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Bankruptcy FAQs


If I cannot afford to pay my mortgage how can I afford to hire a lawyer?

The truth is that it is often substantially cheaper to fight the foreclosure then to let the bank take the home away. By doing nothing, the bank may be able to take the home in a few months leaving you with moving costs and rent, often at a substantially less attractive living situation than you are currently experiencing. Not only that, but by walking away from the home, you may be subject to the bank suing you further on down the road for a deficiency judgment if you owe more than what your house is worth.

We have not only kept thousands of homeowners in their homes for years without paying their mortgages, but also have helped them procure substantial principal reductions enabling them to have significantly lower mortgage payments that they can afford. In addition, we sue banks for many violations under TILA, RESPA, FDCPA, FCCPA, FDUTPA, and other statutes, and have frequently recovered homeowners more money than what they have to pay us in legal fees. Furthermore we offer reduced legal fees and payment plans, charging homeowners in South Florida a fraction of what rent would cost.

If I file bankruptcy, will my credit be ruined?

Under the right circumstances, bankruptcy is an excellent tool that can and should be used to help homeowners. Fear of the ability to get credit should not be a determining factor in stopping someone from filing for bankruptcy. Nothing impacts a credit score more than missing mortgage payments, and after several missed mortgage payments the credit is already significantly reduced. In fact, most people that are in the position to file bankruptcy have already had their credit lowered to about as bad as it will get. On the contrary, after filing for bankruptcy you can then start fresh and begin rebuilding credit again.

How long will it take me to reestablish my credit after filing for bankruptcy?

While there is no exact amount of time, remember that credit card companies and other entities that issue credit make their money by extending credit, and thus are eager to put people back into the borrowing chain. We have had clients receive offers from credit card companies in as little as a year after filing for bankruptcy.

Will my spouse be affected by my individual bankruptcy filing?

A spouse is not affected by a bankruptcy if they did not sign an agreement for the debt. The answer to this question really depends on how the debt is held and who is responsible for it. It is not uncommon for only one spouse to file for bankruptcy. Prior to either spouse filing for bankruptcy, a consultation should be made with an experienced bankruptcy attorney who can go through all of the debt issues with you and give you the proper legal advice.

Can I be fired from my job if I file bankruptcy?

No. Under U.S.C. Section 525, an employer cannot discriminate against you due to you filing for bankruptcy.

What Is Chapter 7 Bankruptcy?

Chapter 7 of the Bankruptcy Code governs the process of liquidation under the bankruptcy laws. Chapter 7 is the most common form of bankruptcy. In the liquidation process, most or all of a debtor’s assets are sold off to generate cash that is then used to pay the debtor’s creditors. The debtor’s debts are thereby eliminated, giving the debtor a fresh start. The liquidation process under Chapter 7 can differ slightly, depending on whether the debtor is a business or an individual.

When a business files for Chapter 7 bankruptcy, the bankruptcy court will appoint a trustee. The business must cease operations, unless the trustee chooses to continue operations. The trustee will make an accounting of the business’ financial affairs, and will then begin selling the business’ assets, distributing the proceeds to the business’ creditors. However, a business’ debts are not technically discharged at the close of a Chapter 7 case, and continue to exist until the applicable statute of limitations expires.

When an individual files for Chapter 7 bankruptcy, unless their debt is primarily not consumer debt, they must meet the means test to demonstrate their eligibility for Chapter 7. A debtor automatically meets the means test if their household income (the income being earned by all individuals in the debtor’s household, not just the debtor’s income) is less than the median household income in the state where the debtor files for bankruptcy. Otherwise, a debtor’s disposable income must not exceed a specified floor amount or portion of their debts. If it does, a debtor can only seek a Chapter 7 bankruptcy if they establish “special circumstances,” such as additional expenses, loss of income, or medical emergency.

An individual is allowed to exempt certain property from liquidation in Chapter 7 bankruptcy. Upon emerging from bankruptcy, most of the individual’s unsecured debts are discharged (with certain exceptions, such as student loans or domestic support obligations).

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is the process by which an individual is allowed to undertake a “reorganization” of their finances. An individual can seek Chapter 13 bankruptcy when they have sufficient income to make payments to their creditors under a repayment plan.

In a Chapter 13 proceeding, the debtor begins making payments to a trustee appointed by the bankruptcy court. The debtor must also present the court with a proposed repayment plan lasting either three or five years. The plan must be approved by the debtor’s creditors. It can also be approved by the bankruptcy court, over the objections of creditors, so long as the plan meets the requirements under Chapter 13.

Under a Chapter 13 repayment plan, a debtor can:

  • Consolidate debts
  • Cure arrearages on mortgages or other long-term debts
  • Avoid “underwater” loans
  • Pay back taxes over time
  • Partially repay unsecured debt

If the debtor makes all payments required under the repayment plan and meets other requirements, the bankruptcy court can discharge outstanding debts, including some debts that cannot be discharged in a Chapter 7 bankruptcy. Chapter 13 bankruptcy also has the benefit of allowing a debtor to keep most or all of their property and assets – which would sold off in a Chapter 7 liquidation – even though the debtor’s creditors are likely to receive less than the outstanding balances owed by the debtor.

