Can I Transfer My Car Title To My Spouse Before Filing For Bankruptcy?

In the State of Florida, there is a $5,000 wildcard exemption that is most often used to keep a vehicle during filing for bankruptcy.  However, to use this exemption, the car needs to be titled in the name of the person filing for bankruptcy.  The $4,000 applies to the equity on the car (this is usually determined based on its bluebook value if there are no payments being made), not how much the car was purchased for at the time of purchase. 

The general rule in filing for a bankruptcy is that you shouldn’t make any transfer of property—be it a car or any other property of worth—to a third party, relative or spouse prior to filing.  According to the bankruptcy court, this is a fraudulent conveyance, and can end up costing you much more than you bargained for if the bankruptcy trustee finds out—and they will!  Any title transfer can be discovered through a simple public record search and will immediately raise red flags to the court overseeing your bankruptcy. 

If a trustee determines that property has been fraudulently conveyed prior to your bankruptcy filing, he or she could seize that property and you could lose the exemption that would have allowed you to potentially keep the property in the first place.  In addition, you might lose the right to file bankruptcy if the court determines that you were attempting to file under fraudulent circumstances.

We at Bankruptcy Law Clinic advise that you consult with one of our Florida bankruptcy attorneys before making any decision about your property before filing.  We are familiar with all the red flags that could cause your bankruptcy case to be denied and will be able to instruct you on the best way to make sure you can keep a vehicle or piece of property you want to keep that doesn’t involve fraudulent conveyance.  

I Got My Discharge In Chapter 13 And Now I Have New Debts…What Do I Do?

Chapter 13 bankruptcy is a wonderful way for people who have dealt with a large financial blow to get back on track.  Following a divorce, loss of a job, or loss of a business enterprise, Chapter 13 bankruptcy has helped millions of people get their lives and finances back together after enormous losses.  However, let’s say you received a Chapter 13 bankruptcy and spent the past 3-5 years paying off your debts—only to be hit at the end of it with another bad blow, sending you straight back in to financial ruin.  What now? 

Don’t worry, there is still hope.  After the 2005 amendments in the U.S. Bankruptcy code, the timeline restrictions for filing another bankruptcy were given more flexibility for situations exactly like yours.  If you filed a Chapter 13 bankruptcy and six years have passed since your filing, there are certain circumstances in which you file again.  The laws are very particular on this but if you filed a Chapter 13 originally and were unable to pay at least 70% of it, you can file a Chapter 7.  Or, you could potentially file another Chapter 13 if only two years have passed since you filed the first. 

Even if you have previously filed bankruptcy, there may be factors within your specific circumstances now that will allow you to file again.  Since the U.S. bankruptcy court looks at each case individually, we at the Bankruptcy Law Clinic can provide you with a qualified and experienced Florida bankruptcy attorney who can look at your situation and help you determine the best course of action to protect your family and assets from financial distress. 

Even if bankruptcy is not an option, we will be able to direct on how to get back on track financially, regardless of your current financial circumstances.  Don’t try to face the situation alone—professional help can be just the ticket to get you back on your feet without the stress you are currently facing.  

I am a member of the US Armed Forces. Will I lose my security clearance if I file for bankruptcy?

Will I Lose My Security Clearance if I File for Bankruptcy?

This question is common among members of the Armed Forces or Federal employees and can often cause hesitation when making the decision of whether or not to file bankruptcy.  While each situation is different, the answer in most cases is no.  The reason for this is simple:  when someone is in a difficult financial situation, they are more likely to make a poor decision or accept a bribe in order to remedy the situation.

However, the United States Air Force Academy Legal Office has this to say about bankruptcy:

“The status of your security clearance can be affected, but it is not automatic.  The outcome depends on the circumstances that led up to the bankruptcy and a number of other factors, such as your job performance and relationship with your chain of command.  The security section will weigh whether the bankruptcy was caused primarily by an unexpected event, such as medical bills following a serious accident, or by financial irresponsibility.  The security section may also consider the recommendations and comments of your chain of command and co-workers.  This is an issue that can be argued both ways, so as a practical matter your security clearance probably should not be a significant factor in making your decision about whether to file bankruptcy.  The amount of your unpaid debts, by itself, may jeopardize your clearance, even if you don’t file bankruptcy.  In that sense, not filing for bankruptcy may make you more of a security risk due to the size of your outstanding debts.  By the same token, using a government approved means of dealing with your debts may actually be viewed as an indication of financial responsibility.  Eliminating your debts through bankruptcy may make you less of a security risk.  There is no hard and fast answer there, with one exception: It never hurts to have a good reputation with your co-workers and your chain of command.”

In our Doral office, we have had several clients from the Metro Dade Police Department and the US Southern Military Command (SOUTHCOM).  Often, it was a letter about a five- year security review that finally kicked them into action.  Their bankruptcies helped them maintain their security clearance.

Can creditors file a judgment and have my disability wages garnished?

How Disability Income Can Affect your Bankruptcy Filing

If you are receiving disability income, regardless of whether the income is from private insurance or social security, Florida has a statute that keeps this income safe from creditors.  This means that most creditors cannot garnish your disability wages because there IS an exception—the IRS.  If you owe back taxes, the IRS can indeed garnish your disability wages, within reason.  However, other than the IRS, creditors cannot garnish your disability wages attempting to recoup money you owe them.

Because of this statute, many people think that their disability income will not be a factor when filing for bankruptcy.  After all, if the wages can’t be touched by creditors, the bankruptcy court must ignore them, right?

Unfortunately, it’s a little more complicated than that.  If you receive disability income and you decide to file for bankruptcy, that disability income will be considered when your bankruptcy attorney conducts a means test analysis.  If your disability income is significant because of private disability insurance, your attorney might suggest that you avoid filing bankruptcy and pay back your debts with the disability income you receive. 

“But wait, I thought disability proceeds were exempt!”

This is where many people become confused regarding the bankruptcy code in Florida.  Yes, disability proceeds are exempt from judgments against you but the court will still consider disability proceeds for the purposes of the means test analysis.  For example, if you were a highly-paid executive who receives $25,000 per month in disability insurance from a private disability policy, the court will likely look at this as significant income to repay your debts rather than granting you discharge of them in bankruptcy.