St. Petersburg Bankrupcty and Foreclosure Attorney Blog

Expansion into Manatee and Sarasota Counties Under Way at Tampa Bay Law Firm Specializing In Commercial and Residential Foreclosures and Short Sales

floridabankruptcyattorney — Mon, 22 Mar 2010 16:27:17 +0000

St. Petersburg, Florida – Yesner & Boss, one of Tampa Bay’s top law firms in the field of commercial and residential foreclosures, short sales and bankruptcies, is expanding into Manatee and Sarasota Counties. The firm has announced the addition to its legal team of Jo Ann M. Koontz, an experienced tax lawyer and a certified public accountant.

Koontz joins Yesner & Boss (www.YesnerBoss.com) from the Sarasota firm, Icard Merrill. She will expand the capacity at Yesner & Boss to chart for clients the tax implications of their real estate decisions.

Foreclosures nationwide continue at record or near-record rates with eight Florida cities in the top 20 in residential foreclosure statistics, according to RealtyTrac, a national real estate database. Foreclosures and short sales also are spreading to suburbs, which had been thought to be more stable.

The spread of mortgage troubles to the commercial sector last year played a role in a number of bank failures, the Wall Street Journal reported. Banks held $1.7-trillion in commercial mortgages and construction loans last fall, a debt load that continues under economic pressure.

“These problems will not be going away for several years, especially in the so-called ‘sand states,’” said Shawn Yesner, a partner in Yesner & Boss. “For several years we have been working with homeowners and business owners facings forclosures and bankruptcies in the Tampa Bay area. Adding Jo Ann Koontz to our legal team gives us the opportunity to expand our services into the Sarasota and Bradenton areas.”

The “sand states” include Florida, Arizona, Nevada and California.

Koontz, a graduate of Ohio Northern University, will focus on helping Yesner & Boss commercial and residential clients determine the impact of foreclosures, short sales and bankruptcies on their tax liabilities.

Koontz has represented clients for more than 10 years in a variety of real estate matters, including commercial and residential real-estate transactions, 1031 exchanges, S corporations, partnership and LLC formation and reorganizations, and in the tax implications of many business and real estate transactions.

Koontz joined Yesner & Boss in February.

For more information or for interviews with Shawn Yesner or Jo Ann Koontz, contact our office today.

How Does Bankruptcy Affect Child Support?

floridabankruptcyattorney — Wed, 03 Feb 2010 15:43:28 +0000

There are two facets to child support and alimony in a bankruptcy context; both the payment and receipt of child support and alimony.

Sometimes, child support and alimony debt can become so burdensome that the parent or ex-spouse believes that bankruptcy is the only way out. Bankruptcy is a bad alternative to eliminate child support or alimony; a family law court would be a better forum to have those obligations reduced, if appropriate. Bankruptcy might help reduce other unsecured debts that will allow the child support and alimony obligations to be more affordable however.

When the bankruptcy is filed, the automatic stay halts all collection activities, except those actions to establish paternity, and actions for domestic support, child custody or visitation. In addition, the automatic stay has no effect on the reporting of overdue child support to any consumer reporting agency.

Both domestic support obligations and debts owed to a spouse or former spouse pursuant to a divorce or separation agreement are non-dischargeable in bankruptcy. Therefore, those debts remain even after the bankruptcy is completed.

Finally, in order to file for bankruptcy protection, child support and alimony obligations must be current and must be kept current during the bankruptcy case.

Therefore, bankruptcy is ineffective as a tool to eliminate child support and alimony obligations, although it might be a good alternative to reduce other debts, thereby making child support and alimony easier to afford.

What happens, however, when the person receiving child support or alimony is forced to file for bankruptcy protection? For those bankruptcy filers that receive child support and alimony, both federal law and Florida law allow the receipt of child support and alimony to be exempt from creditors and from the bankruptcy trustee. Therefore, the receipt of child support and alimony has little effect on the amount the debtor may have to pay to unsecured creditors during the pendency of the bankruptcy case.

The Tampa foreclosure attorney and Tampa bankruptcy attorney at Yesner & Boss, P.L. can answer any further questions you may have before you purchase a home. Contact us today for a free consultation.

