Chapter 13 Bankruptcy

Published on: November 22, 2014

Debtors’ Ability to Strip Second Mortgages: the Door May Be Slammed Shut Soon so File Now!

door shut.jpg As a Florida consumer bankruptcy attorney, we have been able to remove and strip off second mortgages due to the 11th Circuit’s decision in McNeal a couple years back. It is the only Circuit in the country that allows for a second mortgage lien to be stripped from homestead property. The key has been to show that the home does not have value over and above the amount owed on the first mortgage.

Bank of America, N.A. has an appeal in the works that the U.S. Supreme Court has just accepted for review per DS News.

So the window may be closing. Anyone who wants to strip their second mortgage on their home should contact a bankruptcy attorney right away — in case the court starts staying cases pending the appellate review, or in the event that the U.S. Supreme Court rules against homeowners.

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Published on: September 14, 2014

Watch out for Scam Bill Collectors Calling after a Bankruptcy is Filed

By Christie D. Arkovich, P.A.

I don’t know if this is occurring to our Florida bankruptcy clients, but I imagine it is. The ABI

I have a warning for you about scam bill collectors. Criminal gangs are posing as law enforcement officials. They are calling people and emailing phony threats to collect on fake debts that you do not owe. They pose as bill collectors. But they’re not. They’re thieves. During the past 2 weeks, one attorney colleague has heard from at least five former clients who got these calls. The description is always the same. The caller will identify himself as a government official. The caller will proceed to tell you that they have a warrant for your arrest for bank fraud. You will be given an opportunity to pay an immediate cash settlement to avoid being arrested. These callers are thieves. They work out of telephone boiler rooms. Most are probably overseas, where they hide and avoid detection. The callers usually have a heavy foreign accent.

How Scam Bill Collectors Target You.

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Published on: May 22, 2014

Medicare Liens and ObamaCare: Florida Homestead Protected

By Christie D. Arkovich, P.A.

The Affordable Care Act has caused millions of people to sign up for Medicaid for the first time. Medicaid is a program of free health insurance provided to low to no income individuals. Although the care itself is free, there is a lien against estate assets for any Medicaid payments made for any individual who received benefits after he or she reaches 55 years of age. This includes a lien against their home.

In some states, a Medicaid lien will result in the loss of a homestead to the government. This is one of those unintended consequences we hear about. However, in Florida, we do not have to worry about a Medicaid recipient’s house being taken. This is because of the Florida homestead laws.

For additional questions and consultation on debt related issues, please consider contacting Arkovich Law

Published on: April 28, 2013

Bank of America: A Case Study in Incompetence or Intentional Fraud?

By Christie D. Arkovich, P.A.

Bank of America simply cannot get it right. Our Tampa, Florida law firm sees violations regularly whether it involves foreclosure or bankruptcy. Of particular note these violations are all one way and they put money in BofA’s pocket. If they were truly errors, wouldn’t they immediately be corrected once pointed out and wouldn’t the errors go both ways?

Just last week, the Center for Investigative Reporting issued a lengthy case study on yet another botched foreclosure in California by Bank of America.

This is not a one time event I assure you. It extends from coast to coast.

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Published on: March 31, 2013

The Complexities of Bankruptcy: Chapter 13 Plan Choices

By Christie D. Arkovich, P.A.

At the end of February 2013, the Middle District, Tampa Division of the U.S. Bankruptcy Court announced an amended Uniform Chapter 13 Plan would have a new choice for debtors. Debtors can now choose whether they want property of the estate to vest in the Debtor’s name upon confirmation of the plan, or they can choose to wait until discharge or dismissal.

Ok, so what does this really mean? I would easily bet that most debtors do not know what option is best for them in their particular situtation. I imagine that the volume bankruptcy mills don’t care even if they do know. After all I get several emails/calls a month from debtors who hired a mill who got things wrong or won’t return phone calls. They’ve been forced to google for the answer and came up with my blogs. Sorry, you get what you pay for, but that’s another story for another day.We refer to this quandry about vesting as a Section 1306 vs.1327 question. Under Section 1306, vesting occurs at the discharge. Under Section 1327, it occurs much earlier at confirmation of the plan. An Eleventh Circuit case from July 2000, Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000) pointed out a perfect example of why a bankrupt debtor may want to leave jurisdiction over property with the bankruptcy court until discharge. In that case, the mortgage company began to apply post-petition mortgage payments to its attorney’s fees and costs of curing a default after confirmation. First Union forceplaced insurance not with the prior insurance company used by the debtor, but rather with its own subsidiary at considerable additional expense and hefty fees to First Union. No approval of the bankruptcy court was needed since the plan had allowed the property to re-vest with the debtor. As the debtor owed less on the the property than what was owed, this was a pretty sneaky way to relieve the debtor of years of built up equity.

As a consumer advocate and Max Gardner bootcamper, we highly recommend that Debtors take advantage of the protections afforded by the bankruptcy court and choose to vest property to the debtor at the time of discharge or dismissal (the end of the case) and not the far earlier date of confirmation which occurs very early in the case.

Published on: September 17, 2012

How long does a judgment last in Florida?

By Christie D. Arkovich, P.A.

