Not all debts are discharged in bankruptcy.  The scope of your discharge depends on the type of bankruptcy you file.  If a debt is not discharged, you have to repay the debt even if you file bankruptcy.

Section 523(a) of the United States Bankruptcy Code lists the types of debts that are not discharged in bankruptcy.  Some common debts not discharged in bankruptcy include the following:

(a) certain tax claims owed to government entitites
(b) debts not listed on the debtor's bankruptcy paperwork
(c) debts for spousal or child support or alimony,
(d) debts for willful and malicious injuries to person or property
(e) debts to governmental units for fines and penalties
(f) debts for most government funded or guaranteed educational loans or benefit overpayments
(g) debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated
(h) debts owed to certain tax-advantaged retirement plans
(i) debts for certain condominium or cooperative housing fees
(j) debts incurred shortly before filing bankruptcy

Obligations affected by fraud or maliciousness are not automatically excepted from discharge. Creditors must ask the court to determine that these debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, these types of debts  will be discharged.

In addition, chapter 13 provides a broader discharge than chapter 7.  Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property (but not to people), debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.

If you are seeking an appointment with a Cape Coral bankruptcy attorney, contact the Rothrock Law Firm at (239) 206-1948.
 
 

  Click this link to visit the Florida Bar's information on filing bankruptcy.  The Florida Bar offers general information for consumers about different types of law.  Their topics include general information about bankruptcy, wills and trusts, immigration, and more.  The service is free and is intended for consumers.  All attorneys who practice Florida law are required to be members of the Florida Bar. This link contains some useful information about filing bankruptcy.

If you are thinking about filing bankruptcy in Cape Coral, contact the Rothrock Law Firm at (239) 206-1948
 
 
The fear that many people have when filing bankruptcy is that they will be unable to use a credit card while in bankruptcy.  Especially for travel, having a credit card is often necessary.

If you file bankruptcy, you have no legal right to keep a credit card.  Even if you have a $0 balance the day of the bankruptcy filing and you never missed a payment on the credit card, the credit card company has the right to cancel the card anyway.  Sometimes credit card companies do this because you no longer meet their criteria for card eligibility.  Sometimes they do it because the filing of a bankruptcy petition prohibits a creditor from legally collecting a debt.  Whatever the reason is, you might lose the card.

You have a legal obligation to list all your debt on your bankruptcy paperwork.  If you leave the credit card company out of your bankruptcy paperwork, the credit card company can still cancel your credit card.  The companies do this because they check your credit report every month, and many will cancel the card if you file bankruptcy. 

If you want to keep the credit card, you can try reaffirming the debt in the bankruptcy court.  Some credit card companies allow you to keep a credit card if you sign a reaffirmation agreement.  A reaffirmation agreement means that you sign a written document stating that you are agreeing to repay a debt even though it would otherwise be discharged in bankruptcy.  A bankruptcy judge will require you to have a hearing before agreeing to reaffirm the debt.  The bankruptcy judge will question you as to why you want to keep the debt before allowing you to do so.

If you are considering filing bankruptcy in Naples, contact the Rothrock Law Firm at (239) 206-1853.
 
 
One of the most common reasons a person files bankruptcy is because he or she recently got divorced.  The parties that previously shared two incomes for one house, one light bill, and one phone bill now have to pay for two houses, two light bills and two phone bills . . . with only one income. On top of it all, there is very little money left over for either party to pay its credit card debt with the increased living expenses.

The question then becomes - can you get rid of any or all of your debt if you get divorced?

Like everything else, it depends. 

Divorce related debt can be classified as a domestic support obligation or a division of property.  Let's say you and your spouse jointly owed $10,000 on a visa card.  The divorce judge ordered husband to pay it.  Husband files bankruptcy.  If husband files bankruptcy, he is not liable to the bank for the visa card debt.  He may be liable to wife, however, if wife has to pay the debt.    If the debt was classified as a domestic support obligation in the divorce decree , he couldn't discharge the debt as to the wife.  If it were not classified as  domestic support obligation, he probably would not owe the wife anything if he filed a chapter 13 bankruptcy; however, he may owe the wife if he filed chapter 7.

Child support and alimony are almost always classified as domestic support obligations; therefore, you would not be able to discharge those debts whether you filed chapter 7 or chapter 13 bankruptcy.

Judge Delano recently made an interesting ruling concerning attorney fees awarded in a divorce case.  In the case, the wife was awarded attorney fees in the divorce, and the trial judge classified the award of attorney fees as a domestic support obligation.  Husband then filed divorce.  Wife did not file a motion for relief from the automatic stay and enforced the judgment of attorney's fees by garnishing husband's wages.  Judge Delano found that wife did not violate bankruptcy law because the award of attorney fees were classified as a domestic support obligation in the state court and were not subject to the automatic stay of the bankruptcy court.

If you are looking for a bankruptcy attorney in Naples, call the Rothrock Law Firm at (239) 206-1853.
 
