Chapter 13 Category Archives — Page 3 of 3 — Securities Fraud Lawyers Blog Published by Securities Fraud Attorneys

Is a bad faith action still viable when an insured defendant files bankruptcy?

Published on: October 15, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

Johnny Smith accidentally runs a red traffic light and slams his pick-up truck into a motorcyclist, Drew Lenders. Sadly, Drew was not wearing a helmet and suffered significant head trauma and memory loss. Drew’s hospital bill alone is $50,000 He also missed 3 months from work and, therefore, lost about $12,000 in wages. Drew hires an injury attorney and formally demands the $50,000 policy limits from Johnny’s auto insurance, ABC Insurance Co., within 30 days. But believing that the motorcyclist should have been wearing a helmet, ABC Insurance allows Drew’s demand to expire and, instead, hires a biomechanical engineer to find out if Drew’s injuries would have been prevented had he worn a helmet. Meanwhile, Johnny files bankruptcy.

One year later, a jury awards $200,000 verdict against Johnny and in favor of Drew. ABC Insurance pays the $50,000. Because Johnny is not responsible for an excess judgment by virtue of his prior bankruptcy, is a bad faith claim against ABC Insurance even a viable cause of action? The answer is “yes.”

So far in 2014, consumer bankruptcy filings are down 12 percent nationwide.

Published on: October 9, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, with Savage, Combs & Villoch, PLLC

Consumer bankruptcy filings are down 12 percent so far in 2014, according to Epiq Systems, Inc., and as reported by the American Bankruptcy Institute. See “Bankruptcy Filings Through First Three Quarters of 2014 Fall 12 Percent from 2013, Commercial Filings Fall 22 Percent.” The total consumer filings nationwide this year are 705,452. Commercials filings are down 22 percent over the same period. The total commercial filings are 26,767.

The top bankruptcy-filing states per capita are Tennessee, Alabama, Georgia, Utah, and Indiana. Surprisingly, Florida is not in the top 5.

I filed bankruptcy. What is the 341 meeting of creditors?

Published on: September 27, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, with Savage, Combs and Villoch, PLLC

This meeting is named after section 341 of the bankruptcy code. It’s usually held about one or two months after you file for bankruptcy. You are required to attend this meeting in order to successfully complete bankruptcy and discharge your debts. Your attorney will attend the 341 meeting with you and will make sure that you are comfortable and prepared. You should bring your driver’s license and social security card.

A trustee is the person who administers your bankruptcy case. The 341 meeting is an opportunity for the trustee appointed in your case to ask you questions generally about your assets, liabilities, and financial affairs. The trustee will investigate possible fraud, genuine mistakes in the paperwork, and will make sure that your paperwork is in full and complete order. The trustee will also speak with you about:

Proposals for settlement in Florida bankruptcy cases: Will a bankruptcy court enforce them and award attorneys' fees and costs?

Published on: September 10, 2014 | by Savage Villoch Law, PLLC

by Alfred Villoch, III, with Savage, Combs & Villoch, PLLC

In Florida, settlement of legal disputes is strongly encouraged. To encourage settlement, the Florida legislature enacted Section 768.79 of the Florida Statutes. Section 768.79 creates a substantive right to collect reasonable attorneys’ fees and costs as “penalties” when a party declines to accept a reasonable proposal to settle. Rule 1.442, Florida Rule of Civil Procedure, provides the method to enforce the proposal for settlement and sets forth the parameters for implementing Section 768.79.

Specifically, Section 768.79 allows a defendant to recover reasonable costs and attorney’s fees if the defendant proposes settlement which is not accepted within 30 days and the defendant obtains a judgment that is at least 25% less than the proposal. Likewise, a plaintiff can recover reasonable costs and attorneys’ fees if the plaintiff proposes settlement which is not accepted within 30 days and the plaintiff obtains a judgment that is more than 25% of his or her offer.

Parents often co-sign for their children's student loans. Should those parents face a less difficult standard in the bankruptcy discharge of their obligation for that student loan debt?

Published on: September 6, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, at Savage, Combs & Villoch, PLLC

In a recent blog post, the Bankruptcy Blawg addressed how difficult (almost impossible) it is to get rid of student loan debt in bankruptcy. See http://www.thebankruptcyblawg.com/?p=26. Yesterday, the Tampa Bay Times published an article entitled “Co-signing a student loan carries risks for parents.” The article addresses how parents can feel a knee-jerk, moral obligation to co-sign for their child’s student loan. But when you co-sign, the parents are on the hook for the debt with equal force as if the loan was theirs alone. And they might not know that their child is not repaying the loan until they start receiving calls and letters from the bank. By that time, the parent’s credit score has very likely taken a dip, noted Mark Kantrowitz in the article.

Not only is the student loan default potentially devastating to the parent’s credit score, but it is virtually impossible to discharge in bankruptcy unless a bankruptcy court finds that the parent meets the Brunner test. See http://www.thebankruptcyblawg.com/?p=26. That means, the parent or the child must repay the entire debt (with interest and late fees, if applicable) or it may haunt the parent and child for the rest of their lives.

Can I get rid of my student loans if I file bankruptcy?

Published on: September 4, 2014 | by Savage Villoch Law, PLLC

By Alfred Villoch, III, Esquire, at Savage, Combs & Villoch, PLLC

Student loans are very difficult to get rid of in bankruptcy. Whether you file bankruptcy under chapter 7 or chapter 13, the test remains the same: you have to prove “undue hardship” in order to discharge or get rid of your student loans. See 11 U.S.C. § 523(8).

But what is undue hardship? Unfortunately, the Bankruptcy Code does not define “undue hardship” or list any ways in which to determine who meets that standard. Instead, bankruptcy courts have been left to make their own definition through case law. In Florida, bankruptcy courts follow the Brunner test. This test requires the court to consider the following three categories or prongs to determine whether the debtor (i.e., the person who filed bankruptcy) has an undue hardship: