Archive for March, 2017

Medical Bills and Bankruptcy

Sunday, March 26th, 2017

The following from CNBC. Bankruptcies resulting from unpaid medical bills will affect nearly 2 million people this year—making health care the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card bills or unpaid mortgages, according to new data. And even having health insurance doesn’t buffer consumers against financial hardship.


The findings are from NerdWallet Health, a division of the price-comparison website. It analyzed data from the U.S. Census, Centers for Disease Control, the federal court system and the Commonwealth Fund, a private foundation that promotes access, quality and efficiency in the health-care system.

NerdWallet estimates that households containing 1.7 million people will file for bankruptcy protection this year.

Even outside of bankruptcy, about 56 million adults—more than 20 percent of the population between the ages of 19 and 64—will still struggle with health-care-related bills this year, according to NerdWallet Health.
And if you think only Americans without health insurance face financial troubles, think again. NerdWallet estimates nearly 10 million adults with year-round health-insurance coverage will still accumulate medical bills that they can’t pay off this year.

High-deductible insurance plans requiring consumers to pay more out-of-pocket costs are a challenge for many households.

“With an average American family bringing home $50,000 in income, a high medical bill and a high-deductible insurance plan can quickly become something they are unable to pay,” LaMontagne said. “If you have an out-of-pocket maximum of $5,000 or $10,000, that’s really tough,” he said.

Obamacare ‘Not a Panacea’

With millions buried under medical bills, more insured under the Affordable Care Act will not completely solve that problem, LaMontagne said. While the ACA’s reforms will indeed give more people coverage, NerdWallet’s data shows that millions of people with year-round, full coverage are still overwhelmed by medical bills, she said.

“I don’t think Obamacare is going to get rid of the situation,” LaMontagne said. “The data suggests that already-insured Americans are struggling. With the expansion of insurance, it doesn’t seem like that problem will go away entirely. It’s not a panacea.”

The number of medically related bankruptcies is slightly less than the rate of recent years. Despite the anticipated dip, such bankruptcies represent about three out of every five filings.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Stripping Second Mortgages in a Bankruptcy

Tuesday, March 21st, 2017

Refer the Law Bankruptcy Network. One of the types of relief available to help restructure your finances in Chapter 13 cases is the possibility of “stripping,” or eliminating a second mortgage when (and only when) the value of the house is less than the balance of the first mortgage.


So lets say your situation matches that scenario; you have two (or more) mortgages on your home, but your property is worth less than the first mortgage. So when should you take advantage of the lien stripping available in Chapter 13, and when should you pass it up?

First of all, Chapter 13 is a bankruptcy. It is going to affect your credit, and it should be used only as a part of a plan for relief that makes sense given your overall situation. For example, if you have a second mortgage with a favorable fixed interest rate, and your income is such that you are going to be required to pay 100% to all creditors anyway, a lien strip in Chapter 13 may not confer enough of a benefit to overcome the negatives. On the other hand, if your income has dropped, and you can’t afford your house any other way, it may be worth doing. Similarly, if your second mortgage is a monster, with an interest rate well above market, it may make sense to do a Chapter 13 with a lien strip.

Another critical consideration is this: lien stripping may not work unless you are able to complete your Chapter 13 Plan, which is generally three to five years. If you are anticipating a change in income (like retirement) or expenses (like a child starting college) during that time, it may not be a good option. The same may be true if you are self employed, or if your income is less than reliable. This, too, is a function of how much you will save. If your second mortgage is relatively modest, and the payments affordable, it may not be worth the risk of being unable to complete the plan. If you attempt to strip your second mortgage but can’t complete your plan, your payments will be behind, with possible negative consequences.

Also critical to deciding whether a lien strip is appropriate is whether the payments on the second mortgage are current, or whether they are behind. If the only way you can afford to keep the home, it may be worth taking the risk to do a lien strip. But if the payments are current, and continuing to make those payments doesn’t cause a hardship, you may want to carefully consider the risks inherent in a Chapter 13 lien strip

In addition to questions about whether a lien strip makes sense financially, you also want to be sure that the plan process is done correctly, so that you can convey clear title when the time comes. There is even another option, a so-called “Chapter 20” bankruptcy, which can be useful in the right situation. Given all these considerations, the assistance of a good bankruptcy lawyer is extremely important. Look at it this way–if you are getting rid of your entire second mortgage, it’s worth paying a good lawyer to ensure that it is done right.

*It is important to note that lien stripping is available ONLY in Chapter 13, and ONLY when there is NO equity over the first mortgage. If your property has ANY equity over the first mortgage, even a nominal amount, lien stripping is not available.

These decisions should be made with the help of a bankruptcy attorney. Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Getting Ready for Bankruptcy

Sunday, March 19th, 2017

If you think that you might decide to file for bankruptcy, there are some things that you should not do in preparation. Some of these may surprise you.

