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Are you drowning in debt? Bankruptcy Fees It is difficult for most attorneys to quote a fee for a bankruptcy filing without knowing something about the case. Some clients have only credit card debt and no other complications. Others have several mortgages, investment properties, tax issues and other difficulties. The attorney must also determine if a Chapter 7 filing is possible and the best course of action, or if a Chapter 13 or Chapter 11 is necessary. The fees vary accordingly. Unfortunately, some firms quote a low fee to 'make the sale' but change that quote once you have committed. We do not support that practice. Here is some information that might help. Most competent bankruptcy attorneys charge fees within a reasonable range. If you see an advertised fee that sounds too good to be true it probably is. With the collapse of the real estate market and declining economy many local lawyers with declining practices in other areas of the law are attempting to practice bankruptcy law to rebuild their firms. Since they have little or no bankruptcy experience they are advertising low fees to find clients. Some of these newcomers to the bankruptcy field are learning as they go. Some have never filed a case. Others have not filed a case for the advertised fee. Don't be fooled by low quoted rates. Make sure you retain competent counsel or it may cost you much more in the long run. Recently we have noticed a much larger numbers of attorneys who appear to be new to the practice of bankruptcy attending meetings of creditors. We have observed cases in which exemptions were not properly utilized resulting in great expense or loss by the client, cases that should not have been filed because of nonexempt assets that are lost to the bankruptcy trustee, and many cases that are improperly handled and have to be dismissed or refiled. A bankruptcy filing is a serious matter with potentially disastrous results. It should only be handled by an attorney with experience in bankruptcy and who knows the local bankruptcy judges, trustees and procedures. If you have question contact info@bankruptcy.tips. |
Chapter 7 |
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A Chapter 7 liquidation proceeding is available to individuals, partnerships, and corporations. The debtor is allowed to keep exempt assets. For individuals filing bankruptcy in Florida, the exemptions are primarily determined by Florida law. They include the debtor’s homestead, (subject to a cap of $146,450.00 in equity if owned less than 1215 days), a debtor’s interest, not to exceed $1,000.00 in a single motor vehicle, a debtor’s interest in any professionally prescribed health aids, monies paid into the Prepaid Post-Secondary Education Expense Trust Fund, and $1,000.00 per individual in miscellaneous personal property. Individuals not claiming a homestead as exempt can claim an additional $4,000.00 of any type of personal property as exempt. Certain other assets such as the cash surrender value of life insurance policies, annuity contracts, IRA’s and pension plans may be exempt also. All non-exempt assets must be turned over to the Chapter 7 trustee for liquidation and distribution to creditors. We have been handling Chapter 7 bankruptcy cases in the Fort Lauderdale area for over 30 years. For information on Chapter 7 visit www.flalawyer.com. What you may discharge in a Chapter 7 filed in FloridaFor individuals filing Chapter 7, most debts, including some tax obligations, are discharged. Some debts, including recent tax obligations, trust fund obligations, child support and alimony generally cannot be discharged. Other debts may not be discharged if the creditor can prove improper conduct on the part of the debtor. Obligations based on fraud, false financial information or breach of fiduciary duty may be challenged by the creditor. We have experience with these types of challenges. Credit card usage within 90 days of filing and excessive usage within the year leading up to filing may also be challenged. Removal of Second MortgagesFor the foreseeable future, second mortgages can now be removed in a Chapter 7 bankruptcy. Since 1992 it has been possible to remove a second mortgage from real property in a Chapter 13 when the first mortgage exceeds the value of the property. Last year the Eleventh Circuit Court of Appeal ruled in the case of McNeal that a 'lien strip' of a second mortgage is possible in a Chapter 7. It appears the Court intends to stand by that decision. Tax ObligationsMost individuals are unaware that they may be able to discharge some or all of their older income tax obligations in Chapter 7. The filing of a Chapter 7 stays all IRS collection proceedings until the entry of a discharge or dismissal of the case. Tax discharges generally require the filing of an Adversary Proceeding to determine what taxes may be discharged. We have handled many such discharge proceedings. For information on Chapter 7 visit www.flalawyer.com. This article is not intended as a substitute for competent legal or accounting representation, but merely as a guide to help you decide whether you need the services of a licensed attorney or CPA.
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