Kingcade Garcia McMakenFindLaw IM Template2024-03-13T09:23:05Zhttps://www.miamibankruptcy.com/feed/atom/WordPressOn Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495422024-03-13T09:23:05Z2024-03-13T09:23:05Zinvoluntary bankruptcy?”
The basics of an involuntary bankruptcy petition
The U.S. Bankruptcy Code permits three or more petitioning creditors (if the debtor has fewer than 12 creditors, the number of petitioning creditors is reduced to 3) to file a petition in bankruptcy court to declare the debtor to be bankrupt. An involuntary bankruptcy petition is generally used to resist the claim by a debtor that it does not have the assets to pay the claim of one of the creditors.
Claims cannot be uncertain or contingent
The bankruptcy code states that a petitioning creditor’s claim against the debtor cannot be contingent as to liability or subject to a bona fide dispute as to liability or amount. The Bankruptcy Code does not define “bona fide” dispute in this context. The majority of courts that have considered this question have chosen an objective approach. Generally, a claim that is embodied in a final judgment and that is neither stayed nor appealed may be considered not subject to argument as to whether it is the subject of a bona fide dispute.
Minimum dollar requirement
The Bankruptcy Code explicitly states that the aggregate claims of the petitioning creditors must total $15,775. Counterclaims, set offs, and bona fide disputes may serve to increase or decrease this number.
Order for relief
Once the petition is found to satisfy the statutory requirements, the court will enter an order for relief if it finds that the debtor is generally not paying it’s debts as such debts become due unless such debts are the subject of a “bona fide dispute as to liability or amount.”
Creditors beware
A creditor who files a petition for involuntary bankruptcy relief may wind up suffering stiff penalties, including the payment of the debtor’s attorneys’ fees and any other damages suffered by the debtor.
]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495412024-03-07T21:49:31Z2024-03-07T21:49:31ZTaxes can be a huge headache but there is no way to avoid them entirely—just like rain and death, taxes is one of those things that every person has to deal with in the United States.
If you owe a lot of money to the government, this can be even worse. Owing money to anyone is unpleasant as it is, but when you are owing money to the United States government, things can become complicated because of what the government can do to you and your assets if you do not pay.
Bankruptcy considerations
Filing for bankruptcy is not a decision to take lightly. It is a big step that has long-term consequences and even though it can provide short-term relief, it affects your credit, your credibility with creditors and investors, as well as limits your ability to borrow money.
Things to consider before filing:
If you are considering filing for bankruptcy because of tax debt, think of the following before you decide. It is also important for you to speak with an attorney who is familiar with both bankruptcy and tax law, because if you decide to go through with it, you want to know for sure that you made the right decision.
Type of tax debt
Not all tax debt is the same. If you owe income taxes, for example, you might have a better chance of the government wiping them away in bankruptcy compared to other types of tax debt.
Other debt
If you have a lot of other debts besides the tax debit like credit card or medical bills, filing for bankruptcy might help you wipe out all those debts at once.
Financial situation
If you are struggling to make ends meet because of your debt, filing for bankruptcy may be a good idea for you. It can give you relief and, in some cases, it can also serve as a lesson.Some people who file for bankruptcy do so because they did not have a choice in getting into debt. For example, hospital bills they could not afford. Others, however, spent money they did not have for more frivolous reasons and for this second camp, bankruptcy serves as an unfortunate wake-up call and lesson.
Downsides to filing for bankruptcy:
Remember to speak with your tax/bankruptcy attorney before filing for bankruptcy and consider these downsides:
Credit score impact if you care.
It is a matter of public record, again, if you care.
It may not help if you expect future tax debt.
In conclusion, filing for bankruptcy in Florida because of tax debt is a good idea in certain situations, but not all. You should speak with your attorney, go over every single one of your bills and make the most informed decision possible, so your future self can thank you for being responsible and thorough in thinking about tomorrow.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495402024-03-05T11:10:30Z2024-03-07T11:09:47Zforeclosure works that our readers should know?