When Does My Bankruptcy End?

floridabankruptcyattorney — Wed, 06 Jan 2010 15:04:18 +0000

I am often asked, “how long will this take – when will my bankruptcy end?” The answer depends on the congestion of the court’s docket and what type of bankruptcy is filed. Sparked by the great economic disaster of 2008 bankruptcy filing in the Middle District of Florida is up almost 50% from 2008, topping out at almost 58,000 according to the Tampa Bay Business Journal. The increase in filings in the Middle District of Florida is the second largest in the nation behind the Central District of California.

Despite the increased number of filings, a common chapter seven bankruptcy case in the Middle District of Florida takes anywhere from three to six months from the filing date until the date of discharge. Discharge being the conclusion of a bankruptcy case i.e. the Debtor is alleviated of the debt obligations. Considering the overwhelming number of filings and the second busiest bankruptcy court in the country, a Debtor can make their way through a chapter seven in a reasonable amount of time.

However, if a debtor files a chapter thirteen bankruptcy, the time frame is much different. In a chapter thirteen bankruptcy, the Debtor makes a monthly repayment to the Trustee over the life of a thirty-six or sixty month repayment plan. Once the Debtor makes the last payment in their chapter thirteen plan, the Debtor is then discharged. Depending on which plan, a chapter thirteen bankruptcy takes at least three years before discharge and in many cases five years before discharge.

If you are considering bankruptcy contact the Tampa bankruptcy attorneys at Yesner & Boss to find out what options may be available for you.

Congress Extends Homebuyer Tax Credit Until April 30, 2010

floridabankruptcyattorney — Tue, 15 Dec 2009 19:08:24 +0000

On November 5, 2009, Congress voted to extend the homebuyer tax credit program until April 30, 2010. The extension continues the $8,000.00 tax credit to first time homebuyers, and includes an additional credit for current homeowners of $6500.00. Further, by extending the Homebuyer tax credit, the Florida Homebuyer Opportunity Program will continue to provide loans to first time buyers for down payment and closing costs. The chart below provides a comparison of the benefits to homeowners under the original act and the new benefits under the extended program:

FEATURE	Jan 1 – Nov 30, 2009 Rules as enacted February 2009	Nov. 7 – April 30, 2010 Rules as enacted November 2009
First-time Buyer Amount of Credit	$8000 ($4000 married filing separate)	$8000 ($4000 married filing separate)
First-time Buyer Definition for Eligibility	May not have had an interest in a principal residence for 3 years prior to purchase	Same
Current Homeowner Amount of Credit	No Provision	$6500 ($3250 married filing separate)
Effective Date Current Owner	No Provision	November 7, 2009
Current Homeowner Definition for Eligibility	No Provision	Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years
Termination of Credit	Purchases after November 30, 2009. (Becomes April 30, 2010 on Date of Enactment.)	Purchases after April 30, 2010
Binding Contract Rule	None	So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Income Limits (Note: Increased income limits are effective as of date of enactment of bill)	$75,000 – single $150,000 – married Additional $20,000 phase out	$125,000 – single $225,000 – married Additional $20,000 phase out
Limitation on Cost of Purchased Home	None	$800,000 November 7, 2009
Purchase by a Dependent	No Provision Ineligible	November 7, 2009
Anti-fraud Rule	None	Purchaser must attach documentation of purchase to tax return

The Tampa foreclosure attorney and Tampa bankruptcy attorney at Yesner & Boss, P.L. can answer any further questions you may have. Contact us today for a free consultation.

Florida Law Firm Expands Services for Businesses and Individuals Needing Mortgage and Bankruptcy Assistance

floridabankruptcyattorney — Wed, 04 Nov 2009 15:23:39 +0000

St. Petersburg, Florida – Yesner & Boss, a leading Central Florida law firm in the areas of mortgage assistance, bankruptcy and asset protection, has added two attorneys to expand services to clients caught up in the nation’s complex mortgage markets. This will be especially important as the economic tidal wave that swamped residential real estate sweeps toward the commercial market.

Commercial property values have fallen 35 percent since October 2007, according to Moody’s Investors Service, making it difficult for owners to refinance almost $165-billion of mortgages for everything from small stores to skyscrapers. If those properties can’t be sold, foreclosures could become the crisis for the commercial real estate market it continues to be for residential real estate.

The addition by Yesner & Boss of associates Vincent C. LoBue and Paul M. Silvestri significantly increases the capabilities of the firm (www.YesnerBoss.com).

