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Coral Gables Legal Blog

Getting a bankruptcy off a credit report

If a Florida resident files for Chapter 7 bankruptcy, it will likely stay on his or her credit report for 10 years after the filing date. If a person files for Chapter 13 bankruptcy, it will remain on the report for seven years. Unfortunately, there are very few instances in which a person can get the fact that he or she filed for bankruptcy taken off his or her credit report once it shows up on it.

This may be true even if a person chooses not to follow through with the filing or backs out at some point in the process. However, if a debtor explains to a lender that he or she tried to have the bankruptcy canceled, it may be a point in his or her favor when applying for a loan. Even if someone is able to get his or her bankruptcy canceled, it could be extremely costly to do so and may require legal counsel.

More high-income debtors choosing Chapter 11 bankruptcy

When Florida debtors qualify for Chapter 13 bankruptcy, they might still choose to file under Chapter 11. Despite the greater expenses and complications of Chapter 11, researchers discovered that increasing numbers of individuals were opting for Chapter 11 protection. The ABI Endownment Fund commissioned the study, which found that individuals were entering the Chapter 11 process in increasing numbers.

The strict deadlines required for Chapter 13 dissuaded many individuals from selecting that option. These people tended to have high incomes, run businesses, possess many assets and maintain high debt loads. Their large real estate portfolios and substantial mortgage debts required reorganization plans that exceeded five years.

Unemployment income and Chapter 13 bankruptcy

When individuals or married couples in Florida face financial challenges, they may decide to look into bankruptcy as one among many options for debt relief. Depending on their circumstances, they may opt to file for Chapter 13 bankruptcy which permits them to keep their property as long as they continue to make payments on their obligations for the next three to five years.

Unlike a Chapter 7 bankruptcy, Chapter 13 is for people who have a reliable source of income. In a case in New Mexico that was decided in March, a couple believed that the wife's unemployment compensation should not be considered as income for the purpose of determining plan payments.

Obtaining child support from a parent with a disability

When a Florida couple with children divorces, the non-custodial parent is usually required to pay child support. This is to ensure that the custodial parent has enough money to raise the child. The payment amount will be partially based on the non-custodial parent's income, so anything that reduces a one's ability to earn may also result in a reduction in the child support obligations.

One example of this is if a person who is paying child support suffers an injury or develops a medical condition that results in a serious disability. People will not automatically see a reduction in their obligations, but since individuals with a disability often see their income reduced due to being less able to perform job functions, it is common for child support obligations to be adjusted.

Are you the next target of a mortgage modification scam?

Mortgage modifications are often wise options for people who are behind in their mortgage payments or who are interested in lowering their payments. Unfortunately, there are a lot of scam artists out there conning innocent homeowners.  

Florida Attorney General warns residents about scams

Supreme Court sides with truck drivers in bankruptcy case

When a Florida company files for bankruptcy, the workers might worry about receiving their salaries like the drivers who worked for Jevic Holding Corp. They had to take their case all the way to the Supreme Court of the United States after lower courts ignored their $8 million claim for damages while settling the Chapter 11 case for other creditors and paying the lawyers involved. In a 6-2 ruling, the Supreme Court declared invalid the structured dismissal approved previously. The majority of justices agreed that the case could not disregard bankruptcy laws that determine who gets paid first when a business goes bankrupt.

During a Chapter 11 business bankruptcy, creditors are ranked into classes of priority. A structured dismissal allows one group of creditors to be paid while other groups go unpaid. The truck drivers asserted that their classification should have had a higher priority than the creditors that were granted compensation.

Florida prisoners may not be eligible for chapter 13 bankruptcies

A case involving a felon in prison recently came before a state bankruptcy court. The individual filed for chapter 13 bankruptcy, but the court denied his request since he was making only about $14 per month, which came from the Illinois Department of Corrections. This amount was determined to be insufficient for entering into the repayment plan that is the primary feature of Chapter 13 bankruptcies.

The prisoner had a wrongful death suit filed against him, so before the plaintiff in the case was able to get a judgment against him, the man attempted to file for chapter 13 bankruptcy. Since he had a very limited income, the felon's parents had promised to make monthly payments in the amount of $25 for 60 months in addition on his behalf.

The truth about collection accounts and credit reports

Florida residents may understand that collections activity on a credit report is not ideal. However, they may not know that such activity may not necessarily stay on their credit report for a full seven years. This may be true if the account in question does not belong to the person who a collection agency is attempting to collect payment from. Under the Fair Credit Reporting Act, people have the right to dispute inaccurate information on their credit report.

Credit bureaus are then required to fix any inaccurate information, and the party that provided the inaccurate data must also work to correct it. If a creditor is using one of the latest credit scoring models such as the FICO 9, collection accounts that are paid or settled won't impact an individual's credit score.

Ways for parents to protect children in a divorce

When Florida parents begin to consider divorce, they might be primarily concerned about its impact on their children. However, they may be able to approach the issue in a way that is less upsetting. The first thing parents should do is consider the timing. Some parents divorce during the school year when they can meet with their attorneys while their children are in class. Others may choose the summer when they have more time with their children.

If possible, both parents should be present for the conversation in which they tell their children about the divorce. Children might need counseling, and parents should think about how they can answer their questions in a way that will be least likely to upset children's sense of security. Parents should make sure children know they are loved. They should not fight in front of them and should speak positively about the other parent.

Reasons to pay off debt

Some people in Florida who are in debt might think that paying it off as soon as possible is not important. So many people carry debt these days that it is often seen as normal to be hundreds or even thousands of dollars in debt. However, there are a number of reasons to get rid of debt as quickly as possible.

One reason to do so is that it is accompanied by interest rates. Many people may be unaware of this as a hidden cost of ongoing debt. A $500 plane ticket paid off may cost nearly $800 with added interest if a person pays only the minimum amount over several years. Getting out of debt also improves a person's credit score.

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