Archive for the ‘Sign of the Times’ Category
Wednesday, July 7th, 2010
As a bankruptcy attorney in Southwest Florida, many times I see clients who think it is best to withdraw all their money from their bank accounts before filing. This is an incorrect assumption for a couple reasons: (1) any amounts held in cash must be disclosed; and (2) exemptions may apply to protect those funds while in the bank account.
The first reason is a matter of honesty. Remember, bankruptcy is intended to honest debtors a fresh start. Withdrawing your funds and placing them under the mattress or in a cookie jar does not protect it from bankruptcy as it is an asset and good faith requires that it be disclosed. Additionally, the eyes of the bankruptcy trustee are quite sharp and, as we are dealing with money, there is almost always a paper trail and the risk of losing a discharge or worse, criminal charges is not worth the risk – disclose, disclose, disclose.
You may actually be harming yourself by withdrawing the funds. For instance, in Florida, if the funds come from your earnings, all or a portion of the funds are in most instances protectable while in the account. When the funds in the account are traceable to wages, usually at least 75% of the account can be protected. In some instances 100% can be protected. Whether or not all or only a portion can be protected depends on whether the earnings are from the head of household and the amount the earner makes per week. Currently the dividing line is $500 per week or less for 100% but that amount will be raised to $750 in October, 2010 pursuant to a recent amendment.
To protect the funds they must be traceable, i.e. an accounting on the bank statements clearly shows the funds are earnings. Therefore, all other funds received such as gifts, rental income, etc. should be placed into a separate account or simply kept as cash – which we know must be disclosed.
This Blog was written by Attorney David Fineman, Esq. of The Dellutri Law Group, P.A. Mr. Fineman practices Bankruptcy Law, Fair Credit Reporting Act Law, Fair Debt Collection Practices Act Law and in other areas of Consumer Law.
Posted in Bankruptcy News, Consumer Protection, Sign of the Times | Comments Off
Tuesday, July 6th, 2010
Consumer bankruptcy filings are up approximately 14% since the same time last year. The causes of the filings are obviously the recession, unemployment and the housing crisis (the Big Three). In South West Florida, we know the big three all too well. It is expected that over 1.6 million people will file for bankruptcy protection this year.
I have mixed emotions on this issue. First, I think more people should consider the bankruptcy option. I can say this because I understand the bankruptcy process and the benefits it offers. Likewise, I have an open-mind to bankruptcy. I see many people who say that bankruptcy is the worst thing a person can do, and unfortunately, that is not true. Bankruptcy is usually not the worst option.
Second, from a purely economic standpoint, bankruptcy is good for society because it gets the bad money off the books and out of the economy. Second, it allows for a fresh start and gets people, who were formerly shunned from the economy, back into the game.
Third, bankruptcy is merely a form of financial planning. When you get right down to it, that is all it is. All this nonsense about strategic defaults of homeowners is just garbage. People have always made decision on when to cut their losses. If the mortgage companies thought that this would not happen, that was naive. You can only push people so far before they will push back. The mortgage companies and servicers have taken too much, and now the homeowners are saying no more.
Why doesn't someone tell our Elected Officials what is going on in this Country and Southwest Florida? Do you think we are that clueless? I think it's ironic that some of our elected officials are worried about losing their jobs?
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
Posted in Bankruptcy News, Bankruptcy Statistics, Sign of the Times | Comments Off
Tuesday, June 29th, 2010
Are we in Southwest Florida heading into a "Double Dip Recession" ? If you are an avid reader of this blog, and I know there are many of you because of the feedback I receive, you know that I believe we are no where close to the end of this recession/depression. I honestly do not believe that we are being given all of the information that we need to have a proper debate on the economy.
Maybe our elected officials are sparing us more bad news??? I don' t know. But, on the other hand, when you call the U.S. a democracy, and the definition of the words means: Rule By The People. I begin to get concerned when the people are mis-informed and ill-informed.
