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Here’s how much of your wages can be garnished to pay your debts

If you do not pay your debts, your creditors may try to take a portion of your income directly from your employer. This is called wage garnishment.

Fortunately, there are limits to how much of your income may be garnished so that you can hopefully keep paying your basic living expenses. The limits are based in part on “disposable income,” which is income remaining after certain deductions, such as income taxes, Social Security and required contributions to retirement plans.

The maximum garnishment for most creditors is the lesser of

  • 25 percent of your disposable income, or
  • the amount by which your weekly income exceeds 30 times the federal minimum wage ($7.25), or $217.50

In Florida, if your disposable income is less than $217.50, no wages may be garnished at all.

Florida also has a “head of family” exemption. The head of a family’s wages may only be garnished if they exceed $750, and only if they agree in writing to have their wages garnished. This is a very powerful exemption against wage garnishment, but importantly, it does not automatically apply — it must be claimed in an affidavit filed with the court.

If you are facing wage garnishment, contact Olivero Law today.

In a later post, we’ll cover special limits on certain types of wage garnishment.

Posted on Wednesday, June 15th, 2016 at 5:05 pm under Bankruptcy, News and Press.
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Another family law reform bill falls to Gov. Scott’s veto pen

Florida Gov. Rick Scott vetoed a contentious bill that would have reformed the state’s alimony system and altered rules on child custody in divorces.

The bill would have required judges in divorce proceedings to adopt a premise for approximately equal time-sharing of children between spouses. Judges could adjust the split based on 20 factors listed in state law.

Scott objected to that provision, saying it would put some parents’ interests ahead of those of their children.

Scott did not comment on the bill’s proposed changes to alimony rules, which would create a formula for payments based on each spouse’s income and the length of the marriage. It also would have terminated permanent alimony payments upon a spouse’s remarriage and allowed for a review upon their reaching retirement age.

Another controversial provision would have permitted alimony renegotiation if the recipient’s income rises by 10 percent. Opponents of the bill said that trigger was set too low, endangering the welfare of recipients, primarily women, who through hard work made progress in providing for their children.

In 2013, Gov. Scott also vetoed a major family law reform bill, which likewise created a presumption for equal child custody. He said that bill would have been unfair to alimony recipients because it would have applied retroactively to longstanding alimony judgments. This year’s bill did not contain retroactive provisions.

Posted on Wednesday, May 18th, 2016 at 11:29 am under Divorce and Family Law, News and Press.
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Keeping your home in Chapter 7 and Chapter 13 bankruptcy

Homeowners considering filing for bankruptcy often wonder whether doing so means they will lose their home, and whether Chapter 7 liquidation or Chapter 13 reorganization is the better option. Most homeowners can keep their homes if they wish, and the situation is even better for Floridians than for most others.

Those filing Chapter 7 bankruptcy must liquidate any non-exempt assets to pay their creditors. This means that if you have equity in your home, your trustee may sell it to pay down your debts. State and federal guidelines exempt certain amounts of home equity from this process. In Florida, however, there is no limit to how much equity is exempt for most homes. Therefore, while most Americans with a good deal of home equity are well advised to file Chapter 13 instead of Chapter 7, that does not necessarily apply to Floridians.

Other situations make Chapter 13 a better prospect than Chapter 7 regardless of where you live. If you are behind on your mortgage payments and file Chapter 13, your mortgage “arrears” will be incorporated into your court-ordered payment plan, giving you three to five years to catch up on missed payments. You are therefore protected from foreclosure during the Chapter 13 process if you stay current on the loan and your bankruptcy payment plan.

If you have a second mortgage or other “junior lien,” the process of “lien stripping” may permit you to get rid of it. When a lien is stripped, the lender is treated as an unsecured creditor and will usually receive little to no money in your payment plan. Lien stripping is permitted in Chapter 13 bankruptcies, but not Chapter 7.

Chapter 13 bankruptcy is probably a better choice if you have missed mortgage payments, if you want to get rid of a junior lien, or if you have significant non-exempt equity. Otherwise, Chapter 7 may be a simpler and faster way to reduce your debt burden and keep your home.

Posted on Saturday, December 12th, 2015 at 11:01 am under Bankruptcy, News and Press.

Keep recent and up-to-date powers of attorney for an effective estate plan

Powers of attorney are a very important part of an effective estate plan. A power of attorney is a legal document that grants a person whom you trust, called your “agent,” the power to act on your behalf in certain ways and under certain circumstances. For instance, a durable power of attorney for health care might enable your spouse to make decisions about your medical care if you become incapacitated. A financial power of attorney might permit your adult son or daughter to execute transactions on your behalf.