Under Florida law, a creditor has up to twenty years to try and collect a judgment. That’s an intimidating number, two whole decades. Something not to take lightly. To become a lien on real estate, a certified copy of a final judgment must be recorded in the public records in the county in which the real property is located.

Once recorded, Florida law provides that the judgment acts as a lien on non-homestead real property for an initial period of ten years. See Florida Statute Section 55.10. The judgment can be re-recorded and act as a lien for an additional ten years. Prior to 2004, a recorded judgment acted as a lien for only seven years, but could be re-recorded up to two additional times for a total of twenty years.

In comparison, a bankruptcy remains on someone’s credit report for 10 years. However, the last 18 months is the most important time period in anyone’s credit history and often the bankruptcy after it gets old enough is considered irrelevant.

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Published on: September 1, 2012

Can I Buy a House after a Bankruptcy?

By Christie D. Arkovich, P.A.

house shopping cart.jpg It will take less time than you think to qualify to buy a home after bankruptcy. I generally advise my Florida clients that they will likely qualify within 2-5 years.

Where do these numbers come from exactly? FHA and HUD regulations are readily available online.

If you have filed a Chapter 7 bankruptcy, HUD Guideline 4155.1 : 4.C.2.g provides: A Chapter 7 bankruptcy does not disqualify a borrower from obtaining an FHA-insured mortgage if at least two years have elapsed since the date of the discharge of the bankruptcy.

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Published on: July 1, 2012

Beneficial interest in vehicle requires turnover in Florida Chapter 7 bankruptcy

By Christie D. Arkovich, P.A.

car title.jpg This debtor in South Florida recently lost his free and clear car in bankruptcy (actually the debtor was allowed to pay for the one-half interest in a Chapter 13 so it wasn’t quite as bad as it initially appears). Joint ownership is getting murkier and legal advise is definitely needed to preserve vehicles, money in bank accounts and even real property. Other bankruptcy cases in South Florida have recently attacked the “bare legal title” concept. These situations often arise when debtors share bank accounts, vehicles or even real property with parents, children or other relatives. Generally, we can show that the debtor held bare legal title only for probate or other purposes and the property is not subject to turnover by the bankruptcy court. However, the law in this area is getting rather murky. The facts in this case were as follows: a vehicle purchased by a debtor’s mother, but titled in the name of the debtor and his mother, and the debtor paid the insurance and maintenance. In re Fletcher, 2012 WL 2062394 (Bankr. S.D. Fla., March 6, 2012).

Under Florida law, when a person’s name appears on title to property, a rebuttable presumption arises in bankruptcy that the person has a beneficial interest in the property, although that interest may be an equal interest or a factional share. The burden then shifts to the debtor to prove by competent, clear, and compelling evidence she does not hold a beneficial interest in the property. In re Kirk, 381 B.R. 800 (Bankr. M.D. Fla. 2007).

Thus, here, although the debtor’s mother supplied the funds to purchase a motor vehicle, the debtor held a beneficial interest in the vehicle, and the vehicle was subject to turnover to the Chapter 7 trustee, where the vehicle was titled in the name of the debtor and the debtor’s mother, and the debtor paid for the insurance on, and the maintenance of, the vehicle.

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Published on: June 13, 2012

Cramdown of Tenancy by Entireties Property

By Christie D. Arkovich, P.A.

To cram down property owned jointly, both spouses have to file a Chapter 13 bankruptcy. The Bankruptcy Court for the Southern District of Florida held recently that a Chapter 13 debtor whose spouse does not join in the debtor’s bankruptcy petition is not permitted to cram down a claim secured by a lien on property owned by the debtor as a tenant by the entireties. If the debtor were allowed to cram down the claim, the court reasoned, his nonfiling wife would be granted the benefit of having filed for bankruptcy without having to carry any of the burdens, and the Code does not permit this. In re Alvarez, 2012 WL 1425097 (Bankr. S.D. Fla., April 24, 2012).

Another approach is that the non-filing spouse could quit claim their interest in the property to the debtor. That way when the debtor files the bankruptcy, he or she is the sole owner of the property. We have found this works just as well.

Transfers of property especially shortly before filing a bankruptcy is a complex matter and should only be done after consultation with a qualified bankruptcy attorney. For a free consultation, please consider Arkovich Law

Published on: June 11, 2012

Can I list only certain creditors in a bankruptcy in Florida?

By Christie D. Arkovich, P.A.

Many people think it is advantageous to only list certain creditors in their bankruptcy. This is not permissible in a bankruptcy because all creditors must be listed. You cannot favor one creditor over another. However, you can always voluntarily pay a creditor back after a bankruptcy if you wish.

Besides the creditors have their own subscription system with a third party that monitors PACER filings where they will generally learn of a client’s bankruptcy filing even if not listed. Moreover, if the bankruptcy is an asset case, by not listing the creditor, you’ve actually cheated them of monies they would have received in the bankruptcy.

You only become legally obligated to repay a creditor after filing a Chapter 7 bankruptcy if you sign and file a Reaffirmation Agreement with that creditor. A Reaffirmation Agreement reaffirms the debt and sometimes can be advantageous to the debtor if he wants to retain an asset but can’t pay for it outright and in full.

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