Foreclosure basics
For starters, the basic concept of foreclosure is that it is a process by which a financing agent can takeover full ownership of a home or property when a “mortgagor” – the borrower – does not comply with the terms of the mortgage agreement. Through this process, the financing agent must first give the mortgagor notice of the default in payments – in reality, most people already know that they are missing payments or are only making partial payments. But, the notice is an important first step.
Next, there may be a window to negotiate alternative terms for the mortgage and repayment of the debt – but that is not automatic by any means. Sometimes, mortgagees are not open to negotiations and will proceed with getting the proper authority to seize ownership of the home or property in question.
If the mortgagee is successful in gaining full ownership, the home or property is usually sold at auction – unless the mortgagor can somehow come up with the full amount of debt owed. Once the home or property is sold, that proceeds are applied toward the outstanding debt that is owed under the terms of the mortgage agreement.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495392024-02-29T23:01:06Z2024-02-29T23:01:06Z100 biggest urban areas and compared them using a long list of criteria such as average credit scores and the number of bankruptcy filings in 2023, as well as the number of people who are considered in economic distress. For the purposes of this study, Wallethub defined economic distress through looking at credit accounts that were in forbearance or had their payments deferred. The study also looked at more general data, such as the number of residents who had searched for "bankruptcy" or "debt" on Google.
After crunching the numbers, researchers ranked the 100 cities according to their findings. Jacksonville came in at number 10, meaning that the city has one of the highest rates of economic distress in the country.
In some ways, these findings were surprising. According to some sources, the cost of living in Florida is 7% below the national average, and 5% below the average in Florida. Housing is also less expensive than the national average and actually fell by 1.5% in 2023.
However, high debt and low credit scores -- as well as high numbers of people looking up "debt" on Google -- put the city ahead of most urban areas in the study.
Not just Jacksonville
Of course, these problems aren't limited to Jacksonville. Indeed, bankruptcy courts in Florida reported a steady increase in both business and personal bankruptcy filings last year. Non-business filings rose 16% in 2023.
These numbers may signal something bad about Florida's economy as a whole, but for the individuals involved, they signal something else. When people in economic distress file for bankruptcy, they take a big step toward getting out of a financial crisis so they can build a better future for themselves and their families.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495372024-02-26T21:44:43Z2024-02-26T21:44:43ZHow did a federal tax change impact the cost of living in Miami?
The Tax Cuts and Jobs Act of 2017 has had unintended consequences on Miami's economy. High-tax state residents, seeking relief, have relocated to Miami, inadvertently driving up living costs for locals. This has led to an influx of new residents from high-tax states, driving up the cost of real estate in the area.
Although this tax law played a significant role in the surge of residents moving to the Sunshine State, it is only one factor. Another was the impact of the pandemic. The pandemic led workplaces to shift to a remote environment. This allowed workers more flexibility to live where they want instead of where they need to be. With that level of flexibility, many chose sunshine and beaches over boardrooms and skyscrapers.
Regardless of the reason for the surge in residents calling Florida home, the increased population has led to higher demand for real estate and triggered an increase in property values. As the cost of housing rises, associated expenses such as home insurance also increase — and these increases are significant. Between the increased demand and the damage done by natural disasters, some experts predict home insurance rates to go up by 40% in 2023 alone. These increased costs create a domino effect that burdens long-term residents.
Is bankruptcy right for me?
Bankruptcy often carries a stigma, but in Miami's current economy, it's important to understand that financial struggles are not always the result of personal failings. The systemic economic shifts have left many without options.
During these difficult times, bankruptcy can be a viable solution to overwhelming debt.
If you find yourself struggling financially, bankruptcy is a legal recourse meant to offer a fresh start. An attorney experienced in this niche area of the law can review your situation and discuss the benefits and risks of filing for relief through bankruptcy. With this information, you can increase the likelihood that you make the decision that is best for your financial future.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495342024-02-26T14:21:52Z2024-02-26T14:21:16ZChapter 7 bankruptcy, which causes an end to collection efforts of creditors and have most or all debts written off.
