Can Bankruptcy stop a Florida Foreclosure?
One of the biggest problems in today’s economic climate is the prevalence of homes being foreclosed on, perhaps due to issues beyond the homeowner’s control. Maybe the homeowner lost his job and simply cannot afford to make the mortgage payments or has other, more pressing financial needs.
The fact is, one’s home is often his most valuable asset, both in economic and non-economic terms and when foreclosure proceedings are commenced, it can be difficult to know where to turn. Filing for bankruptcy can be one avenue for stopping foreclosure proceedings, although it is not necessarily a long-term solution.
The process works like this- after you have filed your bankruptcy case (which must be in good faith), there is an automatic stay which goes into effect immediately. This stay prevents your creditors from engaging in any further collections activities. This automatic stay will stop any foreclosure proceedings, at least temporarily. After you file for bankruptcy, the court will now legally control your debts and any property not covered by the Florida exemptions. After that, the debt that you owe on your mortgage will be dealt with in the bankruptcy proceeding.
In a Chapter 7 proceeding, a mortgage is considered a “secured” debt since the creditor owns an interest in the property and so the homeowner can either surrender the property or choose to reaffirm the secured debt and therefore keep the property as long as payments are made in a timely manner. In a Chapter 13 proceeding, the secured creditors are paid through the bankruptcy plan.
For any questions about what you can do to deal with a foreclosure proceeding or bankruptcy in general, contact the experienced attorneys at our Jacksonville, Florida bankruptcy law firm.
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Greg Gilbert
Keith Maynard