So what does this all mean? Well, it means that tough times are still ahead for South West Florida. There is no doubt about that. The questions floating around in my head are: When is our Leadership going to wake up and realize that you cannot spend this Country's way into prosperity. When is our State Leadership going to step up to the plate and look at Florida's Housing and Job problems. I don't care how bad the housing problem is down here. People who are unemployed cannot purchase houses.
So, we have a rather cyclical argument. The World economy is in turmoil, which clearly has a direct impact on the United States economy, which clearly has a direct impact on the local economy. However, until the jobs problem is fixed, our housing issues (which are huge) and market will keep limping along. Great.
When I first moved to South West Florida, I used to wake up and say: Ah, another day in Paradise. Now, my attitude has changed slightly. I wake up and say: How is Corporate America and the U.S. Government going to shaft the citizens of Southwest Florida today.
I still believe that America is the Greatest Country in the World, and I have not lost my faith in the people. I believe that I have lost my faith in our Government, and the way things get done or don't get done. That is a shame. What would our founding fathers think if they could see how we have totally distorted their vision? I'm sure they wouldn't be happy.
The Fourth of July celebrates our Independence, and I am going to do exactly that once I get out of the office today. I am going to have a great weekend with my family, and I am going to remind them of all the things this Country stands for. Hopefully, they will feel the way that I do, that this Country still has a chance of coming out of this economic disaster with a new attitude. Hopefully. When you see examples of the people coming together in Nashville after the floods, you know that being American runs in our veins. It's in our DNA. Let's see if we can find that place in all of us, and get back to our Roots.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
Posted in Consumer Protection, Sign of the Times, Southwest Florida News, economic data | Comments Off
Friday, June 25th, 2010
Well, according to a recent ABA Journal article, it appears Fannie Mae is going to pursue deficiency judgments against borrowers who walk away from loan obligations without good reason.
A deficiency judgment is a judgment following a foreclosure sale for the difference between the property’s value at the time of the foreclosure sale and the balance owed on the loan obligation. Once the deficiency judgment is obtained, the creditor may be able to garnish wages, seize assets, and take any other action allowed by law. Apparently Fannie Mae will be instructing its servicers to recommend which homeowners should be pursued for deficiencies.
The first question I had when I read this article is what criteria will be used to determine whether a reason for the walk away was a “good reason.” It appears that the Fannie Mae’s goal is to stop people who have the ability and means to pay their mortgages from walking away merely because the property is no longer an economically appealing investment. But with the management of the loans I have seen by the servicers in my clients’ cases I have little doubt that implementation of this program will affect people not intended.
Some states do not allow deficiency judgments but Florida is not one of those states and pursuit of a deficiency judgment is becoming a more frequent occurrence here. While deficiency judgments may be obtained even if there is a valid hardship, it has largely not been pursued against debtors in the past. However, it seems the tides are changing.
In Florida, a deficiency judgment is an equitable remedy and is discretionary with the trial court judge. Following a foreclosure sale, the creditor has one year from the date of the foreclosure judgment to seek a deficiency in the foreclosure case. If one is not sought or requested in the foreclosure case, the creditor has up to five years to bring a new action for a deficiency. Many debtors believe there is no defense to deficiency judgments but in most instances, this couldn’t be farther from the truth. In defending against a deficiency judgment, debtors can fight creditor’s valuation of the property and raise numerous equitable defenses and legal defenses that an experienced attorney can counsel them on.
As with any legal issue, early consultation with an attorney can many times make the issue much easier and cheaper to deal with. With creditors becoming more aggressive in the collection efforts on the loans by seeking deficiencies, it is more important than ever to seek an attorney’s advice and counsel in handling a foreclosure case from its outset as merely “walking away” may put you in more jeopardy than it may have in the past.
This blog was written by David Fineman, Esq. of The Dellutri Law Group, P.A.. Attorney David Fineman handles Bankruptcy, FDCPA, FCRA, UDAP, FCCPA and civil litigation.
