2017 - Wetherington Hamilton, P.A.

Life Lessons – Joy, Celebration and Chasing Your Passion

December 11, 2017/in Articles/by Ted Hamilton

In the past couple of months, I have heard of the deaths of a number of my high school classmates. And right after an attorney friend of mine retired from the practice of law, his wife died suddenly and unexpectedly. Our best laid plans can be side-tracked by catastrophic illness, or becoming a caregiver for aging parents or a spouse, or finding your children back at home because of crushing college debt, which made them unable to afford that apartment or qualify for that house (or maybe even a car loan).

Rather than being upset or depressed by these developments, I chose to be inspired. Life’s curve balls remind me that I need to act on my passions, take the trip, talk to the kids and my brother, and keep up on Facebook with my vast network of dear cousins (first, second, third, fourth . . .) all around the world.

Family is important. These are the folks who knew you growing up, who knew your parents, who have heard the whispered family secrets, and share the culture of the life and times you lead. And your family is not only the blood relations, but also your tribe made up of friends and co-workers whom you have gathered around you in your life.

I am Facebook friends with some of my high school classmates, although we did not remain in each other’s lives once we were off to college and other adventures in life. Still, it is good to be reminded of how young and hopeful we were, how the world was a much less frightening place in those days, and how we just knew we were going on to bigger and better things as we left high school.

Here are the life lessons –

Don’t postpone joy. – Celebrate absolutely every occasion, at work, at home, with your family, your friends, your customers, your clients. I had examples growing up of those who not only didn’t celebrate each other, but who actively denigrated and criticized each other. The end result was the negative energy boomeranged back on them, and they became increasingly isolated from their support systems as time went on. They ignored or threw away an opportunity to know love and solace and, yes, celebration in their lives, and ultimately paid the price in loneliness and disappointment. Don’t leave yourself facing a life-altering experience that destroys your dreams and leaves you with too many regrets for the things you never did.

We each have a choice. – You can choose a positive or negative approach to life. But, know that you will have to live with the results. And, ultimately, if you don’t make a conscious choice, the Universe will make it for you, and aside from feeling out of control, you probably won’t enjoy the end results.

I came of age with the women’s movement, and I am all about empowering women. I particularly enjoy complementing random unknown women on elevators for the shoes, outfits, hair color they wore. When they smile, I know that I helped make their day better. The unspoken message is: You made a really good choice. You know what works for you. In other words, you are a competent and special person.

Recently, I drove 1 and 1/2 hours and 80 miles south to teach a two-hour class for community association managers. I had to get up very early, and drive in rush hour traffic to get there for my 9:30 a.m. class after I talked them out of scheduling me at 8:30 a.m. If you know me, you know I am not a 5 a.m. riser, and I do not enjoy driving in stop and go rush hour traffic. On the way down there, I stressed about whether I would get there in time; and although I had brought my breakfast with me, I was too occupied with defensive driving to eat it in the car, so I stressed about that. I was relieved to get to my destination just before 9 a.m., knowing I would have time to eat before I had to teach.

When I arrived, I discovered the class before me had started late, and that more than 25 people had signed up for the two classes, but instead, about half of them ate the hot breakfast, and then left. I ended up with about a dozen people in my class (which was on the subject of Leadership) and started about 20 minutes later than advertised.

I chose positive. First, I had plenty of time to eat my breakfast, and listen to the well-crafted program on communication which was first on the schedule. Secondly, the people who were in the room really wanted to be there, and were attentive, interactive and very appreciative of the information and message I conveyed. A number of the students came up to tell me how much they enjoyed the program, and the evaluations were very complimentary.

I told the story to a vendor friend with whom I am putting together another education program, and she smiled at me and said “You are just so positive!” as if it were a rare trait. Maybe it is, but you can change that.

I smiled at her and said “Lemonade. . . “ (as in “when life hands you lemons.. . .)

Bullying is NOT okay. – Unfriend anyone whose negativity creates toxicity in your life. Associating and participating with negative, critical and unhappy people definitely rubs off on you. Not only does it create a miasma of bad energy within your mind, so you don’t do your best or see the good in your life; but it also hurts you physically, by sapping your body’s strength, leading to muscle weakness, and opening the door for illness. Gossiping may seem like fun at the beginning, but remember, when you are not there you and your life are fair game for that gossip circle.

