Archive for the ‘Finance’ Category

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Bankruptcy Should Not Affect Debtor’s Professional License

Tuesday, January 18th, 2011

Over the past few years I have filed many Chapter 7 bankruptcies for real estate contractors, real estate brokers, and mortgage brokers . A common question pertains to bankruptcy’s effect upon their state - issued contrqactor’s and brokers license. These people are afraid that because they file bankruptcy the State of Florida will not renew their professional license, or that they State may refuse to issue a new license they intend to pursue after their bankruptcy.

I have not heard from any of my bankruptcy clients that they have lost or been denied a contractors or brokers license because they filed bankruptcy. There is protection in the Bankruptcy Code. The Code prohibits any governmental unit from denying or revoking a license because of a prior bankruptcy. Therefore, real estate professionals, as well as other professionals such as lawyers or accounts, should not worry about a bankruptcy ruining their professional carrier and their ability to earn a living after a bankruptcy.

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Cash Surrender Value of Your Life Insurance Policy Is Probably Protected

Thursday, January 13th, 2011

A couple of months ago my colleagues David Lampley and Carmen Dellutri both wrote about the importance of protecting 401(k)’s and IRA’s and not taking money from them to pay bills if you can at all avoid it. Their advice continues to be extremely valuable and more important than ever in this economy, but I would like to expand on it here: Don’t take out cash surrender value from life insurance policies to pay your bills either!

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Ransom v. MBNA United States Supreme Court Deals A Blow To Consumer Debtors

Tuesday, January 11th, 2011

The Supreme Court’s most recent opinion on bankruptcy, Ransom v. MBNA, issued on January 11, 2011 deals a major blow to above median consumer debtors in a Chapter 13 bankruptcy that do not have a car payment. The issue before the court was whether a Chapter 13 debtor may take a vehicle ownership expense under the Means Test when a vehicle is owned free and clear of any liens and no payment is being made. The Court, in an 8-to-1 opinion written by Justice Kagan, answered a flat no. Justice Scalia was the sole dissenting judge.

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The New Bankruptcy Law for 2011

Thursday, January 6th, 2011

As of December 22, 2010, there is a new bankruptcy law. Technically it is just an amendment rather than an all out reform such as that seen in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). BAPCPA has been described by legal scholars, practitioners, and the courts as poorly drafted and ambiguous. On December 22, 2010, the President signed H.R. 6198: Bankruptcy Technical Corrections Act of 2010 (BTCA) into law to correct technical errors – though I would hardly say an error in the law is technical.

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Judgments And Bankruptcy?

Tuesday, December 21st, 2010

If a person files for either Chapter 7 or Chapter 13, they must include all their creditors, that includes civil judgments. If you live or own property in Florida and had a judgment against you when you filed your bankruptcy, you may want to consider speaking with your attorney about petitioning the state court to deem the judgment discharged.

You may ask why, I thought my bankruptcy discharge resolved me from the debt and the bankruptcy court avoided the lien? While that is true, the discharge resolved your obligation on the debt, the judgment still remains on the public records and may cause issues on some situations such as when you attempt to obtain a loan or get title insurance during real estate closings.

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Carmen Dellutri Cited in Money Magazine

Monday, November 29th, 2010

Carmen Dellutri was recently cited in the November issue of Money Magazine. The article in Money Magazine was based upon a blog that I wrote for Bankruptcy Law Network. Every once in a while it is nice to have your work cited.

These are very good articles if you are contemplating co-signing any type of financial agreement.

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Friday, October 29th, 2010
bankruptcy file
Jon Arnold asked:


In this day and age when it appears that most people want instant gratification, signs are indicating that filing for bankruptcy is not an exception to this. Despite the long term negative effects of bankruptcy like the fact that it will remain on your credit report like a huge red flag for the next decade, many people are looking at bankruptcy as a quick fix to give them that instant gratification to get out from under a mountain of financial obligations that seems to never dwindle down to a manageable size.

In reality, the truth of the matter is that there is nothing “instant” about the process of filing bankruptcy except for the psychological stigma that is typically attached to the process of bankruptcy, where people tend to feel like a failure for their need to raise the white flag and give up financially to start over.

With the significant recent changes in the bankruptcy law however, most people do not realize that filing bankruptcy is not a given any more. In fact, you may not even get approved to file even if you want to. In addition, there are certain types of financial obligations that are not discharged via bankruptcy, such as federally funded student loans, alimony payments, and similar court ordered judgments. In the latter category, if you delay filing bankruptcy and one of your creditors files a lawsuit against you to collect the outstanding balance, and that judgment is won, then that particular obligation cannot be wiped clean by bankruptcy because there is already an existing court order that requires you to pay it.

The psychological ill effects like low self esteem and feeling like a failure do not need to exist for filers. A lot of the people who file for bankruptcy each year do not do so because they are taking advantage of the system, nor is their filing due to any type of gross financial mismanagement. Rather, it is a reaction to a significant or live changing event that had a drastic impact on their income, such as a huge medical expense, a job layoff, a very messy divorce, or similar things that are out of the consumer’s control.