Posted in Bankruptcy News, Consumer Protection, Foreclosure Defense, Mortgage Foreclosures, Sign of the Times, Southwest Florida News | Comments Off
Saturday, March 13th, 2010
Practicing Consumer Bankruptcy Law is very interesting work. Usually, I get to tell bankruptcy clients good news. Sometimes, I have to deliver bad news about their bankruptcy cases. In a recent case, a young man purchased his first home several years ago, and naturally, the value of the home has dropped significantly. He tried modification and was turned down flat (The mortgage is held by a securitized trust). That wasn't the bad part.
The bad part, as you can tell from the title is that he had his Grandfather co-sign for the loan. So, during the course of the bankruptcy when this young man couldn't get the lender to modify, he asked me: Can I short sale the property, and if so, what will happen to me, and what will happen to my Grandfather? These are both excellent questions.
Here is my advice: Yes, as an option, you can do a short sale. Of course, since you are in a Chapter 13, we will need the Judge's permission, and I will have to file a motion with the Court to allow same, but that is not a problem. I don't believe that the Judge will require any additional items from you other than a signed contract. With regard to the deficiency and you, the answer is simple, your debt will be included in the bankruptcy and you will ultimately receive your discharge, so, no problem.
The problem is: How will a short sale on your primary residence hurt you or hurt your grandfather? As to your grandfather, we have to look at a whole new set of issues. Since this property is not his primary residence, any deficiency that is still owed to the lender will have to be dealt with. This can come in two forms: First, they can pursue him for a deficiency balance. In other words, they can sue him for the remaining balance owed on the promissory note. As I have explained in the past, it's kind of like having two fish on a hook and one gets away. The lender still has one fish to reel in (Grandpa)
When the lender wins the lawsuit, they could go after his non-exempt assets. Alternatively, the lender could just issue him a 1099C cancellation of debt. If the lender takes the second option, your grandfather would have to deal with the IRS. As such, I would advise him to see a CPA for tax advice on how to combat this issue.
All and all, it is not fun to have to explain this to someone who took a risk on purchasing a first home and then sat back and watched his investment disappear as the Southwest Florida real estate market crumbled to the ground.
Now, I just hope the relationship doesn't crumble as well.
I apologize for the depressing blog, but this is something that you need to know and need to prevent in the future. When you take a risk, you want to do it on your own so that you don't jeopardize anyone else's future. It is never worth that risk.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
Posted in Bankruptcy News, Consumer Protection, Sign of the Times, Southwest Florida News | Comments Off
Tuesday, February 9th, 2010
I was really bothered by something that I heard on the news last night, and this morning I couldn't help but voice my opinion on Bankruptcy Law Network. I know that I shouldn't listen to the news before bed, but I heard the talking head make a comment about why people file for bankruptcy and why businesses file. The joker said that when a business files for bankruptcy, it is done for one reason, and that is because it is in the best interests of the business. When an individual files for bankruptcy protection, it is because they have made bad decisions. Nothing could be further from the truth in my opinion.
So, I wrote a blog this morning titled: Bankruptcy Double Standard ? : Businesses and Individuals
Please take a look at the blog and see if I came close to hitting the issues.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
Posted in Bankruptcy Myths, Bankruptcy News, Consumer Protection, Life After Bankruptcy, Sign of the Times | Comments Off
Saturday, January 9th, 2010
In Florida, we pay our property taxes at the end of the year. On April 15, our federal income taxes for the previous year are due. So, within a 4 to 6 month period we may be hit with property and income taxes. In the last few years, there has been a push by the credit card companies, like Visa, American Express, Mastercard and Discover to allow you to pay your taxes with a credit card.
Don't be fooled they are not doing it because they like you. They are doing it to protect themselves. When the Bankruptcy Laws were changed in 2005, Congress added to the list on non-dischargeable debts. A non-dischargeable debt survives the bankruptcy and is still and owing after the bankruptcy discharge arrives in your mailbox. So, what did our wonderful politicians stick us with this time. Well, Congress expanded credit cards protection. While a separate statute provided the credit card companies protection when people pay income taxes and then file bankruptcy, Congress extended this protection to state and local taxes that are paid with credit cards.