Everything happens for a reason. – It has consistently been my experience that although my carefully crafted plans do not always come to fruition, the end result is even better than it would have been on the other path. The change may lead to a more creative solution or a more productive idea, or a better job, or a new and exciting relationship. Or you may have time to eat breakfast, having safely arrived at my destination, and there will be bacon!

Express your love and appreciation every day. – Tell the people you love that you love them. Tell them as often as possible. Thank everyone for a job well done, or for their hard work, or because, by being there, they support the company or the family and thereby add positive energy to the environment.

Many years ago, early on in my practice, the firm lawyers all got together for a session on how to maximize your billing and be productive during the work day. A senior partner advised all of us to devote ourselves to our work, and suggested to anyone who had children that there would be time for those children later in life. That philosophy didn’t work out so well for him – He ended up divorced and without a role in his children’s lives.

If anyone advises you to put your work life first in all things, walk, no run away from that relationship. It is definitely possible to find the work/life balance. Do it!

When you create positive energy in your interactions, you also create it within yourself. It radiates out and becomes a magnet for the people with whom you come in contact. You will be a better version of yourself every time you choose to do so. It’s up to you.

Be loving everyone.

Ellen Hirsch de Haan has over 30 years of experience practicing homeowners and community association law. She regularly teaches classes on the subject to further educate homeowners and property managers alike. Ask to join our email list to learn more by contacting marketing@whhlaw.com.

Repossession and the Self-Help Collection Method

November 6, 2017/in Articles, Debt Collection/by Ted Hamilton

repossession self-help collections

“Self-Help” refers to the collection method where property of a debtor may be taken without going to court. Traditionally, self-help can be taken if a debtor is in default for payment and without notice to the debtor. The usual methods of self-help are by “set-off” and repossession.

Set-off is a creditor’s right established by common law through the ages to apply property of the debtor it holds against an unpaid delinquent debt. Typically, this occurs in a case where a financial institution is holding funds in a checking or savings account. The funds may be taken and applied if the debt is in default.

Repossession involves the taking of property pledged as collateral toward payment of an outstanding debt. It is considered “self-help” because it can be done with court intervention. Repossessed property can be sold with the proceeds applied to the amount owed. The Uniform Commercial Code has established procedures for legal repossession and most state follow these guidelines. Repossession must be done without a “breach of the peace”, meaning there cannot be a disturbance. This is why most vehicles get taken in the middle of the night. Also, if the collateral is worth less than the amount owed the laws require notice following repossession and the sale of the collateral be “commercially reasonable”. The notice typically gives the debtor time of sale and the requirements to redeem the collateral. The sale is commercially reasonable if it is common for the type of collateral involved and is fair. It does not mean the best price possible is obtained. Notice of the deficiency amount owed may be required after the sale. If a creditor does not follow the legal requirements for notice and sale, the right to a deficiency will be forfeited.

Thomas K. Sciarrino, Jr., Esq. is a veteran collections attorney with 38 years of experience in handling Commercial Litigation, Collections, and Creditor’s Rights. He is the head of the collections department at Wetherington Hamilton, P.A. In addition to practicing law, he has also lectured on creditor’s right before various business and professional groups. He can be reached at (813) 676-9082 or by email at info@whhlaw.com.

New Official Form of Chapter 13 Plan for the Middle District of Florida Bankruptcy Courts

October 23, 2017/in Articles, Bankruptcy/by Ted Hamilton

The pending revisions to Federal Rule of Bankruptcy Procedure 3015.1 permit Bankruptcy Court Districts to “opt out” of the Official Form of Chapter 13 Plan approved by the Judicial Conference of the United States Courts. The judges of the Middle District of Florida Bankruptcy Court have elected to “opt out” and have approved a Local Form Model Chapter 13 Plan which is required to be used in all Divisions of the Middle District as of September 15, 2017. Please click HERE for a link to the Middle District Form Model Chapter 13 Plan (“Local Form Plan”).

