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Florida Bankruptcy Exemptions Protect Your Most Crucial Assets

Bankruptcy allows an individual or business overwhelmed by debt to get a fresh start by discharging most debt or allowing a manageable plan and time frame for repayment.

The cost of bankruptcy is that some of your assets may be taken or liquidated to pay your creditors. If bankruptcy meant losing everything, it would be nearly impossible to move forward after filing. The bankruptcy code therefore allows certain property exemptions for basic assets and possessions that cannot be used to pay creditors.

The federal bankruptcy code at one time did not define exemptions, and exemptions depended entirely on state law. Currently, federal law defines exemptions, but allows states to opt out and create their own statutes concerning exemptions. Florida is one state that does so. States are also permitted to decide whether debtors may choose between the federal or state bankruptcy scheme. Florida debtors must use Florida’s exemptions, which are quite favorable.

In order to qualify for the use of Florida’s exemptions, you must live in Florida for a minimum of 730 days prior to filing for bankruptcy.

Florida’s exemption for your home, called a homestead exemption, is one of the most generous in the nation. The law puts no limit on the exemption allowed for your home. Prior to the Bankruptcy Abuse and Prevention Act of 2005, wealthier debtors would often buy an expensive home in a state like Florida just prior to filing for bankruptcy, thereby shielding large amounts of otherwise non-exempt cash and other assets from creditors. The Act curbs this practice by requiring debtors to have purchased the home more than 1215 days prior to filing; otherwise, the exemption is limited to $146,450.

Up to $1000 worth of personal property, such as furniture and electronics, may be exempted. Alternatively, an exemption of $4000 for personal property is allowed if the debtor does not take a homestead exemption. A separate exemption of up to $1000 is allowed for a motor vehicle.

For heads of household, up to six months worth of wages deposited in a bank account at up to $750 per week is exempt. The Florida state legislature raised this limit from $500 per week in October, 2010.

Many types of savings are exempt, including: 401(k) and 403(b) plans; IRAs and Roth IRAs; educational savings accounts and Florida Prepaid tuition payments; health savings accounts; and hurricane savings accounts. Limits apply to some of these exemptions, but they are in most cases quite generous.

Life insurance policies are exempt up to their cash surrender value, as are veterans’ benefits and social security benefits.

Pensions, such as those payable under the Florida Retirement System, police and firefighter pensions, and teachers’ retirement benefits, are exempt.

These are merely the most commonly-claimed exemptions. Florida’s bankruptcy statutes contains still more exemptions that apply in special cases. A qualified Florida bankruptcy attorney will be able to assist you in finding and claiming every allowable exemption under the law.

Shiobhan Olivero is the Owner and President of Olivero Law If you need a Brandon bankruptcy lawyer, Tampa bankruptcy lawyer, or Tampa bankruptcy attorney, call 813.654.5777 or visit Brandonlawoffice.com.

Posted on Friday, April 26th, 2013 at 8:36 am under Bankruptcy.
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Florida Health Insurer Files for Bankruptcy

A large Florida-based health insurance provider has filed for bankruptcy. The move comes after months of state scrutiny and allegations of financial impropriety.

Universal Health Care Group Inc., based in St. Petersburg, has filed for Chapter 11 protection. Meanwhile, state regulators seek to take over two subsidiaries of the company.

The Florida Office of Insurance Regulation (FOIR) referred Universal Health Care Insurance Co. Inc. and Universal Health Care Inc. to the Division of Rehabilitation and Liquidation at the Department of Financial Services to initiate state receivership.

The company has so far withheld consent for the takeover and will have the opportunity at a court hearing to demonstrate why it should not be required to go into receivership.

Florida began formally investigating Universal in August, 2012, after auditing firm Ernst & Young refused to sign off on some of the company’s 2011 financial statements, alleging their internal controls contained “material weaknesses.”

State investigators now claim to have proof that the company is insolvent. That proof also points to a pattern of improper financial management, according to the state. They allege that United misrepresented its balance sheet and misled state regulators and its creditors.

Florida law provides for an HMO to be a candidate for state receivership if it is the victim of “embezzlement, wrongful sequestration, conversion, diversion or encumbering of its assets; forgery or fraud or other illegal conduct” that threaten its solvency. In an interview with the Tampa Bay Times, FOIR counsel Belinda Miller said that all of those violations apply to Universal.