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Transferring Property or Money

People often believe that if they transfer assets, such as houses, cars and cash to relatives or others that those assets will be safe from the bankruptcy proceedings. This is a complete fallacy, and in fact, transferring assets does little to protect your assets. Worse yet, these attempts can be construed as fraudulent by the court, even if you had no intention of concealing the assets.

Remember that just because you have assets, it doesn’t mean that you can’t file a bankruptcy. Also, just because you file, does not mean that you will necessarily lose your assets. The reality is that most people are able to keep their personal assets when they file for bankruptcy, so hiding them is completely unnecessary.

Paying Off Certain Creditors

You might think that you’ll improve your chances of obtaining a bankruptcy if you attempt to pay off some of your debts before you file. This, however, is misguided, and potentially damaging to your case. If you make an out-of-the-ordinary payment to completely pay off a creditor, it is called a preferential transfer. What that means is the creditor received payment in preference over other creditors that hold the same weight. Oftentimes, the bankruptcy trustee will sue the creditor, called a claw back lawsuit, to get the money you’ve paid them back so that it can be distributed equally and fairly. This process will delay your filing and ultimate discharge.

Using Your Credit Cards

Perhaps the first thing that you should do if you’re having financial problems that are leading to bankruptcy is to stop using your credit cards immediately. That means no shopping, for clothing, electronics or other luxuries. It also means not taking out any cash advances against your credit cards. You can, however, continue to use a debit card that is connected to your bank account to pay for the things you buy.

Depositing Extra Money Into Your Bank Account

The only money that should be deposited into any of your bank accounts should come from sources of income. That can be from your job, but it can also be from work that you do for others outside your job. Never deposit anything else, like a check for a friend, or money that belongs to someone else that you’re just holding on to. Likewise, don’t accept checks or cash to deposit from friends and relatives that are trying to help you overcome your financial shortfalls. If you own your own business don’t run your business transactions through your personal accounts, keep everything separate to avoid confusion and the appearance of fraud.

Filing Lawsuits

The moment you file for bankruptcy, all of your assets, including current and future payments awarded from a lawsuit, are transferred to the bankruptcy court. That means that you may not receive any of the money awarded to you, even if your legal case has not been resolved, or if the amount of the settlement hasn’t been determined. Furthermore, legal claims that you haven’t yet filed in court are also transferred to the court. There are, however, state exemptions as to how much, if any, of a settlement or other award can be taken from you. In some states, it may be the entire amount, in others in may be a fraction of the total, based upon what you need to live. Still other states allow no exemptions whatsoever.

Accepting Future Payments

Remember that all of the payments that you expect to receive in the future, are part of your bankruptcy estate, the same as the funds that you currently have. In other words, your bankruptcy trustee can, and most likely will, seize future money and use it to repay your creditors. Future payments include such things as tax refunds, or and potentially an inheritance, depending upon when you receive it. While you may not be able to stop those payments from coming to you, be very aware that they effectively become the property of the bankruptcy court until such a time as your creditors are satisfied.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Credit Repair

Monday, March 6th, 2017

Your credit score can have a significant impact on your ability to receive loans, access credit, and other financial means. Contrary to popular belief, credit score recovery is not simply a waiting game.

reverse mortgage person

We are Tampa Bay and Clearwater credit repair attorneys that assist our clients to quickly repair their credit scores using tried and proven techniques. Our attorneys and support staff work closely with our clients to thoroughly examine their credit reports to gain a thorough understanding of the events that have led to a decrease in the perceived credit worthiness of an individual. We then provide tailored counseling services as to how credit bureaus arrive at a credit score and how our clients can best to go about improving and maintaining a high credit score.

The ads from credit repair companies pop up everywhere—on telephone polls, in newspapers, on TV and radio, in your email and on the internet. The says things like “Fix Your Credit Report. Same Day Service. Proven Results.”

You’ll see similar claims over and over. But can credit repair companies be trusted?We advise consumers to ignore these claims as they’re very likely signs of a scam. In reality, there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes knowledge, time and effort to stick with a personal debt repayment plan.

Credit repair companies can’t deliver an improved credit report using the misleading tactics they promote. No one can remove accurate negative information from your credit report. So after you pay one of these companies hundreds or thousands of dollars, you’re left with the same credit report but out your fees.

According to the FTC, here’s how to evaluate the trustworthiness of credit repair companies. Be cautious if:
•The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
•The company doesn’t tell you your rights and what you can do for yourself for free.
•The company recommends that you do not contact any of the three major national credit reporting companies directly.
•The company tells you they can get rid of negative credit information in your credit report, even if that information is accurate and current.

Perhaps you should consider having a consultation with Caroline Secor. Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.