Author Archives: Radha Rothrock

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

Can you file a joint bankruptcy petition with your illegal alien spouse?

Can you file a joint bankruptcy petition with your illegal alien spouse?

Yes, you and your spouse can file jointly.  If your spouse has a tax identification number, he or she may use it instead of a social security number and file with you.  As a practical matter, if you spouse does not have a social security number, it is unlikely he or she will have many items on a credit report.  The illegal alien might not need to file. The reason a spouse might file is because a couple who files jointly can double their exemptions on their bankruptcy petition.  Click here to visit our page on Florida bankruptcy exemptions.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

How Does Bankruptcy Affect Your Credit?

How Does Bankruptcy Affect Your Credit?

Chapter 7 stays on your credit report for 10 years.  Chapter 13 stays on your credit report for 7 years.  Practically speaking, most of my clients who had 700 credit scores in the past get 700 credit scores again within 2 to 3 years.  Most of them achieve a score in the high 600s within 9 months of filing.  It is important to review your credit report approximately 2 months after your bankruptcy discharge to make sure that your bankruptcy is being reported correctly.  Here are some steps to do so:

1.  Go to www.annualcreditreport.com and order all three of your credit reports for free.  The debts that you sought to discharge should be reported as “discharged in bankruptcy” or “included in bankruptcy.”   If they do not, you can complete an online credit dispute for free.  Within 30 days, the creditor should correct the report.

2.  If you reaffirmed a debt in the bankruptcy, make sure the creditor is reporting the debt as “paid as agrees.”

3.  If you obtain new credit cards after filing bankruptcy, make sure the creditor is reporting that the debt is paid.

If you do not correct the erroneous information on the report, your score will not go up and you will have a hard time getting a mortgage in the future.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

Bankruptcy Credit Counseling Requirement

Bankruptcy Credit Counseling Requirement

If you file bankruptcy, you are required to take a credit counseling class before you file bankruptcy.  In addition, you must take another credit counseling class before your case is discharged.  The requirement to complete credit counseling was part of the Bankruptcy Reform Act of 2005.  The purpose of completing the class is to help people learn why they ended up filing bankruptcy and how they can utilize budgeting to prevent it from occurring again.  The class may be completed online, over the telephone, or in person.  I am not aware of any organizations that currently provide the class in person, but, supposedly, they exist.  The price for the class ranges from $0 to $75.  The class normally lasts for an hour.  The course provider will provide a certificate of completion to you after you complete the class.  You must file the certificate of completion with the court.  If you do not complete the class before you file bankruptcy, the Court will dismiss your case.  If you do not complete the second class, the Court will not give you a bankruptcy discharge.  Click on this link for a current list of bankruptcy credit counseling providers in Florida.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

US Trustee Audits

US Trustee Audits

Approximately 1 out of every 1,000 cases is selected for an audit by the United States Trustee’s office.  If you are one of the unlucky ones, don’t panic. The United States Trustee’s office is a division of the Department of Justice.  Most of the audits selected are random.  Occasionally, the U.S. Trustee sees something in the paperwork that was filed that “doesn’t add up.”  For example, a person might report that he or she earns $10,000 per year; however, that person lives in a mansion.  In this case, the US Trustee’s office might audit the file to see if there are assets that have not been reported.

If you are selected for an audit, you will be asked to turn over to the auditor most of the same information as you would otherwise turn over to the trustee.  Information includes bank statements, pay stubs, and proof of assets.  The main difference is that the chapter 7 trustee might ask for 3 months of bank statements.  The US Trustee will typically ask for six to 12 months of statements.  In addition, the US Trustee might ask for a list of payees for large checks or the source of large deposits.

If the numbers “add up,” the audit will conclude. If the numbers do not add up, the debtor will be asked to explain the discrepancies in the bank statements vs. what was reported in the bankruptcy paperwork.

You should never attempt to handle an audit yourself.  Make sure that your bankruptcy attorney is the point of contact for the audit.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

Does the bankruptcy trustee check bank statements?

