TheFloridaBankruptcyLawBlog

I received an inquiry from prospective bankruptcy clients who had moved to Florida from New York just over six months and had purchased jointly a Florida homestead. The wife had substantial unsecured debts and wanted to file Chapter 7 bankruptcy.

When someone borrows money from another person and then is unable, or simply unwilling, to pay back the loan the lender can feel that the borrower stole his money or defrauded him out of money. Can a creditor challenge the Chapter 7 bankruptcy discharge of a personal loan on the basis of theft, fraud, embezzlement, or like theory?

People who receive distributions of money from Ponzi schemes usually are expected to return the money to a trustee who takes over the operation when the Ponzi organizer files bankruptcy. The trustee usually attempts to “claw back” money distributed to the investors, especially money representing winnings or profits. This recent Florida bankruptcy case produced a slightly different result for a Ponzi investor.

A potential bankruptcy client wanted to avoid a deficiency judgment from a partially first mortgage on his home. The client’s income made him ineligible to file Chapter 7 bankruptcy which would have discharged the deficiency liability in full. The client had heard that filing Chapter 13 bankruptcy could also eliminate the deficiency claim completely.

I have reported previously on this blog that Wells Fargo Bank often will freeze bank accounts of its depositors who have filed bankruptcy even if the debtor claims the money in the account as exempt property on their bankruptcy petition. Wells Fargo bank often requires a letter from the bankruptcy trustee to give the debtor, and even his non-debtor spouse, access to the debtor’s money.