Florida’s Annual Cap on Increase In Homestead Tax Unconstitutional?

A recent article in the Journal of Multistate Taxation and Incentives discusses a timely real property ad valorem tax issue in Florida. (R.S. Franklin, 16 Journal of Mutistate Taxation and Incentives, No. 10, 8 (February 2007). As is well known to Florida homeowners, the Save Our Homes Amendment (“SOH“) to the Florida Constitution caps the increase in annual assessment of homestead properties at the lesser of 3% or the change in CPI. Non-homestead properties, including those owned by out-of-state residents, do not qualify for the SOH cap. Over the approximate 10 years the SOH has been in effect, the law has caused a dramatic disparity or discrimination in taxation among Florida taxpayers for properties of an identical market value. This article discusses whether this discrimination makes SOH vulnerable to an attack under the Equal Protection Clause of the Constitution.

Jordan E. Bublick, Attorney at Law, Practice Limited to Bankruptcy Law, Board Certified Specialist in Consumer Bankruptcy Law (American Board of Certification), Member of the Florida Bar since 1983

BAPCPA Provisions Held Unconstitutional

In the December 7, 2006 decision in the case of Milavetz, Gallop & Milavetz, P.A. vs. USA, 2006 WL 3524399 (D. Minn.) a Federal District Court in Minnesota found the section of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) containing advertising disclosure requirements [11 USC 528(a)(4) and 528 (b)(2)] and the section prohibiting “debt relief agencies” from advising client to incur more debt in contemplation of bankruptcy [11 USC 526 (a)(4)] to be unconstitutional as applied to attorneys.

The Court analyzed section 528(a)(4) and 528(b)(2) by applying “intermediate scrutiny” under which the government may only regulate truthful bankruptcy assistance advertisements if the regulation 1. directly advances 2. a substantial government interest and 3. is narrowly drawn. The Court found that these BAPCPA provisions failed all three parts of this intermediate scrutiny.

The Court found section 526 (a)(4) to be a content-based restriction on protected speech and found that it did not meet the “strict scrutiny” test. The Court explained that “Attorneys have a First Amendment right – let alone established professional ethical duty – to advise and zealously represent their clients”.

The Court further found that attorneys are beyond the scope of a BAPCPA “debt relief agency”. The Court stated that this view is support by the doctrine of constitutional avoidance under which the Court must opt for a construction that avoids grave constitutional questions. For these reasons, the Court held that the “debt relief agency” provisions of BAPCPA found in sections 526, 527, and 528 do not apply to attorneys.

Jordan E. Bublick, Attorney at Law, Practice Limited to Bankruptcy Law, Board Certified Specialist in Consumer Bankruptcy Law (American Board of Certification), Member of the Florida Bar since 1983

Saving Your Miami Florida Home from Foreclosure

In Florida, foreclosure of a mortgage in default is by a judicial action. Foreclosure is a lawsuit wherein the mortgage holder attempts to prove to the Court that you are behind in your mortgage obligations and requests that the Court set a public sale of the mortgaged real estate.

After the foreclosure sale, the Court will issue a certificate of sale and certificate of title. Upon issuance of the certificate of title, the purchaser at the foreclosure sale is the owner of the real property and is entitled to possession. The homeowner/mortgagor owns the involved house until the certificate of title is issued.

A person has certain options to save his home even after a foreclosure case is filed.

1. The simplest, but often the most difficult, alternative is to “reinstate” the mortgage–that is to find out the amount you are behind and pay the amount all at once. One may also try to obtain a payment plan once the mortgage is in foreclosure even if you offer to pay a substantial amount upfront.

2. You may also try to refinance the mortgage. Many people though do not have sufficient “equity” in their property in order to refinance.

3. A good alternative for many is to file for relief under chapter l3 of the Bankruptcy Code. Under chapter l3, the foreclosure case is stopped and you are given the opportunity to catch up the amount you are behind over a period of 3-5 years.

Jordan E. Bublick, Attorney at Law, Practice Limited to Bankruptcy Law, Board Certified Specialist in Consumer Bankruptcy Law (American Board of Certification), Member of the Florida Bar since 1983

Eligibility to File Chapter 13 Bankruptcy

In order to be eligible to file for Chapter 13 Bankruptcy one must be an individual with “regular income.” Corporations, partnerships, estates, and trusts are not eligible to file for Chapter 13, but a trustee of a trust may be eligible. A husband and wife can file a joint Chapter 13 case. The filing of a joint petition does not automatically result in the substantive consolidation of the two debtors’ estates. Individuals who have their own business and operate as a sole proprietorship are generally eligible to file Chapter 13.

Regular income means a source of money sufficient to fund a Chapter 13 plan. 11 U.S.C. Section 101(30). Income is not defined by the Bankruptcy Code, but the courts have held that Congress intended a broad definition of income for purposes of eligibility for Chapter 13.

Jordan E. Bublick, Attorney at Law, Practice Limited to Bankruptcy Law, Board Certified Specialist in Consumer Bankruptcy Law (American Board of Certification), Member of the Florida Bar since 1983