What Is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy allows businesses, whether organized as corporations, partnerships, or sole proprietorships, as well as individuals in certain situations, to undertake reorganization of operations and finances. Businesses typically file for Chapter 11 bankruptcy when they are no longer able to service debts or pay creditors, but when the business can still be reorganized and made profitable again. Unlike Chapter 7 bankruptcy, the debtor remains in control of the business and its operations as a debtor-in-possession, unless the court appoints a trustee.

As in a Chapter 13 bankruptcy, a Chapter 11 debtor is required to file a plan of reorganization with the court. A plan of reorganization is effectively a compromise between the debtor and their creditors. The plan sets forth how the debtor intends to reorganize operations to become profitable again and how the debtor proposes to repay creditors. The plan will also propose to reject and cancel certain contracts known as executory contracts, or those in which both parties still have duties to perform. Examples of executory contracts include collective bargaining agreements, vendor contracts, and real estate leases.

If all creditors approve the plan of reorganization, it is usually approved by the bankruptcy court. In a process known as cramdown, the bankruptcy court can approve the plan over the objection of certain creditors, provided the plan still meets the requirements of Chapter 11. Although a debtor has the exclusive right to propose a plan at the outset of the proceedings, if a plan is not adopted by a certain time, any party with an interest in the proceedings may propose an alternative plan.

Credit card debt FAQs

Credit card debt

How do I know if there has been a reporting error on my credit report?

As a general rule, any consumer that has borrowed money, used a credit card, or has entered into any kind of credit agreement should go online and check their credit report to make sure that it is accurate. The only website that has been approved by the FTC for access to your free credit report is At a minimum, you should check your credit report once a year, if not more.

What do I do if I have found errors on my credit report?

The first step is to contact both the credit reporting company, as well as the company that provided the information to them and let them know. It’s highly recommended to do so in writing via certified mail so you can document that they received your dispute letter. In addition to your name, address, and phone number, the dispute letter should also include the specific items in your report that you dispute, with a short factual explanation as to why you are disputing the information, as well as a clear request that the information be removed or corrected. They have 30 days to investigate the matter, and if it’s determined that the reported information was inaccurate, then it must be corrected on your file.

The credit reporting companies must give you a response in writing as soon as the investigation is complete. Additionally, if it’s determined that there was an error on your report, you can request that the credit reporting company send notices of any corrections to anyone who has requested your credit report in the past six months (or up to two years it was for employment purposes). Unfortunately, even if your credit report has been corrected, the incorrect information may be put on there again, so make sure to check your credit report on a regular basis.

I applied for credit and was denied due to something on my credit report. Is there anything that I can do?

Statistically, a large percentage of credit reports have errors. If you have been denied credit or given credit at a high rate of interest due to your past credit history, the first step is to get a copy of your credit report to check it for accuracy. If there are errors, then immediately file a dispute letter with the credit reporting agency and the company that provided the information. If they refuse to correct the error, you should consult an experienced consumer litigation attorney for help.

Debt collection FAQs

Debt collection

If a debt collection or credit card company sues me, can I just ignore it?

Absolutely not. Even if it’s for a small amount of money, by ignoring the lawsuit, a judgment will usually be entered against you. In addition to this judgment, interest will continue to compile, resulting in a small amount of money continually growing into a bigger and bigger debt. Furthermore, as a result of the judgment, money could be taken from your bank account or your wages could be garnished.

If you have a credit card or other debt that is piling up or you have been sued, call Loan Lawyers for a free consultation to find out how we can help.

A debt collection company sued me for an unpaid credit card bill. Should I file for bankruptcy?

It depends. While bankruptcy may be a good solution to get rid of debts, there may be more effective ways to help without the need for filing bankruptcy. We often use various bankruptcy strategies to help consumers, but also advise them on creative ways to get out of their debt situation without the need to do so. As a general rule, we advise people that bankruptcy should be used as a last resort. We have been very successful in fighting and beating credit card and debt collection companies in court and getting our clients’ debts discharged without the need for bankruptcy. In addition, we frequently recover money on our clients’ behalf due to the violation of multiple state and federal laws by credit card and debt collection companies.

Can a debt collection company call my friends and relatives about my debt?

No. The FDCPA ( Fair Debt Collection Practice Act) strictly prohibits debt collectors from contacting anyone else regarding your debt. You may be entitled to $1,000 per violation, plus actual damages and attorney’s fees.

Debt collectors are calling me all the time, what should I do?

The FDCPA (Fair Debt Collection Practice Act) prohibits debt collectors from harassing you, and whether you owe the debt or not is irrelevant. If you are receiving calls from debt collectors, call us today for a free consultation so we can properly advise you as to what your legal rights are and how you can make money due to debt collector abuse.