 
The Rothrock Law Firm is pleased to announce the launching of its new tax website.  Click here to preview Tax Lawyer in Naples.   The website explains the wide variety of tax services that our firm performs, including negotiating IRS liens, removing IRS wage garnishments and levies, negotiating offers in compromise, negotiating payment plans with the IRS for back taxes owed and more. These services are available to individuals and businesses who have problems with the IRS but do not wish to file bankruptcy, do not qualify to file bankruptcy, or do not need to file bankruptcy.  Call the Rothrock Law Firm today at (239) 206-1976 to schedule a free consultation with a tax attorney in Naples if you have problems with the IRS.
 
 
HAMP:  An Overview
The Home Affordable Modification Program (HAMP) is a government sponsored mortgage 
modification program that may allow homeowers to stay in their homes.  HAMP allows eligible participants to lower their mortgage payment to 31% of their gross income.  They payment includes principal, interest, property taxes, and insurance. 

Qualifications for HAMP:

The property must be used as your homestead or rental property.  Vacations and second homes are not eligible for HAMP modifications.

You obtained your mortgage on or before January 1, 2009.

The home must be 1 to 4 units. (i.e. duplexes and triplexes are eligible for HAMP).

The loan amount cannot exceed the current Fannie Mae and Freddie Mac loan limits, which

is currently $729,750 for a single family residence, $934,200 for a duplex,
$1,129,250 for a triplex, or $1,403,400 for a fourplex.

The property has not been condemned.

You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

You have a financial hardship and are behind on your payments or in danger of falling
behind on your payments. (If you are applying for HAMP for your rental property, your must be behind on your payments).

You must have income sufficient to modify the loan.  Income can be in the form of employment, self-employment, unemployment benefits, disability, social security income, rental income, or a 
combination of any of the above.

Your lender must participate in HAMP.  All loans owned by Fannie Mae and Freddie Mac are required to participate in HAMP. Loans that are not owned by Fannie or Freddie can still participate in HAMP.  Click this link to find lenders currently participating in HAMP.  Click this link to see if your loan is owned by Fannie Mae.  Click this link to see if your loan is owned by Freddie Mac. This list changes frequently.

Recent Changes to HAMP
In June of 2012, the government expanded the eligibility requirements to participate in HAMP.  You can now reapply for HAMP if you fall under these categories:

 You were previously denied for HAMP because your income to debt ratio was below 31%.

You qualified for HAMP but defaulted on your payments during the trial period.

Your HAMP modification was accepted but you defaulted on the regular HAMP payment.


The Application Process

Fill out the application for HAMP modification.  Contact your lender and ask them for a HAMP
modification packet.  If they are taking too long, contact a HAMP Housing Counselor to assist
you with the process.  These counselors are free.  You can also contact an attorney to fill out the packet.  Attorneys will charge you for the service but might get your packet approved faster depending on their case loads.

If the lender approves you for HAMP, you will make three trial payments.  If you pay them on time, the lender will send you closing documents to finalize the modification.  Your mortgage will be modified for 30 to 40 years.  The interest rate will not change the first five years.  After
that, it will increase by 1 per cent.  There are no closing fees for HAMP and you do not need to pay the arrears (the amounts that you are behind) in order to qualify. The arrears will be added to the back of your loan. 

HAMP does not guaranty principal reduction but it does allow for it.

Give your lender two to three weeks to process your loan.  After two to three weeks, call or e-mail your lender every week for weekly updates.  If you do not follow up on this step, your loan
will likely be lost.  If the lender still won't communicate with you, contact your housing counselor for further assistance.

Click this link for updated information on HAMP and changes to HAMP


If you are looking for a mortgage modification attorney in Naples, call the Rothrock Law Firm
at (239) 206-1948.
 
 
Will I be liable to the bank for a deficiency if the bank provides me a satisfaction of mortgage in a short sale?  Yes, you might be.

In a short sale, a seller sells the property to a buyer for less than the amount owed to the bank. The bank, along with any other second mortgage company or lien holder (such as the IRS, judgment lien holder, etc) must approve the sale before it is complete.  Specifically, all these
lienholders must file a satisfaction before the sale is complete.  Short sales have become the norm in Southwest Florida because the valuation of real estate has declined heavily.  The short sale allows the property owner to sell the home and be free of future mortgage payments, property taxes, and liability.  But what happens to the loan balance to the mortgage company, the second mortgage company, or the judgment holder?   Is the seller responsible for these amounts owed? The balance of the amount owed on the note minus the amount received
through the sale is called the "deficiency."

If the mortgage company files a satisfaction of mortgage, it is releasing any claims it has in the
property, not the claims it has against the seller. In other words, a satisfaction only clears up
title to the property.  In general, the seller is still responsible for the deficiency unless the paperwork  in the short sale states otherwise.  Some short sale documents state "lender reserves the right to collect deficiency." If the closing paperwork has this language, the lender can file a lawsuit in court against the seller to collect the money even though it has filed a satisfaction with the court.  The same is true for second mortgage holders or judgment creditors.  Sometimes the paperwork has no language one way or another about the deficiency.  If the paperwork is silent as to the deficiency, the terms of the original promissory note will control.  In
most cases, the promissory note allows the lender to pursue the deficiency even if the property was sold at a short sale.