The Local Form Plan complies with the upcoming Bankruptcy Rule changes in regards to the consistency, formatting and contents of a Form Plan. Specifically, any nonstandard provision which the Debtor includes in the Local Plan will be effective only if it is included in the section of the Plan designated for non-standard provisions. If a nonstandard provision is not included in this section then it is void. There is also a requirement that the Debtor indicate in the initial paragraph of the Local Form Plan that the Plan contains a nonstandard provision. Likewise, the Debtor must indicate in this initial paragraph whether the Plan does (or does not) limit the amount of a secured claim based on a valuation of the collateral for a claim and must also indicate whether the Debtor does (or does not) seek to avoid in its entirety a security interest or lien.
Other provisions of the Local Form Plan that are consistent with the pending revisions to the Rule 3015.1 are separate paragraphs providing for the following:

curing of any default and maintaining payments on a claim secured by the Debtor’s principal residence;
paying a domestic-support obligation;
paying a claim for debt incurred within 910 days of the filing date of the case which secured by a purchase-money security interest in a motor vehicle acquired for the Debtor’s personal use, or for any other purchase-money indebtedness incurred by the Debtor within one year of the filing date of the case.

The Local Form Plan also contains new provisions which are in addition to those required by the revisions to Rule 3015.1. One new section of the Local Form Plan more clearly provides for the designation of attorneys fees to be paid through the Plan, including fees for mortgage modification mediation and post-confirmation monitoring fees. Another new section of the Plan provides for the pre-confirmation disbursement of adequate protection to secured creditors by the Trustee, however, the Plan must propose the disbursement of adequate protection and be funded sufficiently for the Trustee to make such disbursements and the Creditor must have a claim filed in order to receive such payments. Finally, an additional section of the Local Form Plan requires the Debtor to set forth the treatment of leases and provides for the disbursement of adequate protection to lessors.

The new Local Form Plan should provide some much-needed consistency to Creditors who find themselves involved in a Chapter 13 bankruptcy case in the Middle District of Florida and assist Creditors in knowing which matters need to be directed to their attorneys for representation. If you are a Creditor and receive one of these new Local Form Plans and are unsure how the Plan could affect you then you should consult your attorney.

Brad Hissing is a Bankruptcy Attorney with over 26 years of experience in representing creditors, Trustees and other parties in bankruptcy cases. He has extensive experience in Creditors Rights and Insolvency matters in both consumer and Chapter 11 commercial cases. He can be reached at BradH@whhlaw.com or by phone at (813) 676-9075.

Why is OJ Simpson Really Moving to Florida?

October 9, 2017/in Articles, Debt Collection/by Ted Hamilton

Recently, the Florida Attorney General, Pam Bondi, quipped that OJ Simpson was not welcome in Florida. Simpson’s attorney hit back hard saying his client was moving to Florida no matter what.

But Simpson’s attraction to Florida likely goes well beyond the fact that he may have relatives here. Among the States, Florida has some of the most broadly worded protections available to debtors wishing to shelter their assets from creditor attachment. With these protections, Simpson and others facing pressure from creditors often move to Florida to ensure their assets are judgment proof.

The primary Florida exemption is the homestead exemption. In Florida, a debtor’s homestead is completely protected from attachment by an unsecured creditor. To obtain homestead status, the debtor must merely register to vote from the Florida address, get a driver’s license with the Florida address and intend to reside at the property full time. Other criteria may help, but these are the main criteria for qualification for the exemption. So when Mr. Simpson buy’s his big house in Florida and piles all of his cash into it, these funds are very likely exempt from attachment by any unsecured creditor.

In addition to the homestead exemption, pensions and other 401k interests are completely exempt from attachment. Thus, if you have a 401k with 2 million in it, except in certain circumstances, a creditor cannot attach this money to pay that 100,000 judgment. This also applies to cash value of life insurance policies.

Regular wages used to support a family are also exempt from attachment in Florida to a certain extent.

Finally, Florida has a very broad marital exemption, making jointly held marital property difficult for a creditor to attach if the debt is due by only one spouse.

Now for the good news. There are ways to attack money that a debtor has moved into “exempt” assets. Collections attorneys who have experience know how to use the Florida Uniform Fraudulent Transfer act and other such actions in Florida to attack transfers by a debtor into exempt assets. Such transfers may be reversible in certain circumstances. Furthermore, transfers to a spouse may also be reversible if done to defraud a creditor.

Wetherington Hamilton, P.A. is a creditor’s rights attorney firm specializing in the collection of debt. Our services cover debt collection in the Central Florida Area including Hillsborough County debt collection, Polk County debt collection, Pasco County debt collection, Pinellas County debt collection, Sarasota County debt collection and Manatee County debt collection among others. Call us at (813) 676-9082 if you need a judgment collection in Florida.