Can debt collectors call me at work?

No. Debt collectors are prohibited from calling you at work. If you have a debt collector calling you at work, call us to find out more about how we can help recover money on your behalf due to violations of the FDCPA.

If I am receiving calls from debt collectors, is it easier to just ignore them?

If you are receiving calls from debt collectors for any reason, you should contact Loan Lawyers right away. Often, people feel embarrassed when they owe money and try to avoid the situation by ignoring the phone calls or changing their cellular phones. While this may seem like an easy solution, it may wind up costing you tens of thousands of dollars or more that you could have made due to debt collectors violating the FDCPA (Fair Debt Collection Practice Act) or the TCPA (Telephone Consumer Protection Act).

The FDCPA has a long list of violations that are made by debt collectors on a regular basis, with each claim being worth at least $1,000. Furthermore, the TCPA expressly prohibits collectors from contacting you on your cellular phone without prior consent, with every call resulting in between $500-$1,500 in damages. If you are getting calls from debt collectors, we want to hear from you. These annoying calls could amount to you being entitled to some serious money.

What should I do if I’m receiving text messages on my cellular phone telling about some business specials or other marketing issues?

If you are receiving unsolicited text messages from a business or corporation that is trying to market their products or services, you may be entitled to $500-$1,500 in damages for each message due to violations of the TCPA. Call Loan Lawyers today to find out more.

Foreclosure FAQs


I was served with a foreclosure lawsuit, what should I do?

If you have been served with a foreclosure lawsuit in Florida, you have 20 days to file a proper legal response in court. You must admit or deny the allegations, raise affirmative defenses, and file whatever counterclaims you may have against the foreclosing bank. Failure to file a legally adequate response could result in a default being entered against you and the loss of your ability to fight the foreclosure. It is highly recommended that you do not try to do this on your own. Schedule an appointment with a local, experienced foreclosure defense lawyer who can help you with this process.

How long does the foreclosure process take?

The answer depends on many factors. If you ignore the foreclosure and don’t hire an experienced attorney to fight for your rights, the bank may be able to complete the process and sell your home in as little as a few months. By hiring an experienced attorney, the foreclosure process could take years. On average, a defended foreclosure usually takes anywhere from 2-3 years or longer.

Do I need to pay my mortgage during the foreclosure process?

No. In fact, once you have defaulted on the mortgage payments and the loan has been accelerated, the bank will no longer accept the mortgage payments. We have had clients that have been living in their homes without paying their mortgage while we have been fighting their foreclosures for 3, 4, or 5 years or longer.

How come the bank that is suing me is not the same bank that I have been making my mortgage payments to?

The good old days where a bank knew its customers by first name and kept their mortgages in house as portfolio loans are long gone. Mortgage loans are now flipped, bought, sold, and packaged into giant investment trusts with thousands of other mortgages that are sold on Wall Street. In fact one of the legal defenses often used to fight these foreclosure actions is that the bank that is purporting to foreclose doesn’t have proper legal standing or authority to do so.

If I haven’t been paying my mortgage, how can I possibly win my foreclosure case?

Banks are greedy. Due to that greed, they often rush through or ignore the proper legal process of closing, servicing, selling, and foreclosing on mortgage loans. The result is often numerous violations of various state and federal laws that are designed to protect homeowners. It is not uncommon to uncover negligence and intentional fraud committed by the banks that an experienced foreclosure lawyer can use to stop and win foreclosure cases.

Can I rent my home while it’s in foreclosure?

Yes. Unless the bank successfully wins the foreclosure case by getting a judgment against you and selling your house at auction, the home belongs to you and you are within your legal rights to live in, rent or use your home for any lawful purpose you choose.

Will filing a bankruptcy stop the sale of or foreclosure on my home?

Yes. Once a bankruptcy is filed, a stay order will be issued resulting in the halting of underlying foreclosure procedures. It is important to speak to an attorney knowledgeable in both bankruptcy and foreclosure law prior to doing so, as there are many different situations that may affect your legal rights, and you want to make sure that you make an educated decision first.

Should I file a bankruptcy if a foreclosure lawsuit is filed against me?

The answer to this question really depends. It is highly advisable that you speak to an attorney that is experienced in both foreclosure defense as well as bankruptcy. Oftentimes, South Florida homeowners are given whatever legal strategy the lawyer they speak to practices within, often resulting in a less than desirable or horrific outcome. While a Chapter 13 bankruptcy may be a good strategic tool to use to ensure the maximum benefit for the homeowner, it shouldn’t be implemented to stop a foreclosure unless it is the right situation and at the right strategic time.

If you’re contemplating filing bankruptcy or you’ve been told by a bankruptcy lawyer to file bankruptcy to stop a foreclosure,contact Loan Lawyers for a free consultation to make sure that the correct combination of legal strategies are used for your situation.