From time to time, I get emails from people seeking answers to Florida legal questions. While responding to one, I suddenly thought that I should put together a couple of blog posts to highlight a few of the more common questions. Although the situation might be slightly different from individual to individual, I felt these Florida law questions pertained to most people in one way or another.

Florida Chapter 7 Bankruptcy Law Question

I’m a single person and make more than $43,000 yearly gross income. I have been told that I cannot file for Chapter 7 bankruptcy because I make too much money. Is this true?

This depends on your individual expenses. You are slightly over the Florida income level of $40,766 per year for one person to file for Chapter 7 bankruptcy. The good news is that there are certain monthly expenses which may be subtracted from your total income, and these deductions may bring you under the maximum state level in order to qualify for bankruptcy. It’s very important that you have an experienced bankruptcy attorney look over your income and expenses to accurately determine if and how you may file for bankruptcy.

Florida Estate Planning Law Question

In my will, I leave everything to my sister, but my brother is the beneficiary on my two bank CDs. Who would be entitled to the CD money?

Kevin, as you have named your brother as a beneficiary, it must be a “payable on death account.” This is a good vehicle to use to transfer assets and avoid probate. The beneficiary cannot touch the account until the death of the principal. This makes it very different from a joint account. Make sure the CD is not, in fact, held jointly as this would defeat the purpose of having your brother receive the entire balance upon your death. All your brother has to do is present a certificate of death to the bank, and he gets to withdraw the funds regardless of what your will says. Make sure you gave the bank his full legal name and social security number, so the bank will not hesitate in identifying him as the person you designated as the beneficiary.

Ever since the complete housing market debacle, and subsequent economic turmoil including huge layoffs, the word bankruptcy has become a much more common term. It is a real concern for many consumers that are drowning in credit card debt, back taxes and delinquent mortgage payments.

Even the rich and famous are not immune. Warren Sapp, the famous NFL football player and Dancing With The Stars contestant, filed for chapter 7 bankruptcy a week ago here in South Florida. It was reported in court documents that he owes more than $6.7 million to creditors, back child support and alimony.

I get many questions emailed to me about bankruptcy issues, so I thought I would invest the time to answer a bankruptcy question I received recently.

Bankruptcy Question of The Day

A woman recently wrote asking "Can I declare chapter 7 bankruptcy and still be able to keep ownership of my car?" She asked this because she stated "I am concerned because I need my car to take my children to school and also for my commute to work."

The short answer is that, more often than not, you can find a way to keep it under Florida bankruptcy laws. If you have a car which is financed, and is worth less than what you currently owe, then you may ask the bankruptcy court to let you hold onto the automobile and keep making payments toward the debt. If the car is worth more than what you owe, you are still entitled to exemptions that protect some of the equity that you have in the car and you may be able to negotiate a deal with the bankruptcy court so that you can retain ownership.

For example, if you do not own a home or if you do not intend to keep the home you reside in as part of the bankruptcy, then an additional exempt $6000 of homestead protection may be attainable to protect that amount of equity in the automobile if needed.

Call the LaBovick Law Group at 888.777.3884 for a free consultation to discuss the bankruptcy process and your options. The Florida bankruptcy team at the LaBovick Law Group help clients from our Palm Beach Gardens, West Palm Beach, Boynton Beach, and Boca Raton offices. We represent bankruptcy clients throughout Florida, including Palm Beach County, the Treasure Coast, Palm Beach Gardens, West Palm Beach, Jupiter, Boynton Beach, North Palm Beach, Stuart, Deerfield Beach, Port St. Lucie, Vero Beach, Lake Worth, Tequesta, Ft. Pierce, Lake Park, Riviera Beach, Boca Raton, Fort Lauderdale, Orlando, Tampa, Jacksonville, Miami, Pompano Beach, Hollywood, Coral Springs, Delray Beach, Greenacres and Wellington.

As many as 100,000 foreclosure cases in the state of Florida have been put in a state of flux with the undoing of the David J. Stern law practice. March 31, 2012 was the end of the road for Stern’s involvement in more than 100,000 foreclosure cases in which he is listed as the attorney of record. Some have speculated that many thousands of cases could be dismissed, unless lenders quickly hire another lawyer.

