Archive for June, 2011

When a Tax Lien Can Be a Good Thing…

Thursday, June 30th, 2011

by Brett Weiss, Maryland Bankruptcy Attorney · Posted in Bankruptcy Basics

Tax liens usually aren’t good things. But in at least one situation, they can help someone save their home in bankruptcy.

In those states, such as Maryland, that do not have unlimited homestead exemptions, bankruptcy attorneys often have to deal with clients who own real estate that has non-exempt equity. This equity can be a problem, requiring either large payments through a Chapter 11 or Chapter 13 under the “Chapter 7 Liquidation Analysis Test,” or loss of the property in a Chapter 7.

In one recent case, this problem was “solved” through a large state tax lien. The client owned a house that had $60,000 in non-exempt equity. This typically would have resulted in the property being sold in a Chapter 7–something the client did not want to occur–or would have required a monthly payment in excess of $1,000 in a Chapter 13–something the client could not afford. She did have some rather large old state taxes in connection with a long-closed business, and the state had filed a $200,000 tax lien several years earlier. As a result, all of the equity in the house was eaten up by the secured claim of the state on the tax lien, meaning that the client could keep the house in a Chapter 7 or make affordable payments in a Chapter 11 or Chapter 13, taxes that were not part of the lien could be discharged, and the rest of the tax lien could be “stripped off” the property, leaving only $60,000 in claims to deal with.

The client ended up filing a Chapter 7 and worked out an affordable payment plan with the state that started after she got her discharge.

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Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

 www.bankruptcyfortampa.com
or call (727) 254-1704.

Florida Bankruptcy Law Blog

Thursday, June 9th, 2011

Posted on May 23, 2011 by Jonathan Alper Orlando,  Fl.

Banned From Bankruptcy Court: Judge Tells KEL Lawyers To Get Lost

Kaufman, Englett and Lynd, PLLC (“KEL”) is a law firm that advertises mortgage foreclosure defense work, among other things. KEL decided to get into the bankruptcy business and is one of the largest volume filers of bankruptcy petitions in the Middle District of Florida. I assume that many of KEL’s clients who could not pay their mortgage are also good candidates for bankruptcy to both protect themselves from deficiency judgments and wipe out other debts related to their financial hardship. It seems good business for KEL to capture the bankruptcy business from their foreclosure defense clients.

There was much scuttlebutt around the bankruptcy court today about a court order which sanctioned KEL by banning them from practicing in bankruptcy court for the Middle District. No bankruptcy filings, no motions, no claims, no nothing. This is a very severe sanction. I have not heard of this court ever banning an attorney from future legal practice before the court.

The order does not describe in detail KEL’s bad behavior. Apparently, KEL, though its attorney William Sanchez, filed a motion in November, 2010, for sanctions against bankruptcy debtors. The court said that “because of numerous missteps and lack of diligence by Mr. Sanchez and his firm” the court has been unable to adjudicate the motion.

I have no personal experience with KEL problems or their practice. I know they have a high-volume bankruptcy operation A few other bankruptcy attorneys I spoke with today stated that KEL typically assigns inexperienced attorneys to bankruptcy cases, , and that these inexperienced  attorneys are filing a large number of bankruptcy petitions each month. Inexperienced attorneys, generally, make mistakes in their petitions and in their bankruptcy practice. KEL attorneys  must made some serious and repeated mistakes to incite a judge to the point where they have been banned from bankruptcy court.

There is a lesson here for new bankruptcy attorneys. Bankruptcy practice is not as easy as it seems, and certainly, its more difficult than it was before the 2005 bankruptcy law. Federal court judges and bankruptcy trustees do not have much patience with sloppy law practice. Every attorney is inexperienced when he does his first case. By starting with a small volume of cases, and by working initially with a more experience attorney, you can learn things about bankruptcy law which you cannot learn in a book or by reading the bankruptcy rules. Don’t attempt to handle a large volume of cases until you have learned the ropes of bankruptcy law and procedure. Case No. 10-15477

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

 www.bankruptcyfortampa.com
or call (727) 254-1704.

 

Bankruptcy Action

Wednesday, June 1st, 2011

Article  form  Bankruptcy Action

Chapter 7 bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start”.
One of the main purposes of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts.

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.

There has been much doom and gloom written about the bankruptcy means test under the new laws and how much more difficult it’s going to be to file Chapter 7. It’s true that there are more hoops to jump through under the new laws and it’s true that the bankruptcy means test will result in some people having to file chapter 13 instead of Chapter 7

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

 www.bankruptcyfortampa.com
or call (727) 254-1704.