Wetherington Hamilton founding attorney, Theodore J. Hamilton, has over 20 years of experience in handling real estate transactions and litigation. Attorney Hamilton has particular experience in matters involving complex litigation and complicated real estate matters having represented title insurance companies and individuals throughout the state of Florida. He can be reached by phone at (813) 676-9082 or via email at TJH@whhlaw.com.

The Importance of Professional Courtesy in the Practice of Law

September 18, 2017/in Articles, General, Litigation/by Ted Hamilton

Have you heard why sharks won’t attack lawyers? Professional courtesy! (insert laugh here). We have all heard jokes about lawyers referencing their behavior as aggressive, unprofessional, offensive, shady, etc. This may come as a surprise to some, but as attorneys, we are bound by Rules of Professional Conduct. In order to become a member of the Florida Bar, in addition to passing the bar exam and an extensive background check, each new attorney takes an Oath of Admission. In 2011, as a result of concerns over increased lack of civility among those who are members of the legal profession in our state, the Florida Supreme Court added the following language to the Oath of Admission**:

“…To opposing parties and their counsel, I pledge fairness, integrity, and civility, not only in court, but also in all written and oral communications;…”

I was surprised to learn that this language was being included in the Oath of Admission of such a noble profession. I remember the day I learned that I had passed the Florida Bar as being one of the best days of my life; I was being admitted to a respected and noble profession! To me, common sense would dictate acting with fairness, integrity and civility. I try to live my personal and professional life this way, and enjoying professional relationships with other attorneys is one of the many reasons I enjoy the practice of law. Just this afternoon I had the pleasure of speaking with opposing counsel on a case that is set for trial next month. The conversation was pleasant and professional as it should have been, and we are attempting to resolve the case without the need for trial. This type of professional dialogue with other professionals is one of the many reasons that I enjoy the practice of law.

I have dealt with many personality types during my tenure as an attorney. Fortunately, most attorneys with whom I have dealt practice law with fairness, integrity and civility. Of course, there are those who do not, which is unfortunate. But this noble profession, like all others, has its good eggs and not so good ones. The attorneys at Wetherington Hamilton, P.A. practice law with the utmost professionalism, including fairness, integrity and civility…nothing less!

**Supreme Court of Florida, No. SC11-1702, In Re: Oath of Admission to the Florida Bar, September 12, 2011

Joan W. Wadler has been a member of the Florida Bar since 1991. Her practice concentrates on Collections and Commercial Litigation, Real Estate Litigation and Associations Law. She can be reached at (813) 676-9082 or JoanW@whhlaw.com

Should I Pick My Lawyer from a Billboard? Practical Advice on How to Pick a Lawyer

August 29, 2017/in Articles, General, Litigation/by Ted Hamilton

We have all seen them, the giant billboard that says “Aggressive for You”; “Make your wallet fat with us”; “Over 150 million recovered for victims”; or “Just Because You Did It, Doesn’t Mean You’re Guilty”.

Now it may be hard to believe, but at least in Florida, the Bar Association approves each and every billboard you see for its truthfulness and accuracy. Thus, a billboard cannot misrepresent a lawyer’s experience or credentials. It can’t inflate the truth and it must be honest. Unfortunately, beyond these basic approval criteria, lawyer ads can say whatever gets you in the door. So how do you choose a lawyer?

First, determine the type of legal issue you are facing. Just as in medicine, there are general practitioners and then there are specialists. The lawyer you currently deal with may have different types of lawyers’ in the firm. As a result, they may have the ability to handle varied types of law. Our firm for example has an estate planning and probate lawyer as well as a real estate lawyers. Although these two types of law might cross at times, the laws governing these areas of law is definitely different. As a result, the lawyer you need needs to practice in the area you need help in.

Second, if you know a lawyer, trust them and like them, ask them if they handle your type of matter. For example, if you call our office with a family law problem, we will tell you we don’t handle family law but we can refer you to a family law attorney. However, if you call our office for an estate plan, we have an excellent estate planning attorney in our office and I will connect you to her. If you call about a litigation matter, I might handle it or I might have an associate handle it depending on the complexity of the issue. If you don’t know a lawyer, you can check the internet and review sources such as www.Lawyers.com and www.martindale.com . You can also check reviews on Google.