“Bringing on additional attorneys allows us to expand our client base, take on more complex cases and add even more value to all our clients,” said Shawn Yesner, a partner in Yesner & Boss.

The rate of foreclosures in Florida remains staggering. Between August and September, Florida recorded nearly 344,000 new foreclosures of all kinds, according to RealtyTrak, a real estate monitoring firm.

“With foreclosures remaining high and bankruptcies nearly back to the epidemic scale of 2005, creditors are becoming increasingly aggressive in collecting debts,” Yesner said. “In many cases, this activity goes beyond what the law allows. It’s not just homeowners. Commercial landlords are experiencing high vacancy rates, which could lead to increased commercial foreclosures. Our addition of two skilled attorneys will allow us to respond to those needs.”

LoBue received a law degree from Stetson University College of Law and is a member of the Florida and New Jersey Bar Associations. LoBue’s practice includes foreclosure defense, consumer protection litigation and asset protection.

Silvestri, also a Stetson graduate, is a member of the Florida Bar Association. Silvestri’s practice includes foreclosure defense and consumer protection cases.

The Tampa foreclosure attorney and Tampa bankruptcy attorney at Yesner & Boss, P.L. can answer any further questions you may have. Contact us today for a free consultation.

Rise In Foreclosures Ensures That Housing Supply Will Continue

floridabankruptcyattorney — Tue, 20 Oct 2009 14:01:50 +0000

According to the Center for Responsible Lending, a nonpartisan watchdog group based in Durham, North Carolina, there are more than 6,600 home foreclosure filings per day in the US, and with two million this year alone, the flood shows no signs of abating. Foreclosures, which started with subprime borrowers, have now moved on to the much bigger prime loan market on the back of mounting unemployment. Michael Barr, the Treasury Department’s assistant secretary for financial institutions, said in congressional testimony last month that more than 6 million families could face foreclosure over the next three years.

As a result of the continued foreclosure increase, the housing market has a surplus of available properties. The shape of this second downturn is almost completely dependent on the level of government intervention that will take place.

For a number of reasons, banks have not been aggressively taking title to homes and selling them, which has resulted in very few distressed sales in comparison to the actual level of distress in the market. This delay in REO sales, along with historically low mortgage rates and an $8,000 tax credit, has helped to stabilize the housing market – temporarily.

It is very clear that price stabilization is temporary unless something is done. Here are some facts to help project what housing will be like in 2010:

13.54% of the 44.7 million mortgages tracked by the Mortgage Bankers Association are delinquent.
7.57 million homeowners are delinquent, applying the same percentage to the 11.2 million mortgages not tracked by the MBA (55.9 million total mortgages in the U.S.). That means that 10% of all homeowners in the country are delinquent.
Based on historical trend analysis by Amherst Securities, 6.94 million homes that are already delinquent will be liquidated, which is more than a one year supply of distressed sales poised to hit the market sometime in 2010 and 2011. During Q1 2005, that figure was only 1.27 million.
Defaults continue to grow at the rate of approximately 300,000 per month, assuring that the number of distressed sales will grow and will continue through 2012.

2009 Government Intervention

Government intervention to date has been extremely helpful in preventing an even more dramatic decline in home prices. As shown in the chart at right, housing demand has only fallen to “normal” levels and stabilized there. Without historically low mortgage rates, support for Freddie Mac, Fannie Mae and FHA, and an $8,000 tax credit, how far would sales have fallen this year and what would that decline in demand have done to pricing?

Conclusion

Demand needs to continue to be stimulated to bring down supply, particularly while the country continues to lose jobs. Without continued government intervention, home prices will plummet, banks and the GSEs will continue to lose money, and the economy has virtually no chance of increasing overall employment in 2010.

The Tampa foreclosure attorney and Tampa bankruptcy attorney at Yesner & Boss, P.L. can answer any further questions you may have. Contact us today for a free consultation.

Top Tampa Bay Real Estate Lawyer Featured In New Thomson West Book on Florida Foreclosure Law

floridabankruptcyattorney — Thu, 24 Sep 2009 15:59:40 +0000

ST. PETERSBURG, FL – Shawn Yesner, one of Central Florida’s leading experts on residential and commercial foreclosure laws and procedures, is a major contributor to a new book from Thomson West on all facets of the state’s foreclosure statutes.

It is a perfect combination.

