preferential transfer in bankruptcy

If you are considering filing for bankruptcy, you should consult with a Tampa bankruptcy lawyer as soon as possible. Without competent legal advice you may be unaware of laws that prohibit a preferential transfer in bankruptcy. U.S. Bankruptcy laws prohibit certain purchases, payments, or transfers of property prior to filing for bankruptcy. The Trustee has the right to bring an action to avoid transfers that occurred prior to the bankruptcy case. If the Trustee discovers a preferential transfer in bankruptcy it can cause significant consequences for the debtor.

What is a Preferential Transfer in Bankruptcy

One of the possible grounds for a trustee to avoid a pre-bankruptcy transfer is a preferential transfer in bankruptcy by the debtor. A preferential transfer enables a creditor to receive payment of a greater percentage of his claim than he would have received in bankruptcy if the transfer had not been made. For example, a debtor borrowers money from a family member and pays that debt in full within 90 days of filing for bankruptcy while not paying other creditors.  In order to avoid a preferential transfer, the Trustee must prove all of the following:

  1. The debtor transferred property to or for the benefit of a creditor
  2. A transfer was made for or on account of a debt that was owed prior to the transfer
  3. The transfer was made while the debtor was insolvent
  4. A transfer was made within 90 days of filing for bankruptcy
  5. The transfer enabled the creditor to receive more than he would have received in a Chapter 7 bankruptcy if the transfer had not occurred

What Qualifies as a Preferential Transfer in Bankruptcy

The law regarding a preferential transfer in bankruptcy is very broad and includes many different types of transfers. The policy behind the law is to enhance the bankruptcy estate for the benefit of creditors. Additionally, it is intended to encourage a proportional distribution to creditors.  See Union Bank v. Wolas, 502 U.S. 151. Actions taken by a debtor to hide, conceal, or transfer assets can be deemed an attempt to defraud creditors. You should contact a bankruptcy law firm in Tampa for more advice on planning for bankruptcy if you think it may be something on the horizon.

Defenses to a Preferential Transfer in Bankruptcy

If the trustee fails to prove all five requirements the transfer will not be deemed a preferential transfer in bankruptcy. However, even if the trustee does successfully prove all of the required elements there are still defenses. If a debtor is successful in proving a valid defense the transfer will not be avoided by the trustee and will not be deemed an invalid preferential transfer in bankruptcy. Defenses to preferential transfers include but are not limited to:

  • The transfer was made in the ordinary course of business
  • The transfer was substantially contemporaneous with the origination of the debt
  • A transfer that creates a security interest in property acquired by the debtor to the extent such security interest secures new value
  • Earmarking – a third party or a guarantor makes a payment or provides funds to the debtor “earmarked” for payment on a particular debt.
  • The transfer that was payment of a domestic support obligation.
  • The debtor’s debts are primarily consumer debts and the aggregate value of all property affected by the transfer is less than $600

Bankruptcy Law Firm in Tampa

Florida Law Advisers, P.A. is dedicated to providing effective representation, individual attention and affordable fees to our bankruptcy clients. Florida Law Advisers, is a customer-service oriented firm with a strong reputation for providing dedicated legal counsel. Regardless of whether you need help with Chapter 13, Chapter 7, or other forms of debt relief, our professional legal team of bankruptcy lawyers in Tampa will provide you with competent legal advice you can trust.  Call us now at 800 990 7763 to speak with a bankruptcy lawyer in Tampa at our firm.

 

common law marriage in Florida

Common law marriage in Florida is a union that has never been formally registered with the state. Therefore, there was no official ceremony or marriage certificate issued. Instead, there is simply consent by the parties, coupled with some outwardly visible action, such as living together. Essentially, the couple would represent themselves out to be married and act as if they are in fact married. Living together is not a requirement of common law marriage in Florida. However, the habitation status can be a significant piece of evidence.

Common Law Marriage in Florida

The laws treat a valid common law marriage in Florida as it would any other legal marriage. The parties are entitled to all the benefits and responsibilities of marriage. Additionally, the dissolution process would generally be the same as any other dissolution of marriage in Florida. Further, even Alimony is available in a common law divorce if the court feels it is appropriate under the circumstances. For more information on common law marriage in Florida or the divorce process contact a divorce law firm in Tampa.