One of the even more sad things about bankruptcy filings is that most consumers have not done their due diligence to seek options or find out what realistic alternatives might exist for them. For example, a personal loan may get you back on your financial feet without the long term negative effects of bankruptcy. Similarly, a debt consolidation program could also work, where the program will pay your debts at a lower monthly expenditure, which may give you the financial breathing room you need to get back in the saddle financially.

Sometimes bankruptcy is the only viable option, but you still should thoroughly investigate your options. But if bankruptcy is required, make sure you go into it with your eyes wide open. With the changes in the bankruptcy law, it is no longer a do-it-yourself process, and if you attempt to do it yourself, you could end up having more of your assets liquidated than what is actually required by law. The money you invest in a good bankruptcy lawyer can pay for itself over and over again, since they know the law and can also advise you of your possible options.



Bankruptcy Questions

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Thursday, October 21st, 2010
bankruptcy file
James Banks asked:


Business bankruptcy is a situation in which a business organization has more liabilities than assets and is no longer capable of meeting its financial obligations. Any type of business can file for business bankruptcy.

Business bankruptcy can provide relief to the business owners who are overwhelmed with credit problems and cannot find any other way out of debt. However, business owners must also face the fact of losing one’s business and damaging one’s credit standing and endure embarrassment is a possibility. There is not much stigma attached to Business Bankruptcy because it is, in fact, used by many businesses to restructure their companies.

Though Business Bankruptcy may seem different from personal bankruptcy, they both target the same goal: a way out when all possible solutions fail to alleviate the current situation.

When a business or a company is on the verge of forfeiting payments on a debt, it is the sign for an owner or manager to know that the time has come to file for business bankruptcy.

Are there any differences between the different business bankruptcy types?

There are 2 main types of business bankruptcy: chapter 7 and chapter 13, but the latter has more advantages than the former because it is federal bankruptcy, and the law does not require the liquidation of the business itself. As an alternative, the company will have to fulfill paying the debt according to the agreement with the creditors. The company has the chance to recover from the debts and can make profits again. But any decision-making has to be pre- approved by the federal court as the business bankruptcy law stipulates.

Brandon O’Brien is the current manager of a company that filed for bankruptcy after following our professional advice and is currently following making his compulsory payments. Business bankruptcy has helped him regain the company’s financial control and has given him a new way of dealing with the debt problems the company has carried for many years and has not yet solved them.

Brandon O’Brien:

What should I do after filing for Chapter 11 Business Bankruptcy?

James Banks:

Chapter 11 Business Bankruptcy allows the company to keep its assets. Nevertheless it is recommended some bonds be liquidated in order to pay off part of the debt. The amount can be reduced, and the payment will not be too high; allowing the company to generate profit after all. Regardless of what method you use to reduce the debt, the manager of the company has to regularly report to the federal court any decision made in the company.

Brandon O’Brien:

So, after filing for Business Bankruptcy, do the lawyers take care of everything?

James Banks:

Do not believe that by filing for Business Bankruptcy your financial situation will be resolved. You, as the manager will have to make sure that the company has enough cash to endure the whole filing process, and we recommend that you follow a plan in order to avoid any type of delay during the case.

One way to take care of creditors once and for all is to put them all together and set up a plan to start the repayment process. The debt will be reduced, and the creditors will see you are in the process of paying them. This creates trust and understanding as to why you file for bankruptcy.

Remember, filing for Business Bankruptcy is a serious decision, and one that should only be considered when all other options have been tried. It would be wise to seek advice from a financial and legal professional before making any sudden decisions.

We have different articles of interesting topics and current and former clients’ experiences with our programs. Take a look at topics related to Business Bankruptcy, situations in which people can fall into and how to keep yourself a debt free person.

http://www.commercialdebtcounseling.com/avoidbankruptcy.shtml

http://www.commercialdebtcounseling.com/business/business-y/business-business-bankruptcy-filing-laws.shtml



Bankruptcy Questions

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Can I Save My Home With a Chapter 13 Bankruptcy?

Saturday, October 16th, 2010

Here is a link to a video on the Consumer Protection Program where Carmen Dellutri of The Dellutri Law Group, P.A. explains how to strip a mortgage on your homestead property.

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The Truth About Bankruptcy And Saving Homes

Saturday, October 16th, 2010

A common misconception that I observe as a consumer bankruptcy attorney in Southwest Florida is that if you are not current on your mortgage when you file bankruptcy, you will lose your home. Quite the contrary. Many people file bankruptcy every day for the sole purpose of saving their homes. Of course, the best way to determine how best bankruptcy can help you is to consult with an experienced attorney, but my goal with this article is to introduce you to some of the many different possibilities and hopefully give you some hope, especially if you feel you’ve exhausted all possibilities and feel like giving up.

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