What is Chapter 7 bankruptcy?
Also known as "a liquidation bankruptcy", this type of bankruptcy requires debtors to pass the means test to prove that their income is less than the median family income for their household size. A court-appointed trustee then decides on which assets can pay off debts. In Florida, many assets are exempt from recovery for those who have lived in the state two years before filing bankruptcy.
Among the exempt assets are:
Homestead: The house and land owned by the individual for at least 1,215 days before filing (must be half-acre at most in a municipality or 160 acres or less in other areas)
Personal property: Anything you own worth under $1000 or if you take the homestead exception, anything you own worth below $4000
Wages: No more garnishments on the head of the family’s wages of up to $750 every week
Certain benefits: Includes most pension and retirement funds, a life insurance policy’s cash surrender value and social security benefits
Other personal property: Household items and personal effects like clothes, keys, mobile phone, laptop and art
In addition, those who filed for Chapter 7 bankruptcy will get a discharge from debts except for the ones stated by the U.S. Bankruptcy Code. The non-dischargeable debts are alimony, child support, most student loans, court restitution orders, criminal fines and nearly all taxes.
Getting a fresh start
Recovering from a financial slump is a tall order that debtors anxiously face. With the many exempt assets and dischargeable debts in Florida, Chapter 7 bankruptcy may be the way you regain control of your financial life.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495352024-02-26T20:42:10Z2024-02-22T20:40:42Zfiling for bankruptcy.
Personal bankruptcy filings rose substantially in 2023
According to recently released statistics, there was a 16% spike in non-business bankruptcy filings in 2023 when compared to 2022. Overall, there were more than 434,000 filings. In 2022, there were just over 374,200.
Experts believe that this is likely to grow even further as consumers grapple with debt and inflation. This is still significantly lower than the number of bankruptcies from 2010 just after the financial crisis when nearly 1.6 million people filed.
A combination of financial obstacles is believed to have sparked the rise. That includes credit card debt, student loans, increased interest rates and the previously mentioned inflation.
When thinking about filing, it is imperative to know the facts as to which chapter is better for a person’s situation. Chapter 7 is a liquidation bankruptcy and is generally preferable for people who do not have many assets and are dealing with unsecured debt like credit cards and medical bills. Chapter 13 is for people who have a job with a steady income and want to retain certain properties like a home.
Florida debtors can use bankruptcy to help improve their finances
Massive debt is not only stressful financially, but personally and emotionally as well. Frequently, people do not know where to turn and are under the impression that bankruptcy is either a last resort or should not be considered at all.
Once the facts about bankruptcy are understood, people realize that it is a legal and beneficial strategy to get out of debt and move forward without the constant calls, letters and messages from creditors and debt collectors. Before taking that next step, it is wise to know about the process, its benefits and what can be accomplished through a bankruptcy filing.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495332024-02-15T17:25:23Z2024-02-15T17:25:23Zintroduces complexities that demand careful consideration.
Property division challenges
In Florida, marital property undergoes equitable distribution during divorce. Under this system, judges aim for a fair split. However, filing for bankruptcy triggers an automatic stay, freezing the property division process until the bankruptcy case concludes. The stay prevents actions against the debtor’s property, applying to both creditors and the divorce court. Consequently, bankruptcy during divorce can significantly prolong the property division process, escalating legal fees for both parties.
Impact on domestic support obligations
Bankruptcy also influences domestic support obligations like alimony and child support. While these obligations are non-dischargeable, their treatment varies with the bankruptcy type.
In Chapter 7 bankruptcy, domestic support obligations hold priority over other unsecured debts. Yet, if available assets fall short, the balance remains due after case closure. In Chapter 13, these obligations must be paid in full through the repayment plan, with no option for reduction without consent or court order. Ongoing payments must be maintained to preserve eligibility for a discharge.