Termination of Common Law Marriage in Florida

Florida permitted common law marriage until 1968, when it enacted Florida Statute 741.211. The statute abolishes a common law marriage in Florida entered into after January 1, 1968. However, Florida will still recognize a common law marriage that was legally created in another state. Marriages formed in other states are entitled to the full faith and credit under the United States Constitution. Thus, under Article IV of the U.S. Constitution, all states must recognize a valid common law marriage that was entered into in another state. The validity of the marriage is to be determined by the laws of the jurisdiction where the marriage was entered into.

Marriage in Florida

To create a valid marriage in Florida, a couple must secure a marriage license and then solemnize the marriage in a formal ceremony. The marriage license must be issued by either a Florida county court judge or clerk of the court. The issuing officer is required to issue the marriage license so long as the requisite fee is paid and there are no impediments to the marriage. The marriage license will expire within 60 days unless there is a ceremony administrated by an ordained minister, elder, or other clergy of any church, a judicial officer whether active or retired, a clerk of the circuit court, or a notary of the State of Florida to formalize the marriage.

Divorce Law Firm in Tampa

If you need legal assistance with either dissolving a traditional marriage or common law marriage in Florida contact us to speak with a divorce attorney in Tampa. We will listen carefully as you describe the details of your case and develop a comprehensive legal strategy aimed at resolving all of your concerns. Our professional legal team is passionate about fighting for you and your family’s needs. When you work with a Tampa divorce attorney at our firm, you can count on the support you deserve, as well as strong advocacy of your rights in these important matters.

eliminate a 2nd mortgage

Lien stripping is a very useful tool for borrowers who need to eliminate a 2nd mortgage. Additionally, it allows for the opportunity to reduce a car loan down to the car’s current market value. Stripped liens will receive the same treatment as all your other unsecured debts (i.e. credit cards) in bankruptcy.  These debts generally receive nothing or a small amount and get discharged at the completion of your bankruptcy.  Further, after the discharge your lender for the stripped lien will be required to remove its lien from the collateral. For more information on how to eliminate a 2nd mortgage contact a bankruptcy lawyer in Tampa to schedule a consultation.

Eliminate a 2nd Mortgage with Lien Stripping

Chapter 7 may allow you to eliminate a 2nd mortgage with lien stripping. Lien stripping to eliminate a 2nd mortgage is not allowed in Chapter 7 where the lien is partially secured but may be permitted if the lien is wholly unsecured. For instance, if you own a home that is worth $200,000 but owe $250,000 on your first mortgage and $50,000 on a second mortgage, the second mortgage will be treated as an unsecured loan, but the entire balance of the first mortgage will still be classified as a secured loan. Thus, it is used as a tool only to eliminate a 2nd mortgage or Jr. lien.

Stripped liens will receive the same treatment as all your other unsecured debts (i.e. credit cards) in bankruptcy. See Bankruptcy law 11 US 506 These debts generally receive nothing or a small amount and get discharged at the completion of your bankruptcy. The specifics will vary based on the individual facts of each case, contact a bankruptcy law firm in Tampa for more information.

Lien Strip a Car Loan

Lien stripping can also be used to reduce the balance of a car loan. If the lien is stripped down to the market value, the remaining balance will be treated as an unsecured claim. Therefore, the debt would be subject to discharge. For example, if you owe $10,000 on but the vehicle is only worth $5,000, then $5,000 would be classified as a secured claim and the remaining $5,000 would be treated as an unsecured claim. To see if you qualify to eliminate a 2nd mortgage or strip a car loan, contact a Tampa bankruptcy lawyer.  This is article is intended for general information only and not legal advice for any particular case.

Bankruptcy Attorney in Tampa

If you are having a difficult time meeting your financial obligations, Florida Law Advisers, P.A. may be able to help. Our bankruptcy attorneys in Tampa have years of experience helping people just like you to solve their financial problems. We understand these are very difficult times and we are here to help. In some cases, filing for bankruptcy may be a good solution, however, it is often not the only solution available. The right course of action will depend on the unique circumstances of each case. To see which options may be available to you, contact us to today to schedule a free consultation.

