This type of bankruptcy, referred to as a “no asset 7” or “no asset Chapter 7,” often involve many assets, but they are protected by the bankruptcy exemption system.  While in many states debtors filing Chapter 7 can make a choice between the federal and state exemptions systems, you must choose the Florida exemption system when filing in this state.  Many times property may qualify under multiple exemptions so artful use of the exemption system is important to avoid leaving property unprotected that could have otherwise been exempted with more skillful use of the Florida bankruptcy exemption system.  When a debtor emerges from a Chapter 7 or successful Chapter 13 bankruptcy following a discharge, the property that may have been vulnerable to creditors prior to bankruptcy is no longer in jeopardy.

Another asset protection aspect of bankruptcy involves pre-bankruptcy planning.  While simply giving away or transferring assets to avoid exposing them to the jurisdiction of the bankruptcy trustee may constitute a fraudulent transfer, this does not mean that an experienced South Florida bankruptcy attorney cannot assist you with asset protection.  Our Boca Raton bankruptcy attorneys may analyze your assets and determine that certain assets cannot be protected by exemptions.  One solution may be to convert that asset into another type of asset that may be protected by a Florida bankruptcy exemption.

While converting assets from non-exempt assets into exempt assets can be an effective tool for protecting your property in bankruptcy, it must be undertaken carefully.  The bankruptcy trustee may reverse a preferential transfer to a creditor if it is made close in time to the bankruptcy filing.  The trustee may unwind a transaction that is considered a preferential transfer within 3 months of bankruptcy if the other party is an insider or within one year for non-insiders.  An example of a preferential transfer might include paying back a debt owed to one’s parents by transferring real estate to them.  The trustee may also look back two-years for fraudulent transfers that are intended to shield money from creditors.  The key is that the process of converting assets prior to filing bankruptcy is not the type of activity that can be done safely without the legal advise of an experienced South Florida bankruptcy attorney.  If you are considering filing bankruptcy or are struggling with overwhelming debt, the experienced Boca Raton bankruptcy team at Eric N. Klein and Associates, P.A. may be able to help.  We invite you to call us today to schedule your free initial consultation at 561-353-2800.

If your car is totaled in the accident, the auto insurance company will typically offer to pay the full value of the vehicle less salvage value.  It is not uncommon that an insured will choose to keep the vehicle after it has been repaired.  The auto insurance company often objects to someone in a Chapter 13 bankruptcy keeping the vehicle in this situation.  Car finance companies recognize that there is always a risk that a debtor will not make all Chapter 13 plan payments or may choose to surrender the car back to the finance company.  Either way the creditor loses out.  If the debtor does not complete the plan, then the creditor does not get fully paid for the vehicle.  Even if the vehicle is surrendered, the vehicle may not be worth more than salvage value for the car.

When a car accident occurs, the insurance company must pay the lienholder (i.e. the car finance company) the outstanding amount on the loan.  When the debtor makes the decision to keep the car, the payout is reduced by the salvage value of the vehicle.  Thus, the amount paid to the lienholder is less than the value of the car while the lender continues to bear the risk that the debtor will not complete the Chapter 13 plan by making all payments.

While small self-financed car lots more often cause problems in these situations, you have an absolute right to repair and keep your vehicle rather than surrender your car to the lender.  It is not uncommon for unscrupulous lenders to use aggressive tactics to convince debtors in such situation to surrender their vehicle.  In this situation, the lender ends up with the full value of the vehicle in the form of the insurance payout and the vehicle which has some salvage value without facing the risk that the debtor may not complete the Chapter 13 payment plan.  Despite the pressure that may be applied by the lender, you should remember that the decision to fix your car and keep it is entirely up to you.  Our Boca Raton bankruptcy attorneys are dedicated to protecting the best interest of debtors so contact Eric N. Klein & Associates, P.A. today by calling 561-353-2800.

While creditors must stay away while you’re bankruptcy is in process, you may be surprised how quickly you start to receive applications for credit cards after your bankruptcy discharge has been granted.  While most of these inquiries may be, “secured credit cards”, these can be an effective tool to re-establish positive payment history. These banks may charge substantial fees and higher interest rates so it is important to carefully scrutinize the terms of the credit application before applying.  If you maintain reasonable balances and make consistent payments, this can be an efficient way to raise your credit score.

There are a number of reasons that creditors may view those with a Chapter 7 bankruptcy discharge within the last several years as a good credit risk.  Creditors know that if you have received a Chapter 7 bankruptcy discharge, you are barred from seeking a similar discharge for eight years from the time of filing of your Chapter 7.  Because Chapter 7 bankruptcy relief will be unavailable during this period, you are considered a better credit risk.  A person who has recently received a Chapter 7 bankruptcy typically will also have a favorable debt to income ratio because the person’s debts will have been discharged in the Chapter 7 bankruptcy.  The key is not to get overextended when re-establishing credit because Chapter 7 relief is not available.

