It is never a pleasant experience when you answer the door and find a process server with a brand new lawsuit for a past due debt. Once you are served, the worse thing you can do is nothing, which is a common reaction. If you ignore the lawsuit, a Civil Judgment will eventually be entered against you.

Having the lawsuit reviewed by an attorney is the first thing you should do. But if you can’t get to a lawyer right away, you need to respond to the lawsuit. How you respond to a Florida case depends on whether the case is a Small Claims, County, or Circuit Court case.

SMALL CLAIMS – Small Claims Court is handled by County Court Judges, and is for cases with dollar amounts less than $5,000. The rules are less formal, and cases are often handled without attorneys. If you are served with a Small Claims lawsuit, you will usually have a Pre-Trial date already listed in the paperwork. You normally do not need to file a written response. When you go to the Pre-Trial Hearing, the Clerk will ask you if you admit or deny the debt. If you deny it, the Clerk will set the matter for a trial. If you admit, but need time to pay, there are often mediators who can help you reach a settlement, or you can settle directly with the creditor’s lawyer. If you do not attend the Pre-Trial Hearing, a Judgment will be entered against you.

COUNTY COURT – If the dollar amount of a debt is more than $5,000, but less than $15,000, the matter is heard in County Court. Unlike Small Claims where a Pre-Trial Hearing is already set, in these cases, a written response must be filed within 20 days of service. If an Answer is not filed, a Default will be entered and eventually a Judgment. The method and place to file your Answer is listed in the paperwork you received.

CIRCUIT COURT – If the dollar amount is more than $15,000, it is in the Circuit Court. The procedure is just like County Court cases, in that; you must file a written response within 20 days of service, or risk a Default and Judgment.

If you cannot get to a lawyer right away, any Answer is usually sufficient to avoid a Default. It does not have to be perfect or have legal jargon. Just make sure you follow the instructions on how and where to file. After that, you really should hire a lawyer to represent you or at least to review the case, especially for County and Circuit Court cases.


One of the most frequent questions we get from our bankruptcy clients is “What do I need to get together for my bankruptcy filing”? There are numerous documents and items we need to make sure your bankruptcy goes through as smoothly as possible. We make sure that all our new clients receive a packet with instructions, information, and a very detailed list of items to start gathering. Although every Chapter 7 Trustee asks for different things, there are 3 items that every Trustee asks for, and if they are not provided, your case can be dismissed.

Some Chapter 7 Trustees ask for up to 20 things, some ask for only 5, but they all ask for:

PAYSTUBS – You must produce all paystubs and evidence of income going back 6 months prior to filing. That includes paystubs of spouses unless you are separated. If you are self-employed, you must provide a detailed profit and loss statement. This is required in order to substantiate the income and payroll deductions you listed in your bankruptcy paperwork.

FEDERAL TAX RETURNS – You must produce full tax returns for 3 years prior to filing. This includes all schedules. Tax returns are used to confirm income, claimed dependents, evidence of a business, evidence of real property (due to mortgage interest deductions), and the amount and type of refund you may be receiving.

BANK STATEMENTS – You must produce bank statements for 3 to 12 months prior to filing. This includes any and all open or closed accounts in which you were named on the account. It is best to go back 12 months, and get them as soon as possible since you may not have access to older statements. Trustees like to review bank statements to confirm cash on hand, and to determine if there have been any unusual deposits or withdraws.

You should gather these items and have them ready for your lawyer to review before you file your bankruptcy paperwork. It is important that your bankruptcy petition and schedules match with the information on these 3 items, since you are signing under penalty of perjury that all the information filed is true and correct.

If you are thinking of filing bankruptcy, start saving these items now to speed up the process and reduce additional stress when you do decide to file.


Clients are often shocked to discover that the balances due on their student loans are much higher than their original loans. They are wondering how a $30,000 student loan balance is now $55,000 plus interest. The first question I ask is how many deferments or forbearances have they used, and when was the last time they made a payment. The answer is typically they have been in deferments and forbearances for quite a while, and have made very few payments. In that case, the answer for the rise in the principle is interest capitalizing.