The David J. Stern law firm, founded in 1994, became one of the largest in the state of Florida by 2009. Most of its business was handed out by Fannie Mae and Freddie Mac, in which the Stern Florida Attorneys handled many thousands of foreclosures. By its peak, the South Florida lawyers were handling one out of every five foreclosure suits in the state of Florida.

But for much of his legal career, Stern has always been associated with allegations of unethical conduct. He had trouble in 1999, when he agreed to pay $2.1 million to borrowers who were overcharged for legal expenses and the subsequent cover-up by the firm via fraudulent documents. The straw that broke the camel’s back was in 2010, when allegations of illegal shortcuts, including robo-signing, became the center of attention across the nation. Stern’s firm was associated with these allegations, and as a result, the firm was fired by both Fannie Mae and Freddie Mac.

Stern, in a letter back in the beginning of March, wrote the firm is basically out of business. What is left is a mess in the Florida court system.

Over the last few weeks, progress has been made in cleaning up matters after the collapse of the Stern law firm. The Florida court system is paying more attention to these fraud allegations. But it’s a long road ahead.

Frank Albear, a West Palm Beach foreclosure lawyer for LaBovick Law Group, stated that repairs to the Stern files, where necessary, leave stronger legal claims that could protect future home buyers from having to defend title to their home.

Only time will tell how this legal mess will play out. Do you have an opinion? Leave a comment below and let us know your thoughts .

The housing meltdown has sent shock waves throughout the United States, with foreclosures reaching over 4 million. In an effort to help current homeowners that are on the brink of losing their home, the government initiated a program whereby homeowners can receive a free fraud review of their foreclosure to make sure there are no issues.

It was recently reported by the Palm Beach Post that few homeowners have taken advantage of the free foreclosure fraud review. Specifically, less than 3% of the total eligible for the fraud review have taken advantage.

It was reported that representatives have sent out over 4.3 million notices to those that qualify for the review, with only 121,725 people responding thus far. The initial deadline of April 30, 2012 has been pushed back to July 31, 2012, due to the low response.
Some of the main concerns with the program include:

1. A homeowner must have been in some process of foreclosure in 2009 and 2010 to be eligible. But it's only for a two-year period and a lot of the subprime loans went into foreclosure before that.
2. Concerns about whether homeowners would have to sign away rights to future claims if they accept an award for financial harm found during the foreclosure review.

One of the main reasons there has been such a low response is that many homeowners treat the mailing as another piece of junk mail. Homeowners receive several mailers regarding foreclosure assistance and it is believed by many that this correspondence blends in with the rest. Others believe homeowners think it is a scam.

I tell my clients to apply for the review, but only a handful have alerted me to the letters.

They get a lot of advertisements and there are so many scams out there that they might think it's just a scam. It's a bit of a hazy program.

Have you received a free foreclosure review mailer? Have you gone through the process? Leave a comment below discussing you experience.

Nobody I know likes to be ripped off. I am sure that you would not enjoy it as well. It is unfortunate that this occurs, but is a reality that we all must face. In an effort to inoculate the public against being ripped off, each year the Internal Revenue Service provides a list of the twelve biggest tax frauds for that year. Many of these scams are simple in design and implementation, and well known methods of taking advantage of vulnerable people. These acts occur at all times of the year, but most of them come to fruition during tax season.

So as the tax deadline of April 15 quickly approaches, we want you to be aware of what is lurking out there. Most of the scams are easy to spot. Just remember a few cliches and you will stay safe.

First cliche – There are no free lunches!

Second cliche - If it sounds “too good to be true”, it is!