A potential pitfall that can make your plans go awry is having outdated powers of attorney. There are several reasons why a power of attorney can become outdated. For instance, if your agent passes away or becomes incapacitated or otherwise unavailable, the document is obsolete. Or, you may decide that you no longer trust your agent and want to name a new one. This is common in the case of divorce.

If you have moved to another state since creating your powers of attorney, this is another reason to update them. Some terms have differing legal meanings in different states, and states have varying requirements for filing powers of attorney with the government.

Even if your circumstances are unchanged since creating your powers of attorney, it is still a good idea to sign new ones every three to five years. Some financial and medical institutions may be hesitant to honor older documents due to liability concerns.

If you have powers of attorney that are more than a few years old, or if you lack them entirely, contact Olivero Law today.

Posted on Wednesday, December 2nd, 2015 at 8:09 pm under Estate Planning, News and Press.

Woman’s handwritten note insufficient to revoke will

The heirs of a deceased New York woman received an object lesson in the importance of taking proper, legally enforceable action when altering a will.

Some years before Patricia Powers died, she apparently wished to revoke her existing will entirely, and attempted to do so by writing a note to that effect on the will’s first page. She also attached to the document her new, 12-page handwritten will and stated her intent to bring it to her attorney to make it official.

Unfortunately, in the subsequent seven remaining years of her life, she did not make that visit. If she had, her attorney would surely have warned her that her note on the will did not legally revoke it.

If Powers had in some way destroyed the document or defaced its contents, her revocation would likely have had legal standing. Her handwritten note in the margin of the document did not suffice.

Actions that strike a layman as straightforward and clear sometimes do not have legal standing. The best course of action for anyone who wishes to create, alter or revoke a will is to speak with an attorney as soon as possible.

Posted on Wednesday, September 23rd, 2015 at 11:14 am under Estate Planning, News and Press.
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When debtors agree to surrender property, they must follow through

When filing bankruptcy, “surrender” means “surrender.”

That is the message from Tampa bankruptcy judge Michael G. Williamson in a recent Florida bankruptcy case, in which Lisa Metzler of Gibsonton declared bankruptcy in 2012. She was delinquent on her mortgage and had no way to pay it or her other debts. She agreed to surrender her home to the lender, Wells Fargo, and allow them to proceed with foreclosure.

Metzler’s incentive to surrender the home came from one of the finer points of bankruptcy law. Debtors filing bankruptcy are entitled to certain “exemptions” — property not subject to liquidation to satisfy creditors’ claims. Normally, this includes $1,000 worth of personal property, such as furniture and jewelry. However, in cases where a home is surrendered, that exemption is increased to $5,000.

Apparently, however, Metzler had no intention of actually surrendering her home. After agreeing to do so in federal bankruptcy court, she hired an attorney to fight the foreclosure in state court. In response, Wells Fargo filed a motion asking Judge Williamson to revoke confirmation of Metzler’s bankruptcy plan. Williamson granted the motion and dismissed the case.

Since then, at least two other bankruptcy judges in Florida (which continues to lead the nation in foreclosures) have built on Williamson’s ruling in similar cases. And last month, Williamson reopened the Metzler case in order to issue an opinion and further clarify the matter.

“At a minimum,” Williamson wrote, “’surrender’ means a debtor cannot take an overt act that impedes a secured creditor from foreclosing its interest in secured property.”

In case it was not already clear, now it most certainly is: In bankruptcy filings, as in all legal matters, you must do what you say you will do.

Posted on Thursday, August 13th, 2015 at 11:38 am under Bankruptcy, News and Press.
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Studies Show Divorce’s Ill Effects on Children, but Risks Can Be Mitigated

Everyone who gets married hopes to stay that way forever. But despite everyone’s best efforts and intentions, sometimes divorce really is the only solution. For childless couples, divorce is a decision that does not greatly impact anyone but the couple themselves. Of course, the same cannot be said of parents who divorce.

Divorce can have a profound effect on children. And children do not really have a say in whether their parents stay together. Obviously, having children gives parents an enormous incentive to work things out. But in the end, the decision to keep the family together or split it up rests with the parents.

Health scientists and social scientists want to know exactly how divorce affects children. A pair of recent studies on the consequences of divorce showed harm, but those problems can be solved, mitigated or avoided altogether by a loving, but divided, family.

The first study showed that children of divorced parents may be at greater risk of health problems. Researchers at the University College of London studied the blood of 7,462 people age 44. They found that the subjects whose parents had divorced before they reached age 16 showed elevated levels of a protein that is associated with increased risk of adult-onset diabetes and heart disease.

Dr. Rebecca Lacey, who led the study, said that it is not necessarily the divorce itself that caused the physiological changes, but rather the socioeconomic hardships that often accompany divorce when compared to two-parent households. For instance, children of divorced parents can face greater economic challenges and more limited educational opportunities.

The second study indicated that children of divorced parents regard their relationships with their parents as weaker than other children’s. Researchers at the University of Illinois at Urbana-Champaign surveyed 7,335 men and women averaging 24 years old. Those from divorced families less often saw their current relationship with their parents as “secure.” The effect was more pronounced in those whose parents divorced before they reached age 5.

Studies like this can be disheartening to families contemplating divorce, because they feel conflicted about the actions that are best for their children and for themselves. But not every divorce or troubled relationship or child is the same.

Notice one thing both the studies mentioned have in common: the negative effects of divorce on children are worse for younger children. No divorce at all gives kids the best chance, but if divorce must happen, later is better than sooner. If you and your partner can stay amicable and on the same team for the sake of your child – even for just a couple more years – the benefits can be significant. Couples therapy can go a long way to help you make this happen.

If divorce is inevitable, at the very least, it can be peaceful. “Collaborative divorce” is a process by which couples agree from the outset to cooperate and negotiate toward a solution that is satisfactory to both parties and their children. They agree not to litigate against each other. The process is not only often faster and less expensive than litigious divorce, but far less emotionally draining.

Many couples with prenuptial agreements find that the documents give a certain peace of mind and help them avoid fights. If you are considering divorce, it is too late for a prenuptial agreement, of course, but not for a postnuptial agreement. “Postnups” are just like prenups, but for couples already married. Sometimes it can help prevent conflict to have a written agreement in place, and if a divorce still comes to pass, the outcome is largely prenegotiated and the process can be relatively quick and painless.

When a divorce is finalized, parents can still give their children enormous advantages by actively maintaining healthy, happy relationships – both with your children and your ex. Children who see their parents maintain civility and cooperation and keep close ties with both of them will fare far better than those who do not.

Posted on Friday, October 3rd, 2014 at 11:08 am under Divorce and Family Law, News and Press.
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Detroit Bankruptcy Represents Largest Municipal Case in U.S. History

Bankruptcy is most often used as a way for individuals and businesses to either discharge debts or reorganize them into a more manageable payment plan. But governments, particularly cities and counties, can declare bankruptcy as well for the same reason: unmanageable levels of debt.

Municipal bankruptcies are fairly rare. They have happened at the rate of about one per year since the Great Depression. But in the wake of the U.S. and global recession of recent years, the filing and/or consideration of municipal bankruptcies have become an ever-present part of the news.

Last year, the controversy in Detroit, Michigan dominated headlines for weeks. The city filed for bankruptcy, but the legality of the filing was in question for almost a year. Detroit filed for Chapter 9 bankruptcy on July 18, 2013. The next day, judge Rosemarie Aquilina ruled the filing violated the Michigan Constitution by interfering with pension payments. She ordered Michigan Governor Rick Snyder to withdraw the filing. Snyder appealed the ruling, and the Bankruptcy Court declared a federal stay of state laws to make the bankruptcy legal. After a trial for objections and several deadlines, the Bankruptcy Court ruled the filing legal in December 2013, and the bankruptcy procedure moved forward.

On June 3, the state legislature of Michigan passed a number of bills designed to prevent Detriot from falling into the same state of emergency again.

It was by far the largest bankruptcy filing of any municipality in U.S. history, both in terms of debt and in terms of the population. Detroit’s debt was estimated at $18-$20 billion, towering over the previous record-holder, Jefferson County, Alabama, which declared bankruptcy in 2011 with some $4 billion in debt. And Detroit’s population is about 700,000, or more than twice that of Stockton, California, which went bankrupt in 2012.

One of the main reasons for Detroit’s financial troubles is a steadily declining population and, therefore, tax base. Its peak population was 1.8 million in 1950. Other causes the city named in its bankruptcy filing were pension and health care costs for retired workers, a dismal rate of property tax collection – with nearly half not having paid for 2011 – budget deficits, government corruption and poor record keeping.

Many consider pensions for current retirees to be untouchable in bankruptcies. The question of whether the modification of debt obligations in bankruptcy proceedings trumps state constitutional protections of pensioners’ rights is being tested for the first time in a Chapter 9 case.