It is also very important to monitor your credit report after you have filed bankruptcy.  Some creditors may not report the debt as included in a bankruptcy so it may look like you still have pending financial obligations that have been discharged.  Any errors in your credit report should be immediately corrected by writing to the credit reporting bureaus.

After 2-3 years have passed, you may also start to be eligible for home loans with various lending programs.  A person becomes eligible for a FHA loan, for example, once two years have passed from the time of a Chapter 7 bankruptcy discharge.  Ultimately, filing bankruptcy can be viewed as the first step in rebuilding one’s credit rather than damaging one’s credit.  Our Boca Raton bankruptcy law firm can help you plan your bankruptcy, prepare the documentation, and represent you in front of the bankruptcy trustee or bankruptcy court so contact Eric N. Klein & Associates, P.A. today by calling 561-353-2800.

While there are legitimate reasons to consider reaffirmation of a particular obligation, there are also significant drawbacks so you should never enter into a reaffirmation agreement without obtaining legal advice from an experienced Florida bankruptcy attorney.  Boca Raton and other areas in Florida are basically car type communities so families or individuals seeking bankruptcy will need a vehicle.  It generally is safe to assume that at least for a while after a bankruptcy discharge you will not be able to finance a new vehicle.  Even lenders that do work with those who have recently filed bankruptcy do so at exorbitant interest rates that are likely to create the same sorts of financial hardships that drive people into bankruptcy in the first place.

Although there is always the option of buying a cheap vehicle for cash, you may not have cash on hand to afford a vehicle or to pay for a vehicle that will suit your needs.  In this situation, the option of holding onto the vehicle you have by signing a reaffirmation agreement can be appealing.  This may be especially true if you need a specific type of vehicle for your business, such as a utility truck.  When you reaffirm the contract on a vehicle during bankruptcy, you are effectively reaffirming the old contract or more typically creating a new finance contract that will replace the contract terminated by the bankruptcy discharge.

There are a number of drawbacks to reaffirmation that should be considered.  Typically the vehicle being refinanced will have “negative equity.”  Because you owe more than the vehicle is worth, it may not be a sound financial decision to keep the vehicle that is upside down.  If you keep the vehicle, you will end up paying far more for the vehicle than its actual value, which is why purchasing a cheaper car for cash can be a more prudent alternative  A more serious issue involves the fact that if the car is upside down or your payment is too high you might find yourself back in the same situation needing bankruptcy relief.  However, you will not have the option to file a Chapter 7 bankruptcy again because must wait eight (8) years after a Chapter 7 discharge before you can file again.

Another reason not to reaffirm the debt is that sometimes people indicate their intention to reaffirm the debt in their Chapter 7 bankruptcy filing but never actually sign a reaffirmation agreement.  In this situation, you may be effectively getting the benefits of a reaffirmation agreement by being allowed to keep your vehicle as long as you make the payments but without a new contractual obligation.  Our Boca Raton bankruptcy law firm can analyze your situation and advice you regarding the merits of reaffirming a debt as part of your Chapter 7 bankruptcy process so contact Eric N. Klein & Associates, P.A. today by calling 561-353-2800.

Many times people that are struggling with financial challenges will engage in transactions where they may sell assets for less than market value or effectively give the assets away to friends or family.  The bankruptcy trustee has the power to carefully scrutinize transactions during a “look back period” to determine if certain creditors are being treated preferentially.  The bankruptcy trustee can reverse those transactions if they are within ninety (90) days of filing bankruptcy.  If the transaction involved an “insider”, such as family, friends or business alter-egos, the bankruptcy trustee can avoid transactions that occur within twelve (12) months of a bankruptcy filing.

While paying your mortgage/rent, car payment, or ordinary household expenses will not typically fall within the rubric of the preferential treatment of creditors, other less routine transactions may be subject to close scrutiny.  A debtor might give one’s parents $10,000 from the proceeds of  the sale of a boat as repayment on a loan.  The parents could be required to pay the $10,000 back if the bankruptcy trustee voids the transaction.  If you have engaged in significant transactions of this nature, your Boca Raton bankruptcy attorney may advise you to delay filing bankruptcy until you are beyond the look back period.

Another important aspect of pre-bankruptcy planning is determining how to protect the largest portion of your estate.  Our Boca Raton bankruptcy law firm carefully analyzes our clients’ assets to plan how to use the exemption system to the greatest benefit when it comes to preserving your assets and net worth.  While in many states you may choose between the federal and state exemption schedule, you must use the Florida state exemption schedule if you file in the state.  However, your bankruptcy attorney can help you determine the best way to utilize available exemptions to take full advantage of the protection provided.  The attorney may also be able to advise you about how to legally convert assets that are not exempt from bankruptcy into those that are exempt.  This is a process that should be done with the guidance of an experienced Boca Raton bankruptcy attorney so that you avoid charges of bankruptcy fraud.

The important point to keep in mind is that our experienced Boca Raton bankruptcy attorneys can assist with your bankruptcy even in the planning stage to ensure you obtain the full benefit of the asset protection provided by the bankruptcy process.  Our Boca Raton bankruptcy law firm can help you plan your bankruptcy, prepare the documentation, and represent you in front of the bankruptcy trustee or bankruptcy court so contact Eric N. Klein & Associates, P.A. today by calling 561-353-2800.