IRS List of Top Tax Ripoffs for 2012

1. Identity Theft
2. Phishing
3. Tax Preparer Fraud
4. Hiding Income Offshore
5. Free Money from the IRS
6. False or Inflated Income or Expenses
7. False Form 1099 Refund Claims]
8. Frivolous Arguments
9. Zero Wage Claims
10. Abusing Charitable Deductions
11. Disguised Corporate Ownership
12. Misusing Trusts

Let’s explore in more detail the top three:

Topping the list again is IDENTITY THEFT

Identity theft is the biggest problem in the electronic age. The internet and its electronic community have rushed forward, ahead of all methods of control, and create a “Wild West” atmosphere. The thing about the United States that makes us great is our respect for the rule of law. However, that is not true for the Internet. The controls, privacy protections, and rule of law are just not moving as fast as the Internet community is moving forward. False tax returns are one common way thieves take advantage of both the government and the victims. The IRS has stepped up efforts to control Identity Theft tax rip offs but because ID thieves use real social security numbers and easy to find personal information (see Face Book, Google +, and Twitter) it is a hard job. If you get a notice that more than one tax return was filed in your name, make sure you report it immediately. The IRS has create a significant system to catch ID theft on tax returns and last year they saved over $1,400,000,000 in taxpayer refunds, but the thieves are smart and the schemes are getting more and more complex. If you are suspect that your ID was stolen you need to contact the IRS ID Protection Unit at www.IRS.gov/identitytheft.

Fishing! No, wrong, sorry: Phishing!

Phishing is when ID thieves lure victims into giving valuable identity information to the ID thief. This is typically carried out using email requests or setting up websites that look and feel like a legitimate site. Because there is really no difference between a “Real Website” and a “Fraudulent Website” it is easy to mistake them. Once the ID thief has your information, you are likely to get ripped off.

Here is a KEY POINT with respect to the IRS. The IRS does not use email to collect, or even request personal information from taxpayers. They certainly do not use FaceBook, Twitter or any other social media to contact or collect information. Do not trust an email, FaceBook contact, or any electronic contact from the IRS. If you do get an email from the IRS, or even the EFTPS – which is the Electronic Federal Tax Payment System, that looks legitimate but was unsolicited, you need to report that to the IRS through their specially designed Phishing unit at phishing@irs.gov.

Preparer Fraud

Almost nobody understands the tax code. Certainly those simple to fill in return forms are a nightmare to get right. So, many of us use accountants, CPA's, or tax attorneys to help us at the end of the tax year. But the expense of paying for a professional is quite burdensome for most people, so they either do it themselves, or look for a more economical option. The “Economical” route has created a space in the market for fraudulent tax preparers. These thieves will take money out of their clients’ refund, or charge unfair fees to prepare the return. They promote their service with unrealistic promises of guaranteed, overinflated refunds. Further, these thieves then have access to your personal information and can steal from you twice!

Here are some good standards to look for when choosing a Tax Preparer:

• Every paid “tax preparer” must get a “Preparer Tax Identification Number” (PTIN) from the IRS. This number must be placed on every prepared tax return. If your tax preparer does not have a PTIN then you should not sign the return.
• Every Preparer should give you a free copy of the return. If you are not given a copy of your tax return there may be a problem. If your Preparer is promising to get you an incredible or unusual amount on your return, I would be very wary.
• Tax preparers should be working on a set fee. They should not be on a contingency or commission basis and you should never have to pay the preparer from your refund.
• Finally, never allow a preparer to convince you to put false information on a tax return. That means you can never put in false income or false credits. If you do you are subjecting yourself to double jeopardy, because the preparer will have you and the IRS will also not be happy with your false information.

As a firm that concentrates on IRS Tax Fraud including Qui Tam and Whistleblower Issues we want you to beware of tax season scams! If you believe you are the victim of a scam, you need to report it as soon as possible. The IRS Criminal Division and the Dept. of Justice take online, telephone and in person scams seriously. If you have questions or have information about a tax fraud where more than $2,000,000 is at stake, call our office to report the fraud. Remember, when reporting tax fraud you must be first in line, you must have convincing information, and you must secure your claim to get paid the “Relator’s Share”. Call our office for a free consultation: LaBovick Law Group at 561-625-8400, or email info@labovick.com.

Buggy whips. I think of buggy whips when I hear stories like Kodak filing for bankruptcy. First I think how could this happen? Then I think "Buggy whips." I know that sounds crazy; why would somebody think about buggy whips? But it's pretty appropriate isn't it?

