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August 2016 Archives

Bankruptcy and protecting your home: Part II

Even though bankruptcy may be the best option for countless Florida families struggling with debt, many avoid the idea all together - often because of the mistaken belief that they will lose everything they own, including their home.

Bankruptcy and protecting your home: Part I

Unfortunately, there are many people who, to no fault of their own, fall behind on home payments and ultimately face foreclosure. Whether you are having a hard time paying your mortgage due to a medical emergency, unexpected job loss or any other reason, it is important to remember that you may have many options available - including a possible loan modification and other debt relief alternatives.

Southern states have highest rates of bankruptcy

Florida is not one of the top 10 states for bankruptcy filings, but several nearby states are. According to an analysis by NerdWallet, states in the south have some of the highest bankruptcy rates in the country. They have remained high in some southern states even as nationwide bankruptcy rates have fallen to their pre-recession levels.

Being proactive may prevent bankruptcy

While bankruptcy may quickly eliminate or reduce an individual's debt load, it is not an easy way out for Florida residents who are struggling to pay their bills. Those who file for Chapter 7 bankruptcy will see it remain on their credit report for an entire decade. However, it may be possible to avoid filing for Chapter 7 or Chapter 13 bankruptcy by being proactive when it comes to financial issues.

Good faith and Chapter 13

A judge in Kansas confirmed a Chapter 13 bankruptcy plan that would allow debtors to pay attorney's fees and a dividend to creditors over a 36-month period. The judge ruled that the couple, who are in their 70s, were not abusing the system when siding with them over the objections of the bankruptcy trustee. Previously, the U.S. Courts of Appeals for the 1st and 5th Circuits have ruled on such cases and found that they did not violate any provisions in the Bankruptcy Code. The U.S. Court of Appeals for the 11th Circuit, which covers Florida, has issued similar rulings as well.

Debt management vs. bankruptcy

When people living in Florida find themselves faced with a mountain of debt, they may look into ways of managing it. One option is a debt management program, sometimes known as credit counseling. In these programs, a credit counselor reviews a person's debts, income and assets, and works out a repayment plan that can last for several years.

What debts remain after a Chapter 13 bankruptcy?

While Chapter 13 bankruptcy may eliminate some debts, others will remain after the repayment period ends. For instance, Florida parents who still owe child support will have to make those payments even after obtaining a discharge. Student loans, liabilities stemming from a drunk driving incident and other fines or restitution may also remain after a discharge. Mortgages may also remain if their term is longer than the repayment period.

The importance of having a qualified bankruptcy attorney handling your foreclosure case.

Seven people were recently indicted in Texas for abusing federal bankruptcy protection laws as a way to stop foreclosure actions on their homes. They filed bankruptcy without any intention of attempting to repay their debts. The filings were only intended to suspend the foreclosure process.

Recent ruling could impact bankruptcy estates in Florida

A judge from the U.S. Bankruptcy Court for the Western District of Louisiana ruled on Aug. 5 that proceeds from an auto accident settlement can be considered part of a bankruptcy estate. The case involved a man who was in an accident three years after his plan had been confirmed, and the court took the estate-replenishment approach when making its ruling. The driver had updated his schedules based on the possible cause of action after the crash.

What happens when creditors return payments to the trustee

When Florida residents decide to file for bankruptcy, they will often choose between Chapter 7 and Chapter 13. Unlike a Chapter 7 bankruptcy, Chapter 13 cases involve the debtor repaying his or her debts pursuant to a payment plan that lasts from three to five years. Debtors submit their payments to the bankruptcy trustee, who then disburses them to the creditors.

The bank says I'm not eligible for a loan modification. Now what?

In the previous post in this series, we discussed your right under Florida law to attempt to modify your loan as a way to avoid foreclosure and save your home. There have been numerous cases, however, where lenders will attempt to keep the terms of the current loan by telling you that you are not eligible for a loan modification.

Deficiency lawsuits and how to make them go away

After Florida consumers see their homes foreclosed or their cars repossessed, they are often shocked when their creditors still come after them for the deficiency amounts that they owe. If you are being harassed by creditors for deficiencies owed on repossessed or foreclosed property, you might not know what to do about the situation.

Organization and purpose of bankruptcy courts

The federal government operates all bankruptcy courts. Federal laws guide the bankruptcy process, and state law in Florida would not apply to the actual bankruptcy filing. In 1978, the U.S. Congress enacted the laws of the Bankruptcy Reform Act. The purpose of the act was to create a consistent method for managing personal and business bankruptcies across the country.

Becoming late on mortgage payments

When Florida homeowners lose a job or experience other financial difficulties and fall behind on their mortgage, their homes could be targeted for foreclosure. However, just because a lender wants to pursue foreclosure doesn't mean that a homeowner will lose the home. Homeowners are advised to contact their lender or otherwise take action as soon as a foreclosure notice is received.

Assemblywoman explains bankruptcy in open letter

Florida residents who have a lot of outstanding debts but still earn a regular income may decide to file for Chapter 13 bankruptcy. A state assemblywoman from New York published an open letter Aug. 2 explaining why she and her husband had chosen to file for Chapter 13 bankruptcy.

Negotiating with credit card companies

Most people in Florida have some credit card debt that they would like to get rid of. As a person's debt rises more and more, a person may become unable to afford the minimum monthly payments. Someone in this situation may decide to ask their creditors if they are willing to lower the monthly payments, lower the interest rate or accept a lump sum settlement.

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