President Obama commented that the federal government is “committed to continuing our strong partnership” with Detroit, but he did not indicate any intention to attempt a bailout of the city, even when the bankruptcy was uncertain. Gov. Snyder has said he does not support the idea of a bailout, saying “accountable government” is the answer.

The ability of bankruptcy to allow individuals, businesses, and governments to move on from untenable financial situations is key to keeping our economy flowing smoothly, but when the livelihood of many thousands of pensioners is on the line, the issue becomes much more complicated.

Posted on Saturday, September 27th, 2014 at 11:08 am under Bankruptcy, News and Press.
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The Steps: How Florida Courts Determine Child Support Obligations

Child support is an often-misunderstood topic in Florida family law.

In Florida, child support is not an obligation that one parent has to the other. Instead, it is an obligation that each parent has to the child — from the day he or she is born until he or she reaches adulthood. 

Florida Statute §61.30 sets the guidelines that Florida courts use to determine how much child support a parent owes. The statute establishes minimum levels of support based on the parents’ combined income. Courts use these guidelines to determine each parent’s individual child support obligation based on his or her proportion of the couple’s combined income.

The income used to make this determination is net income – gross income minus certain deductions. Gross income includes employment income (such as wages, salary, commissions and bonuses) and retirement, pension and social security benefits. Allowable deductions include federal, state and local taxes, mandatory retirement contributions, union dues and health insurance premiums.

The child support figure that results from this series of calculations is generally presumed to be correct, but the court may deviate from the guidelines. Taking into account “all relevant factors,” including the child’s needs and the financial status of each parent, the court may increase or decrease this amount by up to five percent. The court may alter the figure by an even greater amount if it provides written findings explaining its reasoning.

The court that enters a child support order retains jurisdiction to alter that support in the future. The court may do so when it is in the child’s best interests or when circumstances change substantially. 

A parent who wishes to modify his or her child support obligation must show that the change in their circumstances is material, significant, permanent and involuntary. For instance, a parent who chooses to quit a high-paying job for a lower-paying job would not be eligible for a modification because the change is voluntary. Parents who choose to have income significantly less than that readily available to them may find the court will attribute additional income to them. This is called “imputing” income.

If you have questions or concerns about your current or possible child support obligation, contact Olivero Laws.

Posted on Wednesday, July 2nd, 2014 at 11:28 am under Divorce and Family Law, News and Press.
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If Affordable Care Act Lives Up To Its Name, Divorce Rate May Rise

Financial insecurity keeps many couples from seeking divorce long after they lose hope for their relationship. They simply cannot afford to go it alone. Because the cost of health care has risen steeply in recent years, their coverage often weighs heavily on such decisions.

A recent article on the Washington Times Communities website suggests that the Affordable Care Act (ACA), or Obamacare, may lower this barrier to divorce if it succeeds in making health care more affordable.

A study by the University of Michigan in 2012 found that each year, some 115,000 American women lose their health insurance after they get divorced. Many of them are not employed outside the home, work part-time, or work for companies that do not offer insurance. Some are eligible for COBRA benefits, but of those, many cannot afford the premiums while living alone.

Concerns over health insurance are especially prevalent among couples divorcing after age 50, cases sometimes called “gray divorces.” If individuals are too young to qualify for Medicare, they may find themselves priced out of insurance markets. An unknown number of couples remain married until age 65 for this very reason.

Individuals with pre-existing conditions who are covered under their spouse’s plan also face strong incentives to remain legally married.

Beginning January 1 2014, the ACA could change this dynamic for many people. Presumably, some number of people will be able to afford health insurance on their own where previously they could not. If the program is a success, and large numbers of couples find themselves in this situation, the divorce rate could rise sharply, especially among the unemployed or underemployed, seniors and those with pre-existing conditions.

The ACA could also bring about changes in spousal support. The cost of health insurance affects the need for spousal support, with one party often having to pay enough for adequate coverage. Any change in the overall insurance market could affect how much support is awarded in some cases.

Accounting for these changes will likely be highly contentious in several ways. Opposing parties might disagree over whether spousal support should provide for excellent (“platinum”) insurance, or only basic (“bronze”) plans. If the spouse receiving support is eligible for a federal insurance subsidy, the other party may argue that that should lower the support awarded. Likewise, the expansion of Medicaid in some states will make more individuals eligible—another possible argument for lower support.

Among those couples who find themselves better able to afford health insurance under the Affordable Care Act, some who might otherwise have remained married may opt for divorce. The specific effects of such a change will take time to recognize and understand.

Posted on Thursday, December 12th, 2013 at 11:43 pm under Divorce and Family Law, News and Press.
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