No Surprise that filings are up given the economy, especially in light of recent Federal Reserve comments this week...

Personal Bankruptcies Rise, Reversing Trend - WSJ.com

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U.S. personal bankruptcies rose 9% last month, reversing a trend of declining filings over the previous three months and highlighting the continuing financial struggles of many consumers.

Great reminder from a great attorney and fellow NACBA member that how you look at your situation and the words you speak have power in your life. Let your words echo your attitude and have faith and hope and look at Bankruptcy as a new beginning.

http://www.legalquestion.com Attorney Richard Baker

http://www.bankruptcylawnetwork.com/2010/08/07/isaiah-5719-and-bankruptcy/?utm_source=twitterfeed&utm_medium=twitter

Credit Card Companies Never Stop! New Junk Fees! Where there is a will, there is a way..right? Greed Never Sleeps!  Rick Baker, Esq. www.legalquestion.com

A Consumer's Guide to the Latest Credit-Card Traps - WSJ.com

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Just months after historic legislation banned certain billing practices, card issuers have dreamed up new ones designed to trip up consumers.

In an opinion just issued by the Honorable Karen Jennemann, Orlando Division U.S. Bankruptcy Judge, stripping off second mortgages in Chapter 7 cases is not allowed.

This is unfortunate for people needing Chapter 7 relief who want to keep their home but are reluctant to do so because of a second mortgage in relation to the value of their home.

The case explains the 1992 U.S. Supreme Court case that many believed controlled; however, there has been a split of authority around the country and your truly informed local members of the Bankruptcy Bar about a case that went the other way in New York last fall.

The good news is that stripping off that unsecured (no equity) second mortgage in a Chapter 13 case is still the law of the 11th Circuit (Florida, Georgia and Alabama federal appeals circuit). 

Where the value of your home is less than the amount owed on the first mortgage, we can "strip" the lien, turning that mortgage into an unsecured debt, like a credit card.  In most cases, people will pay pennies on the dollar on this second "stripped off" mortgage and at the end of the case, the mortgage is gone forever!  A huge factor when deciding whether keeping the home is a wise move.  By lien stripping the second mortgage, the property will have more equity when the real estate market finally recovers.  A reason to not give up your home!

By: Consumer Bankruptcy Attorney Rick Baker www.legalquestion.com  

How much do I have to pay unsecured creditors in my Chapter 13?

A less experienced Bankruptcy Lawyer I know recently asked me about his Chapter 13 Bankruptcy client who owned a rental property that actually had some equity in it; very rare these days.

He wanted to know whether it would have to be liquidated (sold) to pay unsecured (usually credit card) debts in the case? 

The real question is not whether it has to be sold, as Chapter 7 is liquidation whereas Chapter 13 is an individual reorganization and no liquidation occurs.  The real question is if he keeps the rental property and it has non-exempt equity, what does that mean?

The answer is that the non-exempt equity in the rental house establishes the “floor” or minimum amount required to be paid pro rata to all allowed unsecured claims but no liquidation occurs.

My less experienced Bankruptcy Attorney friend forgot or did not realize that there are actually two (2) tests to determine how much gets paid to the unsecureds in a Chapter 13 bankruptcy case. 

The above example of non-exempt equity establishing the minimum payout to the unsecureds is called the liquidity test.  The other test is whether there is any excess disposable income left for the unsecureds after payment of priority and secured debts in the Plan.

A new third test may result soon based on the recent U.S. Supreme Court decision of Hamilton v. Lanning; more to come on that one.

This issue points out an advantage to filing Chapter 13 Bankruptcy.  The Debtor remains in control of assets and can keep them.  They may have to repay some portion of their debts but it could be pennies on the dollar relative to what they gain in keeping assets. I call these cases “Liquidity 13s.” 

The rule is that the unsecured creditors have to come out as well in Chapter 13 as they would in a Chapter 7 case where assets are liquidated to pay unsecureds.  The advantage of the 13 is control over the asset is not in the hands of a Chapter 7 Trustee.  By Consumer Bankruptcy Attorney Richard R. Baker at BAKER LAW, PLLC. www. LegalQuestion.com

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Offices in Winter Park, Florida.

Three Reasons Why Upside Down Homeowners Should Consider Bankruptcy http://bit.ly/9fXgln 

Another good blog that ties in with a recent blog I wrote on this very issue.

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Central Florida Consumer Bankruptcy Attorney Richard R. Baker www.legalquestion.com

You have options and you have rights so...KNOW your options!

The new reality of the housing market; too upside down!  South Florida is no different from Central Florida.  Nobody wants to surrender their house in a bankruptcy but if you cannot modify through Chapter 13, it may be the last option.  http://fb.me/zxFeURmA 

I don't agree with the news anchor at the end.  It will not take four years to buy another home.  That is where his ignorance on the power of a bankruptcy discharge is obvious.  The Attorney paints a much more accurate picture. Richard R. Baker, Esq. www.legalquestion.com

Fight to save your Home or Walk Away? Why hiring an experienced Attorney Matters

The decision to fight to save your home or to walk away or surrender in a bankruptcy case is not an easy one.  The important thing to remember is that you should not make your decision based on the skill level of your Attorney.

With so many new and inexperienced Bankruptcy Attorneys, the easy advice is to file Chapter 7 Bankruptcy and surrender your home and start fresh.  Sometimes, this is the smart decision…sometimes it is not.  The truth is that many new Bankruptcy Attorneys know very little about your true options and do not even handle Chapter 13 Bankruptcy cases so unfortunately, they may try to direct you to what they do handle…Chapter 7 Bankruptcy.  This may not be the best option for you and they may not be able to competently advise you on your real options.  This is why experience matters.

The factors you want to closely consider are:

Your Current Income

The amount of your Mortgage Payment

The Market Value of your Home

Whether you have a Second Mortgage

These factors drive the advice I give clients on whether to hold on to their home or to let it go.  What I find is that some people are “DONE” with it all.  I understand that; however, don’t let your current frustrations drive your decision to keep or not keep your home. 

When speaking with an experienced Consumer Bankruptcy Attorney (not an Attorney who files bankruptcy cases…know the difference?) you may learn of other alternatives you had no idea existed and may help.  If your lawyer has never filed a Chapter 13 case, you must realize that so ask them if they only do Chapter 7 cases!  You have a right to know so you can make the smart decision. To learn more, contact Consumer Bankruptcy Attorney Richard Baker at www.legalquestion.com