Does the bankruptcy trustee check bank statements?

In the Fort Myers division in the Middle District of Florida, the chapter 7  trustee will ask for the following documents.

  • Complete bank statements covering the 90 days prior to date of filing bankruptcy, including the bank statement that contains transactions on the date of filing the bankruptcy.
  • Pay stubs for the 60 days prior to the filing date AND the first pay period after the filing date.
  • Complete federal income tax return for the last year a return was filed.
  • Written payoff statements reflecting the balance owed for all vehicles, boats, trailers or homes.  If your billing statement contains the payoff figure or if a creditor sent you a letter with the payoff, this will suffice.
  • Titles or registrations for all automobiles, boats, trailers, or other personal property that is titled.  If your vehicle(s) are paid off, I would recommend getting your vehicle appraised prior to filing.
  • The last two statements for all retirement and non-retirement accounts, including 401(k) plans, IRAs, mutual funds, etc.
  • Closing statement and deeds for all real estate sold or transferred for the last three years.

In addition, he or she can ask for more documentation.  In particular, if the trustee notices a pattern of large withdrawals in the account or large deposits, he or she might ask for more.  In addition to the trustee, the United States Trustee can ask for this documentation.

The chapter 13 trustee in the Middle District of Florida typically looks at the last two years of your tax returns and the last six months of your pay stubs.  On occasion, they will ask to see your bank statements.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

Where do you file a bankruptcy petition in Florida?

Where do you file a bankruptcy petition in Florida?

A bankruptcy petition, for an individual, is usually filed in the district in where you reside.  For a business, it is usually filed in the district where the business is located.  There are exceptions to this rule.  Click this link of the United States Bankruptcy Court to determine what district your city is located in.

Below is a list of cities and the corresponding district for the Middle District of Florida:

Fort Myers Division
Charlotte, Collier, De Soto, Glades, Hendry and Lee counties

Jacksonville Division
Baker, Bradford, Citrus, Clay, Columbia, Duval, Flagler, Hamilton, Marion, Nassau, Putnam, St.Johns, Sumter, Suwannee, and Union counties

Orlando Division
Brevard, Lake, Orange, Osceola, Seminole and Volusia counties

Tampa Division (yellow)
Hardee, Hernando, Hillsborough, Manatee, Pasco,Pinellas, Polk and Sarasota counties.

Rothrock Law Firm files cases in the Middle District of Florida, Fort Myers division, only.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

What happens in bankruptcy if I buy a car from a family member?

What happens in bankruptcy if I buy a car from a family member?

One of the most complicated, yet common, scenarios in bankruptcy occurs when a debtor buys a car from a family member.  Typically, when you buy a car from a family member, you don’t go through the normal channels of preparing a promissory note and recording the note.  Unfortunately, unless the note is prepared properly and recorded properly, the bankruptcy trustee can collect the payments from the family member made within 12 months of filing bankruptcy.  Further, the trustee can avoid the lien of the family member.  In plain English, if you bought your mother’s Toyota for $5,000 and agreed to pay your mother $300 per month, the trustee can take the car and liquidate it to pay your creditors and/or collect $3,600 from your mother.  Why?  There are two principles of law that are applied here.  First, the trustee can “avoid” a lien on secured property if it is not “perfected” properly.  Whether you borrow from a family member or not, the State of Florida requires you to take certain actions for your security interest to be valid.  Most car dealerships follow these procedures.  Most individuals do not.  Second, the trustee can recover money that is considered a “preferential transfer.”  The bankruptcy code presumes that if you make payments to your family members rather than repaying other creditors, you are favoring your family members over your other creditors.  If this is the case, the trustee can recover the money.  Bottom line, if you cannot get conventional financing because of your credit and seek to finance your car from your family members. hire an attorney to complete the paperwork properly.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

How to Choose a Bankruptcy Attorney

How to Choose a Bankruptcy Attorney

There are many considerations when deciding how to choose a bankruptcy attorney.

1.  First and foremost, you must be comfortable with the attorney.  If you are too afraid to ask the attorney questions, the representation will not go well.