Although student loan payments are not due while you are attending school, any unsubsidized loans continue to accrue interest. If your loans are in deferment or forbearance, interest continues to accrue on most loans. Once you are required to start making payments, the unpaid interest is added to the balance due, and interest begins to grow on the new balance. For example, if the original loan is $15,000, and $10,000 of unpaid interest accumulated while you were in school or in loan deferment, when you have to start making payments, the new principle is $25,000, plus interest. That is due to capitalized interest.

You can reduce capitalized interest by making interest payments while attending school or during any deferments and forbearances. Even a small or partial payment will help. You can also make extra payments during repayment periods if you think you will get a forbearance or deferment in the near future. If you are unable to make these payments, some people rely on family to help them make interest payments until they are able to make regular payments.

Your monthly student loan payment could be much lower if you can avoid capitalized interest. This is especially true for private student loans due to limited repayment options. If you ignore it, be prepared to pay back a larger loan balance.


Clients often ask us what they can do to raise or maintain an excellent credit score. There are numerous factors that affect your credit score. Many people believe that all they have to do is review their credit report for errors, pay their bills on time, and let time pass. While this is important, we have found that there are 5 factors that primarily effect your credit score.

Payment History – About 35% of your credit score is determined by your payment history. Paying your bill on time, each and every month is an absolute necessity if you want an excellent credit score. This may seem obvious, but many of our clients fail to pay their bills, even when they have the funds. If you are unable to make a payment, contact the creditor to make payment arrangements. Paying nothing may immediately drop your score.

Percentage of Outstanding Debt – Credit card and debt utilization makes up about 30% of your score. Credit card and debt utilization rate is the amount of debt compared to total limits. For example, if the total debt is $20,000 and you have credit limits of $100,000, the utilization rate is 20%. The lower the better. Once you get over 30%, you should take action to lower the percentage. You should also try to keep each individual account at a low percentage in addition to the total accounts.

Age of Accounts – the age of your accounts make up about 15% of your score. The older the better. That is why you should keep older accounts open.

Type of accounts – This makes up about 10% of your credit score. A good mix of accounts is ideal, such as credit cards, car loans, secured loans, ect. We do not recommend that you obtain unnecessary credit just to raise your score. However, having no available credit could be just as bad. Three to five credit cards or accounts is enough.

Credit Inquires – This makes up about 10% of your score. If you apply or open numerous credit cards, you are hurting your score. Although it is a small percentage, and is often temporary, it does have an effect.

If you have a poor credit score, it can be rebuilt to an excellent score in very little time by improving these factors.


When we meet with clients to discuss their debts, they are often surprised when we recommend debt settlement rather than bankruptcy. They assume that as bankruptcy attorneys, we always recommend bankruptcy. Our goal is to develop a specific and unique plan of action for each client. Sometimes bankruptcy is not the best choice.

There are many reasons why you should choose debt settlement over bankruptcy. Some of these are:

The total debt is relatively low. The costs and fees to settle the debt may be less or equal to the costs and fees of filing bankruptcy;

There may be only one or two accounts that need attention. If all other debts are under control or in good standing, it makes more sense to attempt to settle the delinquent accounts;

Your income is too high or your property too valuable to file Chapter 7, and you do not want to be in Chapter 13 bankruptcy for up to five years.

You have a high security clearance or a position at work where filing bankruptcy may cause problems;

You are about to make a major purchase, such as a home or car, where filing bankruptcy may affect your financing.

You have an excellent credit score. Although we have a credit rebuilding program that can get your score back up, there is a bigger initial drop when bankruptcy is filed vs. debt settlement for people with high credit scores.

Of course, debt settlement has its own problems. Creditors may not agree to settle on favorable terms, you may have to pay a large lump sum payment or monthly payments for years, your credit score may not improve as quickly, and you may have to pay taxes on the money you saved in the settlement.

Each case is different. That is why we review every case and weigh the pros and cons of bankruptcy vs. debt settlement for every client that walks through our door.


