TheFloridaBankruptcyLawBlog

A reader wrote me stating that she had filed Chapter 7 bankruptcy because a bank was suing her for the amount of her home mortgage. This was not a deficiency action. The bank sued the reader for default under the promissory note without foreclosing on the mortgage. Without foreclosure, the owner would keep her house but the bank would have a judgment against her personally. She filed Chapter 7 to stop the lawsuit.

Is it ever possible for a Chapter 7 trustee to take a debtor’s exempt assets? The answer is “yes” in extraordinary cases. The issue was addressed in a recent bankruptcy court decision.

People who receive money from Ponzi schemes usually have to return the money if the Ponzi organizer filed bankruptcy. The bankruptcy trustee typically pursues recipients of Ponzi profits as transferees of fraudulent transfers made by the Ponzi organizer. What happens when the Ponzi organizer donates part of Ponzi profits to a charity?

A bankruptcy court can dismiss a Chapter 7 bankruptcy filing for “bad faith” even if the debtor passes the means test or is exempt from the means test because his debts are primarily non-consumer debts. A Florida bankruptcy court dismissed a Chapter 7 filing because the court found that the bankruptcy filing was not appropriate and was not consistent with the purpose of the bankruptcy code.

A bankruptcy court today gave one of my bankruptcy clients a $10,000 judgment against one of his creditors for attempting to collect a debt after the entry of the debtor’s discharge. A key part of my client’s success was his detailed documentation of collection letters and calls as well as my own repeated written warnings to the creditor.