In the 1800s everyone had a buggy whip. You needed them to get your horses to drag around your cart. As the 1900s approach, and Ford and Benz build cars, they became a thing of the past. I wonder what happened to all those buggy whip companies. A few must have been wise enough to get into the automobile industry. Maybe they started creating belt drives or some other thing that would be similar to buggy whip on the new-fangled cars.

Kodak is just a buggy whip company and should serve as a hard lesson to anyone in business. Life moves quickly, and the only thing constant in life is change. If you don't look forward, you will be looking at your company broken and bankrupt, because the world, technology and life have moved past your usefulness.

I hate to say it, but the same is true for Florida lawyers. Lawyers must look to the future, adapt to the new environment and change our business practices if we want to survive.

Those of us who are wise enough to create strong websites, begin client interactions over the Web and save our data in the cloud, MAY survive. Those of us to hang on to the institutional old-world model by setting up large law firms with bloated overheads and white shoe arrogant high-cost lawyers will eventually be a thing of the past.

Lawyering was an interesting profession where we selected few lawyers who knew and understood the law. We were uniquely able to research a legal issue and cogently understand them and then develop legal theories to help clients. Soon that may be done by anyone who can type it into the Google search bar!

If we are not able to adapt to this new environment, we might as well join Kodak in bankruptcy court.

I wish Kodak the best. I nostalgically love the company. It reminds me of photo albums and my childhood. I hope the bankruptcy provides them enough time and releases, and enough capital to turn their substantial investment in new technologies into profitable ventures. Turning the company around is a tricky business, and I know it's one that Kodak has worked hard to achieve. It just seems they figured out they were making buggy whips a little too late.

Hostess Brands Inc, the father of Twinkies, Wonder Bread and HoHos, is again preparing to file for bankruptcy laws protection this week, The Wall Street Journal reported.

Twinkies ingredients have been the same for nearly 80 years, and although this is the second company restructuring, experts say the king of cakes won't disappear.

For more commentary and full news story:
Twinkie alert! Hostess may again file bankruptcy

Oh, how the Twinkie has fallen: Reflections of an ex-Twinkie tester

A recent article on Bankrate.com, "Help! I'm a victim of ID theft -- by my wife", highlighted an interesting scenario. A reader under the name "shocked", posed the following question to the Debt Adviser: Dear Debt Adviser,

I just checked my credit report and found my wife opened an account using my name and information. I have never used this account. I didn't apply for this credit. Now the account is delinquent. In your opinion, what is the best way to go about fixing my credit? Author, Steve Buscemi, gave a very detailed answer to the reader in regards to his marriage.

This question made me think about the implications regarding a person going through a bankruptcy or thinking about divorce. I sought answers from Florida Bankruptcy Attorney Audra Simovitch and Palm Beach County Divorce Attorney, Joseph R. Fields.

Continue reading "Unsecured Debt dispute with ex-spouse" »

In February, President Obama and attorney general, Eric Holder, announced that they considered Defense of Marriage Act, DOMA, unconstitutional and would no longer defend it in court. While the law is still on the books, the Justice Department will no longer defend the provisions of Section 3 and will leave that up to lawyers for Congress. DOMA refers to the exclusive federal recognition of marriages between men and women. In a recent turn of events, Bankruptcy Judges around the country are making landmark decisions regarding the rights of same sex couples in Bankruptcy Court.

In response to the bankruptcy case of legally married same-sex couple Gene Douglas Balas and Carlos A. Morales, 20 Bankruptcy Judges from the U.S. Bankruptcy Court in Los Angeles, signed a declaration that proclaimed Defense Of Marriage Act, to be in violation of the U.S. Constitution’s Fifth Amendment.

Judge Thomas B. Donovan of the United States Bankruptcy Court for the Central District of California wrote the following: “In this court’s judgment, no legally married couple should be entitled to fewer bankruptcy rights than any other legally married couple".

Continue reading "Bankruptcy Judges take giant step for rights of same-sex couples" »

JP Morgan Chase made headlines today with notice of dropping several credit card debt-collection laws nationwide per a WSJ article.

JP Morgan declined to give a reason as to why they are dropping the suits at this time. The list of states involved in the credit card cases are short, and yes, Florida made the list. The state list also included: California, Illinois, New Jersey, and New York.

