chapter 13 Tag Archives — Page 2 of 2 — Securities Fraud Lawyers Blog

I haven’t been able to pay my bills. Could I lose my car?

Published on: October 19, 2014 | by Savage Villoch Law, PLLC

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

If you miss car payments, the company that loaned you the money to purchase the car can likely take back your car in what is called “repossession.” The right to take back your car for nonpayment usually comes from the terms of the signed loan paperwork when you buy your car. Usually, a few missed payments and the loan company will start calling you and sending you warning letters. Warning calls and letters will ultimately lead to repossession. Once the loan company repossesses, it can then sell your car at an auction and apply that money to pay down the amount that you still owe. This can also happen with car title loans (e.g., where you receive a loan and agree to give the loan company your car title as security and part of your promise to pay back the loan. This is called a security interest). In situations where the car is part of your promise to pay back a loan, the answer is “yes”: you could lose your car if you don’t make your car payments. Bankruptcy can immediately stop this process.

If you haven’t paid other bills, like a credit card or a payday loan, you could still lose your car, but the situation is a bit different and the company must take a few extra steps. For example, the company must first sue you to get a judgment in court. With a judgment in hand, the company can then apply to the court to have the sheriff take your car and sell it. This process is similar to repossession and is called a writ of attachment. The company would then use the money from the sale of your car as payment down on the amount that you owe. Bankruptcy can immediately stop this process too.

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.

Florida's Homestead Exemption: One reason the SEC struggled to collect $62 million from Paul Bilzerian.

Published on: September 18, 2014 | by Savage Villoch Law, PLLC

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

Today, the Wall Street Journal ran an article entitled “A Maze of Paper. SEC Judgment against Raider Paul Bilzerian: $62 Million. Collected: $3.7 Million.” In the article, Michael Rothfeld and Brad Reagan write how Paul Bilzerian was a corporate raider in the 1980s who victimized investors, parked stocks in other people’s names, and failed to make disclosures of his interest in other companies, to name a few things. Due to this fraud, Rothfeld and Reagan explain how the U.S. Securities & Exchange Commision (“SEC”) obtained federal court orders for Mr. Bilzerian to pay a whopping $62 million as penalties, but was able to collect only $3.7 million from him.

The WSJ article explores a few methods that Bilzerian used to thwart the SEC’s collection efforts, including moving to another country, but the article touched on one maneuver in particular that is dear to Floridians’ hearts: Bilzerian’s move to Florida to purchase land and build a 28,000-square-foot mansion.

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:

If I file bankruptcy, will it stop the foreclosure of my home?

Published on: August 30, 2014 | by Savage Villoch Law, PLLC

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

If you’re a few months behind on your mortgage payments, the bank that loaned you the money to purchase your home (or alternatively, the company that services the loan) will likely file a lawsuit with the intent to sell your house and use that money to pay down your loan. If the money achieved from the sale is not enough to pay down the entire loan, the bank can still pursue you for the remainder owed or the deficiency. This process is commonly called foreclosure and the pursuit of a deficiency judgment.

If you file bankruptcy before the foreclosure sale, however, you will get temporary relief from the foreclosure. Specifically, upon the bankruptcy filing, you will get the benefit of the “automatic stay,” which stays all actions of your creditors not brought before the federal bankruptcy court, and this will include the foreclosure action. It is important to understand that this stay is often times only temporary and will depend on how active your bank is in pursuing the foreclosure.

Do I qualify for chapter 7? And what is this “means test?”

Published on: August 29, 2014 | by Savage Villoch Law, PLLC

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

Chapter 7 of the bankruptcy code allows you to discharge certain debts immediately upon order of the bankruptcy court. But to qualify for chapter 7, you must satisfy what is called the “means test.” If you cannot satisfy this means test, you must instead file for chapter 13 (or chapter 11). In a chapter 13 case, rather than the immediate discharge of certain debts, the bankruptcy court determines your monthly disposable income and you are required to pay over that monthly disposable income to the trustee for the benefit of your creditors over a 3 or 5 year period.

So what is the “means test” and how do you qualify for chapter 7 for a more prompt discharge of your debts? The initial part of the means test depends on your household income and the number of people in your household. If your current monthly household income is less than the median income for a household of your size in your state, the bankruptcy court presumes that you are eligible to file for chapter 7 bankruptcy. Current Monthly Income is the monthly average of certain income that you (and if you are married, your spouse) received in the six calendar months before your bankruptcy filing. In Florida, the median income for one person is $41,939 for cases filed after May 1, 2014. For two people, the median income is $52,598. You can find more information at: