Preparing for Bankruptcy

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Photo Credit: Taking Notes ©Antony Rufus,

Filing bankruptcy requires that you pull together documentation of your financial circumstance. Your attorney will review your documents to help determine your qualification for bankruptcy. Under Chapter 7 bankruptcy, you are required to provide a completed Bankruptcy Questionnaire listing all of your assets, liabilities (debts), income and expenses. You also will need to provide pay stubs and records of all income earned (or given) in the six months prior to your bankruptcy petition.

If you want to begin your Bankruptcy Questionnaire now, click here to access our form.

A Chapter 7 filing also requires that you prove your income meets the requirements of the Means Test and/or The Totality of Circumstances Test.

You will be asked to disclose evidence of your monthly gross income and details of any expected increases or decreases in income or expenses. You may be asked to provide your income tax returns for the past two years; and you may be required to file any outstanding tax returns before filing for bankruptcy.

In addition you will need to certify that you have completed both credit counseling courses within 180 days before filing your bankruptcy petition. You also will be required to attend a mandatory Meeting of Creditors, after which you will have 45 days to attend a federally-mandated financial management course, either in person or online.

Be sure to provide your attorney and the bankruptcy trustee with your photo identification and any other documentation specifically requested by the Court.

For legal advice on your case and circumstances, be sure to consult a qualified attorney.




What Happens to Income Tax Refunds in a Bankruptcy?


Know Your Bankruptcy Options

Under a Chapter 7 bankruptcy, income tax returns received during the bankruptcy period will become part of the Bankruptcy Estate and, if not exempt, will be under care of the bankruptcy trustee. The trustee is charged with evaluating the estate, liquefying assets and repaying as many creditors as possible with available funds. Your attorney will help determine which of your assets are exempt from liquidation.

If you are due a significant tax return, you may want to speak with a qualified bankruptcy attorney about the best time to file, how much cash you will be able to keep on hand during the bankruptcy period, and how best to protect your assets.

Daley Law is available to answer your questions and offers a free 30-minute consultant. If you have extenuating tax circumstances, Daley Law may refer you to a qualified tax attorney in your area.

Concerned about Credit After Bankruptcy? Know this …

dreamstime_s_31277981A bankruptcy discharge provides major financial relief that helps debtors gain back their financial footing. Then, with fewer bills looming each month, most debtors are better able to manage monthly expenses. That’s the good news.

The bad news is that lenders and credit card companies, for a while, will not consider you a good financial risk and may only sparingly lend money should you find yourself in a financial hole again. A bankruptcy may stay on your credit record for up to 10 years, and if you accrue massive debt again, you will not be able to file another Chapter 7 bankruptcy petition for 8 years.

More good news …. You can build credit again by using credit responsibly. Once you have filed for bankruptcy, credit card companies have the right to automatically cancel your credit cards—even if you did not include them in your bankruptcy petition and intended to keep using those accounts.


Begin to re-build your credit history as soon as possible. It may take at least two or more years before you obtain an above-average credit rating again. You can get a start by finding a bank that will issue you a “Secured Credit Card,” which works kind of like a bank account. You give the bank the amount of money you wish to tie to a credit card, while the bank watches your credit behavior. As you use the card to pay a bill or bills, and pay the bank on time each month, you will begin rebuilding your credit worthiness. When the bank sees that you are managing your monthly payments on time, your bank may even provide you with a small amount of additional bank credit ($100, $250, $350 or $500) above your own investment. If you continue to pay bills in a timely manner, your bank credit will increase — and so will your credit rating.

When choosing a Secured Credit Card, make sure the bank will report your credit behavior to the three credit reporting agencies: Experian, TransWorld, and Equifax. As those credit agencies receive word of your good credit behavior, they will begin to elevate your credit score. When your score goes up, you will have more access to credit.


Just because you’ve earned more credit doesn’t mean you have to spend it. To manage credit wisely, use your secured card for necessities only, such as monthly utility bills that you would need to pay whether or not you had the credit card.

Avoid using your secured card for luxuries such as dining out or the latest fad in technology. By committing that your credit card spending will be only for true necessities, you will avoid the temptation to spend beyond your means. Over time, your new spending strategy will become a good financial habit, and you will rebuild your credit one step at a time.

Worried About Losing Property in Bankruptcy? Get the Facts

Will I lose my property if I file for bankruptcyIf you are in dire financial straits and holding off filing for bankruptcy because you are worried about protecting your property, here are a few things you should know.

Homestead Exemption
Florida’s homestead exemption offers protection to homeowners. If you have been a legal Florida resident for at least two years, and you have owned your home for at least 3.5 years, you may be fully protected under the Homestead Act from losing your home. If you have owned your property for less than 3.5 years, only a portion of the value of your home may be protected under bankruptcy law.

Other Protected Assets Under Bankruptcy

  • If you have claimed a homestead exemption, you may retain $1,000 in personal property assets after bankruptcy; but if you have not claimed homestead exemption, you may qualify to keep $5,000 worth of assets per person in your household.
  • Most employee Retirement plans are exempt from creditor claims.
  • Individual retirement accounts and most annuities may be exempt. If you file outside of Florida, be aware that a recent Supreme Court decision ruled that bankruptcy may only protect IRA contributions the debtor made personally; inherited income from another person’s IRA may not be protected in other states.
  • Personal property pledged to a secured creditor, such as a motor vehicle, recreational vehicle or boat may be retained, provided payments can be maintained.
  • An unsecured motor vehicle with equity of $1,000 or less is protected. If you have more than $1,000 in equity, you should consult an attorney.
  • Cash value of your life insurance, provider you are both the owner and the insured party.

Other protections under the law cover the bank account of a head-of-household when that account contains only wages; contributions made to college trust funds more than a year before bankruptcy filing; and personal property that was previously pawned.

Need more information before deciding if bankruptcy is right for you? Contact a qualified bankruptcy attorney.

Happy 50th Birthday to Miranda

Daley Law celebrates the 50th birthday of the Miranda rule.YOU HAVE THE RIGHT TO REMAIN SILENT

The Supreme Court decision known as the Miranda Rule gave Americans under arrest the right to remain silent until they are able to speak with a defense attorney.

This landmark decision protected the rights of citizens from breaches of procedure and abuse of power that might arise while citizens are in custody. The Miranda Rule requires police to inform detainees of their legal rights before interrogating them and to abide by a set of procedural standards.


Miranda v. Arizona was a landmark decision released June 13, 1966, by Chief Justice Earl Warren, of the U.S. Supreme Court, who penned the majority opinion. The decision ruled in favor of Ernesto Miranda, one of four petitioners in a rape case. Miranda was (later) acquitted of the rape charge, as were two other defendants. The ruling declared a set of specific rights for criminal defendants, including that law enforcement officers must inform anyone arrested for a criminal act about their rights before they may be interrogated. The ruling also prepared a set of rules governing the behavior of enforcement personnel.

Said Justice Warren, “The cases before us raise questions that go to the roots of American criminal Jurisprudence: the restraints society must observe consistent with the Federal Constitution in prosecuting individuals for a crime. More specifically, we deal with the admissibility of statements obtained from an individual who is subjected to custodial police interrogation and the necessity for procedures which assure that the individual is accorded his privilege under the Fifth Amendment to the Constitution not to be compelled to incriminate himself,” the decision began.


If you, a family member or friend have been arrested, be aware that the Miranda Rule offers protections under the law. It’s important to use the rule to protect against inadvertent self-incrimination. You have the right to remain silent and should avoid making any statements before consulting with an attorney or without an attorney present on your behalf.

Protect your rights by contacting an experienced criminal defense attorney who can advocate for you, spot mistakes in police procedure that may have bearing on your case, and represent you in court.

If you have questions about legal matters, speak with an attorney. Don’t assume that you should represent yourself because you consider the charges a “little matter.” Drug charges, drinking-and-driving offenses, and crimes against persons or property can carry with you for a lifetime and affect your ability to get a job, hold a job, secure a loan or even maintain a good credit rating.

Bankruptcy May Be Your Weapon of Mass Relief

Image bankruptcy is a weaopn of mass reliefDo you know someone who is under siege by creditors, has stopped answering the phone to avoid calls from collection agents, or lies awake at night wondering how to stop the financial bleeding? If so, let your friend know there is a way out. Bankruptcy can provide massive financial relief.

