jail for unpaid debtIt is quite unusual to go to jail for an unpaid debt. Debtors’ prisons were abolished in the 19th century in the United States, and the Fair Debt Collection Practices Act prohibits debt collectors from threatening you with criminal prosecution.

In the state of Florida, you can’t be put in jail for failing to pay a debt or judgment. What can happen when you fail to pay a debt is that it will be reported to credit bureaus, and it will become part of your credit history for up to seven years. It is also possible that your property is seized and your wages may be garnished. But since debtors’ prisons were found to be unconstitutional and biased against people with lower incomes, you are not likely to face jail time over an unpaid debt.

However, you should be aware that there are certain situations that can lead to jail time in relation to an outstanding debt. These include:

will bankruptcy stop irs garnishmentFalling on hard times financially can also lead to falling behind on your taxes. When your tax debt becomes extremely delinquent, the IRS may issue a garnishment on your wages. This garnishment, or levy, allows the IRS to take part of your wages each pay period. A garnishment will continue until you: A. make other arrangements to pay off your tax debt; B. your debt has been paid in full; or C. the levy has been released. Overwhelmed by the thought of losing your wages, you may wonder if filing for bankruptcy will relieve you from an IRS garnishment.

Filing for bankruptcy can in fact offer some relief from the stress of an IRS garnishment. Once you file bankruptcy, a court ordered automatic stay will immediately go into effect. This stay will stop any type of debt collection, including garnishments and seizures, for the duration of the bankruptcy case. However, since bankruptcy will not get rid of most tax debts, how your garnishment is affected after the case is over will depend on which type of bankruptcy is filed: Chapter 7 or Chapter 13.

In a Chapter 7 bankruptcy filing, all of your dischargeable debts will be wiped out. Since most tax debts are not dischargeable, they will remain. The IRS garnishment will, however, be temporarily halted due to the automatic stay while your bankruptcy case is processed. When your case is over, you will still owe on your tax debt. For this reason, while Chapter 7 can offer a window of relief, it does not offer a long-term solution to the situation.

visitation during paternity actionWhen a man is not named on a child’s birth certificate, a paternity action is needed to determine that the man is the child’s biological father and to establish his rights and responsibilities. A paternity action is the legal process used to establish the paternity of a child. This is most often done by using DNA analysis of a swab test or a blood test. In the state of Florida, a paternity action may be filed by the child’s mother, the man involved or even by the child.

Some of the reasons a paternity action may be needed include:

• To verify a child’s identity or to give a child a needed identity.

divorce disclosuresIn a divorce or family law case, people are often concerned that their former spouse or significant other will not be entirely straightforward with their financial information. Through a procedure called mandatory disclosure , the state of Florida mandates that each party is fully informed about the other party’s financial situation.

In simple terms, a mandatory disclosure means that the financial information of both parties in a divorce or other family law case are required to be disclosed. It specifically requires that financial affidavits be exchanged, and this requirement is not able to be waived. Mandatory disclosures must be filed within 45 days of the case being served. They must also be continually updated whenever there is a substantial change in one of the party’s financial circumstances.

On top of the financial affidavit, there are additional documents required which help demonstrate the debts and assets of each party. These documents are furnished as a way to support the numerical figures on the affidavit. Some of these documents may not always be necessary and can potentially be waived if agreed upon by both parties.

refuses to pay child supportDealing with a former spouse who is not paying their court-ordered share of child support can be an unfortunate hassle. Left with this financial and emotional burden, you may feel like you’ve made every attempt to collect but just aren’t getting anywhere. You may even be at the point where you’re asking yourself, “is withholding visitation an option?”

The answer to that question is no. You cannot refuse visitation if your ex is not paying child support. While you may be able to have your ex-spouse’s visitation rights modified in court, withholding visitation rights is considered custodial interference. Child support and visitation rights are two separate issues that should not be confused.

  • Child support is determined in court, and must follow the guidelines of the Child Support Enforcement Act. These guidelines vary from state to state. The factors that are looked at include the child’s needs (health care, education, child care, etc.), the income and needs of the custodial parent, the paying parent’s income and the child’s standard of living before the divorce or separation.

student loan bankruptcyIf the debt from your student loans is overwhelming you, you’re not alone. According to the Institute for College Access & Success, an independent non-profit organization, 68% of students who graduated from both private and public colleges in 2015 had student loan debt. The debt average had risen 4% since 2014 to a whopping $30,100 per borrower in 2015.

While it can be challenging, it is not impossible to have student loan debt discharged in bankruptcy. In order for your student loan to be discharged, you must be able to prove that it is causing undue hardship. Courts use certain tests to make this determination. The most common is called the Brunner Test, in which courts will look for you to meet the following three criteria:

  1. You are unable to maintain a minimal standard of living for you and your dependents if you are required to continue paying your student loans.

When you fhow to stop creditors from callingace the unfortunate situation of falling behind on your credit card, mortgage, auto loan or other bills, you may also find you’ve become the victim of debt collection harassment. The goal of this type of harassment is to annoy, intimidate or bully a consumer into paying off a debt.

Debt collection harassment can come in different forms—email, direct mail or texts—but it is most often done by constant, repetitive phone calls. These phone calls are often designed to annoy and belittle not only the person who holds the debt, but also whoever happens to answer the phone. At worst they may contain profane language and threats. They might even contact your friends and neighbors about your debt, seeking to humiliate you.

Fortunately, you have rights. While debt collection agencies are legally permitted to collect the debt that is owed to a creditor, they are not legally permitted to use abusive tactics to collect this debt from you. The Federal Trade Commission, the nation’s consumer protection agency, enforces something called the Fair Debt Collection Practices Act. This act prohibits debt collectors from using abusive, unreasonable and/or deceptive practices to collect a debt.

florida supreme courtCase Law Update: Florida Supreme Court Issues Decision in Bartram v. U.S. Bank

The Florida Supreme Court ruled in an important decision November 3 that will impact current and future mortgage foreclosure cases. The ruling in Bartram v. U.S. Bank (SC14-1265) directly affects Florida’s five-year statute of limitation in mortgage foreclosure cases. The ruling holds that the statue of limitations does NOT prevent a mortgage service from multiple, successive foreclosure lawsuits against a borrower.

This means that even if a prior foreclosure case was dismissed or the mortgage service lost at trial the mortgage service can commence another foreclosure against the borrower if the borrower defaults again within five years simply by setting a new default date.  Therefore homeowners are still obligated to pay their mortgage obligations even if a lender unsuccessfully attempted foreclosure in the past. A past dismissal will not prevent a future filing.

Attorney Chip Parker spoke on First Coast Connect Tuesday morning – the topic centered around an article written by Neal Gabler published in The Atlantic. Gabler disclosed in the article that “just like nearly half of Americans, he would have trouble finding $400 to pay for an emergency.” Parker says that he does not believe Gabler should feel resigned to this lifestyle, and that there are ways to turn it around – including bankruptcy. 

Chip Parker believes that bankruptcy is a viable option to repair financial fragility and help individuals to save for retirement. 

For more information and to listen to the segment, click here.

Bankruptcy is an excellent retirement strategy, especially if you are behind in saving for retirement because your credit card debt is robbing you of your ability to save.

Just look at the math:

Let’s say you’re about 10 years away from retirement, and you owe $25,000 in credit card debt at a typical 18.9% interest. Based upon your budget, you can pay no more than $500 per month toward this debt while maintaining your monthly expenses.