Archive for October, 2013

Bankruptcy Is Merely a “Tool” In The Tool Box.

Thursday, October 31st, 2013
article by admin

It is said that bankruptcy is merely a “tool” in the toolbox, meaning that, when used correctly, it gets the job done, and that it is often used in conjunction with other “tools” to complete a project.  This analogy is especially true for underwater homes.

Under the threat of sanctions, the mortgage servicing industry actually cooperates with the homeowner to rewrite the home loan.  As this phenomenal program matures, the judges and the banks are becoming more receptive to the process, and the results continue to outpace non-bankruptcy modification applications.

We have many examples of meaningful modifications that succeeded only because the homeowner invoked the power of the Federal Bankruptcy Court and demanded that the mortgage servicer comply with its obligation to modify.


Sometimes, the best decision is to walk away from your home or investment property.  For instance, In Florida, many homes are still 25% or more underwater, and Fannie Mae and Freddie Mac STILL do not allow for the reduction of principal balance in a modified mortgage.  Modification without reduction makes absolutely no sense for many Floridians. Chapter 13 of the Bankruptcy Code allows debtors to surrender any secured collateral, including cars, RVs and houses.

For example, when a Chapter 13 Plan is approved by the Court at a “confirmation hearing,” and that plan surrenders a house “in full satisfaction” of the debt owed to the bank, the bank can never seek a deficiency, and if a bank files a 1099 with the IRS for “debt forgiveness the IRS does not consider it income to the debtor/taxpayer.


Once the house is successfully surrendered in bankruptcy, the debtor should consider short selling it.  The State of Florida is a “lien theory” state, meaning that, when a buyer purchases a home, he or she gets actual title to the property, and the bank takes a lien (known as a mortgage).  The lender must go through the process of foreclosure in order to get title to the property, free and clear of all inferior interests and liens.  The upshot is that, even having surrendered your house in bankruptcy, you will still end up with a foreclosure on your credit.

“So what?” you ask.  Well, the largest underwriters of residential mortgage, Fannie Mae and Freddie Mac, have stated that they will consider underwriting a mortgage for someone who short sells their home two years after the sale, even with a bankruptcy on your credit.  By contrast, you must wait up to five years after a completed foreclosure before they will underwrite that same mortgage.

It’s clear that Fannie and Freddie view the foreclosure worse than either a short sale or bankruptcy, and because the debt has been eliminated in bankruptcy, the lender knows that it cannot demand that the homeowner come to the closing with cash.  Therefore, the bankruptcy actually “greases” the short-selling gears by streamlining paperwork, resulting in faster closings.

Considering the relative ease with which a bankrupt debtor can short sell (as compared to anyone who has not filed a bankruptcy), the short sale should typically be part of a surrender strategy.

If your home or investment property is preventing you from kick-starting your post-recession finances, talk to a qualified bankruptcy attorney about modifying your mortgage or surrendering your home.

Defense in Tampa, Florida.  For more information, go to our web site.

Carolyn Secor P.A. focuses its practice in the area of Bankruptcy and Foreclosure or call (727) 254-1704

Filing Bankruptcy To Save A Business

Monday, October 14th, 2013
article from BLN

There are two types of bankruptcy  that can be used for a business: liquidations and reorganizations.

A liquidation bankruptcy is one which eliminates debt; often at the cost of liquidating (selling or transferring) your assets to creditors.

A reorganization bankruptcy can stretch out payments to creditors, reduce or eliminate some debts, and “reorganize” or rearrange your economic structure so you can keep your business.

The main liquidation bankruptcies are Chapter 7s and Chapter 11s. Chapter 7s liquidate the assets of the debtor to pay creditors (note that if there are no assets or only exempt assets, there may be nothing to liquidate). Thus, a chapter 7 filing for a corporation or LLC ends the business: it’s gone after the bankruptcy. A Chapter 7 for an individual in business usually ends that business too. Under some circumstances it can survive, but usually without much of the property or assets it started with.

In a chapter 11, 12 or 13 bankruptcy, the goal is different: to save the business and protect the assets while dealing fairly with the creditors. Chapters 12 and 13 are only available for consumers – not for corporations or LLCs.  Chapter 12s are only for a family farmer or fisherman.

Creating and maintaining a workable Chapter 13 plan for a business can be difficult and complicated. But it can work, and a debtor in a Chapter 13 bankruptcy can often save his or her business.

In any reorganization bankruptcy, the process generally involves categorizing the debts: determining which ones need to be paid, which ones can be reduced and which ones can be discharged.

The second step is to develop a plan to pay the necessary payments and leave enough money to continue the day-to-day expenses of running the company (payroll, rent, advertising, etc.).

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:
or call (727) 254-1704.

Petition To File For Bankruptcy…..

Tuesday, October 1st, 2013
article by admin

“Bankruptcy Is  Not Just About Filing Out Forms And Collecting Your Fee”

Unfortunately, there are many out there who would imply that it is just that.  Some websites will have you “call around and ask the attorney to see if that attorney’s fees are cheaper.  Some sites state that, with the correct “form,” you can determine whether you qualify for a chapter 7 case.  If price is your only consideration, to quote an old adage that “you get what you pay for“, you may be destined for trouble.

Sometimes, it is not about “completing forms” but knowing the legal importance of those forms and the impact of bankruptcy on YOU.  Often, completing the forms and attending the creditors’ meeting is the easy part.  Knowing and advising you appropriately is the hard part and that is what you are paying your attorney to do.

In one example, a lady used a forms provider and she filed bankruptcy by herself.  Because she was concerned that her house was “paid for” and she did not want the trustee to get the house so she “deeded” it over to her son.  The trustee found out and commenced a “fraudulent transfer” action to recover the house to sell it to pay her creditors.  If only she had consulted with an attorney.

Bankruptcy is not about filling out a few forms and collecting a fee.  It is about the knowledge and experience that goes into knowing how, why and when to complete those forms and file them that justifies the fee.

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:
or call (727) 254-1704.