If you have a Federal student loan and file Chapter 7 bankruptcy, the status of your loan changes. Your loan is in forbearance until you receive your discharge. No payments are due and all collection efforts must stop. Although that gives you immediate relief, it also gives you a great opportunity to review your loans and develop a plan to get them under control once you come out of bankruptcy.

A Chapter 7 bankruptcy can last 4 months or more. During that time, you can determine the status of the loans, prepare documents to get out of default, consolidate or rehabilitate your loans, and determine the best repayment option. Once you receive your discharge, you can immediately file the documents and bring your account current and get your loans under control.

If your wages were being garnished, or if your loans were in default before you filed bankruptcy, the worst thing you can do is nothing. I have had clients fail to take care of their loans while they were in bankruptcy, only to find themselves in another financial mess after the bankruptcy because the Department of Education and their collectors immediately garnished their paycheck when they finished their bankruptcy.

If you have a Private Student Loan, you can use the time in bankruptcy to negotiate and implement a repayment plan. This is especially useful if you have co-signers on the loan.

You could use any deferments or forbearances remaining on your loan after the bankruptcy is complete. However, that may not stop interest from accruing, and you would be unnecessarily wasting valuable deferments and forbearances.

If you have student loans and are considering filing, or are already in bankruptcy, feel free to contact us if you have questions.


You might not know this, but you have tons of credit scores … for a variety of reasons. For one thing, anyone with information about your credit history can create a formula to determine your creditworthiness. For instance, the three credit-scoring bureaus—Equifax, TransUnion, and Experian—all collect information about your activity on credit cards, mortgages, installment accounts, car loans, student loans, and the like. And they have all different proprietary formula that they apply to this information to generate a credit score.

Equifax offers something called an Equifax Credit Score. Experian offers both the PLUS score and the VantageScore. And TransUnion has its own credit score, too!

If all these names are confusing, here’s the important part: When deciding whether to extend a loan to you, your potential creditors want to know how risky you are. Currently, the formula they trust the most to determine your creditworthiness—and therefore your credit score—is called FICO. In fact, FICO is the score that is almost exclusively used by creditors, banks, and the like.

Created by an engineer and a mathematician, Bill Fair and Earl Isaac, FICO is the best-known and most widely used credit score model in the United States. So you can (and should) ignore all those other scores. They do not reflect the same score that your lender will see when pulling your credit report and credit score. So don’t spend your money on buying a score that isn’t a FICO score. The only thing these scores will do is paint an unrealistic picture of the loan terms you can expect.

In other words, FICO is the only credit score that matters.

But … it’s a little more confusing.

Though all three of the bureaus have created their own formulas, they also apply FICO to the information they have on file about you. So you have three different FICO scores: One from Equifax, one from TransUnion, and one from Experian. Each of these three FICO scores is based on information the respective credit bureau keeps on file about you.

As a result, your three FICO credit scores might be different, depending on what information the credit bureaus have about you. For instance, if you have a credit card that doesn’t report to all of the three credit bureaus, your FICO score will be different among the three bureaus. On the other hand, if your information is identical at all three credit bureaus, each FICO score will be identical because the same formula is being applied to the same information.

So what do lenders do with these three FICO credit scores?

They ignore the highest score and the lowest score, and they base your loan terms on the middle score. If your Equifax score is 732, your Experian score is 693, and your TransUnion score is 692, they will toss out the high score (732) and the low score (692) and consider your loan terms based on your 693 Experian score.

So if you want to qualify for a loan, or if you want to qualify for better terms on your existing loans/credit cards, you must follow the FICO model and demonstrate the behaviors that will boost your FICO score.

(Special thanks for 720creditscore.com for this article)


Small business owners have had a difficult time making their business profitable in an uncertain economy these last few years. Many have had no choice but to shut down their business. They are then left with debts in the name of their business, Limited Liability Company (LLC), or corporation. Most of these debts usually have a personal guarantee, which means creditors can sue them personally for the business debts. Clients will then file a personal bankruptcy to eliminate any personal liability for the business debts, and will assume the problem is solved since a creditor will not bother to sue a closed company. That is not always the case.

