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Orlando Attorney Lewis Roberts

Tag: insolvency law

Tag: insolvency law

Chapter 13 Bankruptcy and Your Car Payment

Posted on November 27, 2024 - 12:00 am by

Florida Chapter 13 cases often come with questions about cars. Clients frequently own or are financing an automobile and are worried about losing their car when they file a Chapter 13 petition. This is a reasonable concern, especially since the main benefit of Chapter 13 bankruptcy over Chapter 7 bankruptcy is that it is supposed to allow you to keep most or all of your assets.

The Good News for People Filing Chapter 13 Bankruptcy

The good news is that when you file for Chapter 13 bankruptcy in Florida, there may be a way to get relief from car loans with high payments, high interest, or loan amounts greater than the car’s value. If you are paying a high interest rate on your car loan or have payments that are too high to be affordable, Chapter 13 may be able to help you lower the interest rate or payments. Many people are paying more than 10% for their car loans. In Chapter 13 cases filed in Florida, it is fairly routine for a lender to be required to accept 10%.

Most people who are making car payments will pay them at a lower rate after declaring Chapter 13 bankruptcy.

The Till Rate

The reason that many lenders will accept a 10% rate is due to the outcome of a court case that set a fair rate for car loans. The shorthand lawyers use is called the Till Rate, named after a 2004 court case decided by the U.S. Supreme Court called (what else?) Till v. SCS Credit Corp.

There are some limitations on your ability to use a Till Rate, but if it is possible, then it would allow you to reduce your car loan rate – and thereby lower the monthly payment amount.

Let’s take an example of how the Till Rate may work for you. Let’s say you’re paying $500 per month for your SUV. The loan has 36 months left on it, and your interest rate is 18%. When you file for Chapter 13 bankruptcy, I may be able to reduce that amount to 10%; you’d pay the balance of the loan through your Plan, which would reduce the monthly payment and possibly provide some relief.

One potential pitfall with this scenario is that you must complete your bankruptcy case. If your case is dismissed or fails, the deal is off and you’ll be back to your old 18% rate, and have to catch up the shortage you were paying during the time you were in chapter 13.

Worried about losing your car after filing for Chapter 13 bankruptcy? I will help you get your finances back on track while keeping your prized possession. Contact me at (407) 749-0080 today.

Committing to a Chapter 13 Payment Plan

This type of bankruptcy requires a long-term commitment. You will need to make payments, on time, for three to five years. The cost of those payments is determined by the court based on your ability to repay, so you won’t be required to pay more than your income allows.

However, just because the payment plan is viable, that doesn’t necessarily mean it is easy. You will likely need to be very careful with money for the full duration and won’t be able to enjoy luxuries. That can be a difficult commitment for some people. Not everyone successfully makes it through Chapter 13 bankruptcy. Failing to complete bankruptcy is difficult because your debts are still hanging over your head and you can no longer rely on the bankruptcy process to protect you. In this situation, you would likely lose your car as you would be required to make full payments to catch the loan up at the same time that all of your other delayed bills also come back to life.

What if Your Car Is Paid Off?

This is the best-case scenario. If you have no debt on your vehicle, it shouldn’t be at risk in a Chapter 13 bankruptcy situation. As soon as you enter Chapter 13 bankruptcy, an automatic stay is placed on all of your debts. This means, among other things, that creditors can’t place liens on your property.

Safety of Your Car After Bankruptcy

Possibly the best news is that once the bankruptcy process has been completed, you will no longer have any debt on your vehicle, unless your loan is longer than the life of the plan. That is true even if the amount you paid during the bankruptcy process was less than the total amount that you should have paid to fully pay off your car. That is the beauty of the bankruptcy system. It is designed to help you get a fresh start as long as you do your best to pay what you can.

The experience of a debt-free life is a powerful one, possibly allowing you to take care of your family and provide for your future in a way not otherwise possible.

Contact a Chapter 13 Bankruptcy Lawyer in Florida Immediately

The fear of losing your car from bankruptcy is entirely reasonable. Thankfully, that is a fear that shouldn’t come to fruition with the right preparation and assistance. My law firm can help you take advantage of bankruptcy without losing your freedom to get around.

Chapter 13 bankruptcy may seem daunting, but it can potentially protect you when you are in financial peril. When you’re ready, it’s worth it. Call (407) 749-0080 now for a free consultation to see how I may be able to help you.

Does the Bankruptcy Trustee Come to My Home?

Posted on May 13, 2024 - 9:50 am by

One of the challenges many consumers face is an overwhelming amount of debt. The last few years let you make more purchases for different goods and services using easy financing and low interest rates.

Times are changing, with many consumers facing overwhelming payments and debt. The situation is becoming dire, and more people are filing for bankruptcy. Recent statistics show that these high debt levels make it harder for consumers to pay their bills. Many are turning to bankruptcy to reorganize, with the total number increasing by 10% in the last year.

A common misconception is that the bankruptcy trustee will come to your home. We dive into this question to help you understand the trustee’s responsibilities, roles, and whether they will visit your home.

The Role of the Bankruptcy Trustee

The simple answer is “no, the trustee will not visit your home.” Most proceedings occur in their office, where they will review the evidence and critical documents. A visit to your home is unnecessary and extremely rare.

The trustee’s role is to oversee your bankruptcy proceedings to maintain objectivity and ensure legal compliance. Trustees are appointed by the court and act as intermediaries between you and your creditors. Their objectives are to ensure the bankruptcy goes smoothly for everyone. You have two options when filing for personal bankruptcy — Chapters 7 and 13.

Home Visits and Chapter 7 Bankruptcy

Chapter 7 bankruptcy is called liquidation bankruptcy because the trustee reviews and sells non-exempt assets to pay creditors. The trustee has no reason to come to your home unless they feel the filing is suspicious.

For example, if you overstate your assets on the bankruptcy filing and give a different answer to the trustee. They could come to your home because these numbers are not matching, and they want to assess the situation.

The trustee can examine your assets, but these proceedings are typically conducted in the trustee’s office. The trustee will review all the information, including your assets, liabilities, expenses, income, and bankruptcy documents.

Home Visits and Chapter 13 Bankruptcy

Chapter 13 bankruptcy is when you create a repayment plan that slowly pays off your debt over a specified time (usually three to five years). The trustee is responsible for reviewing the plan and its feasibility, collecting and sending money to creditors.

The trustee’s responsibilities are not to pay you a home visit unless they see disparities and suspect illegal activities. Their assessment uses the information provided in the bankruptcy documents and hearings. The trustee will address these concerns during the court hearings, and they do not need to come to your home.

Unusual Circumstances

Home visits for the trustee are rare unless they have specific reasons for coming, such as possible fraud, non-compliance, or under/over reporting of assets. These visits stem from possible red flags raising the suspicions of the trustee.

For example, if you underreport the value of your home at $100,000, but you are living in a community where the average price is $500,000, the trustee could come to your home to verify that the information you submitted is accurate.

I recommend discussing your situation with me. I have years of experience handling the most complex bankruptcy cases and will give you objective advice. I am a four-time speaker for the National Association of Consumer Bankruptcy Attorneys. Contact me at (407) 749-0080 to schedule your free consultation. I will review your situation and discuss our options.

The Times when a Bankruptcy Trustee will Conduct a Home Inspection

The trustee would rather conduct the meetings and visits at their office. The trustee will come to your home when it is obvious that something is off and makes no sense. Some of the scenarios that could cause a trustee to come to your home are:

  • Overvaluing the property
  • Undervaluing the property
  • Failing to list the property
  • An expensive house with no personal property
  • High levels of credit card debt with no assets
  • A creditor provides conflicting information that contradicts your filing
  • Your home is in disrepair, and the value is much lower than other properties in the area.

These are red flags that could cause the trustee to come to your home to verify the accuracy of your filing.

I recommend taking advantage of my free consultation. It is a chance to learn about your options and what we can do to protect you. The trustee wants the most accurate information, and I will guide you to protect your exempt assets.

How will the Trustee know if You Fail to Report all Assets Correctly?

The trustee reviews all the bankruptcy documents to ensure you make an honest and full disclosure. They use common sense to examine your filings and will ask questions to understand your financial situation.

It is common for the trustee to request additional documentation at the creditors’ meeting. They want to address any confusion and gain a better understanding of your financial situation. If there are discrepancies, they could come to your home to verify your assets.

I recommend giving a full and honest disclosure of your assets and liabilities. The process focuses on understanding what you have and identifying assets that could be sold to pay your creditors. In most situations, your home is protected, and the trustee does not need to visit you. The trustee would rather handle the situation in their office and have you bring them the requested information.

What Happens if the Trustee Comes to Your Home?

The trustee cannot show up at your home unannounced and demand to conduct an inspection. They must make arrangements with you before coming to the location.

