FISHER'S LAW OFFICE NEWSLETTER
Welcome to the NEWSLETTER of Fisher’s Law Office, providing you with legal information you can use in your everyday life. In this issue of the Fishers Law office newsletter we discuss ways of surviving our difficult economic times. If you have any questions about any of the articles in this newsletter please don’t hesitate to contact us.
1. ARE YOU IN MORTGAGE FORECLOSURE TROUBLE? YOU MAY BE ABLE TO DO A “CRAM DOWN” ON YOUR MORTGAGE.
Under a proposed change in the United States federal bankruptcy law, if a debtor is “upside down” on a home mortgage (meaning the value of the house is less than the balance of the mortgage) then the bankruptcy judge has the right to reduce the mortgage balance down to the value of the home.
Debtors in bankruptcy court already have the right to “cram down” the balance of cars owned for more than 910 days and to cram down the balances owed on rental property. This major change in the law will for the first time allow homeowners who are “upside down” to reduce a mortgage balance down to the home’s value.
Warning: This new proposed law will only apply to homeowners who file chapter 13 Bankruptcy. Also, you must request a “loan modification” from you bank before the court will “cram down” the balance of your mortgage. Lastly, the law has not been passed yet by the U.S. Congress. When the law passes, we expect a huge increase in bankruptcy filings in the U.S.
2. FLORIDA’S LAWS DEALING WITH CHILDREN AND PROPERTY IN DIVORCES HAS CHANGED!
The parents of children going through a divorce must now present a divorce judge with a “parenting plan” that includes a general outline of overnights and timesharing the children will spend with each parent, including holidays, summer recess from school and other special occasions. Parenting plans will also outline parental responsibilities of each parent as it relates to their children. Parenting plans can include details on children’s extra curricular (after school) activities. The new statute requires a specific time-sharing schedule that states exactly how much time each parent will spend with their children after the divorce.
There is no model time sharing schedule but under the new law the terms “primary” and “secondary” residential responsibility will no longer apply, rather parents will be called Mom and Dad maybe even Father and Mother.
As a practical matter the new statute requires parents to cooperate more when it comes to raising their children. Parents will be expected to “co-parent” their children. No longer will one of the parents be a mere visitor in the child’s life.
FLORIDA’S EQUITABLE DISTRIBUTION STATUTE HAS ALSO CHANGED
In 2008 the Florida Legislature also altered Florida Statute Chapter 61.075. The statute makes clear that all property should be equally distributed in a divorce unless there is a justification for an unequal distribution. Some of the reasons for unequal distribution of property between divorcing spouses include the following:
Under the law, a divorce court is required to identify all marital assets and non-marital assets and to clearly state which spouse is entitled to each asset. The new law also allows courts to make interim partial distributions of assets during a divorce case. Marital assets include all assets acquired during the marriage by either party as well as the increase in value of non-marital assets as a result of active effort during a marriage. Gifts made between spouses during the marriage are also considered marital assets.
The big change in the law is that all assets held as “tenants by the entireties” are presumed to be a marital asset and any party that makes a claim to the contrary has to prove that the asset is not a marital asset. Non-marital assets are assets acquired prior to the marriage and gifts from outsiders during the marriage.
Lastly, the law states that all assets acquired during the marriage are presumed to be marital assets.
3. WHO SHOULD WRITE A WILL IN FLORIDA?
Answer: Anyone who has assets or who has a child or a spouse should write a will. For example, a person with rental property, brokerage accounts or mutual fund accounts may want to write a will. The will should clearly state who receives the property when the decedent dies. If you decide not to write a will, Florida law provides a will for you. The problem is that that the will the State or Florida provides for you may make gifts to people you do not want included in your will. Therefore, we recommend that all our clients consider writing a will if he or she has a child, a spouse, or property.
Our client defaulted on his credit card obligation in early 2000. Under Florida law, the statute of limitations gives a credit card company only five years to sue. Years after the statute of limitations had run, our client was sued. The company suing claimed to own the account. Upon investigation it turned out that the original bank had sold the credit card debt.
During the course of “discovery” our client also found out that the new company was accruing interest at a rate in excess of 25% interest. This interest rate is illegal under Florida law. (Florida law defines “usury” as any contract for payment of interest upon any loan or line of credit that is greater than of 18% interest.)
National banks are exempt from this state statute if they are based in a state that allows such excessive rates of interest. However, the company that was suing our client was not based in such a haven jurisdiction and wasn't a National Bank and was therefore subject to Florida’s usury laws. Since the rate of interest accrued on the account was greater than 25% the company may have also been guilty of violating a criminal statute dealing with loan sharking. This statute makes it illegal to charge more than 25% interest on a loan in Florida. The penalty for such interest is criminal prosecution under Florida law and is punishable by imprisonment up to one year in prison.
Our client was successful in getting the credit card company to dismiss the case against him. The judge then ordered the company to pay our client’s attorney’s fees.
Moral to the story? See a lawyer if you are sued on a credit card debt. You may owe nothing!
5. UPDATE: HERE ARE SOME OF THE LATEST DEVELOPMENTS IN THE FORECLOSURE WARS IN THE FLORIDA COURTS.
6. WHAT ARE SOME WAYS TO STAY OUT OF THE FORECLOSURE PROCESS?
The current law tends to benefit people who bought a home 15 years ago and causes people who recently purchased a home to pay more property tax, even if the two homes have the same current market value.
Under a proposed change to the Florida Constitution, the Florida property tax exemption will increase by $25,000, but the exemption only applies to the value of property between $50,000 and $75,000.
If you are registered to vote you should become knowledgeable of what changes are proposed in Florida’s tax system. The election to decide on the new tax system is set for January 29th, 2008.
7. CAN YOU GO TO JAIL FOR FAILURE TO PAY YOUR DEBTS?
The history of “debtor’s prisons” is long in Western civilization. In the early days of the American colonies debtor’s prisons were common. Debtor’s prison was also common in England. One of the most famous debtors in history was Samuel Johnson the author of an English dictionary written in 1855. Regarding debtor’s prisons Samuel Johnson said, “There can be no reason why any debtor should be imprisoned, that he may be compelled to payment.” Samuel Johnson was imprisoned for failure to pay 18 pounds (the currency of England) in debt in 1856. Federal debtor’s prisons existed in the United States until 1833. In 1868 Florida added a provision to the state Constitution declaring: “No one can be imprisoned for his or her debts, except for fraud.” In 1968 the Florida Constitution was rewritten and today Florida constitution article 1, section 10, outlaws imprisonment for indebtedness. Creditors who have judgments must collect their debts using garnishment and seizure of assets and no longer can they have their customers put in prison until the debt is paid.
8. ARE YOU A SPEEDER OR RED-LIGHT RUNNER?
Be careful. Florida Law changed in January 2009. Currently you can be fined $208.00 for running a red light and $258.00 for speeding. The discount of 18% given to people who attend traffic school has been abolished. You’ve been warned: Do not speed or run red lights in Florida or you will pay the consequences financially..
9. PRICES FOR LEGAL SERVICES -2009
General Legal Advice - $125 (First Consultation)
10. DO YOU NEED A “LEGAL CHECKUP”?
In these perilous times, it is a good idea to visit a lawyer at least every two years to review the following: