Inherited IRA Exempt in Florida Bankruptcies

When an IRA owner dies and designates an heir, other than his spouse, as the beneficiary of his IRA the beneficiary acquires an “inherited IRA” from the decedent. Federal bankruptcy exemptions protect IRAs up to approximately $1 million. Some bankruptcy trustees have challenged the exemption of IRAs which the debtor inherited from a parent. Recently, the United States Supreme Court ruled that inherited IRAs are not exempt pursuant to the Bankruptcy Code’s exemption of IRA accounts Continue reading

Bankruptcy Courts To Strictly Enforce Geographical Boundaries of Florida Court Divisions

Bankruptcy debtors are supposed to file bankruptcy where they live. The Florida bankruptcy court system is divided into divisions where each division (e.g., Orlando Division, Tampa Division, Miami Division….) handles bankruptcy filings of debtors residing in counties assigned to each division. The Division filing system has not been strictly enforced in the past, but the bankruptcy court in Florida’s Middle District, including the Tampa, Orlando, and Jacksonville Divisions, announced that henceforth no court will accept filings from outside their division boundaries. Continue reading

Recipient of Fraudulent Transferred Property Can Recoup Some Expenses

An Maryland attorney wrote me an email about his representation of a person who received what was determined to be the fraudulent transfer of a piece of real property. His client had spent money maintaining and repairing the property. The attorney wanted to know if his client was entitled to payment for money he spent on property fraudulently transferred to him by a bankruptcy debtor. Continue reading

Does Constitutional Homestead Protect Non-Debtor Spouse?

A married man used exempt money from his retirement funds to pay off a $400,000 mortgage on his homestead. Within three years thereafter, the same man filed Chapter 7 bankruptcy. The Chapter 7 trustee is challenging the man’s homestead exemption because he (the debtor) obtained $400,000 equity within 1215 days of filing bankruptcy. Can the man’s non-filing spouse exert her homestead interest to save the house? Continue reading

Chapter 7 Discharge Does Not Prevent Subsequent Foreclosure

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. Continue reading

Can Trustee Recover Fraudulent Transfer To A Charitable Organization?

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? Continue reading

Florida Court Dismisses Chapter 7 Bankruptcy As Filed in “Bad Faith.”

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. Continue reading