Weighing the decision
The decision to file for bankruptcy during divorce is nuanced. On the advantages side, it can eliminate some or all debts post-divorce. It can provide some protection of assets from creditors and ex-spouse. It halts creditor actions during bankruptcy, and it can streamline financial matters for fair settlement negotiations.
On the other hand, it will prolong the property division and divorce proceedings. This means increased legal fees for both parties. It can cause credit score damage hindering future credit access, and you risk losing nonexempt assets. You also still have the ongoing obligation to non-dischargeable debts after bankruptcy.
Individual circumstances dictate the best course of action. Assess the potential pros and cons and navigate the legal complexities in both bankruptcy and divorce courts.]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=495262024-02-06T05:18:35Z2024-02-09T05:16:15Zstructure a repayment plan spanning 3 to 5 years, contingent on your income and expenses. Though, you may fear that life during this repayment plan will be unbearable.
The dynamics of your repayment plan
Full payment of priority debts is required. These include child support, alimony, employee wages and specific tax obligations. Additionally, monthly allocations for secured debts, like mortgages and car loans, are integral if you want to keep the property.
Disposable income remaining at the end of the month is channeled towards unsecured debts, like credit cards and medical bills. These debts do not have collateral backing and are subject to potential discharge or reduction in bankruptcy.
Succeeding in the Chapter 13 repayment plan requires unwavering adherence to your budget. Living within your means is crucial. Avoid unnecessary spending and make timely and complete monthly payments. Failure could lead to case dismissal or conversion to Chapter 7 bankruptcy, potentially resulting in property loss.
Incurring new debt during Chapter 13 bankruptcy is prohibited without court and trustee authorization. Unauthorized credit card usage or loan acquisition can result in penalties or loss of bankruptcy protection.
Can the repayment plan change?
Yes. Unforeseen difficulties, such as job loss, illness or family emergencies, may impact your repayment ability. Promptly informing your trustee and attorney of any issues or changes in circumstances is crucial. They may assist in plan modifications or request a hardship discharge from the bankruptcy court.
A hardship discharge offers an early exit from Chapter 13, contingent on proving an inability to make payments due to circumstances beyond control. A hardship discharge could be based on the fact that the creditors received at least as much as in Chapter 7 bankruptcy, or that there was no reasonable possibility of modifying the repayment plan. While a hardship discharge discharges only unsecured non-priority debts, you remain obligated to pay priority and secured debts in full.
Seek assistance when necessary
Surviving the Chapter 13 repayment plan entails seeking assistance when encountering challenges. Remember, you do not have to do this alone, and this will only last, at most, 5 years. Lean on your friends, family and support network to get through this journey.
]]>On Behalf of Kingcade Garcia McMakenhttps://www.miamibankruptcy.com/?p=494972024-01-30T12:18:48Z2024-01-30T12:18:48ZChapter 7 bankruptcy to shed yourself of unwanted debt. As you think about pursuing that course of action, though, you might find yourself asking if you and your spouse should file for bankruptcy together, or if you’re better off pursuing bankruptcy on your own.
When should you file for Chapter 7 bankruptcy individually?
There are several circumstances where filing for personal bankruptcy on your own, without naming your spouse in the petition, is best. This includes the following situations:
You carry most of the debt and your spouse has very few, if any, creditors.
There is a prenuptial or postnuptial agreement that could help protect assets during the bankruptcy process.
Your spouse is expected to receive a large inheritance.
Your spouse owns a business.
You want to protect your spouse’s ability to file for bankruptcy in the future.
Remember, if you and your spouse both file for bankruptcy, then both of your credit scores can take a hit. While this isn’t insurmountable, it can put you and your spouse in a less advantageous financial position moving forward. Also, including your spouse in a bankruptcy will likely subject other assets to liquidation when they could’ve been retained if your spouse opted not to file.
So, which bankruptcy path is best for you?
Ultimately, that’s a question that only you can answer. Before you make your decision, though, be sure you have a full understanding of the risks and rewards of each course of action. By doing so, you’ll be able to choose the bankruptcy path that gives you the brightest future possible.
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