Jeff Atwater, Chief Financial Officer for Florida, wants to liquidate the company. Insurance Commissioner Kein McCarty is working with federal and state law enforcement to determine whether criminal or civil action is appropriate.

A Tampa Bay Times report said that according to documents filed with the state, the company admitted to being insolvent as of the end of 2012 and required a cash infusion of $30 million in order to continue operations.

At about the same time, officials in Georgia and Ohio reached agreements with Universal under which the company could not sign up new Medicare members.

Miller said that it wanted instead to prove that the company was insolvent.

Universal is pursuing a merger of three of its HMOs in Texas, Florida and Nevada with America’s 1st Choice, owned by Tampa philanthropist Dr. Kiran Patel. Patel has offered $36.5 million for the companies. Universal must now seek the authorization of the bankruptcy court to move forward with the sale, the company said in a statement.

Shiobhan Olivero is the Owner and President of Olivero Law If you need a Brandon bankruptcy lawyer, Tampa bankruptcy lawyer, or Tampa bankruptcy attorney, call 813.654.5777 or visit Brandonlawoffice.com.

Posted on Tuesday, April 23rd, 2013 at 10:35 am under Bankruptcy.
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Lifetime Alimony for Military Ex-Spouses Under Fire

Military advocates are pushing for alimony reform.

Advocacy groups are increasing pressure on lawmakers to reform an alimony law that can award ex-spouses of U.S. military service members as much as half their retirement pay until death.

Several states, including Florida, are contemplating reforms to permanent alimony. This has contributed to military members’ calls to revise the federal law.

The Uniformed Services Former Spouses Protection Act (USFSPA) of 1982 allows states to treat military pensions that are not disability-based as property that may be awarded to ex-spouses at up to 50 percent.

Opponents of the USFSPA say they should not have to hand over forever a large portion of the retirement pay they earned over 20 years of serving their country. They point out that military retirement does not constitute an end to all duties, but is reduced pay for maintaining a reserve status. They also point out that few other employees of the federal government are subject to such laws, including the Congress members who created it.

In an interview with Newsmax, Larry White of the USFSPA Liberation Support Group said, “We just don’t think the military should have special rules against it that don’t apply to others.”

But supporters of the law say that being a military spouse means sacrificing productive years and, often, inconvenient relocations in support of their spouses’ careers, according to Diane Mazur, a University of Florida law professor.

“The spouse [says]: ‘I gave my life to the military too, sometimes under difficult circumstances, and so I’ve earned part of that pension. It’s not fair for me to have to start out with nothing,’” Mazur told Newsmax. “A military pension attracts a lot of attention because usually that will be the asset of greatest value, by far.”

Congress created the USFSPA in 1982 in response to a Supreme Court decision the previous year that permitted a ban on the division of military pensions in divorces. The law allows for an officer’s spouse to be awarded half the retirement pay if he or she was married to the service member for the entire 20 years during which pension benefits accrue. The portion to which the ex-spouse is entitled is prorated if the marriage lasts for only a portion of those 20 years, and there is no minimum duration of marriage to qualify for a portion of the pay. This last point is of particular concern to critics of the law.

Opponents concede that the law was necessary in the past. Military spouses were often left to perform child-raising and homemaking tasks almost entirely on their own, leaving them with little to no skills or education necessary to join the workforce after divorcing. Now, critics say, spouses are able to get a college education, seek employment, and contribute to their own retirement savings while married.

Joshua Law is a Tampa divorce lawyer and Brandon family law attorney with the Olivero Law To learn more, visit http://www.brandonlawoffice.com/

Posted on Wednesday, April 17th, 2013 at 10:34 am under Divorce and Family Law.
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Bankruptcy Audits Suspended Due to Tight Budget

A federal government program to audit bankruptcy filings is being put on hold due to budgetary constraints.

The U.S. Trustee Program (USTP) – part of the Justice Department – began auditing corporate and individual bankruptcies as part of Congress’s 2005 overhaul of the Bankruptcy Code. The USTP in March said it has “indefinitely suspended” the audits. This is not the first time a lack of funds has interfered with the program.