Third, determine your budget. The pricing of lawyers varies greatly depending on the type of matter and the complexity of the issue. Even today, most lawyers bill by the hour. Very specialized matters such as tax appeals, benefits law issues or securities law issues, require a specialized attorney who will likely charge more. In Tampa, the rates for these types of attorney’s at this time runs anywhere from $375 per hour to over $500 per hour. As a general matter, larger firm prices are more than smaller firms or solo attorneys. Finally, you might have heard the slogan “you pay nothing unless you recover”. This is basically what is called a contingent arrangement. You don’t pay the lawyer unless they collect. This type of fee arrangement works best in the personal injury area where there is insurance coverage. However, our firm also does collections on a contingency basis. Thus, if you have a judgment to collect, our firm will often handle the collection of a judgment or suit to collect based upon a percentage of the recovery.

Finally, ask questions. Check the internet. Check the Florida Bar or your local bar to see if any grievances have been filed against the lawyer. These types of checks can help narrow down your choices and ensure you make the best decision. Also, if your not happy with your lawyer, make a change. There are over 100,000 lawyers in Florida. If yours is not doing the job for any reason, you certainly have the right to chose someone else.

Wetherington Hamilton founding attorney, Theodore J. Hamilton, has over 20 years of experience in handling real estate transactions and litigation. Attorney Hamilton has particular experience in matters involving complex litigation and complicated real estate matters having represented title insurance companies and individuals throughout the state of Florida. He can be reached by phone at (813) 676-9082 or via email at TJH@whhlaw.com.

Helman v Bank of America Case Analysis: Who is The Least Sophisticated Consumer?

August 14, 2017/in Articles, Debt Collection/by Ted Hamilton

The Fair Debt Collection Practices Act (FDCPA) is the principal federal statute that governs the conduct of debt collectors and prohibits many kinds of abusive or deceptive behavior as set forth in the Act. In Florida, the Florida Consumer Collection Practices Act (FCCPA) prohibits much of the same actions. Both the FDCPA and FCCPA permit debtors to file lawsuits against debt collectors who they perceive are engaging in abusive or deceptive tactics to collect on a debt. One issue that often comes up in these cases is whether communications by the debt collector to the debtor are misleading. The standard that the Courts use in interpreting whether a communication is misleading is whether such communication would be misleading to the “least sophisticated consumer.”

So, who is the “least sophisticated consumer”? The Eleventh Circuit Court of Appeals considered that issue in the case of Helman v. Bank of America, 2017 WL 1350728 (11th Cir. April 12, 2017). Gayle Helman was a discharged debtor who received a mortgage statement from Bank of America. The mortgage statement was marked “FOR INFORMATIONAL PURPOSES” and also contained a disclosure indicating that Bank of America’s records indicated that the debt was discharged in bankruptcy and therefore no longer had a personal obligation to pay the debt. The debtor argued that the mortgage statement, despite these disclosures, was confusing and misleading to the least sophisticated consumer as it implied that a personal obligation to repay the debt remained.

On appeal, the Eleventh Circuit determined that the least-sophisticated-consumer standard was an objective standard that did not require proof of actual deception. However, the Court also determined that in construing what was misleading or deceptive to the least sophisticated consumer, such least sophisticated consumer must be considered to possess a rudimentary amount of information (for example, the effect of a bankruptcy discharge) and the ability to read a collection notice with common-sense care. The Court indicated that the least-sophisticated-consumer standard would protect the gullible, but that it would not extend to “bizarre or idiosyncratic interpretations” by a debtor. A reasonableness requirement remains when considering whether a communication was misleading or deceptive even to a least sophisticated consumer.

Note that this is a brief overview of some of the provisions of the FDCPA and FCCPA. There are important differences between the two Acts and some actions that might not be actionable under one may be actionable under the other. This area of the law is complex and you should seek the advice of an attorney if you have questions about this area of the law.

Brad Hissing is a Bankruptcy Attorney with over 26 years of experience in representing creditors, Trustees and other parties in bankruptcy cases. He has extensive experience in Creditors Rights and Insolvency matters in both consumer and Chapter 11 commercial cases. He can be reached at BradH@whhlaw.com or by phone at (813) 676-9075.

How and When Can Someone be Held Personally Liable?

July 28, 2017/in Articles, General/by Ted Hamilton

There are situations where you can be held personally liable even though it is not your intention be responsible. Two circumstances where this often arises in contract situations are when you are representing another as an agent or where you are signing a personal guaranty.

