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Dealing With This Economy
December 28, 2012
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. We have filed several Chapter 11's for condominium associations and many for small businesses. We have seen a drop in the number of Chapter 7 cases due largely to the drop in foreclosure filings. However, the foreclosure attorneys we know predict that the next waive of foreclosures is coming soon. We expect to see a corresponding increase in Chapter 7 filings. Read more on our Blog. Let us know if we can help you with your financial issues.
How will our Drop off of the Fiscal Cliff Affect you?
December 29, 2012
Bankruptcy filings were down locally for November and December 2012 - see the Sun-Sentinel article on this. We expect the fall off the cliff to prompt another increase in filings. This sluggish economy cannot rebound until Washington gets it act together. Until then many South Floridians will continue to suffer and many will seek bankruptcy protection.
Congresses' inaction includes its failure to extend the Mortgage Forgiveness Debt Relief Act which eliminates the tax on the portion of your home mortgage that is forgiven or written off in a short sale or foreclosure sale. See our Blog. A bankruptcy discharge eliminates this tax.
Almost all of us will see our tax bill increase. There is a good article on this on CNN Money. A slowing of the economy will hinder job growth and the real estate recovery, something that has hit us particularly hard in South Florida. Many will also lose unemployment benefits. We suggest you hope for the best but plan for the worst. Let us know if we can help.
The Local Bankruptcy Scene
January 2, 2013
In the Southern District of Florida, our firm has seen an increase in the efforts of the local Trustees to recover money from Chapter 7 debtors. An individual is entitled to certain exemptions of personal and real property in a bankruptcy action. Property that is not exempt can be taken by the Trustee. Historically, if an individual was over their exemption limit by a small amount the Trustee would take no action. However, our firm has observed an uptick in the willingness of the trustees to pursue non-exempt assets. We have seen greater scrutiny of values placed on furniture. Most trustees now use NADA retail value for an automobile and will no longer accept a trade-in value. 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.
Chapter 11 - An Overview for South Florida
Chapter 11 is available to both individuals and businesses. Due to the higher filing fees ($1,213.00), reporting requirements and legal fees involved in a Chapter 11, it is not often used by individuals. However, for those individuals with debts in excess of $1,000,000.00 it may provide an opportunity to reorganize that may not be available in Chapter 13. For a small business a Chapter 11 bankruptcy filing allows the business to reorganize its debts and make arrangements to pay all or a portion of the debts while obtaining protection from creditors. A small business Chapter 11 also may be used to sell the business as a going concern. Our office has filed numerous Chapter 11 cases in Broward County and throughout South Florida.
A small business can invoke the protection of Chapter 11 to hold collection actions and levies at bay while developing a plan of reorganization. If your business has suffered a temporary setback a Chapter 11 may give you the time you need to get caught up on bills. It also provides a forum to negotiate with all creditors in a setting favorable to the business. Chapter 11 can also be used to liquidate a small business in an orderly fashion. Call us if you would like an assessment of whether a Chapter 11 can help your business. We work hard for our clients to find the right solution for any business situation. Call us if you would like to discuss your business or personal case. David Langley has been practicing in the Fort Lauderdale area for over 28 years and can assist you with your financial problems.
Individuals may also file for Chapter 11 bankruptcy protection. There is no debt ceiling for a Chapter 11 as there is in Chapter 13. An individual Chapter 11 also provides greater flexibility than a Chapter 13. In this difficult economy many real estate investors are turning to Chapter 11 to allow them time to sell properties and reorganize debts.
Condo associations can also file for Chapter 11 bankruptcy protection. In this unusual economy many condo associations are facing serious financial problems as unit owners default on monthly maintenance payments. Many units are in foreclosure but the banks often drag their feet as they are in no hurry to take title to the units and by doing so incur the monthly maintenance fees. While not a solution for all associations, a Chapter 11 reorganization can stop pending lawsuits and levies, force all creditors to deal with the association in one forum, prevent utility companies from terminating service and allow the association to reject unfavorable leases. The association should have a clear exit strategy before filing a Chapter 11 proceeding.
Bankruptcy protection also provides a means to stop IRS collection procedures for a period of time while payments are made. Bankruptcy Code § 362, which grants debtors automatic relief from collection activity, applies to the IRS in the same manner as other creditors. Priority and non-priority taxes can be treated in a Chapter 11 plan and paid out over time. This may allow a business which has been seized by the IRS to re-open and operate without interference from the IRS or other creditors.
Some Chapter 11 Success Stories
We have filed Chapter 11 for many individuals and small businesses over the past 30 years of practice in bankruptcy law. Here are a few examples:
Individual Chapter 11 to stop a foreclosure, allow the client to convert a small rental building to condo and sell off two units to pay down debt and reinstate mortgages.
Small business Chapter 11 to stop an IRS levy and allow the client to negotiate a payment plan with the IRS. We were able to file and remove all levies within 48 hours and save over 100 jobs.
Small business Chapter 11 for a toy distributor which allowed the client to sell the business as a going concern and shed most of the company debt.
A Chapter 11 for an LLC which owned two apartment complexes to reduce the secured debt to the appraised value of the real property.
Small business Chapter 11 for a mortgage company to stop a foreclosure proceeding by its warehouse line lender.
Chapter 11 for a condominium association to stop several creditors from levying on bank accounts.
Call us to see if there might be a strategy to help you or your business at 954-356-0450.
This article is not intended as a substitute for competent legal or accounting representation, but merely as a guide to help you decide whether you need the services of a licensed attorney or CPA.
David W. Langley is licensed to practice only in the State of Florida and handles bankruptcy cases in South Florida, Miami, Hollywood, Fort Lauderdale, Plantation, Pembroke Pines, Pompano,Coral Springs, Deerfield, Boca Raton, Delray and West Palm Beach.
South Florida Bankruptcy Lawyer David W. Langley
8551 W. Sunrise Blvd., Suite 303, Plantation, FL 33322
Phone: (954) 356-0450
Fax: (954) 356-0451
For an appointment call (954) 356-0450