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When you've done all you can you may be able to get A Fresh Start

Orlando Bankruptcy Law Blog

Why are condo foreclosures on the rise?

If you're facing foreclosure on your condo, the pressure probably started long before you were even in financial trouble. For many older condo communities, the effects of the 2008 recession never went away. These communities are faced with aging facilities in desperate need of repair, which, when coupled with declining cash reserves and stricter lending rules, have left many condo owners holding the bag in terms of supporting their facilities.

Do not wait too long to find a debt relief option

Research indicates that one out of every three Americans has saved for retirement, and approximately 62 percent have less than $1,000 in savings. The primary reason that most people here in Florida and elsewhere are unable to save money is due to their debts. Many people who are struggling to make ends meet also wait too long to find a debt relief option that will turn their finances around.

Part of the issue is that many Florida residents do not adequately understand when their financial situations have become dire. Furthermore, they might not be award of the options available to them. Simply put, if a person is living paycheck to paycheck, he or she is probably having financial issues.

Anyone can be overwhelmed by credit card debt

Many Florida residents are under the impression that only people who do not earn a substantial income, have a nice house or even a healthy retirement plan can experience financial hardship. Nothing could be further from the truth. Anyone can be overwhelmed by credit card debt and other debts to the point where they find themselves in financial distress.

Take for instance a family in which both parents have full-time jobs and they collectively earn approximately $90,000 a year. They seemed to be doing fine until the wife suffered a medical issue that kept her from work for approximately eight weeks. In addition, before surgery on her hand could be performed, the family had to pay some medical bills and the deductible on her insurance. Disability insurance only provided her with 60 percent of her normal income during that time as well.

Chapter 7 bankruptcy and the Florida homestead exemption

When homeowners are in financial distress and begin to explore their debt relief options, they might become fearful that they will have to give up their homes. They might want to file for Chapter 7 bankruptcy, but are not sure how their homes will be affected. Fortunately, Florida has one of the highest homestead exemptions in the country, and in many cases, filers will not be required to liquidate what is ordinarily their largest asset.

A "homestead" exemption makes a certain amount of a home's value unreachable by creditors. Many states put a cap on this amount, but here in Florida, there is no maximum value. That means that most people are able to protect the entire value of their homes when they file for bankruptcy. As long as the property does not sit on more than half an acre of land in an urban area or 160 acres in rural areas, the home could be exempt.

Student loan debt relief is elusive for many borrowers

Recent estimates indicate that as of March, borrowers owe approximately $1.35 trillion in student loans across the country. Many Florida residents are likely among the nearly 10 million people who are unable to repay these loans, which means that approximately 43 percent of all borrowers are either behind in their payments or are unable to make payments at all. To make matters worse, student loan debt relief through bankruptcy is unavailable for many borrowers.

From the time student loans became available in 1958 through 1976, student loans were treated as any other unsecured debt in bankruptcy. However, in 1976, Congress passed legislation to curtail the ability to discharge government guaranteed student loans during the first five years of repayment. In 1990, that period was extended to the first seven years, and in 1998, borrowers were unable to discharge their loans at all absent "undue hardship." In 2005, borrowers became unable to discharge private student loans as well. 

Have you verified your credit report?

Most major events require a background check or credit report before the deal is final. What you may not know is that the major credit reporting companies have a proven record of being wrong. If you're already struggling to pay your bills, that extra blight on your record could cost you a new apartment or better job, sinking you further into your own debt, and costing you more money along the way.

With the government receiving 8,000 to 10,000 complaints per month about these companies, they need to clean up their act.

Beware of loan modification schemes

When Florida homeowners are unable to make their mortgage payments, they can begin to panic and look for a way to avoid losing their homes. It is this group of people that can easily become the target of loan modification schemes. Recently, two men were recently sentenced to prison for taking advantage of their victims' fears, and four others are awaiting sentencing.

The two men, along with others, offered homeowners across the country the chance to modify their mortgage loans in order to keep their homes -- for a fee. The men, who operated under a variety of company names, enticed homeowners with promises that they were already approved for a modification and even promised relief under the Home Affordable Modification Program and/or the Troubled Asset Relief Program. The offers came with a "guarantee" of a full refund if the deal fell through.

The automatic stay stops harassment by your creditors

When Florida residents who are in financial distress are being bombarded with phone calls, threats of litigation and wage garnishments, the stress can be overwhelming. Filing for Chapter 7 bankruptcy not only begins the process of eliminating many of an individual's debts, but also stops harassment by your creditors. Once the petition is filed, an automatic stay is put into place that halts all collection activity by creditors and provides filers with the breathing room they need to sort out their financial situation with the court's help.

The automatic stay provides many advantages to a filer. If a Florida resident is in danger of having his or her utilities shut off, the automatic stay can prevent that from happening for at least 20 days. Foreclosure proceedings are also halted, at least temporarily, while the stay is in effect. People in danger of being evicted from a rental property could be given more time as well depending on the circumstances.

Can creditors take my retirement funds after filing for bankruptcy?

After spending most of your career saving for retirement the idea of your hard earned money being taken away is devastating. Retirement accounts are essential to maintain the life you built, therefore the fear of creditors can keep some people from choosing to file bankruptcy. Believe it or not you are protected by the law, and you should not let this fear dictate your future.

401(k) accounts after bankruptcy

401(k) and 403(b) accounts are typically established through an employer and can become the major contributor to your retirement. Federal law protects your 401(k) from being garnished by creditors, even after filing bankruptcy. On the other hand, solo 401(k) accounts (also known as individual 401(k) or self-employed 401(k) accounts) are more vulnerable to damage depending upon your state. A solo 401(k) account is a retirement plan created for business owners and their spouses in which they do not have additional employees. As a Floridian, your solo 401(k) is safe due to state law.

How do you pick a Chapter 7 bankruptcy attorney?

Many Florida residents are no stranger to financial struggles. They might not feel as though their struggles are over once they decide to file for Chapter 7 bankruptcy, however. Finding an attorney can also be a challenge.

Experience makes a difference when it comes to dealing with trustees, judges and creditors. The bankruptcy process can be complex under the best circumstances. For example, if creditors decide to file objections to your discharge, the proceedings can become even more complicated.

Paul Urich
Orlando Office

Law Office of Paul L. Urich, P.A.
1510 East Colonial Drive
Suite 204
Orlando, FL 32803
Phone: 407-896-3077
Fax: 407-896-3041

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