The only way to prevent a lender in pursuing a deficiency is to have the lender sign a release at closing that releases its right to pursue a deficiency.  In terms of negotiation, the time to obtain the release is during the negotiations to close the sale.  The lender has more reason to sign a
release during the short sale negotiation because it can avoid the legal fees and time in a foreclosure proceeding if the short sale closes.

If you are selling your property in a short sale, your should hire an attorney to negotiate elimination or reduction of the deficiency.  Your realtor and title agent are compensated at the time of closing, and are financially motivated to close the sale as quickly as possible. Your interest is to walk away from the property owing as little as possible.  Your attorney can negotiate with the lender to completely eliminate the deficiency or to reduce it.  Often times, the lender will allow the seller to repay the negotiated amount without interest for several years. If you are looking for a short sale attorney in Naples, call the Rothrock Law Firm at (239) 206-1948.
 
 
Can I refile my bankruptcy case after it is dismissed?

Sometimes, people file for bankruptcy on the eve of foreclosure to delay the foreclosure, but they
have no real plan of action to try to save the home or to liquidate their assets to pay their debt.
They simply file the petition and dismiss it later on.  The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) addressed this situation.  The act provides that if a debtor files a new  bankruptcy within one year after the dismissal of an earlier case, the automatic stay terminates in the second case 30 days after filing the second case, unless
the debtor proves that the filing was in good faith.  Further, if a debtor files a third case within the one year period, the automatic stay does not apply  unless the debtor proves that the third case was filed in good faith.

Example:  You reside in your home.  A foreclosure sale is scheduled next week.  You file your first bankruptcy.  The automatic stay takes effect when you file the bankruptcy.  You do not have to prove anything.  The creditor has to go to court to prove why it should be allowed to go
forward with the foreclosure proceeding.  Now assume that the case is dismissed and you refile the bankruptcy.  Here, the creditor cannot continue with the foreclosure for 30 days but can go forward with it after that time unless you file a motion with the court.  Now assume that you dismiss the case again and file it nine months later for the third time.  The creditor can move forward with the foreclosure immediately unless you file a motion with the court to enact the
stay and stop the foreclosure.  If you are filing your first bankruptcy, the court generally presumes you are filing your bankruptcy in good faith.  If you file your second bankruptcy after dismissing the first one, it is up to you to prove you are acting in good faith.

In all of these examples, it is presumed that the Court did not make any findings of bad faith when the debtor's case was dismissed.  In the event the Court made a finding that a debtor
dismissed a case in bad faith, Section 109(g) of the Bankruptcy Code provides that a debtor is ineligible to re-file bankruptcy for six months after the dismissal of his or her last bankruptcy.  Further, if a creditor files a Motion to Lift the Automatic Stay before a debtor files a Motion to Dismiss his or her case, the debtor cannot re-file the case for six months.

If you are looking for a Naples bankruptcy lawyer because your bankruptcy case was dismissed and you are considering re-filing, contact the Rothrock Law Firm at (239) 206-1948
 
 
Whether or not you can keep real estate commissions received after you file bankruptcy depends on when you earned the commissions.  Let's say that a buyer and seller sign a contract in May.  You file bankruptcy in June.  You get your commission in July.  In this case, the trustee will probably take the position that the commission was earned when the buyer and seller signed the contract.  If the court agrees, then the commission received in July will be considered property of the bankruptcy estate.  The trustee will take the money in excess of the property you claim exempt and distribute it to your unsecured creditors.  Now let's say you file bankruptcy in June and the contract is signed in July.  In this case, you probably did not earn the commission before the bankruptcy was signed and you will probably be allowed to keep the money.

If you are thinking about filing bankruptcy in Naples, call the Rothrock Law Firm at (239) 206-1948 for your free initial consultation.
 
 
In case you haven't heard, Casey Anthony filed bankruptcy this week.  She apparently owes over $500,000 in legal fees.  She also owes the IRS and has a couple of lawsuits involving
defamation against private individuals.  The legal fees should be dischargeable in the bankruptcy.    The IRS might be dischargeable depending on the year the tax was assessed and/or whether the IRS asserted any fraud penalties against Ms. Anthony.  What will be interesting is the lawsuit.    The lawyers that represent the plaintiffs who are suing Casey Anthony have told the media that they intend on going forward with the lawsuit and asking the bankruptcy court to declare all or part of the debt nondischargeable. 

Most debts to that are subjects of lawsuits are nondischargeable.  One of the few exceptions falls under 11 U.S.C. § 523(6) which requires that a willful and malicious injury by the debtor occur to the plaintiff.  If the plaintiffs can prove that Casey Anthony's acts were willful and malicious, the bankruptcy judge can make a finding that the debts are nondischargeable.  We'll keep you posted as we get more news.

If you need a bankruptcy lawyer in Naples, call the Rothrock Law Firm at (239) 206-1948.