Driver's License Suspended?

Involved in a vehicle accident with no insurance?  Has a Judgment been entered against you?  Has your driver's license been suspended?  Florida Statute sec. 324.121 provides that your driver's license will be suspended by the Florida  Department of Highway Safety and Motor Vehicles if you fail to satisfy the judgment entered against you. 

You have options. 

You can propose a payment plan with the insurance company and if you reach an agreement the insurance company will issue you documentation that can be provided to the Department of Highway Safety and Motor Vehicles to release your suspension.  Many times the insurance company demands a high down payment or high monthly payments.  In that case Florida law provides a procedure by which you can petition the Court that entered the Judgment for a reasonable payment plan to satisfy the judgment.  This procedure does require supporting documentation and a possible Court appearance.

An additional option is to seek relief from the United States Bankruptcy Court.  You have a constitutional right to file for bankruptcy protection and the discharge issued from the Bankruptcy Court will allow you the right to demand the reinstatement of your driver's license.

Both of these options can be handled by an attorney who has experience in both state and federal court.  If your driving privilege has been suspended in the State of Florida and would like to fully explore your options contact The Tancredo Law Firm at (813) 659-3612.   We are offering telephone and video appointment.  www.tancredolaw.com

Modification of First Mortgages in Chapter 13 . . . reality of just more of the same

Currently Senate Bill 61 known as "Helping Families Save Their Homes in Bankruptcy Act of 2009" sponsored by Richard Durbin (D-IL) is the latest and by all sources potentially the most likely bill to pass into law a procedure by which Chapter 13 debtors would be able to modify their current mortgage.

The current version (as of the date of this article) would provide the debtor the ability to extend the mortgage to a period of 40 years (reduced by the number of years the mortgage has been in existence), provide for a fixed interest rate in an amount equal to the "most recently published annual yield on conventional mortgages published by the Board of Governors of the Federal Reserve System, plus a reasonable premium for risk (sounds like a Till analysis, possibly 2 %), the waiver of a pre-payment penalty, and most importantly removing the restriction on the filing of a motion to determine secured status on a principle residence.

As the bill currently reads, one would be able to now value their principle residence, reduce the principle amount owed to that value, adjust the interest rate of the mortgage, and extend the time period in which to pay the mortgage.

The bill was referred to the Senate Judiciary Committee on January 6, 2009. There are no Florida Senators that sit on that committee.

(If anyone is interested in e-mailing their comments on this pending legislation to a member of the committee follow this link http://www.govtrack.us/congress/committee.xpd?id=SSJU)

As this is possibly the most important bill to affect bankruptcy since the 2005 reform bill I will try to keep you up to date as the bill progressed through Congress.

Free Informational Seminar Announced

On Tuesday, February 3, 2009 the Tancredo Law Firm will hold a free informational seminar. This seminar will be held a the Plant City office at 7:00 p.m. The seminar will focus on common questions most consumer have when they are faced with financial trouble. What are my options, what can a creditor take from me and what can I keep if I file for bankruptcy.

Additionally, the seminar will provide information on who qualifies for bankruptcy and what a person can expect if they choose to file for bankruptcy.

Space is limited so anyone who is interested in attending should contact the office to reserve a space. (800) 796-4610.


A seminar for the South Florida office will be announced soon.

What to bring to my initial bankruptcy consultation with the attorney

Your initial consultation with any bankruptcy attorney is a very important event and should not be viewed as a quick meeting to obtain free advise. Typically (at least in Florida) the initial consultation with a bankruptcy attorney will be free of charge and will last about 45 minutes to 1 hour. Our office presents the prospective client with an information sheet that attempts to gain a good picture of the person's overall financial situation.

Most individuals that schedule a consultation have either been sued, are in foreclosure or are just simply overwhelmed with their current debt and are being harassed by creditors. It is the more in debt analysis that most bankruptcy attorneys are seeking beyond these norms that is the subject of the initial consultation. (The clear exceptions to this are when the prospective client's house is set for a imminent sale in foreclosure, their wages or accounts are being garnished or they have a court hearing scheduled that may substantially affect their personal interests).

To be prepared for your initial consultation it is suggested that you:

1. Afford yourself enough time for the consultation. It is not only important to have a full analysis of your matter but also that their is time to listen and understand your options so that you can make an informed decision.

2. Bring your most recent pay stub and the most recent pay stub of your spouse (regardless if you will be filing a joint bankruptcy). If you are separated from your spouse and you do not share finances, please explain that to the attorney.

3. Bring with you any legal documents that you have received, such as a copy of a lawsuit and any documents that you have received since being served with the lawsuit.

4. Bring the most recent statements from your mortgage company and any other finance companies that have a secured interest in any collateral, such as vehicles, boats, etc. The most recent statements are important so that estimated calculations can be made by the attorney in reviewing your financial options.

5. Bring your last two (2) years of tax returns, and any documents that alleged that you owe the IRS back taxes. Obviously if you owe the Florida Department of Revenue money or you are delinquent in your 941 trust taxes all documents related to these liabilities should be brought with you to the meeting.

6. Bring an understanding of the debts that you owe so that you can review this with the attorney so that an initial plan can be developed that best fits your situation and the law.

