Author Archives: naplesbankruptcy

Student Loans and the NEW 2023 Income Driven Repayment Adjustment

If you have been paying your student loans for any significant period of time you may be eligible for the new Income Driven Repayment Adjustment. This allows a borrower who was not previously in an Income Driven Repayment (IDR) program to receive credit towards such a program. This can help borrowers who have been paying their student loans for 20-25 years receive forgiveness under the IDR program. Sounds exceptional, however there are many borrowers that have been paying their student loans for over 10 years that have not received credit towards the program and have no prospect of paying off their student loans off in the next 20 years as a result of the payment program they are in. This helps to give borrowers credit they deserve towards the IDR program. The time is limited to qualify for the one time adjustment so act fast! If you are unsure of how to qualify contact your student loan servicer!

Rebuilding credit after bankruptcy!

Many fear that after filing Bankruptcy they will not have credit. In general when you receive a Discharge in Bankruptcy your debts are considered ‘Discharged’ and creditors can no longer attempt to collect the debt. A Discharge serves to substantially improve your debt-to-income ratio because you have no more outstanding liabilities – simply put, you have more money in your budget because you have no debt to service and interest to pay. So how do you rebuild your credit after receiving your discharge in Bankruptcy? First, begin by establishing a payment history with a new creditor such as a credit card. Second, simply let time pass – each month that passes will serve to improve your credit. Most of my clients have better credit eight months after receiving their discharge than before they filed for bankruptcy. Ask me how a bankruptcy can help to improve your credit today!

Bankruptcy vs. Debt Consolidation

Many people ask me what the differences are between Bankruptcy and Debt Consolidation.

Debt Consolidation entails getting a loan from a bank which is large enough to pay off your existing debts – thereby ‘Consolidating’ your debt into one loan and one payment. This requires that the consumer applying for the loan have good enough credit to obtain the loan.  Debt consolidation can be an advantage as most debt consolidation loans have a lower interest rate making it less expensive to pay the debt off over time.  A debt consolidation loan does not eliminate interest and so it may still take a significant amount of time to pay off the debt.

Bankruptcy allows a consumer to ‘Discharge’ their debts in order to obtain a fresh start.  There are primarily two chapters that consumers use when filing bankruptcy – Chapter 7 and Chapter 13.  A consumer does not have to have good credit to file a bankruptcy.  In most Chapter 7 cases there are no payments – this is dependent upon your assets and household income.  A Chapter 13 bankruptcy includes a payment plan where the payment is normally related to your household income or assets.  A Chapter 13 plan can also be used to save a home or car that is in arrears.   For many consumers a bankruptcy allows them to obtain a discharge of their debts and improve credit immediately without having to pay their entire outstanding debt.  Another advantage that bankruptcy has vs. debt consolidation:  bankruptcy can stop a garnishment or lawsuit.

If you are considering either debt consolidation or bankruptcy consult with a professional to help you compare each given your current situation.

Fuel Crisis 2022

Update March 8th, 2022-

Geopolitical tensions and inflation are causing fuel prices to sky rocket. The U.S. average price is currently $4.00 and still rising. It is predicted to reach $4.25 by memorial day which would break the previous record of $4.10.

Update March 23rd, 2022-

The National Average record has been broken by reaching $4.24 just 4 days before memorial day.

New Bankruptcy Rules to Take Effect December 1, 2021

A few changes to the Federal Rules of Bankruptcy Procedure became effective on December 1, 2021. The most noteworthy change relates to Bankruptcy Rule 9036, which addresses notice and service by electronic transmission.

  • Bankruptcy Rule 2005 – Bankruptcy Rule 2005 generally deals with the apprehension and removal of a debtor to compel attendance at an examination regarding the administration of the bankruptcy estate. Upon motion of a party in interest supported by an affidavit regarding the necessity of the examination and the risk of the debtor’s flight, the court may issue to the marshal or another officer of the court an order to bring the debtor before the court without unnecessary delay. The amendment to Bankruptcy Rule 2005(c) fixes a technical error related to the conditions of release of the debtor. The technical error arose in connection with the repeal and replacement of certain provisions under the Bail Reform Act of 1984, and the new reference to 28 U.S.C. § 3142 now properly tracks the conditions for release and gives the court discretion to consider only the “relevant” provisions of that section.
  • Bankruptcy Rule 3007 – Bankruptcy Rule 3007 covers the procedure for objecting to claims, and Bankruptcy Rule 3007(a) addresses the timing and manner of service of such objections. The amendment to Bankruptcy Rule 3007(a)(2)(A)(ii) clarifies that the specialized service requirements of Bankruptcy Rule 7004(h) apply only to insured depository institutions as defined in Section 3 of the Federal Deposit Insurance Act. In other words, institutions insured by the Federal Deposit Insurance Corporation are covered by Bankruptcy Rule 7004(h), which generally requires service by certified mail addressed to an officer of the institution, subject to limited exceptions. Institutions not insured by the FDIC, such as credit unions, may be served by first-class mail sent to the person designated for receipt of notice on the proof of claim.
  • Bankruptcy Rule 7007.1 – Bankruptcy Rule 7007.1 applies in adversary proceedings and generally deals with the requirement that a party file a disclosure listing the party’s parent corporation, if any, and publicly held corporations owning 10% or more of the party’s stock. The rule is used to assist the court in determining whether the assigned judge should be disqualified under Canon 3C(1)(c) of the Code of Conduct of United States Judges. The amendment makes clear that the Bankruptcy Rule 7007.1 applies to non-governmental corporations and also provides for supplementation of the notice when the information required by the rule changes.
  • Bankruptcy Rule 9036 – Bankruptcy Rule 9036 addresses notice and service by electronic transmission. When the bankruptcy rules require or permit sending a notice or serving a paper, Bankruptcy Rule 9036 provides for certain documents to be served electronically. The amendments to Bankruptcy Rule 9036 are designed to deal with high-volume paper- notice recipients. The clerk is now allowed to send notice or serve registered users by using CM/ECF (the court’s electronic-filing system) and also may serve any recipient by electronic means if the recipient had consented to such electronic notice in writing, subject to certain exceptions. The amended rule further clarifies that electronic notice or service is complete upon sending and that it is the recipient’s responsibility to keep its electronic address current with the clerk.

Collections and the Florida Statute of Limitations

Florida Statute 95.11 governs when a creditor can present an action to recover.  In general a creditor has 5 years to present their claim (some types of debts have different statute of limitations).  The Fair Debt Collections Practices Act prohibits collectors from taking action to collect a debt they cannot legally take.   Some actions you may take such as making a payment on an old debt may pause or toll the statute of limitations so it is important to consult with an attorney and carefully review any debt for which a creditor is attempting to collect.