2. Cost of the attorney will vary from one firm to another.  Consider the number of years the attorney has been practicing and the number of cases the attorney has filed.  Sometimes, one attorney’s fees might be a couple of hundred dollars lower than another; however, if the less experienced attorney makes a mistake on your case, you will pay much more than a couple of hundred dollars fixing the problem.

3.  Make sure the attorney you select is aware of what the local judges and trustees are looking for.  States and counties differ vastly from one region to another even though the laws might be the same.

Radha Rothrock has been licensed for 20 years and is licensed in the states of Florida and Texas.  She has filed chapter 7, 13, and 11 cases in both states and has appeared before all the judges and trustees in the Middle District of Florida.  She is a bankruptcy attorney in Fort Myers, Cape Coral, and Naples.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

What is the difference between Chapter 7 and Chapter 13 bankruptcy?

What is the difference between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 liquidates your assets to pay your debt, while Chapter 13 reorganizes your debts.  In a chapter 7, a trustee is appointed to your case.  When you file your case, you are allowed to designate certain property, called “exempt” property.  You can keep this property without having to repay your creditors.  If there is property that you are not allowed to keep, the chapter 7 trustee will either allow you to buy your property back or will sell it to pay your creditors.  In a chapter 13, you can keep your property even if it is not claimed exempt; however, you pay your creditors back the value of your property that is not exempt.

 

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.

How to rebuild credit after filing bankruptcy?

How to Rebuild Credit after Filing Bankruptcy

1.    First, order a copy of your credit report approximately three months after you get your bankruptcy discharge.  You are entitled to get a free copy of your credit report from all three major credit bureaus once a year at www.annualcreditreport.com.  Make sure that your debts show up as “discharged in bankruptcy” or “included in bankruptcy”  on the credit report.  If they do not, file an online dispute.  Your report should be corrected within thirty days.

2.    If you reaffirmed a debt in bankruptcy, such as a mortgage or car loan, the creditor should report your payments on your credit report.  Your score will eventually go up.  Again, check your credit report to make sure that the lenders are reporting the payments on the debt that you reaffirmed.

3.    Apply for 3 credit cards.  I am aware of at least three companies that solicit bankruptcy clients for preapproved credit card offers, with annual fees of $0 to $39 per year with no other charges.  If you use the cards to buy gas and pay them off in full at the end of the month, your score will go up.   Try to utilize less than 20 per cent of your available credit and try to pay off your cards in full at the end of the month.  This will help your credit score tremendously.  Sometimes you will be denied if you apply for a retail store card online, but you might be approved for the same card if you apply in the store.  Remember, retailers want you to spend money in their stores and sometimes offer promotions to make it happen.

4.    If you didn’t reaffirm any debts and you can’t get any credit cards, ask your bank if they have a secured loan program.  For example, you might purchase a $1,000 certificate of deposit from them and they give you a $1,000 line of credit using your CD as collateral.  You might also be able to get a secured credit card.  Keep in mind the secured credit cards can charge very high fees, such as $150.00.

5.    Look into lease to own options on housing.

 

There is no hard and fast rule for rebuilding credit after filing bankruptcy.  Every person’s situation is different.  Factors that will influence your ability to get credit include your employment history, your income to debt ratio, the amount of down payment you are willing to contribute, and the overall economy.  The federal government is imposing strict lending standards at this time for mortgages.  Currently, in Southwest Florida, most of banks are requiring at least three years after your discharge to give you a mortgage.  For FHA loans, the wait period is two years after a chapter 7 discharge or one year of consecutive chapter 13 payments.  A new program went into effect at the end of 2013 that shortened the waiting period upon  showing of “hardship”; however, underwriters are seldom granting the hardship.  Expect to wait at least two years after your chapter 7 discharge if you want a mortgage.

About Radha Rothrock

Radha Rothrock is a bankruptcy attorney in Cape Coral, Fort Myers, and Naples. Call today for your free consultation at (239) 206-1948.