As of March 31, there was an outstanding balance of $45.9 billion in credit cards due to JP Morgan. This included —current and delinquent accounts—for the states listed. JP Morgan is seeking an average of around $1,000 per lawsuit, per the WSJ.

CNN Money Reporter, Colin Barr, took the words right out of my mind in the article - JPMorgan's plastic explosives - Do we have credit card robo-signing scandal on our hands? For the sake of the already overburdened courts, let's hope not.

Continue reading "JP Morgan Chase drops several credit card lawsuits nationwide" »

One minute you’re on top of the world. The next, you’re being swept aside. It would be easy for one of America’s top real estate agents to feel that way. John McMonigle’s tale is a true rags-to-riches success story, but so far he hasn’t achieved a fairy-tale ending.

For two decades, McMonigle has been the top real estate agent in Orange County, Florida. He lived in a mansion, drove an expensive car, and appeared to have everything going for him. Now he’s declaring bankruptcy.

The Realtor is not alone. So far in in 2011, 40,291 Florida Bankruptcies have been filed already in the courts. Shockingly, the Florida bankruptcy numbers are not the worst in the nation. Consider California, where 16% of all filings in the nation have been made this year. Florida bankruptcies are 7% of the nation’s total, while Michigan is close behind with 6%. If you look at the numbers another way, they still seem quite high. Nevada has the most filings per capita, with Georgia and Tennessee bringing in the second and third spots.

Continue reading "Bankruptcy and a Former Number One Real Estate Agent" »

Rarely does a common business bankruptcy have all the mystery and international intrigue of a thriller spy novel, but one that was recently highlighted in the Wall Street Journal comes close. W. R. Grace and Company has a long and fascinating history.

William Russell Grace left Ireland during the potato famine to work harvesting guano in Peru. These bird and bat droppings were turned into fertilizer and gunpowder. His brothers began entrepreneurial ventures in America and London, but by the end of the 1800s, the brothers consolidated most of their holdings and the business passed on to their heirs.

In 1954, W. R. Grace Co. bought a chemical company. Within a decade, it was acquiring major shares of Miller Brewing, only to resell them to Phillip Morris three years later at a whopping profit. In 1987, it became the first foreign company to do business in the People's Republic of China when it opened a canning factory in Shanghai.

Continue reading "WR Grace Files Chapter 11, Royal Family Protests" »

Bankruptcy can be pretty scary, given today's unsettling economic times. However, if you are considering bankruptcy or have gone through one, you are not alone. In January 2011, The 2010 numbers showed that appx. 1.53 million people went through a personal bankruptcy. That was a 9% increase over 2009 numbers. The National Bankruptcy Research Center provided 2011 bankruptcy numbers through April, reported that 476,000 personal bankruptcies have been filed in 2011. If the economy improves we could see a trend of lower bankruptcies for 2011, but time will tell.

There are several myths about bankruptcies that are misconceptions. I came across a great article on Investopedia covering bankruptcy myths. West Palm Beach Bankruptcy Lawyer, Audra Simovitch, agreed that she hears these and more daily when working with bankruptcy clients in Florida and Massachusetts. She is amazed at how many people feel that they are in this alone and feel guilty about ashamed about their financial situations. "A bankruptcy is a way to get a fresh start. It is a restructuring of debts and assets and takes courage to admit that you want to improve your current situation.", said Attorney Audra Simovitch. "Hoping your debts will go away and not taking action will not make them disappear. Sometimes, lack of action, can make it worse.

Continue reading "Five Personal Bankruptcy Myths Explored" »

Florida courts received a sigh of relief today when Governor Rick Scott approved millions of dollars in emergency funding to help clear some of the hundreds of thousand of Florida foreclosure cases.

The Florida Supreme Court warned the governor that the $14 million was desperately needed to clear the massive foreclosure case backlog throughout Palm Beach County, Broward County, Dade County and other counties throughout Florida.

Florida Foreclosure Defense Attorney, Audra Simovitch, is in court almost daily representing clients in fighting the banks against fraudulent foreclosures and helping clients in bankruptcy matters. This new financial boost for Florida courts should help in this foreclosure crisis.