If you are a little behind on your savings (and who isn't), and you use a credit card to pay your state or local taxes, that debt may be excepted from the discharge if you file for bankruptcy protection. I say maybe for a reason. If you think about this for a moment, you will have given it much more thought than our representatives in Washington, and it is easy to see some potential problem spots for this legislation.
First: What if you take a cash advance on a credit card, and pay your taxes with cash. Is that debt non-dischargeable? Second: What if you have multiple credit cards, and you decide to cash advance one or two and make some payments and then use some of the money to pay your taxes? Is that non-dischargeable? Third: What if you pay your property taxes on a credit card and then continue to make payments on the card without incurring new debt? What part of the balance will be non-dischargeable? Good Question. How would you like to be the debtor or creditor at this trial?
The bottom line is this. When a credit card company is offering a convenience to the consumer, hold onto your wallet, there is usually an something in it for the credit card companies.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog. Mr. Dellutri also writes for the firm's other blogs: www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.combankruptcy blog.
Posted in Bankruptcy News, Consumer Protection, Credit Card Industry, Credit Cards, Fair Debt Collection, Sign of the Times | Comments Off
Monday, December 7th, 2009
This Morning I wrote a blog for the Bankrutpcy Law Network discussing why consumers shoudn't apply for a department store credit card at the register and try to save 10%.
Please click here to read it.
Don't Cave In And Apply For A Deparment Store Credit Card
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog. Mr. Dellutri also writes for the firm's other blogs: www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.combankruptcy blog.
Posted in Consumer Protection, Credit Card Industry, Credit Cards, Sign of the Times, Southwest Florida News | Comments Off
Tuesday, September 29th, 2009
The Dellutri Law Group is getting ready to start a New Blog focusing on the Federal Fair Credit Reporting Act. Our Fair Credit Reporting Act Blog can be found at:
www.faircreditreportingactblog.com
Please check it out and tell us what you think? It should be active in 7 to 10 days. The Fair Credit Reporting Act Blog will focus on all aspects of Credit Reporting.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
Posted in Consumer Protection, Credit Card Industry, Credit Cards, Credit Report Errors, Fair Credit Reporting Act, Fair Credit Reporting Act Cases of Interest, Good News, Legislative Updates, Sign of the Times, Southwest Florida News | Comments Off
Saturday, August 22nd, 2009
When you file for bankruptcy, a bankruptcy estate is created (11 U.S.C. 541). Individuals are allowed to protect items of personal property, cars and equity in real estate from their creditors. The process is called claiming an exemption or exemption planning. When an item is claimed as exempt, the property is theoretically removed from the bankruptcy estate and is no longer available to pay the claims of creditors.
If you are a Florida resident or have lived here for at least two years prior to the date of filing for bankruptcy protection, you must use the Florida Exemptions to protect your personal property in a Chapter 13 or a Chapter 7.
Even if you are just falling behind on your bills or have lost your job and think you may have some financial troubles, knowing the Florida Exemptions is important. In a nutshell, exempt property is protected from liquidation by a creditor. So, if you have a creditor or creditors coming after you, you know that your property is safe because it is exempt.
Florida's most significant exemption is the Homestead Exemption because it is unlimited. The reason it is significant is because the protection arises in the Florida Constitution. Therefore, the homestead exemption cannot be altered without a constitutional amendment. The exemption extends to real property of 1/2 acre within a municipality and 160 acres outside a municipality. Accordingly, a person can own up to 160 acres outside of a municipality with a house with no mortgage and a creditor cannot touch the place. This exemption was limited by the 2005 Bankruptcy Amendments.
In Bankruptcy, to qualify for the unlimited Florida Homestead Exemption, you must own the residence for 40 months. Or, if you owned your current home for less than 40 months, you must have owned a previous home in Florida for 40 months total. If you have owned a home(s) in Florida for less than 40 months, then you are only allowed to exempt $136,875.00 of equity per person.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog and the firm's mortgage modification blog.
Posted in Consumer Protection, Debt Collection Law, Good News, Sign of the Times, Southwest Florida News | Comments Off
