Ft. Lauderdale Bankruptcy BLOG

Florida Means Test Changes Nov. 1, 2014

Posted on by Jeffrey Solomon

The Florida bankruptcy means test figures change again on November 1, 2014.  The median income figures both increase and decrease.  For a household of 1, there is a slight increase to $42,036.00;  for a household of 2, a slight decrease to $51,584.00;  for a household of 3, a large increase to $57,052.00;  and for a household of 4, a large increase to $66,461.00.  The median income increases an additional $8100 for each additional member of the household.  Overall, the median income figures have increased.  This means higher incomes will be considered as under median income for purposes of eligibility for chapter 7. (This also affects the length of the required fort lauderdale chapter 13 bankruptcy.  You can contact us to explain the “applicable commitment period” of 3 or 5 years.)

Trustees Find New Ways to Sell Debtor’s Real Estate

Posted on by Jeffrey Solomon

Trustees are finding new ways to sell debtor’s real estate in South Florida bankruptcies. I recently litigated this issue as to  property that was co-owned by the debtor and a non-debtor, which will be discussed below. I represented the co-owner who was not in bankruptcy. The basic idea is that Debtors could be unpleasantly surprised if not fully aware of this development.  Trustees have made arrangements with lenders to sell all of the trustee’s right, title and interest in the debtor’s real estate.    These sales could be by short sale or actually by selling back to the foreclosing lender.  The bankruptcy trustee would be paid a “carve out”,  meaning the trustee receives funds for the benefit of the bankruptcy estate. In theory, there would be a meaningful contribution to unsecured creditors, but realistically, most would go to the trustee and his or her attorney.  An aggressive pilot program has…
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Child Support Income and Bankruptcy

Posted on by Jeffrey Solomon

Child support income in bankruptcy can raise some tricky issues.  I recently posted a blog on social security and bankruptcy, and there are some related issues.  A recent case may help debtors in chapter 13 not to have to use their child support income. Child support income is included in the chapter 7 means test (unlike social security).  The child support income, together perhaps with other income, might show that the debtor is not eligible for chapter 7 (there is a presumption of abuse).  However, in chapter 13, child support income is deducted from the total income.  This could actually show that the chapter 13 means test would show that no payments are required in the chapter 13 though the chapter 7 means test would require a chapter 13. Bankruptcy attorneys must evaluate not only the means test income, but what I call the “real budget” as reflected on Schedule…
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Fort Lauderdale Bare Legal Title Decision on Real Estate

Posted on by Jeffrey Solomon

I successfully represented the debtor in a Fort Lauderdale chapter 13 involving the debtor’s claim that real estate was owned by the debtor merely as bare legal title.     In re Pengos, Case No. 14-13586 DE 64. (Southern District of Florida) Judge Raymond B. Ray held that based on the facts of this case, the debtor who was on the title to real estate only held an interest as bare legal title (so the debtor did not have to include the value of the property in her chapter 13 plan payments).  We submitted clear and convincing evidence that the debtor never had any interest or contributed any funds towards the property.  The debtor merely bought the property in her name to obtain a mortgage while her mother, who was moving to this property, sold  her home and used her funds to payoff the mortgage obtained by the debtor on the…
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Social Security and Bankruptcy

Posted on by Jeffrey Solomon

Social Security income in bankruptcy should be a well-settled issue now in bankruptcy court.  Social Security benefits do not count as income.  Several US Circuit Courts of Appeals have held that the debtor does not have to use Social Security income to pay creditors during a chapter 13 plan.  Social Security income does not count as “projected disposable income”. I have filed several chapter 7 cases even though the debtor’s actual budget shows that he or she could make payments to creditors.   I have not received any objections until recently in one case.  The US Trustee claimed that the ability to pay was a basis to contest in a chapter 7 even though the ability was based on social security.  Ultimately, the US Trustee withdrew its motion to dismiss.  There remains a possibility the US Trustee could object in a future case.  There have been no rulings in the…
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Assignment for the Benefit of Creditors