If you are an agent or the representative for someone, you can be held personally liable. The law generally holds that an agent is responsible under a contract if the principal is not disclosed. Therefore, if you enter a contract for someone else (the principal) make sure you fully disclose that you are entering into that contract in a representative capacity. You should make sure that the principal is fully disclosed (named). It may not be enough to just indicate that you are entering a contract as an agent or representative if the principal is not fully disclosed. Do not rely on the other party to be aware that there is a principal, even if you believe that they should be. To protect yourself, be sure to spell it out clearly that you are the agent and indicate the name of the principal. Also make sure that the principal is a real person or legal entity. If you represent a person or business that does not actually exist, you could be held personally liable.

Another situation where unexpected personal liability occurs is if you sign a personal guaranty. Where this most often occurs is if you sign on behalf of a corporation. Many times people will sign a guaranty and designate that they are signing as president or an officer of the corporation. The law is that if the corporation is already responsible, it is meaningless for it to guaranty its own debt. Therefore, an officer who guarantees the debt of the corporation becomes personally liable and adding a title does not relieve the personal obligations.

These can be tricky situations and may result in personal liability when there was no real intention to give it. Of course, if you have any doubt, call the experienced attorneys at Wetherington Hamilton who are familiar with these situations. You may save a big headache in the future.

Thomas K. Sciarrino, Jr., Esq. is a veteran collections attorney with 38 years of experience in handling Commercial Litigation, Collections, and Creditor’s Rights. He is the head of the collections department at Wetherington Hamilton, P.A. In addition to practicing law, he has also lectured on creditor’s right before various business and professional groups.

Why You Must Always Comply with Court Orders

June 26, 2017/in Articles, Debt Collection, General/by Ted Hamilton

Currently, my practice focuses primarily in the area of collections, which in Florida, can be broken down into two main steps- they are obtaining Judgment and execution or collecting sums due as a result of the Court having entered Final Judgment.

Once final judgment has been entered, there are various methods available for collection of that judgment. Often, the Final Judgment contains language requiring defendants to complete what is known as a Fact Information Sheet as provided in Florida Rule of Civil Procedure Form 1.977, or defendants may be subpoenaed to appear at deposition in aid of execution.

Parties to a case are all required to comply with court orders; when a party fails to do so, the Court has the authority to find an individual in contempt. The individual is given the opportunity to purge herself/himself of the contempt by complying with the Court Order. The court may order monetary or other sanctions for failure to comply with a Court Order. I regularly hear judges tell defendants that there is no longer debtor’s prison and that they do not send people to jail for not having money to pay their debts, but when people fail to provide a fact information sheet as ordered by the Court or fail to appear at deposition after having been served, they can be found in contempt of court and, after proper notice (personal service), arrested. This is never our goal, but it can happen.

Approximately ten years ago, I brought my then 9 year-old daughter to work on “bring your daughter to work” day. The day began as a normal day (and I had no court appearances scheduled that day), but soon after arriving at work, I was told that I had to go to court because a defendant had been “picked up” for not appearing at a deposition. So I brought my daughter to the court house with me. When we arrived, a woman, our defendant, dressed in an orange jump suit and in hand cuffs, was in the court room. After a hearing in front of the presiding Judge, I took her deposition while my daughter waited patiently nearby; the Judge then ordered the woman’s immediate release. As you might imagine, this made quite an impression on my young daughter.

So what is the bottom line? Parties cannot be arrested for not having money to pay their debts…but parties to a case are all required to comply with Court Orders.

Joan W. Wadler has been a member of the Florida Bar since 1991. Her practice concentrates on Collections and Commercial Litigation, Real Estate Litigation and Associations Law.

“I Just Received a Bankruptcy Notice, What Should I Do Now?”

June 5, 2017/in Articles, Bankruptcy, Debt Collection/by Ted Hamilton

Bankruptcy filings in the Middle District of Florida (Tampa, Ft Myers, Orlando and Jacksonville) increased in 2016 and are on the rise in 2017 after declining for several years due to the improving local and national economy. This means that if someone (a person or company) owes you money then there is an increased chance that you might receive a Suggestion of Bankruptcy or Notice of Commencement of Bankruptcy Case advising you that a bankruptcy case has been filed.