The first consultation with a bankruptcy attorney should be an opportunity to learn your options and start to develop a plan to relive the financial stress. I have literally done thousands of consultations over the past 10 years and I have always have a feeling of accomplishment when a prosective client says to me that while the decision to file for bankrutptcy relief is not an easy one having the option has substantially reduced their stress.

Discharging Taxes in Chapter 7, the Basics

Many individuals that I consult with that have a tax liability for income tax bring to my office letters and envelopes from the IRS that are still unopened. Many simply give up or are too afraid of the IRS to even try to understand what to do with the tax liability other than simply allow the IRS to collect the amount owed with their next tax refund.

Of the individuals that I consult with many owe taxes after they liquidated all or a portion of their retirement account without holding back enough to satisfy the tax obligation or they are or were self employed.

Despite the reason for owing a tax liability Chapter 7 offers a possible solution to resolve this liability. In reviewing the taxes that alleged to be owed for a consumer my first priority is to always have a tax professional review the returns that resulted in the liability to determine if the amounts alleged are in fact owed. If the return was self-prepared or not prepared by a tax professional a portion of all of the tax may not be owed. A full review by a tax professional is always worth the time that you will pay that personal to analyze your tax situation. (We have a CPA that is in our office that we often engaged to review tax matters).

If it is determined that the tax is due and owing and the client has made the decision to file for relief under Chapter 7 of the Bankruptcy Code then the following five (5) rules for dischargeability will apply:

1. The tax in question must be over three (3) years old; dated from the most recent date the tax return was due to be filed. This will typically be April 15th of the year following the tax year. (i.e., April 15, 2009 for the 2008 tax year). Extensions will extend this time period and other circumstances may also extend the time period.

2. The tax return itself must have been filed two (2) years prior to the filing of the bankruptcy petition.

3. The tax which you are seeking to have discharged must have been assessed more that 240 days prior to the filing of the bankruptcy petition.

4. The tax return that resulted in the tax liability must not have been filed fraudulently.

5. Lastly, you must have have been guilty of a willful attempt to evade or defeat the tax.

The rules set forth above apply to both Federal and State Income Taxes.

Furthermore, penalties and interest that have accrued on the liability will be discharged if the underlying tax liability is discharged.

Driver's License Suspension and Bankruptcy

I have had the opportunity to review many cases were individuals have had their driver's licenses suspended by the Florida Department of Highway Safety and Motor Vehicles after a Judgment was entered against that individual by an insurance company.

The classic example involves an individual who does not have insurance coverage on their motor vehicle. The vehicle is involved in an accident and the other party's insurance has the cover the damage to their own insured. The other insurance company then sues the uninsured motorist for the money that they have paid out. This suit results in a Judgment against the uninsured motorist, sometimes for tens of thousands of dollars.

The insurance company then submits the Judgment to the Florida Department of Highway Safety and Motor Vehicles and the driver's license of the uninsured motorist is suspended and remains suspended until the Judgment is satisfied. The uninsured motorist is now left with the option of driving illegally or relying on others for his or her transportation. This creates a substantial amount of stress, financial crisis and possibly criminal charges if the driver is caught driving with their license suspended.

The United States Bankruptcy Code provides a solution to this problem. Because the suspension of the driver's license resulted from a debt, an individual can file for bankruptcy, discharge the debt and then the Florida Department of Highway Safety and Motor Vehicles will re-issue a valid driver's license. If the individual files under Chapter 7 of the Bankruptcy Code they can have a valid license in 90 to 110 days from the date of filing.

Can I keep any of my property if I file for Bankruptcy?

(NOTE: Florida has established a long history of exempt personal property law and you should consult a bankruptcy attorney in your state if you do not live in Florida as all states have developed law in this area that may not be consistent with Florida law).

This is one of the most common questions that I am asked during any consultation for bankruptcy. What you get to keep is called in the law exempt property and is typically referred to as having an exemption in that property. That is that the property is exempt from garnishment, levy and the like.

Starting with the basics, your primary residence (i.e. your homestead) is a protected asset, and can have total protection if it has been your residence for the past 3.5 years. If you have lived at the residence for less than 3.5 years and the residence has more than $139,000.00 worth of equity then you should consult an experienced bankruptcy attorney.

Note, there is not exemption for non-homestead property.

As far as personal property there are two roads you can take. The first would be if you claim an interest in homestead property then you have an entitlement to $1,000.00 in exempt personal property (cash, bank accounts, clothing, personal articles, furiture, furishings, tools, etc.). If you do not claim a homestead interest, that is if you rent or you are in the process of surrendering your homestead residence then you can then retain $4,000.00 in personal property.

As to your vehicles, each debtor is entitled to claim an exemption for one vehicle up to $1,000.00 in equity. This can become more complicated if the property is jointly owed or if the equity in the vehicle exceeds $1,000.00. You may then have the opportunity to claim the property exempt by utilizing some of your unused portion of your personal property exemption or exempting the property by utilizing the Florida common law exemption of tenants by the entireties. (Exemption planning can become complicated and it is always wise to consult with an experienced bankruptcy attorney to chart out your exemptions so that you are allowed to keep the maximum under the law).

To be continued....