Congradulations to Judge Burgess and Judge Geyer, Florida's Newest Bankruptcy Judges

The Honorable Jason A. Burgess and the Honorable Tiffany Geyer were recently sworn in as the United States Bankruptcy Court for the Middle District of Florida’s newest bankruptcy judges.

 
Judge Burgess was sworn in on March 18, 2022. Prior to his appointment, Judge Burgess practiced at The Law Offices of Jason A. Burgess, LLC, in Atlantic Beach, Florida, and served as Subchapter V Chapter 11 Trustee in both the Middle District of Florida and Northern District of Florida. He will preside in the Jacksonville Division and conduct hearings in Courtroom 4A of the Bryan Simpson United States Courthouse.

 
Judge Geyer was sworn in on March 25, 2022. Prior to her appointment, Judge Geyer was a partner at Baker & Hostetler LLP in Orlando, Florida. She will preside in the Orlando Division and conduct hearings in Courtroom 6A of the George C. Young United States Courthouse.

Assets: Disclose ALL Assets

 When an attorney is preparing bankruptcy documents to be filed with the Court, he or she will most likely ask you what assets you have.  When asked, they asking for all assets, whether legal or illegal, whether in your or someone else's possession, and whether readily apparent or hidden.

On March 21, 2022, Heather Lynn Pratt, a Fort Myers, Florida resident, was sentences for "Fraudulent Concealment of Bankruptcy Assets."  For more information about this case, see the press release "Florida woman sentenced for bankruptcy fraud."

How to Discharge a Student Loan

You may have heard bankruptcy is good for discharging all your debts with a few exceptions.  Among these exceptions are student loans. Well the common thought is student loans are not dischargeable in bankruptcy, there are exceptions to this rule as found in 11 USC Section § 523(a)(8) which says a student loan is only dischargeable if it is an undue hardship. The problem is "undue hardship" is not defined within the Bankruptcy Code.

Fortunately we have a court case from 1987 (in re: Brunner) which attempted to define undue hardship through a test.  This case has been followed by a majority of the courts, and the Brunner Test has been further honed through court cases around the country.  The Brunner Test requires the debtor show by a preponderance of the evidence that:

(1) the debtor cannot maintain, based on current income and expenses, a minimal standard of living if forced to repay his or her student loans;

(2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period for the applicable student loans; and

(3) the debtor has made good faith efforts to repay the loans.

 The test above presents its own challenges. It does not define current income and expenses. For example, it may or may not include income from family or charity, and while many would consider expenses to include shelter, food, utilities, transportation, and healthcare, expenses are not defined in the Brunner Test.

Within the second prong of the test, it doesn't outline what happens if the original payment period has expired.

The third prong fails to establish what happens if the debtor's income is not sufficient to make a good faith effort to repay the loan.  This actually seems to come full circle back to the first prong that includes income, because one's income directly effects ones ability to make "a good faith effort" to repay.

So if you have a student loan you think might be dischargeable under the Brunner Test, you should seek the advice of a competent bankruptcy attorney in your area, as this area of the law is constantly changing.

U.S. Household Debt Increase With Low Delinquency Rate

Unless you live under a rock, you have noticed a tremendous amount of inflation over the last couple of months. This inflation eats directly into one's disposable income when income does not keep up with inflation.

Household debt in the United states hit $15.8 trillion in the fourth quarter of 2021. This is an increase of $333 billion from the previous quarter. Credit card balances were up $52 billion raising the balances to $860 billion. That's the largest quarterly increase the Fed has seen since it's been collecting data over the past couple of decades. This surge was mostly driven by increases in home and car prices.

However, credit card balances are still lower than prepandemic levels, being $71 billion less than they were at the end of 2019.

The consumer price index rose 7.5% in January. Economists predicted that it won't get worse than that in 2022, but it follows a year of inflation that already raised prices on gasoline and groceries. Additionally, real wages have not kept up with inflation. That means there is less cash to spend on their expenses which will likely rack up credit card debt.

At the end of last year delinquency rates were low; only 3.2% of credit card debt was more than 90 days past due, although the feds consider this a "serious delinquency."