Most people under financial duress feel overwhelmed by stress. We’ve seen it over and over in our practice. People who finally decide to seek legal help arrive anxious about their situation and unsure whether they can get out from under their debt. They often feel guilty for having amassed so much debt that they put off asking for help. Some didn’t know whom to ask; others didn’t believe they had the right to ask for help.

A strong tool in the legal arsenal, the bankruptcy law gives people the right to ask for help getting back on their feet.

About the Bankruptcy Court

By the 1960s, the rise in consumer bankruptcy and congestion in the federal courts led to proposals for reform of the nation’s bankruptcy laws. As part of a broad plan to revise the bankruptcy code, the congressionally chartered Commission on Bankruptcy Laws of the United States recommended the establishment of independent bankruptcy courts within the federal judiciary. The Bankruptcy Reform Act of 1978 (92 Stat. 2657) conferred original bankruptcy jurisdiction on the district courts and established a bankruptcy court in each judicial district to exercise bankruptcy jurisdiction. The act provided that the new bankruptcy courts would be considered adjuncts of the district courts, but would be presided over by bankruptcy judges appointed by the president and confirmed by the Senate for fourteen-year terms, beginning in 1984. In the meantime, the incumbent referees would serve as bankruptcy judges. Additional challenges to the bankruptcy law in 1984 changed bankruptcy jurisdiction. Under current practice, district courts automatically refer bankruptcy cases and proceedings to the bankruptcy court. A bankruptcy court is authorized to decide all referred business, except in limited matters known as “non-core” proceedings. If one of the parties does not consent to entry of a judgment by the bankruptcy judge in these proceedings, the bankruptcy court may only hear the matter and submit proposed findings of fact and conclusions of law to the district court. The district judge then enters the final order, which is subject to review by the courts of appeals or bankruptcy appellate panels.

The Attorney’s Role

An attorney evaluates and helps determine a client’s qualifications for bankruptcy. The attorney also files the bankruptcy petition to the court trustee for consideration. (Individuals may represent themselves in bankruptcy court as well). Once the bankruptcy petition is filed, the court-appointed bankruptcy trustee evaluates the case and considers the needs and rights of creditors in each case, as well as the qualifications and means of the debtor before submitting the case for adjudication.

A court-approved bankruptcy judgment may discharge massive debt under a Chapter 7 filing, or establish a feasible repayment plan under a Chapter 13 bankruptcy for some or all of the debt. Other bankruptcy chapters address the financial needs of specific entities, such as businesses, farms and municipalities. A variety of remedies may apply. However, not all debts are dischargeable under bankruptcy: college loans, child support payments, criminal restitution demands and divorce judgments may not be discharged through bankruptcy.

At Daley Law we recommend that people and companies suffering severe financial stress consult an experienced attorney who can help explore legal options and recommend the appropriate course of action. Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences. If you need help finding a bankruptcy attorney to assist you, visit

Timely Topic: How Your Tax Return Can Reduce Your Debt

US Dollars

PHOTO CREDIT: US Dollars ID: 280422 © Manuel Hoo | Dreamstime Stock Photos

Most people run right out after receiving their tax return and spend it on a luxury (or necessity) they’ve been hoping to enjoy. To make the most of your tax return, think about safe alternatives for turning the money returned to you into more money in your pocket. Here are a few options:

  • Start an interest-bearing savings account that can add to your peace of mind.
  • Speak to a reputable financial adviser who can help you decide where to invest it carefully, perhaps in a low-risk mutual fund, annuity, 401K or other retirement plan, where your money is likely to make you money.
  • Use your tax return to reduce indebtedness by paying down debts not likely to be discharged under a bankruptcy filing (such as child support and college loans).
  • If you own a small business, you might choose to invest it in a special project, such as a sales, marketing or incentive program, that will help add to your bottom line.
  • If you are so deeply in debt that your tax return feels more like a small drop in an already leaky bucket, then contact Daley Law or another qualified attorney to help you review your debt situation.

Debt management is a skill that you can learn. For more information read our last article on Financial Fitness.