Yesner, a partner in Yesner & Boss, P.L. is regarded as one of the most effective attorneys in Florida in defending clients involved in foreclosure and short-sales of residential and commercial property. Thomson West is the most prestigious publisher of legal resources in the country, with more than 5,000 titles in print.

The new book, “Florida Foreclosure: What Lawyers Need to Know,” provides commentaries from proactive experts on a variety of current and highly relevant areas of real-estate law, including commercial foreclosures, mortgage modifications, homestead laws, foreclosure protection, Federal Trade Commission actions and a guide to foreclosure pleadings and practices.

“I consider it a high honor to be involved in this Thomson West project because the state of real estate markets has been and continues to be dire,” Yesner said. “While the residential markets are showing sporadic signs of improvement, we are moving toward commercial markets, where the next wave of distressed borrowers is facing a difficult future.”

As the economy struggles, businesses are failing, making it increasingly difficult for commercial landlords to keep property occupancies sufficiently high to pay their mortgages. But few new companies are emerging to fill those vacancies.

“Commercial property owners will start defaulting and going out of business,” Yesner said. “They will need asset protection, help with possible bankruptcies and effective representation with lenders. That’s where we are focused.”

“Florida Foreclosure: What Lawyers Need to Know,” is an invaluable asset for law offices and should be a resource in every law library. It is available for $79 from Thomson West online here.

Shawn Yesner offices are at 10812 Gandy Boulevard North, St. Petersburg, Florida 33702. Mr. Yesner can be contacted toll-free at 888.282.2110 or, locally, at 727.471.0039.

For more information or requests for interviews, contact Shawn Yesner directly at the numbers above

Bankruptcy Court Finds Discharge of Indebtedness by Issuance of 1099-C Forms Does Not Equate to Discharge of Debt

floridabankruptcyattorney — Thu, 27 Aug 2009 14:24:37 +0000

For homeowners considering a short sale or deed in lieu of foreclosure (“DIL”) as a means to prevent foreclosure, a recent bankruptcy decision from the Third Circuit has important implications towards the treatment of deficiency liability. In re Zilka, a July 2009 case from Pennsylvania, the debtor received a post-petition personal injury settlement allowing for settlement of all creditors claims in the bankruptcy estate. At issue was whether a creditor could file a claim against the debtor for accounts it had previously charged off and issued 1099-C forms for cancellation of debt to the IRS. The debtor argued the charged off accounts and the 1099-C forms amounted to a discharge of the debts. However, the court distinguished between a charge off of indebtedness and a discharge of indebtedness. The court found the IRS requirement that a lender file a 1099-C form to be a reporting requirement for income tax purposes. In contrast, it held state law governs whether a discharge of debt has occurred. As such, a creditor may still attempt to collect on a charged off debt during bankruptcy proceedings, even if it has previously issued 1099-C forms.

The ruling in Zilka highlights the importance of tax considerations for homeowners who complete a short sale or DIL. Banks must issue a 1099-C anytime there is a deficiency resulting from the sale of a property. For instance, a homeowner, Bill, owns two properties: property 1 is his primary residence and property 2 is an investment property he rents to tenants. For the purposes of the example, Bill considers property 2 a bad investment because the mortgage balance is $45,000.00 greater than the value of the property, and he is unable to find tenants. He obtains a short sale offer of $20,000.00 less than the value of the property, which the bank is willing to accept. Should the sale close, the IRS requires the bank to report a deficiency of $65,000.00 (Mortgage balance of $45,000.00 + $20,000.00 less the value of the property) to by filing a 1099-C form. When Bill completes yearly tax returns, he would be required to report the $65,000.00 as gross income, which, after deductions and exemptions, would increase his taxable income, and potentially place him in a higher tax bracket. The ruling in Zilka, though, would allow for Bill to re-adjust his income if the bank later filed a claim in bankruptcy court for the deficiency of $65,000.00. In short, Zilka affirms the principal that a debtor may be liable for deficiencies by either an increase in the debtor’s taxable income or the creditor’s right to collect on the deficiency, but not both.

There are a few applicable exemptions under the Internal Revenue Code for tax liability resulting from deficiencies in debt settlement. For instance, deficiencies resulting from the sale of a qualified principle residence are exempt from gross taxable income in most circumstances. In the example above, the QPR exemption would apply if Bill can show he has lived in the property for 2 years, the debt was used to acquire, construct, or substantially improve the property, and the total debt is less than $2 million. Although this exemption excludes deficiency income reported through a 1099-C from Bill’s gross income, it also increases his tax basis if there is a short sale of the property. However, the insolvency exemption, which applies if Bill’s total liabilities exceed his assets, would operate to cancel any liability resulting from this increased basis.