Posted on by Jeffrey Solomon

Assignment for the Benefit of Creditors is a state court procedure that has many benefits over a corporate chapter 7 bankruptcy.  A small business with no assets often does not need any court procedures and can just shut the doors.  A business with substantial assets may want to have a proper method of winding down the business.  If the company files a chapter 7, an independent bankruptcy  trustee will liquidate the assets.  The chapter 7 trustee will also thoroughly analyze possible transfers of assets to friendly creditors or to the owners of the business.  In an assignment for the benefit of creditors (ABC), the debtor company makes an agreement and selects the company who is going to liquidate the business assets.   The assets of the company are actually transferred to the liquidator. Additionally, the liquidator might need to pay for some time the principals of the debtor to assist…
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Lien Strip in Chapter 13 after Chapter 7 Now Permitted in South Florida: Scantling Decision 11th Circuit

Posted on by Jeffrey Solomon

Debtors may now strip off a second mortgage in a chapter 13 even after filing a chapter 7 in Fort Lauderdale chapter 13 cases and other South Florida chapter 13 bankruptcies.   This has been an issue across the country.  In South Florida, the local bankruptcy judges have ruled that a debtor could not eliminate junior mortgage liens after obtaining a chapter 7 discharge.  However, the 11th Circuit Court of Appeals today ruled today in the Scantling case that debtors can eliminate junior liens even in the so-called chapter 20, filing a chapter 13 after a chapter 7. This means that debtors who filed chapter 7 and are not eligible now to file bankruptcy again to obtain a discharge nevertheless can file a chapter 13 to eliminate second mortgages. I would like to thank Patrick Scott for sending me the following analysis: “Jeff Kuntz of my office shared with me today’s new…
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Same Sex Couple Bankruptcy

Posted on by Jeffrey Solomon

A bankruptcy court permitted a same sex couple legally married in one state to file a joint bankruptcy petition in their state of residence even though that state does not recognize same sex marriages.  In re Matson and Mabry, Case No 13-35361, E. D. Wisc.  April 29, 2014.  In this case a creditor filed the objection to the joint bankruptcy petition.  The bankruptcy court determined that under the Full Faith and Credit Clause and  the Supreme Court decision in United States v Windsor, 133 S. Ct. 2675 (2013), the same sex married couple could file their joint bankruptcy petition in Wisconsin even though Wisconsin does not recognize same sex couples.  The state law as to marriage in Wisconsin did not prevent the application or recognition of the marriage in the federal bankruptcy proceeding. I do believe that it is fair to say that a joint Fort Lauderdale bankruptcy filing for a same sex couple legally married in another state would not…
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Bankruptcy Filing Fees Increase June 1

Posted on by Jeffrey Solomon

The filing fees for bankruptcy are increasing on June 1.  Chapter 7 filing fees will be $335.00 and chapter 13 filing fees will be $310.00.  As for Chapter 11, the increase in fee will now require $1,717.00 to be paid to the clerk of bankruptcy court.

Florida Means Test Changes April 1, 2014

Posted on by Jeffrey Solomon

The median income used for the bankruptcy means test changes on April 1, 2014.   The median income figures slightly increase.  These figures are the starting point for determining eligibility between chapter 7 and chapter 13. The list below is the median income for each household size: 1    $41,939   2.    $ 52,598   3.     $ 54,742   4.   $64,122, and an additional $8100 for each additional person in the household.  These figures will now be used for any Florida bankruptcy including Fort Lauderdale bankruptcy filings.

Law v Siegel: Supreme Court Strongly Protects Exemptions from Trustees

Posted on by Jeffrey Solomon

The United States Supreme Court on March 4, 2014 in Law v Siegel thwarted a trustee’ s attempt to surcharge the homestead exemption.  Based on a strict statutory construction, Justice Scalia for a unanimous court gave debtors great protection to assert their statutory exemption rights.  In a highly pro-debtor opinion, the Court basically held that Congress created a scheme for exempt property, and the courts cannot avoid congressional intent by creating other exceptions that are not in the Code.  Though trustees and creditors might have other remedies, exempt property remains exempt.  This case could have a great impact in Florida bankruptcy cases. Below is the syllabus of the Opinion. Slip Opinion) OCTOBER TERM, 2013 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has…
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