The trustee can conduct the inspection themselves, but they will likely send an appraiser. The appraiser will take videos and photos to fully document everything and show the trustee the extent of your holdings.

I can help you understand a trustee’s role and when inspections are needed. I have years of experience handling these cases and will guide you through the process. Bankruptcy is a fresh start, but you must be honest and transparent to ensure everything goes smoothly.

Can the Trustee take Property without Consent?

The trustee does not have the power to take anything from your home if you have a disagreement over its part in the case. Anything the trustee finds suspicious (such as exempt assets) requires filing an objection with the courts.

A judge decides whether or not the property you claimed as exempt falls into this category. The trustee must show legitimate reasons why your property should be reclassified as non-exempt. The courts must agree with the trustee’s motion before handing anything to them.

What are the Red Flags the Trustee Uses?

In addition to the above factors, there are certain situations when the trustee might become suspicious:

  • Closed investment and bank accounts
  • Undervalued assets listed in the filing
  • Missing information and records
  • Debts that are not listed in the filing
  • Claims that your property was stolen, but there are no insurance claims, police reports, or financial records
  • Paperwork and payments for a safe deposit box
  • Income from no clear sources
  • Outstanding insurance claims
  • Property transfers conducted recently.

These are the most common red flags that will cause the trustee to become suspicious. They will normally ask for more documentation and give you time to get them the proper information. When these requests are not met, the trustee could set up a time to come to your home and verify these assets.

Why Choose Us?

Filing for bankruptcy can be complex, and you need a skilled bankruptcy attorney to guide you. All bankruptcies involve a trustee that oversees your case, and they could liquidate certain assets to pay off your creditors.

I work with the courts and trustees to ensure your rights are respected. I will discuss our options to help you make intelligent decisions.

I have years of experience working on these cases and will put my knowledge to work for you. My track record speaks for itself with my favorable reviews from clients I helped through similar challenges as yours. No two cases are the same, but experience and knowledge matter to ensure you get the protections you need. I am focused on helping you to get a fresh start so you can get your life back and stop worrying.

I respond promptly to your messages, calls, texts, and emails. My job is to ensure you get the maximum protection under the law to start over. Easy financing can be a double-edged sword, and you need me to clarify the situation. The bankruptcy laws are complex, and the trustees play a critical role. I work with you to ensure that everything goes as planned so you can relax and have peace of mind.

Contact me at (407) 749-0080 to schedule your free consultation about your situation. I will review everything and discuss our options to offer you the maximum financial relief. You will get practical and objective legal advice guiding you through bankruptcy.

Can I Go to Jail If I Don’t Pay My Debts?

Posted on February 25, 2011 - 8:57 am by

Many people think they can go to jail (debtor’s prison) for not paying their debts. This is not true.

It is your right to ignore a lawsuit, if you want to – up to a certain point. I don’t think that is a very good strategy, but it is your right.

If for whatever reason you don’t want to fight a lawsuit against you, it can be ignored. But a judgment will likely be entered against you.

Some people feel that since their creditors have nothing to take from them (maybe they are unemployed, their assets are exempt, etc.), then there is nothing a creditor can do to them in the lawsuit. This can lead to problems as well.

First, if you are working, a creditor may be able to garnish your wages. And once a garnishment hits, it can put a stranglehold on your finances and ability to make necessary payments – like your car or mortgage.

Second, if a creditor gets a judgment against you, and you ignore it, you could end up in jail.

Yes, an extreme result. Please see a Wall Street Journal article on the topic.

And I know what you are saying: But there is no debtor’s prison in Florida!

This is true. You cannot be thrown into jail or prison for not paying your debts.

But you CAN be thrown into jail for ignoring a court order. This is how some creditors get around not having debtor’s prison.

Once the creditor gets a judgment against someone, they are entitled to get certain information from the debtor. This is usually in the form of a Fact Information Sheet. As a judgment debtor, you will have to let the creditor know about your assets, wages, bank accounts, as well as other information.

If you don’t provide this information to the creditor, then they may ask the judge to hold you in contempt of court – for failure to abide by the court’s order. This is how someone ends up in jail.

While a contempt order is not very common, it shows you the peril of simply ignoring a lawsuit – which is almost always the worst course of action one could take. Burying your head in the sand, or running from the problem, usually will make the problem worse and more costly to fix later.

If you are served with any lawsuit, the first thing you should do is consult with me as to your options. Get your options early, make a decision, and follow through.

Call 407-749-0080 for a free consultation to see how I may be able to help you.