you intend to repay your creditors, either wholly or partially. The biggest concern for most individuals is how much they will be required to pay under their plan. To calculate this amount, numerous steps must be taken.

As your bankruptcy attorney, we will apply the means test to your individual finances to determine whether your income is higher or lower than the median income for your household size. The median income for each state is set by the U.S. Census Department. If your income falls below the applicable median income, the term of your Chapter 13 plan will be 36 months. Your “disposable income” or the sum that is remaining after you pay your “reasonable and necessary expenses,” will determine the amount of your monthly plan payment.

If your household income is greater than the median income, we will apply the Internal Revenue Service (IRS) standards in calculating the amount of your plan payments. The IRS standards permit you to apply deductions for specific expenses such as your rent or mortgage payment and other necessary living expenses such as clothing, food, medical costs and other similar expenses. A seasoned Chapter 13 attorney can assist you in taking full advantage of all the applicable deductions. Once all of the deductions are applied to your gross monthly income, the remaining balance is your projected disposable income that will be used to fund your repayment plan.

The Chapter 13 procedure can be complicated, but we can walk you through the process step by step. If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment.


Professional Licenses in a Bankruptcy

When you hold a professional license, it is a significant asset and you want to do everything you can to protect it. Whether you are a doctor, lawyer, realtor, CPA, or some other type of professional, your license is essential to your livelihood. When you file a personal bankruptcy, it is important to understand that your license is considered an asset.

prof license in bky pic

Your Professional License is Considered an Asset When Filing Bankruptcy

Pursuant to section 525(a) of the Bankruptcy Code, a government agency is prohibited from denying, revoking, suspending or refusing to renew a license to an individual who has filed for bankruptcy protection, solely due to the Chapter 7 or Chapter 13 filing. This means that although your professional license is an asset with value, your bankruptcy filing will not prevent you from practicing your profession.

It should be noted, however, that filing a personal bankruptcy will not shield you from losing your license for other reasons. If you are in violation of the standards or ethics of your profession and the governing body is taking action against you, filing bankruptcy will not stop the revocation or suspension of your license.

The “Good Moral Character” Provision

The Bankruptcy Code contains a broad “good moral character” provision. If you hold a professional license and you have concerns, you should confirm that you are in compliance with the standards and requirements of your profession to ensure that no issues arise in your case. Although this is rarely an issue in personal bankruptcy filings, it is always better to confer with your attorney about anything that worries you before your Chapter 7 or Chapter 13 case is filed.

Contact a Brevard County Attorney at Faro & Crowder, PA

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.

Areas We Proudly Serve

We provide services throughout Central Florida and the Space Coast including Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie. Contact our office in Melbourne today to set up a free consultation with a bankruptcy relief attorney.

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.

How Much Does a Bankruptcy Filing Cost?

When you are struggling to make ends meet and you are hoping to obtain debt relief, you are probably concerned with how much filing a Chapter 7 or Chapter 13 case will cost you. Financial struggles can be nerve-wracking and trying to come up with money to pay an attorney can feel overwhelming.

Bankruptcy Filing Cost | Brevard County | Melbourne,FL Attorney

Finding the Right Bankruptcy Lawyer

If this is your situation, it is important to retain the right attorney. An experienced bankruptcy attorney can not only help you save money, but also prevent you from losing your most valuable assets. You may be tempted to retain the “cheapest” lawyer out there, but you don’t want to put your future in the hands of a lawyer that does not have bankruptcy experience or that you cannot rely on. Thus, it is imperative that you research the attorney to ensure that he or she is knowledgeable in the area of bankruptcy and has a solid reputation for helping people in your situation.

You may also think you can save money by working with a bankruptcy petition preparer instead of an attorney. As the name suggests, a bankruptcy petition preparer helps you prepare your paperwork needed to file your case. However, he or she cannot give you legal advice or represent you during your case. This means that if any problems occur in your filing, you don’t have anyone there to help you.

Bankruptcy attorneys understand better than anyone that your finances are in trouble, so their fees are typically reasonable. In fact, when you compare the small amount you pay your lawyer to the thousands of dollars you can discharge in your bankruptcy case, you are getting quite a deal! Additionally, most lawyers are willing to assist you in finding a way for you to pay for your filing. Below are a few considerations:

  • Start setting aside small amounts of money as soon as you think it is likely you will seek bankruptcy protection. Planning ahead is the best way to prepare yourself for filing a Chapter 7 or Chapter 13 case.
  • Seek help from your friends and family. It is essential that they understand the money is a gift because the amount they give you will be discharged in your bankruptcy filing. If you want, you can repay the amount after your bankruptcy case is over.
  • It is generally a bad idea to borrow from your retirement savings to pay for a bankruptcy case. A loan from your 401k can have negative tax consequences and your retirement funds are exempt in your bankruptcy.
  • Discuss a payment plan with your bankruptcy lawyer.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

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.

