Tag Archives: automatic stay

Debt Collection after Bankruptcy

One of the primary benefits of seeking bankruptcy protection is that the automatic stay stops all collection efforts against you.

Once you have completed your case and obtained your discharge order, your dischargeable debts are eliminated and collectors are barred from taking any collection actions against you to recover the discharged debts. Unfortunately, this does not always mean that collectors won’t attempt to contact you. If this happens, below are a few suggestions on how to handle it:

  • Stay calm – in many cases, the collector has made an error that can be resolved.
  • Look over your bankruptcy pleadings and verify that the creditor was included in your filing and given notice of it.
  • Confirm that your discharge order was entered and filed with the bankruptcy court. If you don’t know if you received your discharge, contract your bankruptcy lawyer or the court clerk for help. You should be sure to keep a copy of your discharge order with your important documents.
  • It is important that you understand that certain types of debts are not dischargeable. You must confirm that the collector is not attempting to collect a debt that was not discharged in your case. Most consumer debts such as credit card and medical debt is dischargeable.
  • Once you verify that the creditor was included in your bankruptcy case, the debt the collector is attempting to collect was discharged, and your received your discharge order, contact the creditor and inform them.
  • To be safe, we recommend confirming your conversation with the debt collector in a follow-up letter and providing them with a copy of your discharge order. Be sure to keep a copy of this letter for your records.

The above steps should resolve the issue. However, if you take the above measures and the collector continues to contact or harass you, contact us for help. A creditor or collector that continues to ignore your bankruptcy discharge can be held liable by the court. 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.

Debt Collection 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.

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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.

Understanding the Benefits of the Automatic Stay

If you are tired of being harassed by relentless debt collectors and you are wondering how filing for bankruptcy can help, the answer is a protection afforded to debtors called the “automatic stay.” As soon as you file your personal Chapter 7 or Chapter 13 petition, the stay immediately goes into effect and prohibits further collection activity against you. This means that all telephone calls, demand letters, lawsuits, garnishments and other similar forms of collection tactics must immediately stop.

Automatic Stay

Bankruptcy Attorney serving Melbourne, FL

Automatic Stay Exceptions

There are some exceptions to the automatic stay, so it is important to confer with a bankruptcy attorney regarding what matters will not be halted by your filing. Some of the more common examples of matters that can continue even though you filed for bankruptcy include certain family court matters, criminal court proceedings, and tax audits.

Creditors with Secured Debt

If you have a creditor that has a secured debt (a loan where you pledged an asset as collateral for the lender), it is important to understand that the creditor has the right to file a motion and ask the court to lift the stay as it applies to that lender’s specific debt. There are certain requirements that must be met for the court to grant this type of motion. If the court grants the creditor’s motion, the stay is lifted as to that creditor and the debt at issue. This means that the creditor can proceed with certain actions against you and/or the asset pledged as collateral. For example, if you fail to pay your car loan and you do not have insurance coverage on it, the bankruptcy court may permit your lender to repossess the vehicle.

Questions About the Automatic Stay?

Although the bankruptcy laws were designed to primarily protect debtors, they also set forth many safeguards for creditors as well. If you are concerned with how the automatic stay will apply to your debt and the collection actions being taken against you, contact us today.

Contact an Attorney at Faro & Crowder, Pa Today

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.

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

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.

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.

automatic stay pic

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.


How will I be Impacted by my Ex-Spouse’s Bankruptcy?

Ex-Spouse Bky pic

What happens if your ex-spouse files a bankruptcy case? Will it impact you? The answer is “it depends.” It is important to have one of our bankruptcy lawyers review your individual circumstances to help you understand how you might be affected, but below is some general guidance.

As soon as your ex-spouse files his or her Chapter 7 or Chapter 13 case, the automatic stay goes into effect and protects him or her from any collection efforts by creditors. Your ex-spouse will likely be permitted to discharge or eliminate the majority (if not all) of his or her debt – including the debt your ex agree to pay in the divorce agreement. This may result in you being liable for some of the marital debt that was not assigned to you in the divorce order because your name is still on the loan documents. It should also be noted that if your state uses community property laws, it can impact how your ex-spouse’s bankruptcy filing impacts you.

You may be wondering if your divorce decree protects you. The divorce order is a contract between you and your ex-spouse. In other words, your creditors usually are not bound by the terms of the divorce decree, unless your creditor or lender agreed to the terms of it and removed you from liability for the financial obligation Thus, what was owed by you and your ex-spouse prior to the divorce can still be owed by both of you after the divorce, regardless of what the divorce decree provides. Once the creditors are unable to take collection action against your ex-spouse, they will likely start trying to collect from you.

If your ex-spouse informs you that he or she intends to file a personal bankruptcy and you have a significant amount of joint debt, you may want to consider filing your own Chapter 7 or Chapter 13 case.

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.

What is the Co-Debtor Stay in Bankruptcy?

Bankruptcy Attorney Palm Bay

Faro & Crowder, PA Bankruptcy & Foreclosure Attorneys

When you file a bankruptcy case, you obtain the benefit of the automatic stay. If you file a Chapter 13 bankruptcy, you are also given the “co-debtor stay.” The automatic stay prevents creditors from taking collection actions against you, while the co-debtor stay prevents collection against your family, friends or others who co-signed loans with you. The automatic stay and the co-debtor stay can remain in place while your Chapter 13 is pending.

It is important to note that the co-debtor stay does not change or eliminate your co-borrower’s liability to pay the loan. Their financial obligations remain intact, but the creditor cannot use collection efforts against him or her while your Chapter 13 case is active (without court approval). Additionally, a Chapter 7 case does not provide you with the co-debtor stay.

As with most general rules, there are some exceptions to the application of the co-debtor stay. If a debt was incurred in the “ordinary course of business” by the debtor, the stay does not prevent collection efforts against the co-debtor.

Pursuant to 11 U.S.C. §1301, the co-debtor stay applies if (i) the primary debtor files a Chapter 13 case, (ii) the debt is a consumer debt (not a business debt), (iii) the co-borrower is an individual, (iv) the co-borrower did not become liable on the debt in the ordinary course of business, and (v) the Chapter 13 case was not dismissed, closed or converted to a Chapter 7 or Chapter 11 case.

If the above criteria are met, the co-debtor stay can be effective for the full term of the Chapter 13 plan (which is three to five years).

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.

 

Filing Bankruptcy Can Help with “Emergencies”

EmergencyPhone

One of the benefits of filing a Chapter 7 or Chapter 13 case is the automatic stay. The stay is immediately effective upon your bankruptcy filing and it prevents creditors from taking any further collection activities against you. This can be very helpful when you are facing a financial emergency:

  • Foreclosure of your home. Whether your mortgage lender is threatening to foreclose or you already have a foreclosure lawsuit filed against you, a bankruptcy filing can halt (at least temporarily) your lender’s actions. At a minimum, your filing will allow you to have more time in your house.
  • Eviction from rental property. Depending on where you are in the eviction process, a bankruptcy filing may allow you to delay it.
  • Account or wage garnishment. If a creditor has a judgment against you, it is likely that a garnishment of your paycheck or your bank account has been filed against you. As soon as you file your bankruptcy petition, the automatic stay stops all garnishments. Additionally, it is possible the debt linked to the garnishment can be discharged or eliminated in your filing. In fact, it is possible that the creditor will be ordered to refund a portion of the funds previously garnished.
  • Disconnection of utilities. Even if your electricity has been turned off, a bankruptcy filing may allow you to get it reinstated. This can be a real advantage if you are in the middle of summer or a terrible winter and you do not want your utilities to be turned off.

If your financial struggles have put you in one of the above situations or a similar circumstance, it is time to consider your debt relief options. We can help you understand how filing a bankruptcy case will benefit you. We can also explain your other debt relief options. Call us to schedule a free consultation today.


Do Exempt Assets Stay Exempt When Inherited?

NestEgg1

What was exempt before you inherited it may not be after, according to a recent Supreme Court case.

Clark et ux v. Rameker et al centered around the Chapter 7 Bankruptcy of Heidi Hefron-Clark and her husband, Brandon. In 2001, the Clarks inherited a $450,000 IRA from her mother. When the couple later filed bankruptcy in 2010, they claimed the IRA (then worth approximately $300,000) was exempt property, pursuant to 11 U.S.C. 522(b)(3)(C). The trustee and unsecured creditors objected, arguing that the inherited IRA was not a “retirement account” within the meaning of the statute. The Bankruptcy Court disallowed the exemption. The Supreme Court agreed to review the case, to resolve a split between the Fifth and Seventh Circuits.

A unanimous decision by Justice Sonia Sontamayor focused largely on the ordinary meaning of a “retirement account.” An IRA, 401(k) or any similar defined contribution account is simply money that a worker sets aside in anticipation of retirement. Basically, the account owner worked to fund the account. An inherited IRA, according to the court, is more like a gift, and gifts are normally not exempt in bankruptcy proceedings.

The justices also discussed the legal elements of an IRA. They held that an earned and inherited IRA are different in several key areas:

  • No additional deposits: The owner of an inherited IRA may never add more money to the account, so the device is clearly not an investment vehicle.
  • Required periodic withdrawal: In fact, owners of these accounts are required to withdraw money from the IRA, no matter how far the owners are from retirement.
  • Penalty-free complete withdrawal: The owner of an inherited IRA may withdraw all the money at any time for any purpose, without penalty.

Implication

This decision may serve as a precedent in some future disputes, if a trustee challenges an inherited asset in your possession, such as a house or car. An attorney can represent you in these proceedings, and be your advocate in front of the court.

Contact our office for a free consultation with attorneys that help protect your assets.


GM Tries to use Bankruptcy to Avoid Lawsuits

Chapter 11

General Motors is trying to use its Chapter 11 Bankruptcy as a shield against liability lawsuits stemming from faulty ignition switches.

The automaker claims that it emerged from bankruptcy as “the new GM” and as a different corporate entity. According to a court filing in New York, the new GM’s recall of the ignition switches does not serve as a basis for a lawsuit against the “old GM.” Its lawyers asked the Bankruptcy Court to bar any liability lawsuits from incidents that occurred prior to 2009.

In their response, the negligence plaintiffs stated that the government would have never agreed to the bailout and bankruptcy if it had known about the products liability lawsuits.

A Fresh Start

One of the main purposes of bankruptcy law is to give debtors, corporate or individual, a fresh start. A debt that has been discharged is no longer owed. The problem in the GM context is that the debts have to be listed and the creditors notified so they can assert their rights. Where claims are uncertain and unknown, debtors often attempt to claim that the publicity of the bankruptcy, or a notice in a newspaper, serve as notice to the unknown creditors. In the context of a corporation reorganizing under Chapter 11 like GM, it is even more complex, because the GM that emerged from bankruptcy was not the same GM that filed bankruptcy. That may sound like legal mumbo-jumbo, but ask anyone who owned shares in the old GM and they will confirm the old GM, and their shares in it, are worthless. The name “GM” was simply one of many assets purchased by the new GM.

In the individual debtor’s situation the issues are not so complex. First, it is relatively rare that an individual is unaware of potential claims. If you are filing a petition for bankruptcy, and you think your former business partner may sue you, you list him as a disputed creditor and he gets actual notice. He will then have an opportunity to file a claim if appropriate, examine you and your petition, and object to you discharging your debt (to him or all debt). That is not an unknown claim.

If you have listed all known claims (disputed or not), it is very unlikely you will ever have a challenge like the one GM faces. The Bankruptcy Code is designed to give debtors a fresh start. For most debtors, as long as you are honest and complete in your petition and schedules you will get the fresh start the Code promises, so that you can move forward with life again.

For a free consultation with attorneys who can help you get your fresh start, contact our office in Melbourne, Florida.


Court Stops Lawsuit against Debtor

The Middle District of Florida recently ruled that the automatic stay is a blanket protection that applies to multiple creditor claims, even if there is not a perfect symmetry of parties.

Facts

In Peterson et al v. Avantair et al, Avaintair informed its employees that it could not make payroll almost simultaneously with its bankruptcy filing. Mr. Peterson, along with some other employees, personally sued Avantair’s corporate officers and senior managers for breach of contract, failure to pay minimum wage and several other causes of action.

The defendants argued that the case should be stayed as to the individual defendants while it was stayed as to Avantair under Section 362 of the Bankruptcy code, , while the plaintiffs stated that their case should be allowed to proceed, as the defendants had not technically filed bankruptcy.

Holding

The district court agreed with the defendants and stayed the case. Citing a 1936 case, the court stated that it had broad powers to stay a case to avoid “duplicative discovery, multiple hearings and inconsistent results.”

The court was convinced that, although there may have been some minor differences, the essentials of the case against the defendants and Avantair’s bankruptcy were substantially similar. The evidence would have been the same and the legal arguments for each side would have been much the same as well. The district court issued an order staying the case.

Bringing a business through bankruptcy is complex, and requires an attorney who understands the interplay of the business’s liabilities and the liabilities of its officers, directors, and owners.  We have experience representing small businesses and their owners through the bankruptcy process.

Contact our office in Melbourne, Florida for a free consultation with attorneys who are there to protect you.

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

Contact Us For A Free Consultation






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