Student loans in a divorce

When a couple gets divorced in Florida the court will order an “equitable distribution” of the martial assets and liabilities. See Florida divorce law 61.075. The court will divide marital property 50/50 unless there are factors that would make an equal split inequitable. This can also include student loans in a divorce, debt is subject to equitable distribution as well. Equitable distribution and addressing student loans in a divorce can be complex. Therefore, if you need assistance contact an experienced divorce attorney in Tampa.

Student Loans in a Divorce: Is the Debt Marital Property

Typically, the first step in an equitable distribution analysis for student loans in a divorce is to classify each asset and debt as either marital or separate property. Only marital property/ debt is subject to equitable distribution by a court; separate property will remain the property of the spouse who owns it. Marital property is typically all debts and property acquired jointly during the term of the marriage. However, the asset or debt does not need to be in both spouses’ names to be deemed marital debt. For instance, student loans with just one spouse listed as borrower can be treated as marital property in divorce.

Division of Student Loans in a Divorce

Generally, student loan debt incurred during the marriage is a marital liability and subjected to equitable distribution. Thus, the debt will be equally divided be unless there are factors that would make an equal split inequitable. The fact that a non-borrowing spouse will not receive any benefit from the student’s education is not enough for an unequal division. See Smith v. Smith.

In Rogers v. Rogers, the parties filed for divorce after eight years of marriage. During the marriage the wife incurred over $23,000 in student loan debt, the husband did not incur any student loans.  The court ruled that the student loan debt was to be divided equally between the husband and wife, despite the fact the wife did not begin working as a paralegal until after the divorce. Each case is different, if you are inquiring about the facts of a particular situation you should contact a divorce attorney in Tampa.

Unequal Division of Student Loans in a Divorce

Student loan debt is most often used with the expectation that the education will increase the earning and career potential. If the couple gets a divorce the non-student spouse will typically not reap the benefits of the future earnings. However, Florida courts cannot deviate from the 50/50 distribution unless there are some other grounds for an unequal split, including for student loans in a divorce. Distribution of marital assets and debts are governed by Florida Statute 61.075. In order for a court to award an unequal distribution of student loan debt there must be evidence justifying the deviation based on one of the grounds enumerated in the statute.

Divorce Attorney in Tampa

Student loan debt is often a very contentious issue in a divorce proceeding. Student loan debt can be an enormous amount of money and in some cases even greater than a couple’s mortgage. If you are considering filing for divorce and are concerned about the student loans in a divorce contact us to speak with a divorce attorney in Tampa. With years of experience in divorce litigation, the divorce attorneys at Florida Law Advisers are prepared to aggressively fight for what is fair in your case. Call us today to schedule a free consultation with a divorce attorney in Tampa.

 

 

median income

The U.S. Trustee’s Office recently announced changes in the median income used in the Chapter 7 bankruptcy means test. This is significant since all Chapter 7 petitioners must pass the means test in order to qualify for Chapter 7. If an individual does not pass the means test their only bankruptcy option will be to file for either Chapter 13 or Chapter 11. The U.S. Trustee will typically change the median income figures twice a year, the recent changes became effective May 1, 2014. The next adjustment is expected to be announced in October or November of this year.

The median income levels used for Chapter 7 eligibility is derived from the Census Bureau and are based on the actual incomes of Florida residents. The amounts are broken down into family size by geographic region. The median income for Florida residents increased by over 1.46% for all family sizes.

The increased limits will allow more people to qualify for the means test. If your average income over the most recent 6 months is lower than the state median income for a household of the same size as yours, you automatically pass the means test. Thus, the higher Florida’s median income is the greater the likelihood you will pass the means test. If your earnings are above Florida’s median income you will need to continue with the means test to determine your eligibility for Chapter 7 bankruptcy. To learn more about the means test click here.

Florida’s Median Income Effective May 1, 2014

  • Household of 1person = $41,939
  • Household of 2 people = $52,598
  • Home of 3 people = $54,742
  • Household of 4 people = $64,122

Florida’s Previous Amounts

  • Household of 1person = $41,334
  • Household of 2 people = $51,839
  • Home of 3 people = $53,952
  • Household of 4 people = $63,196

Change Measured in Dollars

  • Household of 1person = $605
  • Household of 2 people = $759
  • Home of 3 people = $790
  • Household of 4 people = $926