Even though the corporation or LLC is closed, many creditors will still file a collection lawsuit against the business. As an officer or member of the company, you are not relived of your responsibilities to the business. You cannot be held personal responsible for the debts if you filed personal bankruptcy, but you have to spend the time and expense of responding to the lawsuit or a subsequent judgment. This may include spending time gathering and producing documents, answering questions, depositions, as well as the costs and attorney fees to comply. If you don’t cooperate, you may be held in contempt of court.

That is why considering the time and money you will have to spend on one or more collection lawsuits, it may make more sense to file a chapter 7 bankruptcy for the corporation or LLC, in addition to a personal bankruptcy.

Each case is unique. That is why we recommend talking to an experienced bankruptcy attorney to decide whether filing a chapter 7 bankruptcy for the business is appropriate. We handle these cases on a regular basis. If you have questions regarding debts on a dissolved, or a business you are considering closing, please feel free to contact us anytime.


Homeowners who have older homes often have a difficult time obtaining, changing or renewing homeowner’s insurance coverage without an updated home inspection. Typically, they are looking for a 4 point insurance inspection.

A 4-Point Inspection is often a requirement when obtaining a new homeowners insurance policy or renewing an existing policy. A 4 point insurance inspection only concentrates on key items in which the insurance companies are interested in.

• HVAC (Heating, Ventilation and Air Conditioning)
• Electrical wiring and panels
• Plumbing connections and fixtures
• Roof

The intent of the inspection is to determine the components, general condition, and age of these systems.

These inspections are needed because insurance companies have become increasingly hesitant to issue Homeowner Insurance Policies on older homes (usually between 20 – 25 years old or more).Their statistics have shown that homes over 25 years of age have more claims than newer homes. The claims are usually due to deteriorated condition of the older home. The four areas are Roof, HVAC, Plumbing and Roof.

If these elements are in poor condition, in need of being updated or replaced or were improperly installed, they may fail and cause fire or water damage to a home. Newer homes are assumed (by the insurance companies) to not have these problems as frequently as older homes. Therefore, you are required to get a 4 point insurance inspection to obtain homeowners insurance for older homes.

The insurance company will typically require that the inspections be performed by a suitably licensed and qualified person. All 4-Point inspections should be performed by a Florida State licensed Home Inspector. This type of insurance inspection should not be confused with a “standard home inspection” which is and detail broader in scope.

Special thanks to John C. Hall, President and Inspector, Enterprise Home Inspection Inc. for providing this article. If you or someone you know is interested in home inspections for their property, or have any questions on the process, feel free to contact us, or John directly at enterprisehomeinspection@gmail.com, (904) 378-1227


If you accumulated Federal Student Loans, and then become totally and permanently disabled (TPD), you may be able to discharge or wipe away your loan. A TPD discharge relieves you from having to repay the majority of all Federal Student Loans, but there are certain requirements you must prove before your loan is discharged. There are generally three ways you can prove you are permanently and totally disabled.

1. If you are a veteran, you can submit documentation from the U.S. Department of Veterans Affairs (VA) showing that the VA has determined that you are unemployable due to a service-connected disability.

2. If you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, you can submit a Social Security Administration (SSA) notice of award for SSDI or SSI benefits stating that your next scheduled disability review will be within five to seven years from the date of your most recent SSA disability determination.

3. You can submit certification from a physician that you are totally and permanently disabled. Your physician must certify that you are unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that

• Can be expected to result in death,
• Has lasted for a continuous period of not less than 60 months, or
• Can be expected to last for a continuous period of not less than 60 months.

You must provide documentation to the Department of Education and submit the proper petitions for discharging your loan. This can be a cumbersome process, especially when you are dealing with the effects of your disability. Our office can prepare and submit these documents for you or anyone you know who needs to get relief from their Federal Student Loan because of disability.