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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.

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

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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
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935

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


Q&A about Vehicle Repossessions

When you obtain a loan to buy a vehicle, your car loan documents provide that your lender has the authority to repossess the car if you fail to make a timely payment. The contract should detail what events constitute a default, which can include a variety of events, but failure to make a payment occurs most frequently.

Vehicle Repossessions

Below are a few the questions we commonly get from our clients regarding the seizure of their car or truck. If you have a question not covered, however, please contact one of our knowledgeable attorneys for help.

Can the original contract be modified to change my payment terms? Yes, if the lender agrees to the modification. It is imperative that you get the loan modification in writing because proving a verbal agreement is difficult.

Does the creditor send notice before my car is repossessed? In most jurisdictions, your creditor is permitted to seize the collateral pledged to it at any time after default occurs, without providing notification to you. A repossession agent is permitted to go onto your property to take the vehicle, but only if the agent can do so without breaching the peace. This means that the agent can seize the car from your driveway, but he cannot use physical force, threaten it, or enter a closed structure to seize the car without permission.

What happens if the repo agent breaches the peace? Every case is different, but the creditor may be ordered by the court to pay a penalty and/or pay for any harm caused to you or damage done to your property. Depending on the circumstances, breaching the peace may also provide a successful defense if the lender files a collection lawsuit against you seeking to recover the deficiency remaining after the vehicle has been sold.

Can I recover the personal property that is in my vehicle when it is seized? The answer to this question depends upon what state you live in. In some states, the repossession agent must give you an inventory list of all the personal items that were in your vehicle when it was seized and instructions of how you can get them back. If a creditor cannot account to you for the items that were in your car, contact us to discuss whether you can seek compensation for such items.

Contact an Attorney at Faro & Crowder, PA today

If you are struggling financially and you want to discuss your debt relief options and how to avoid having your vehicle repossessed, contact us today to schedule an initial consultation.

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
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.

Contact Us For A Free Consultation