The 2005 law changes authorized the USTP to randomly select for auditing one of every 250 personal bankruptcy cases in each federal judicial district. The amendments also authorized audits of cases showing statistically unusual claims. Under the program, U.S. trustees select the cases, and independent accountants then conduct the audits.

According to a USTP report, the program saw audits of one of every 250 consumer cases per district. But in fiscal years 2008 – 2010, that rate fell to one of every 1,000 cases because of budgetary pressures. A temporary suspension of the program extending from late 2011 to early 2012 pushed those years’ numbers further down to one out of 1,700 cases and one out of 1,450 cases respectively.

Consumer credit industry associations lobbied for the audit program in an attempt to crack down on what its members saw as widespread fraud in bankruptcy filings. The audits review a number of financial documents, such as bank records, paychecks, tax filings and divorce settlements.

Industry groups including the Financial Services Roundtable (FSR), a group of executives at consumer finance firms, have previously asked Congress to increase the program’s funding. In an interview with The Wall Street Journal, Scott Talbot, a vice president at FSR, said the recent suspension concerns him.

“The audits are designed to catch and prevent abuse. The absence of the audits could lead to more instances of abuse of the Bankruptcy Code,” said Talbot.

Another group warned the suspension could negatively impact credit for consumers.

“Funding for bankruptcy fraud prevention is critical because it keeps the cost of credit affordable for everyone,” Karen Klugh of the American Financial Services Association told The Wall Street Journal.

But bankruptcy attorneys may feel differently. Henry Sommer, a bankruptcy attorney and past president of the National Association of Consumer Bankruptcy Attorneys, said the audits add significant time and expense to the bankruptcy process. They are “a real hardship,” he told the Journal.

With or without the threat of audits, an experienced bankruptcy attorney can help the process go smoothly and make sure debtors leave bankruptcy ready for a fresh financial start.

Posted on Monday, April 15th, 2013 at 8:54 am under Bankruptcy.
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Florida Brain Injury Center Declares Bankruptcy

A Florida brain injury treatment facility has declared bankruptcy in the wake of allegations of patient neglect and abuse by its employees.

The Florida Institute for Neurologic Rehabilitation, Inc. (FINR) recently filed for Chapter 11 protection in federal bankruptcy court in Tampa, along with three affiliated companies. According to court filings, they estimate their liabilities to be between $3 million and $30 million and the number of their creditors to be between 103 and 346. They also estimate their assets to be less than $150,000.

The filing occurred on the same day that Regions Financial Corp. sued FINR, alleging that FINR had defaulted on $31 million in real estate mortgages. Regions Bank claimed in its suit that FINR’s patients’ welfare is in jeopardy due to financial and management problems at the facility in Wauchula, southeast of Tampa.

In August, state authorities ordered FINR to relocate about 50 residents to other facilities. That directive, which the company has been fighting, followed a Bloomberg News story detailing a history of allegations of abuse at the center. According to reports by Florida investigators, FINR staff beat patients and cajoled them into fighting each other.

The creditors listed in FINR’s court filings include attorneys, insurers, medical suppliers, utilities, Hardee County, and a public relations company.

Regions Bank requested in its lawsuit that a court-appointed receiver direct operations at the facility until the collateral on its loans is foreclosed on or sold. It alleges that FINR has not made any payments on its loans since August, has not given payroll tax withholdings to the federal government, and is behind on property taxes and operating expenses. Regions also alleges that after they sent the facility a letter of default in September, Joseph Brennick, owner of FINR, withdrew nearly half a million dollars from the company’s accounts.

Brennick released a statement saying he was “confident” the company could properly care for its resident patients while restructuring financially. He added that media coverage led to “a significant decline in revenue making FINR unable to meet is financial obligations.”

The Florida Agency for Health Care Administration has requested detailed financial disclosures from FINR and told the company it must demonstrate that its assets and revenues are sufficient to maintain operations for two years and prove its ability to rectify its financial situation.

A spokesperson for the agency declined to comment to Bloomberg News on the consequences if FINR were not able to prove financial solvency.

Shiobhan Olivero is the Owner and President of Olivero Law If you need a Brandon bankruptcy lawyer, Tampa bankruptcy lawyer, or Tampa bankruptcy attorney, call 813.654.5777 or visit Brandonlawoffice.com.

Posted on Tuesday, April 9th, 2013 at 11:33 pm under Bankruptcy.
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