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.

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" »

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" »