Author Archives: By Radha Rothrock

About By Radha Rothrock

Radha Rothrock is a bankruptcy lawyer in Cape Coral, Fort Myers, Naples, Lehigh Acres, and Bonita Springs, Florida. She is the founder of Rothrock Law Firm PL.

What Debts Are Not Dischargeable in Bankruptcy?

Not all debts are discharged in bankruptcy.  The scope of your discharge depends on the type of bankruptcy you file.  If a debt is not discharged, you have to repay the debt even if you file bankruptcy.

Section 523(a) of the United States Bankruptcy Code lists the types of debts that are not discharged in bankruptcy.  Some common debts not discharged in bankruptcy include the following:

(a) certain tax claims owed to government entitites
(b) debts not listed on the debtor’s bankruptcy paperwork
(c) debts for spousal or child support or alimony,
(d) debts for willful and malicious injuries to person or property
(e) debts to governmental units for fines and penalties
(f) debts for most government funded or guaranteed educational loans or benefit overpayments
(g) debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated
(h) debts owed to certain tax-advantaged retirement plans
(i) debts for certain condominium or cooperative housing fees
(j) debts incurred shortly before filing bankruptcy

Obligations affected by fraud or maliciousness are not automatically excepted from discharge. Creditors must ask the court to determine that these debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, these types of debts  will be discharged.

In addition, chapter 13 provides a broader discharge than chapter 7.  Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property (but not to people), debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.

If you are seeking an appointment with a Cape Coral bankruptcy attorney, contact the Rothrock Law Firm at (239) 206-1948.


Can you Keep a Credit Card when you file Bankruptcy?

The fear that many people have when filing bankruptcy is that they will be unable to use a credit card while in bankruptcy. Especially for travel, having a credit card is often necessary.

If you file bankruptcy, you have no legal right to keep a credit card. Even if you have a $0 balance the day of the bankruptcy filing and you never missed a payment on the credit card, the credit card company has the right to cancel the card anyway. Sometimes credit card companies do this because you no longer meet their criteria for card eligibility. Sometimes they do it because the filing of a bankruptcy petition prohibits a creditor from legally collecting a debt. Whatever the reason is, you might lose the card.

You have a legal obligation to list all your debt on your bankruptcy paperwork. If you leave the credit card company out of your bankruptcy paperwork, the credit card company can still cancel your credit card. The companies do this because they check your credit report every month, and many will cancel the card if you file bankruptcy.

If you want to keep the credit card, you can try reaffirming the debt in the bankruptcy court. Some credit card companies allow you to keep a credit card if you sign a reaffirmation agreement. A reaffirmation agreement means that you sign a written document stating that you are agreeing to repay a debt even though it would otherwise be discharged in bankruptcy. A bankruptcy judge will require you to have a hearing before agreeing to reaffirm the debt. The bankruptcy judge will question you as to why you want to keep the debt before allowing you to do so.

If you are considering filing bankruptcy in Fort Myers, contact the Rothrock Law Firm at (239) 206-1976.


One of the most common reasons a person files bankruptcy is because he or she recently got divorced. The parties that previously shared two incomes for one house, one light bill, and one phone bill now have to pay for two houses, two light bills and two phone bills . . . with only one income. On top of it all, there is very little money left over for either party to pay its credit card debt with the increased living expenses.

The question then becomes – can you get rid of any or all of your debt if you get divorced?

Like everything else, it depends.

Divorce related debt can be classified as a domestic support obligation or a division of property. Let’s say you and your spouse jointly owed $10,000 on a visa card. The divorce judge ordered husband to pay it. Husband files bankruptcy. If husband files bankruptcy, he is not liable to the bank for the visa card debt. He may be liable to wife, however, if wife has to pay the debt. If the debt was classified as a domestic support obligation in the divorce decree , he couldn’t discharge the debt as to the wife. If it were not classified as domestic support obligation, he probably would not owe the wife anything if he filed a chapter 13 bankruptcy; however, he may owe the wife if he filed chapter 7.

Child support and alimony are almost always classified as domestic support obligations; therefore, you would not be able to discharge those debts whether you filed chapter 7 or chapter 13 bankruptcy.

