Asset Protection
Our team of attorneys and legal professionals will assist you through your legal entanglements with care and professionalism.
WhatsNew:
Dealing With This Economy
December 3, 2011
We have been busy at the firm helping our clients deal with this difficult economy. We have had some success recently filing Chapter 11's for a few individuals with multiple properties. A recent court ruling from the Middle District of Florida eliminated a major challenge to this type of bankruptcy. We have seen a drop in the number of Chapter 7 cases compared to last year but have been advised by the foreclosure attorneys that the next waive of foreclosures in coming soon. We expect to see a corresponding increase in Chapter 7 filings. Let us know if we can help you with your financial issues.
CurrentNews:
American Airlines Files Chapter 11
December 2, 2011
The parent company of American Airlines filed for bankruptcy protection in late November, seeking relief from crushing debt caused by high fuel prices and expensive labor contracts that its competitors shed years ago. For most travelers, though, flights will operate normally and the airline will honor tickets and take reservations. American said its frequent-flier program would be unaffected.
Recent Events:
The Local Bankruptcy Scene
November 28, 2011
In the Southern District of Florida, our firm has seen an increase in the unwillingness of Chapter 7 trustees to forgo the collection of potential funds. In Florida, an individual's exemptions in bankruptcy are guided by reference to state-not federal-law. An individual is entitled to certain exemptions of personal and real property. Generally, if an individual was over their exemption limit, i.e. having certain property not entitled to exemption, trustees would generally forfeit their right as administrator of the bankruptcy estate to sell the non-exempt asset if the asset was of little value or considered "unsellable." However, our firm has observed a recent uptick in the willingness of the trustee to sell non-exempt assets worth little, seemingly because trustees do not want to lose out on the potential collection of funds. Often, the sale generates funds in an amount that does little more than pay for trustee and professional fees. If you are considering filing for bankruptcy protection, it is imperative to consult with a bankruptcy attorney who can explain your options and offer pre-bankruptcy planning to avoid these common pitfalls.
Florida Asset Protection
Individuals with high risk professions or businesses can often benefit from asset protection planning. There are numerous ways to legally protect your assets from creditors. Taking advantage of available Florida property exemptions and protections is not improper if handled in an appropriate fashion. Our office can guide you through this difficult process.
One key factor for an individual to consider is the Florida homestead protection. Most states offer some form of homestead protection from creditors (not to be confused with the homestead real estate tax exemption offered in many states). Florida is one of a hand full of states that offer an unlimited homestead exemption. The purchase of a homestead is generally considered the first and most important step in protecting assets in Florida. The protection takes effect immediately upon closing on the property and taking up residence with the intent to permanently reside in the home. The property must be titled in the individuals name, not a corporation, although some courts have upheld the homestead protection for homes titled in an irrevocable trust.
Other exempt assets in Florida include annuities, cash surrender value of like insurance policies issued upon your life, life insurance benefits, Florida Prepaid College Trust Funds, Medical Savings Accounts, IRA's and certain other retirement funds and disability benefits. We can assist you in developing a plan that is right for you.
Asset Protection and Fraudulent Transfers
Transfers made shortly before a lawsuit is filed or other claim is made may later be deemed fraudulent transfers and set aside. Clients often wait until they have encountered financial difficulty before they seek asset protection advice. The options at that point are much more limited. The potential for a fraudulent transfer action should always be considered in asset protection planning.
Asset Protection and Bankruptcy Reform
Asset protection planning has changed dramatically under the new bankruptcy reform laws. Responsible planning should be conducted with an eye towards the effect of these new laws.
Several provisions of the 2005 legislation limit the application of the homestead exemption. Five states (including Florida) now offer their residents an unlimited homestead exemption. Many people facing large money judgments have moved to states like Florida, purchased a home with their available funds, waited an appropriate time period (usually one year) and filed for bankruptcy. Several provisions in the new bankruptcy laws were designed to limit this form of planning.
One new provision limits the homestead protection available in bankruptcy if the Debtor has not owned his or her home for more than 1215 days (three and one-third years). Until that ownership period has been reached the homestead exemption is limited to $146,450.00. This amount is adjusted periodically. Once a Florida resident has owned and lived in the homestead for more than 1215 days the homestead protection reverts to the unlimited Florida homestead exemption for up to one-half acre within a municipality or 160 acres outside a municipality.
A second provision prevents a debtor in bankruptcy from claiming as exempt any equity fraudulently transferred into the home within the past ten years. This could occur, for example, if the individual used non-exempt funds to acquire the property or to pay down the mortgage. The equity resulting from the one-time payment may not be exempt until the then year period expires. This may lead to an unusual situation where an individual's home may be protected from creditors as long as the debtor steers clear of bankruptcy for the ten year period. Asset protection planning must then take into consideration the possibility that a creditor may file an involuntary bankruptcy. Competent planning must take into consideration all of these factors and many others. Call us for a free initial consultation to see if asset protection planning may benefit you.
David W. Langley
8551 West Sunrise Blvd.
Suite 303
Plantation, FL 33322
954-356-0450
dave@flalawyer.com