Loan Modifications and The “Making Homes Affordable Act”

floridabankruptcyattorney — Fri, 24 Jul 2009 17:47:31 +0000

The Obama administration’s recent bailout of the financial services industry now includes aid to homeowners facing foreclosure in their primary residential home. One important aspect of the bailout plan is the establishment of incentives for banks to modify loans through the “Making Homes Affordable” Act (MHA). Many commentators have pointed out that while banks have a method of disposing of REO properties, there are a lack of incentives for banks to complete short sale transactions and loan modifications. MHA seeks to make these transactions more advantageous for both banks and homeowners: mortgage servicers can receive $1,000 for successful completion of a short sale or deed-in-lieu of foreclosure , and $1,500 to borrowers for transferring title back to the bank.

MHA also provides $9.0 million worth of financial incentives to mortgage servicers to modify loans. It requires that the homeowner sign a financial hardship affidavit, and in exchange, the Servicer will decrease the interest rate and lengthen payment periods. The goal of the incentives are to reduce payments to 31% of homeowners’ pretax monthly income for residential, single family homes, and in which the principal balance is below $729K. It does not apply to individuals who bought properties for investment purposes. A second component of the plan is to allow for borrowers from Freddie Mac and Fannie Mae to refinance if they owe more than their home is worth, up to 105% of the deficiency between the value of the home and the amount owed. Between these two components, the Obama administration estimates that 1 out of 9 homeowners facing foreclosure will receive aid under the plan.

Since the enactment of MHA in February, mortgage industry analysts have pointed to the successes of loan modifications that reduce the principal amount of the mortgage. According to LPS Applied Analytics, modifications that reduce principal have a 25% lower re-default rate within 6 months than other types of loan modification. Further, Fitch Ratings has found in a recent report that homeowners who receive principal reductions are 20-30% less likely to re-default. Our Short Sale Lawyers & Debt Negotiation Attorneys at Yesner & Boss, P.L., will work with you and your lender in reaching a favorable modification of the terms of your loan.

The “Helping Families Save Their Homes in Bankruptcy Act of 2009″

floridabankruptcyattorney — Wed, 15 Jul 2009 16:05:19 +0000

The Bankruptcy Lawyers and Foreclosure attorneys at Yesner & Boss, P.L. posted a Real Estate law blog entitled “Foreclosure Prevention Programs Fail.” The article highlighted the National Association of Consumer Bankruptcy Attorney’s (NACBA) view that a court ordered process of loan modifying is necessary in order to solve the current mortgage crisis as opposed to the current voluntary loan modification process which is available. Several proposals have been made in this effort but the latest, a United States Senate Bill, seems to be gaining the most momentum and has been also endorsed by both the United States President-Elect Barack Obama and Vice-President Elect Joe Biden.

Currently, the Bankruptcy Code prohibits the modification of mortgage loans on primary residence. The proposed Senate Bill (S.61) seeks to amend certain provisions of the Bankruptcy Code in order to allow a Homeowner to be able to modify their mortgage loan in a bankruptcy proceeding through a judicial rather than voluntary process. The bill was introduced on January 6th, 2009 by Illinois Senator Dick Durbin. Senator Durbin’s view appears to be that the provisions of the Bankruptcy Code of which this bill seeks to amend are outdated, especially in today’s mortgage crisis. The goal of this Bill is to give Bankruptcy Judges the power to modify mortgage loans secured by principal residences during a bankruptcy proceeding possibly to reduce the balance to the current fair market value (cramdown), extend the payment period, modify the interest rate, convert an adjustable rate mortgage into a fixed rate mortgage, or any other modification the court may choose.

Proponents of this bill believe that it is the first viable step in a foreclosure prevention plan of some sort and that if passed this bill will help millions of homeowners stay in their homes and also help towards stimulating growth in the economy. We will be sure to keep our clients informed on the progress of this bill and other options or programs that are available to our clients so please check back routinely for any updates and contact us with any questions or for any further information regarding your particular situation to find out how we may be of assistance. Contact the Bankruptcy Attorneys at Yesner & Boss, P.L. for further information.