The automatic stay against creditors can be triggered by the filing of your bankruptcy petition whether a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.  While the situation is more complicated if you have recently filed for bankruptcy relief and had your case dismissed, a bankruptcy filing will generally prevent creditors from attempting to enforce financial obligations during the pendency of your Chapter 7 Bankruptcy.  Many debtors file for Chapter 13 relief to protect their home.  It is common for mortgage holders to file a motion for relief from automatic stay, but the automatic stay still provides substantial relief to those who file Chapter 13.

The injunction against collection actions by creditors limits a broad range of actions by creditors including:

• Filing a lawsuit
• Collection letters
• Foreclosure sale of real property
• Continuing litigation that was pending prior to filing bankruptcy
• Wage assignments
• Phone calls from creditors and collection agencies
• Levies against bank accounts
• Repossession of property (e.g. family car, work truck)

Because many people facing enormous debt because of job loss, unanticipated family emergencies, serious illness or other issues are overwhelmed by their credit problems, this protection from creditors can be an enormous relief.  The function of the stay is to provide debtors with a temporary reprieve from collection efforts while they address their credit issues in bankruptcy court.  The stay even provides protections to co-debtors on obligations shared by the party that has filed bankruptcy.  Another function of the stay is to freeze collection action so that creditors are treated equitably and no creditor receives preferential treatment.

If your wages are being garnished, home foreclosed or car repossessed, you should contact an experienced West Palm Beach bankruptcy attorney at our law firm.  We can analyze your financial situation and advise you of your options.  We also can stop most types of debt enforcement tactics that often make it even harder to pay your mortgage, rent, utilities and other bills so call us today to see how we can help!

The district includes Fort Meyers, Tampa, Orlando, and Jacksonville divisions. 2,389 of the bankruptcies filed in the district in 2011 were commercial bankruptcies. 1,718 of these bankruptcies were small business liquidations under Chapter 7 bankruptcy and 496 were Chapter 11 reorganizations. Also, 17 Chapter 12 bankruptcies were filed at the court, as well as 157 Chapter 13 filings.

A total of 51,166 consumer bankruptcies were filed in the Middle District of Florida. These were divided between 88 Chapter 11 bankruptcy filings, 12,872 Chapter 13 filings, and 38,206 Chapter 7 bankruptcies.

If you are considering filing for bankruptcy and would like the assistance of an experienced bankruptcy attorney, contact the West Palm Beach bankruptcy lawyers of Eric N. Klein & Associates, P.A. at 561-353-2800 to learn more about how we can help you.

Then, last February, T-Boz filed for Chapter 13 bankruptcy with more than $700,000 in debt. This case was dismissed, and the singer filed for Chapter 13 bankruptcy again in October. However, creditors were able to make enough of a case that T-Boz was not making an effort in her bankruptcy for the judge to toss out her most recent filing.

T-Boz was accused of failing to attend meetings with creditors, to make any payments in her bankruptcy, to submit required documents, and to seek $250,000 in child support she is owed. The judge agreed with creditors that T-Boz was not trying to resolve her bankruptcy.

180 days after her case was dismissed, the singer may file for bankruptcy again. Until then, creditors are permitted to take action to recover the singer’s assets to pay off the debt she owes to them.

Contact the West Palm Beach Chapter 13 bankruptcy lawyers of Eric N. Klein & Associates, P.A. at 561-353-2800, if you or someone you know has questions about filing for Chapter 13 bankruptcy.

Tennessee had the highest number of bankruptcy filings per capita.  For every 1,000 people in the state, 6.38 people filed for bankruptcy in 2011.  Nevada, Georgia, Delaware, and California had the next highest numbers of bankruptcy filings per capita.

Last month, the total number of bankruptcies filed in the country decreased by 9 percent from a month before and 14 percent from a year before.  87,946 bankruptcies were filed in the U.S. in January, making the nation’s per capita rate 3.41 out of every 1,000 Americans.

If you or someone you know is considering filing for bankruptcy, contact the West Palm Beach bankruptcy attorneys of Eric N. Klein & Associates, P.A. by calling 561-353-2800 today.

According to their Chapter 11 filing, Kodak has $6.8 billion in debt and $5.1 billion in assets.  Last week, NYSE Regulation Inc. decided to stop the trading of Kodak stock.

Since 2010, Kodak has had to let go of 47,000 employees and close 130 photography labs and 13 factories.  The company hopes to be able to sell off patents in order to continue operations under Ch. 11.  ”Out of the bankruptcy proceedings, a much smaller company can emerge,” said former vice president for digital imaging at Kodak.

If you or someone you know has questions about reorganizing under Chapter 11 bankruptcy, contact the West Palm Beach Chapter 11 bankruptcy attorneys of Eric N. Klein & Associates, P.A. at 561-353-2800 to speak with an experienced and compassionate bankruptcy lawyer about your situation.