Car Cramdowns in Bankruptcy

Most consumers owe more on their car loan than their vehicle is worth. If you are also overwhelmed by other debt and you have a regular source of income, it may be time to consider filing a Chapter 13 bankruptcy.

Chapter 13 Bankruptcy and the “Cram down” Process

When an individual files a Chapter 13, he or she may be able to take advantage of the “cram down” process to reduce the balance on the car loan and the applicable interest rate.

Chapter 13 Bankruptcy Brevard County

Free Initial Bankruptcy Consultation

Chapter 13 Bankruptcy May Lower the Balance Due on the Vehicle Loan to the Amount That the Car Is Worth

When you purchase a vehicle, it starts to depreciate in value as soon as you drive it off of the dealership’s lot. Thus, it is common for car owners to be “upside down” on their auto loans. A debtor in a Chapter 13 case can lower the balance due on the vehicle loan to the amount that the car is worth. To take advantage of the cramdown procedure, a debtor must have purchased the car at least 910 days (nearly 2.5 years) prior to filing the bankruptcy petition.

Chapter 13 Bankruptcy Repayment Plan

The cramdown can be accomplished through your Chapter 13 repayment plan. The debtor proposes that the car lender should be paid the value of the vehicle rather than the full amount due under the loan. Consider this example: If you owe $10,000 on your auto and its value is only $7000, then your plan can provide that the lender have a secured claim for $7000 and an unsecured claim of $3000. The logic is that if the lender seized your car and sold it, the lender would only be able to recover $7000 since that is what the car’s value is. Classifying the $3000 as an unsecured debt means that you will likely only pay a small portion (if any) of this amount under the Chapter 13 plan.

The cramdown process may also allow you to reduce the applicable interest rate under your contract with the lender. The applicable interest rate can be determined by the bankruptcy court, but it is commonly the prime interest rate with a little extra added on.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

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

Phone: (321) 784-8158
Address: 1801 N. Sarno Road, Suite 01
Melbourne, Florida 32935
Email: info@farolaw.com

How Chapter 13 is Better than Chapter 7

Hopefully you have read our blog titled “How Chapter 7 is Better than Chapter 13,” to learn more about the advantages of a Chapter 7 filing. This blog will focus on the many benefits of a Chapter 13 case.

Chapter 13 Bankruptcy Brevard County

Debt Consolidation in Chapter 13 Bankruptcy

A Chapter 13 filing is a reorganization process which allows you flexibility in how to deal with your debt. A Chapter 13 debtor creates a repayment plan that sets forth how you intend to pay your creditors, either fully or partially. You make one monthly payment to the Chapter 13 trustee who then pays your creditors as set forth in your plan.

Unsecured Debts

Your unsecured debts will be included in your Chapter 13 repayment plan and you are required to pay a percentage of them (0 to 100%), depending on your finances. In most cases, the debtor only pays a very small percentage of the unsecured debts owed, including credit card and medical bills.

Secured Debts

If you are delinquent on your mortgage or car loan payments, you can make small payments through your Chapter 13 plan and get caught-up on your secured loans. Since your plan lasts three to five years, the smaller monthly payments can be applied to the past due amounts.

Lien Stripping in Chapter 13 Bankruptcy

You may be able to eliminate a second or third mortgage in a Chapter 13 filing by using the lien stripping process. To learn more, please read our blog titled Stripping Off Junior Mortgages in Bankruptcy.”

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

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.

How Chapter 7 is Better than Chapter 13

 

Many people come to our office seeking debt relief, but they don’t know where to begin. There are pros and cons to both Chapter 7 and Chapter 13 bankruptcy filings, so it is important to understand them. Be sure to read our next blog titled “How Chapter 13 is Better than Chapter 7.” This blog will focus on the many benefits of a Chapter 7 case.

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The Process is Faster

A typical Chapter 7 filing takes four to five months to complete, while a Chapter 13 lasts three to five years. This can be extremely beneficial if you have a large amount of debt to discharge because you can obtain your fresh start quicker and begin rebuilding your credit faster.

Eliminate Unsecured Debts

A significant benefit of the Chapter 7 process is that you can discharge medical bills, credit card debt and most loans that do not have assets pledged as collateral to the lender. This is often the majority of an individual’s debt.

Keep Your Assets

While the Chapter 7 procedure is commonly referred to as a “liquidation” case, most debtors don’t actually lose possession of their property in their filing. The law provides you with a wide variety of exemptions that safeguard valuable assets from being used or sold to pay your creditors. Common examples of exempted property includes your home, vehicle, 401k account, clothing and common household belongings. The reality is that the majority of Chapter 7 debtors are allowed to fully discharge their debts without losing any of their assets.

More Affordable

Because the Chapter 7 process does not last as long as the Chapter 13 process, it generally costs you less to file.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

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.

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