If you are in Florida facing foreclosure or bankruptcy, understand that there is help out there for you in getting you that fresh start.

Click on the following links to read more on the Florida courts receiving millions in badly needed funding:

Governor approves millions to speed up foreclosure cases - - WPTV.com

Scott approves partial bailout for Florida courts - WTSP.com (Associated Press)

Every year, lending giant JPMorgan Chase & Co. files an annual securities report. This year's report, which was filed on February 28, included some very eye-opening information. The bank disclosed that it is currently the defendant in more than 10,000 legal proceedings around the United States. The proceedings stem from the huge array of investigations that have been taking place concerning foreclosure practices. Around the fall of 2010, glaring paperwork errors on foreclosures were brought to public attention. In many cases, those errors cost people their homes. Not surprisingly, the discovery prompted a vast range of investigations into foreclosure industry practices.

If JP Morgan ends up paying out on all of the proceedings, the New York-based bank could end up paying fines of up to $4.5 billion. The legal proceedings have been initiated by a number of different entities. The attorney generals of all fifty states have banded together to investigate botched foreclosures. The United States Department of Justice has gotten into the act, too; many bank regulators have been filing suit, as well. Considering the huge number of involved parties, it isn't especially surprising that the nation's second-largest bank is knee-deep in litigation concerning these foreclosures.

JP Morgan is not alone in its battle, though. CitiGroup, Bank of America, Wells Fargo and many other banks and lenders are facing legal proceedings, too. For homeowners who are facing foreclosure, this news highlights the importance of seeking a qualified foreclosure defense attorney. All too often, homeowners feel helpless in the face of such troubles. When a bank begins foreclosure proceedings, many people just let things proceed. The assumption tends to be that the bank knows what it is doing. As the huge number of botched foreclosures and the issue of far-reaching foreclosure fraud comes to light, it is clear that homeowners need to protect themselves.

Continue reading "J.P. Morgan Facing Up to $4.5 Billion in Fines over Botched Foreclosures" »

2010 was a disheartening year for many people. According to the Bankruptcy Court in Miami, the number of personal bankruptcies in Miami-Dade, Broward and Palm Beach counties rose by 40%. Bankruptcies Florida totaled 24,681 in the state's southern region in 2009; they rose to 34,579 in 2010. As unfortunate as the increase is, it dovetails with unemployment figures, home foreclosures and business closings around the state.

Are Things Worse in Florida?
Across the country, personal bankruptcies were up by 9% in 2010. In 2009, approximately 1.41 million personal bankruptcies were filed in the United States. In 2010, that number rose to 1.53 million filings, according to the American Bankruptcy Institute. Based on that information, it may appear that Florida is worse off than many other parts of the country. However, there is a bit of a silver lining at play: Monthly bankruptcy filings have actually been on the decline in the state since September 2010. In December, there were 2,577 bankruptcies filed in south Florida, which represents a 2.6% decline from the previous month.

Understanding Bankruptcies Florida
The vast majority of the personal bankruptcies that are filed in the state of Florida are Chapter 7 bankruptcies. Under Chapter 7, a person must liquidate his or her assets in order to pay off old debt. Under Chapter 11 bankruptcy a person with the help of an attorney, works with the court to come up with a way to consolidate and reorganize his debt. Determining which bankruptcy is right for you can be tricky; an experienced attorney can help you make the right decision.

Unemployment and Bankruptcies
Considering the fact that Florida's unemployment rate is, on average, 12%, it makes sense that there have been excessive numbers of bankruptcies during the last twelve months. In south Florida, unemployment ranges from 10.8% to 13%, a fact that highlights the especially dire situation in that part of the state. Whether or not those numbers will improve in 2011 remains to be seen; similarly, it's too early to tell whether the slow decline in the number of bankruptcies is just a blip on the radar or the beginning of a long-term trend.

Click on the following links to read more on Bankruptcy increase in Florida:
South Florida Bankruptcies increas 40% in 2010 - Sun Sentinel - Marcia Pounds
Bankruptcy Statistics 2010 - U.S. Federal Courts