Sometimes Creditors receive the dreaded notification or other documents pertaining to the bankruptcy filing and choose to do nothing because they are unsure of what the documents mean and what they need to do. This is understandable—bankruptcy law is often counterintuitive and complicated and certainly different from how things work in the “real world”. By doing nothing, however, you risk serious financial penalties including loss of your claim and the ability to enforce a lien against the Debtor.

So what should you do when one of these Notices arrives in the mail? The first and most important thing that I can tell you is to not give up hope! As a Creditor you have several options depending on the type of claim that you have against the Debtor. Claims are typically secured (common examples are lien on a car, a homeowner’s association/condominium association lien, or a mortgage lien) or unsecured (such as debts from credit cards, medical bills, signature loans, or deficiencies after repossession or foreclosure sales). If you hold a judgment against the Debtor they debt may be either secured or unsecured depending on what steps you have taken to collect on the judgment prior to the bankruptcy filing and whether your judgment has “attached” to the Debtor’s assets, including real estate. Regardless of the type of claim you have, you should reach out to your bankruptcy attorney to discuss what options you have in a particular case.

Here are some situations that often arise in bankruptcy cases and which require action on your behalf as Creditor. Please note that there are many other common situations which can occur in bankruptcy case. I will discuss these in future articles.

Proofs of Claim: You may receive a Notice from the bankruptcy court advising you that there are funds available to pay creditors in a case and alerting you to file a Proof of Claim. It is important to file a Proof of Claim when you receive notice to do so. The Proof of Claim is a specific form that you must file in order to be paid. The form is comprehensive and may require detailed attachments depending on the type of claim you have against the Debtor. You must file a claim to be paid. I’ve been a bankruptcy attorney for over 25 years and I’m aware of several situations where Creditors have left “money on the table” by not filing a claim in a bankruptcy case despite the Bankruptcy Trustees holding significant funds which are available to pay creditors. There is also a deadline imposed by the Court for the filing of such claims. The deadline is called the “bar date”. Claims filed after the bar date are not paid except in certain very limited situations and only if the bankruptcy court expressly permits them to be paid. Needless to say, a bankruptcy Proof of Claim is an important document that needs to be properly handled. Contact your attorney with your proof of claim questions.

Valuations of Property, Lien-Stripping and “Cramdowns”: If you hold a secured claim against the Debtor it is important to know that the Bankruptcy Code in certain circumstances allows a Debtor to seek to “value” your claim and reduce the amount of your secured claim or even eliminate your lien entirely. Typically the Debtor will seek such valuation in a motion filed with the bankruptcy court which will be served on you. In many instances the motion will be served by “negative notice” which requires you to affirmatively oppose the Motion within a very short period of time (usually 14 to 21 days) failing which the Motion will be granted without hearing and without further notice. I’ve seen large homeowners/condominium association liens and second mortgage liens removed this way and oftentimes the affected creditor—after the fact—recalls receiving the Motion but doing nothing since it was not aware of what the Debtor was trying to do and the ultimate impact on the claim. It’s usually too late to do anything about one of these Orders once it is entered so make sure to contact your attorney if you receive a Motion or Debtor’s Plan which seeks to “value” your secured claim or otherwise modify your secured claim in any way.

Fraud/Dishonesty of Debtor: A Creditor might hold a claim resulting from fraud, misrepresentation, or other types of dishonest acts by the Debtor. The Bankruptcy Code provides that certain types of these claims will not be discharged (eliminated) in the Debtor’s bankruptcy case. However, if it up to the Creditor to assert the non-dischargeable nature of the claim in the case and obtain a determination from the bankruptcy court that the debt is one of these types. If the Creditor fails to seek such a determination in these cases then the debt will be discharged regardless of the nature and severity of the fraud! Needless to say, if you believe that fraud, misrepresentation or some type of dishonesty is involved on the part of the Debtor in regards to the debt owed to you then you should contact your bankruptcy attorney to review the same and discuss the best course of action available to you.

This article is an overview of some aspects of the bankruptcy process. The bankruptcy laws are complicated and there are many nuances and exceptions to the general rules. Seek advice from your attorney when you receive a bankruptcy notice or other documents pertaining to a bankruptcy case.

Brad Hissing is a Bankruptcy Attorney with over 26 years of experience in representing creditors, Trustees and other parties in bankruptcy cases. He has extensive experience in Creditors Rights and Insolvency matters in both consumer and Chapter 11 commercial cases. He can be reached at BradH@whhlaw.com or by phone at (813) 676-9075.