Judge Delano recently made an interesting ruling concerning attorney fees awarded in a divorce case. In the case, the wife was awarded attorney fees in the divorce, and the trial judge classified the award of attorney fees as a domestic support obligation. Husband then filed divorce. Wife did not file a motion for relief from the automatic stay and enforced the judgment of attorney’s fees by garnishing husband’s wages. Judge Delano found that wife did not violate bankruptcy law because the award of attorney fees were classified as a domestic support obligation in the state court and were not subject to the automatic stay of the bankruptcy court.

If you are looking for a bankruptcy attorney in Cape Coral, call the Rothrock Law Firm at (239) 206-1948.

Can Bankruptcy Eliminate or Reduce IRS Debts?

Bankruptcy and the IRS

Radha Rothrock is a tax attorney and bankruptcy attorney in Fort Myers, Florida.  Bankruptcy is one of the most useful tools to manage your IRS debt.  In bankruptcy, your tax debts can be treated as “secured debts,” “priority debts” or “general unsecured debts.”  General unsecured debts are treated like any other general unsecured debt in bankruptcy, such as medical bills and credit cards.  In most cases, you do not have to pay back the debt at all.  In some cases, you might have to repay a small portion.

The General Rules:  Will Bankruptcy Eliminate my Tax Debt?

In order to be treated as “general unsecured debts,” the following rules apply: 1.  Your tax debt must have been assessed at least three years ago.  For example, tax return 2010 typically would not be due until April of 2011.  In that case, your three years runs April 16,  2014.  Keep in mind the three years runs on April 16, not the day you actually filed the return.  If the deadline to file a return is April 16 or 17 because April 15 falls on a weekend, the three years runs on April 17 or 18.  If  you asked for an extension and the return was due October 15, the three years would not run until October 16, 2014. 2.  You must have filed your tax returns the last two years. 3.  Your tax returns must have been truthful and not fraudulent. 4.  You must not have intended to evade paying your taxes. 5.  The tax you owe must have been assessed against you by the government for at least 240 days before the bankruptcy case is filed.

Exceptions to the General Rules

Some conditions cause the three year time and the 240 day time period to “toll.”  In other words, if you take certain actions, you could extend the three years.  Events include the following: 1.  If you have a prior bankruptcy case, the three year/240 day time periods are tolled during the period of bankruptcy plus 90 days. 2.  If you requested a hearing or filed an appeal for a collection action, the three year/240 day time periods are tolled during the period of the appeal plus 90 days. 3.  If you filed an offer in compromise, the 240 day period is suspended during the period the offer is pending plus an additional 30 days. 4.  If the IRS assesses taxes and the taxpayer files a lawsuit in Tax Court and subsequently loses, the 240 days will not start to run until after the lawsuit is over.

Using Chapter 13 to Repay the IRS that cannot be discharged in bankruptcy

As stated above, some of your IRS debts are classified as “priority debts,” namely the IRS debts that are less than three years old or the debts that otherwise could not be discharged in the bankruptcy.  Chapter 13 makes the repayment of those priority debts much more manageable than a traditional installment agreement with the IRS.  The rules for repayment of priority tax debt through a Chapter 13 Plan are as follows: 1.   IRS collection efforts will be suspended while you are undergoing your chapter 13 plan. 2.  Penalties and interest will stop accruing during the period of time you are in your chapter 13 plan. 3.  Penalties and interest that were assessed before you filed bankruptcy will be treated as general unsecured debt as opposed to priority debt.  In other words, there is a good chance you will not have to repay any of that debt.


You owe the IRS.  Today is 2013.  You owed the IRS $10,000 in 2004.  The IRS did not place a lien.  You owe the IRS $1,000 for tax year 2005, and the IRS placed a lien on your property.  You owed the IRS $8,000 in 2010.  Of that $8,000, $4,000 was for taxes and $4,000 was for penalties and interest.  The IRS did not place a lien.  You owe $20,000 in credit card debt.  After subtracting your expenses from your income, you have $100 left in disposable income.  Under the means test calculations, you are eligible to file chapter 13 for 36 to 60 months. In this case, the $10,000 owed for tax year 2004 is treated as general unsecured debt.  The $4,000 of penalties and interest in 2010 is treated as general unsecured debt.  The $20,000 credit card debt is treated as general unsecured debt.  The $1,000 of IRS debt in 2005 is treated as secured debt.  The $4,000 of taxes for 2010 is treated as priority debt because the tax return for tax year 2010 would have been filed in 2011.  The three year assessment period for priority debt will not run until 2014.  In this example you would repay the $4,000 of priority debt for tax year 2010 at $100 per month for 40 months.  You would pay the 2005 secured debt at $100 per month for 10 to 11 months because the secured debt would be entitled to interest on top of the debt.  Your total plan would be for 50 to 51 months.  You would not have to pay the credit card debt, the 2004 tax debt, or the 2010 penalties and interest.

To schedule a free consultation today, call the Rothrock Law Firm today at 239-206-1948

HAMP Qualifications in Florida

HAMP: An Overview
The Home Affordable Modification Program (HAMP) is a government sponsored mortgage
modification program that may allow homeowers to stay in their homes. HAMP allows eligible participants to lower their mortgage payment to 31% of their gross income. They payment includes principal, interest, property taxes, and insurance.

Qualifications for HAMP:

The property must be used as your homestead or rental property. Vacations and second homes do not count.

You obtained your mortgage on or before January 1, 2009.

The home must be 1 to 4 units. (i.e. duplexes and triplexes are eligible for HAMP).

The loan amount cannot exceed the current Fannie Mae and Freddie Mac loan limits, which is currently $729,750 for a single family residence, $934,200 for a duplex, $1,129,250 for a triplex, or $1,403,400 for a fourplex.

The property has not been condemned.

You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

You have a financial hardship and are behind on your payments or in danger of falling behind on your payments. (If you are applying for HAMP for your rental property, your must be behind on your payments).

You must have income sufficient to modify the loan. Income can be in the form of employment, self-employment, unemployment benefits, disability, social security income, rental income, or a combination of any of the above.

Your lender must participate in HAMP. All loans owned by Fannie Mae and Freddie Mac are required to participate in HAMP. Loans that are not owned by Fannie or Freddie can still participate in HAMP. Click this link to find lenders currently participating in HAMP. Click this link to see if your loan is owned by Fannie Mae. Click this link to see if your loan is owned by Freddie Mac. This list changes frequently.

Recent Changes to HAMP
In June of 2012, the government expanded the eligibility requirements to participate in HAMP. You can now reapply for HAMP if you fall under these categories:

If you previously were denied for HAMP because your income to debt ratio was below 31%

You qualified for HAMP but defaulted on your payments during the trial period

Your HAMP modification was accepted but you defaulted on the regular HAMP payment

The Application Process

Fill out the application for HAMP modification. Contact your lender and ask them for a HAMP modification packet. If they are taking too long, contact a HAMP Housing Counselor to assist you with the process. These counselors are free. You can also contact an attorney to fill out the packet. Attorneys will charge you for the service but might get your packet approved faster depending on their case loads.

If the lender approves you for HAMP, you will make three trial payments. If you pay them on time, the lender will send you closing documents to finalize the modification. Your mortgage will be modified for 30 to 40 years. The interest rate will not change the first five years. After
that, it will increase by 1 per cent. There are no closing fees for HAMP and you do not need to pay the arrears (the amounts that you are behind) in order to qualify. The arrears will be added to the back of your loan.

HAMP does not guaranty principal reduction but it does allow for it.

Give your lender two to three weeks to process your loan. After two to three weeks, call or e-mail your lender every week for weekly updates. If you do not follow up on this step, your loan will likely be lost. If the lender still won’t communicate with you, contact your housing counselor for
further assistance.

Click this link for updated information on HAMP and changes to HAMP

If you are looking for a mortgage modification attorney in Naples, call the Rothrock Law Firm at (239) 206-1948.

Am I liable for a deficiency on a short sale in Florida if the lender gave me a satisfaction of mortgage?

Will I be liable to the bank for a deficiency if the bank provides me a satisfaction of mortgage in a short sale? Yes, you might be.

In a short sale, a seller sells the property to a buyer for less than the amount owed to the bank. The bank, along with any other second mortgage company or lien holder (such as the IRS, judgment lien holder, etc) must approve the sale before it is complete. Specifically, all these
lienholders must file a satisfaction before the sale is complete. Short sales have become the norm in Southwest Florida because the valuation of real estate has declined heavily. The short sale allows the property owner to sell the home and be free of future mortgage payments, property taxes, and liability. But what happens to the loan balance to the mortgage company, the second mortgage company, or the judgment holder? Is the seller responsible for these amounts owed? The balance of the amount owed on the note minus the amount received
through the sale is called the “deficiency.”

If the mortgage company files a satisfaction of mortgage, it is releasing any claims it has in the
property, not the claims it has against the seller. In other words, a satisfaction only clears up
title to the property. In general, the seller is still responsible for the deficiency unless the paperwork in the short sale states otherwise. Some short sale documents state “lender reserves the right to collect deficiency.” If the closing paperwork has this language, the lender can file a lawsuit in court against the seller to collect the money even though it has filed a satisfaction with the court. The same is true for second mortgage holders or judgment creditors. Sometimes the paperwork has no language one way or another about the deficiency. If the paperwork is silent as to the deficiency, the terms of the original promissory note will control. In
most cases, the promissory note allows the lender to pursue the deficiency even if the property was sold at a short sale.

The only way to prevent a lender in pursuing a deficiency is to have the lender sign a release at closing that releases its right to pursue a deficiency. In terms of negotiation, the time to obtain the release is during the negotiations to close the sale. The lender has more reason to sign a
release during the short sale negotiation because it can avoid the legal fees and time in a foreclosure proceeding if the short sale closes.

If you are selling your property in a short sale, your should hire an attorney to negotiate elimination or reduction of the deficiency. Your realtor and title agent are compensated at the time of closing, and are financially motivated to close the sale as quickly as possible. Your interest is to walk away from the property owing as little as possible. Your attorney can negotiate with the lender to completely eliminate the deficiency or to reduce it. Often times, the lender will allow the seller to repay the negotiated amount without interest for several years. If you are looking for a short sale attorney in Cape Coral, call the Rothrock Law Firm at (239) 206-1948.
My Profile

Can You Re-File a Bankruptcy After It Has Been Dismissed?

Can I refile my bankruptcy case after it is dismissed?

Sometimes, people file for bankruptcy on the eve of foreclosure to delay the foreclosure, but they have no real plan of action to try to save the home or to liquidate their assets to pay their debt.
They simply file the petition and dismiss it later on. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) addressed this situation. The act provides that if a debtor files a new bankruptcy within one year after the dismissal of an earlier case, the automatic stay terminates in the second case 30 days after filing the second case, unless the debtor proves that the filing was in good faith. Further, if a debtor files a third case within the one year period, the
automatic stay does not apply unless the debtor proves that the third case was filed in good

Example: You reside in your home. A foreclosure sale is scheduled next week. You file your first bankruptcy. The automatic stay takes effect when you file the bankruptcy. You do not have to prove anything. The creditor has to go to court to prove why it should be allowed to go
forward with the foreclosure proceeding. Now assume that the case is dismissed and you refile the bankruptcy. Here, the creditor cannot continue with the foreclosure for 30 days but can go forward with it after that time unless you file a motion with the court. Now assume that you dismiss the case again and file it nine months later for the third time. The creditor can move forward with the foreclosure immediately unless you file a motion with the court to enact the stay and stop the foreclosure. If you are filing your first bankruptcy, the court generally presumes you are filing your bankruptcy in good faith. If you file your second bankruptcy after dismissing the first one, it is up to you to prove you are acting in good faith.

In all of these examples, it is presumed that the Court did not make any findings of bad faith when the debtor’s case was dismissed. In the event the Court made a finding that a debtor dismissed a case in bad faith, Section 109(g) of the Bankruptcy Code provides that a debtor is ineligible to re-file bankruptcy for six months after the dismissal of his or her last bankruptcy. Further, if a creditor files a Motion to Lift the Automatic Stay before a debtor files a Motion to Dismiss his or her case, the debtor cannot re-file the case for six months.

If you are looking for a Cape Coral bankruptcy lawyer because your bankruptcy case was dismissed and you are considering re-filing, contact the Rothrock Law Firm at (239) 206-1948

My Profile