Bankruptcy and Foreclosure Attorney Blog

Pursuant to Florida Bankruptcy Law, the debtor will have to attend a court hearing. This hearing is called the First Meeting of Creditors and is presided over the appointed bankruptcy trustee. At this meeting, the debtor is asked questions by the trustee while under oath. These questions typically concern the content of the debtor's bankruptcy papers, assets, debts, among other matters. Once the trustee if finished questioning, the creditors are permitted to ask the debtor questions.

Here is where the representation of an attorney is highly beneficial - an attorney can help you prepare for the Creditor's Meeting and will attend the meeting with, as well as provide representation. After the Creditor's Meeting, the debtor is unlikely to attend court again. However, the creditor may have to return to court in the event a creditor files a motion or an adversary action.

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Consider this situation: Homeowner has taken out a mortgage, made payments on time, until a few months ago. Now, Homeowner has defaulted on the mortgage payments and is served with a foreclosure action. Given the current housing market this scenario is very typical. Pursuant to Florida Foreclosure Law, Homeowner must be served notice of the foreclosure action against Homeowner's residence. Foreclosure cases are usually long, drawn-out proceedings, unlike a Landlord-Tenant eviction proceeding. Typically, a homeowner must be given 90 days notice before the action goes to court. Note the proceeding can go to court earlier than the 90-day period, however it is usually impossible to force the auction of the home sooner than 65 days from the date the foreclosure proceeding was filed. Once the foreclosure action does go to court the judge typically rules on a motion for summary judgment. If the bank wins the hearing on this motion, the Final Summary Judgment states two important things: (1) the judgment states the total remaining balance owed to the bank from Homeowner, and attorney's fees; and (2) schedules a date and time for the home to be auctioned of. If at any time after the judgment Homeowner can pay the balance owed before the auction, Homeowner can retain possession of his home - this is highly unlikely.

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Once a petition for bankruptcy is filed a bankruptcy estate is created pursuant to the Bankruptcy Code. A trustee is then appointed - it is the trustee's duty to liquidate all the property of the bankruptcy estate. The estate is comprised of all the debtor's legal and/or equitable interests in property as of the date the petition for bankruptcy was filed. Thus, the bankruptcy estate can include all real property, crops, livestock, equipment and other machinery, contract rights and leases. Property that the debtor acquires 180 days of filing the bankruptcy petition is also included within the bankruptcy estate - typical property includes inheritances, divorce decrees, life insurance policy, etc.

However, there is certain property considered exempt and is not included within the bankruptcy estate. For example, a debtor's earnings from personal services performed after the filing of a Chapter 7 Bankruptcy, but before termination of the bankruptcy proceedings, are not included within the bankruptcy estate.

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Pursuant to Section 341 of the Bankruptcy Code, a meeting is held where all the creditors - or appointed representatives - attend, the debtor is also required to attend this meeting. The purpose of this meeting is for the appointed trustee to examine the debtor while under oath regarding information that is been filed with the court (i.e., debtor's financial status and affairs and other relevant matters as to the administrations of the debtor's estate). If a creditor wishes to have a more in-depth examination of the debtor, the creditor typically requests a Rule 2004 examination from the court.

A discharge is one of the primary benefits and forms of relief under the Bankruptcy Code. A discharge is a statutory injunction against the commencement or continuations of any action to collect, recover or offset debts owed to creditors. The timing a debtor receives his/her discharge depends on the type of bankruptcy filed (i.e., Chapter 7 vs. Chapter 13). Although a discharge is essential to the "fresh start" debtors receive, a discharge can be denied or revoked by the court in certain situations. For example, a trustee is required to timely file a 2004 Examination. If not the request is not filed timely the examination is considered waived. Therefore, as a practical tactic, trustees file the request timely in order to avoid waving the examination. These requests, however, should be reasonable. Therefore, it is wise to seek representation of a Bankruptcy Attorney who can review these requests for reasonableness and make any objections to the request if proper. Contact Wood, Atter & Wolf, P.A., to speak with a Bankruptcy Attorney.

During these tough economic times many consumers are increasingly delinquent on their debts, including mortgage payments. Thus, many consumers are faced with the fear of their home going into foreclosure. Foreclosure has many negative impacts, especially on a consumer’s credit. Foreclosures, deeds in lieu, and short sales can all be reported on one's credit report for up to seven years. However that can be negotiated.
Deed in Lieu
A deed in lieu of foreclosure is an alternative routes given to those individuals who have default on their mortgage payments. In a deed in lieu of foreclosure, the property owner voluntarily transfers the deed to the possible forecloses property to the lender. In exchange for the deed, the lender cancels the loan, promises not to initiate foreclosure proceedings against the property owner and terminate any foreclosure proceedings if already underway. As for the deficiency balance, the lender has the option to agree or not agree to forgive the deficiency balance that results from the sale of the property.

Short Sale
Another alternative is for the property owner and lender to agree to do a short sale on the home. In a short sale, the lender agrees to sale the home for an amount less than the amount due on the mortgage. Unlike a deed in lieu of foreclosure, the ownership of the property remains with the property owner, not transferred to the lender. Lenders prefer short sales where the property is distressed and the lender does not want to go through a foreclosure proceeding, which are timely and costly. Typically, any deficiency amount in a short sale is forgiven. However, some lenders have been asking borrows to assume responsibility for any deficiency amount.

The lesson here - it all comes to the terms of the agreement you signed with your lender, especially regarding forgiveness of any deficiency amount. If you are faced with a potential foreclosure proceeding it is wise to seek the advice of an bankruptcy attorney. Contact Wood, Atter & Wolf, P.A. to speak with a Bankruptcy Attorney who can help you better understand the options available to your for resolving your mortgage debt and potential foreclosure.

Continue reading " Can I short sale or sign over the deed to my property if it is in a Florida Foreclosure? " »

There are two major types of personal bankruptcy proceedings for consumers – Chapter 7 and Chapter 13. A Chapter 13 Bankruptcy permits a debtor to keep his or her property and repay his/her debt over a period time, usually three to five years. Also known as a “wage earner’s plan,” a Chapter 13 Bankruptcy allows those consumers with a regular income to develop a plan and repay their debt (in whole or in part) in accordance with that plan. A plan may never be longer than five years.

When an individual files a Chapter 13 proceeding, the courts administer an impartial trustee to administer the case. Pursuant to Federal Rules of Bankruptcy Procedure 3015, the debtor must file a repayment plan with his/her petition or within fifteen (15) days after the petition is filed. The repayment plan must receive court approval and provide for payments of a fixed amount. The fixed payments are paid to the trustee, who then distributes the funds to creditors in accordance with the terms of the repayment plan.

Imagine this scenario: You’ve followed all the rules and procedures regarding your Chapter 13 proceeding. You’ve submitted a repayment plan, received court approval of your repayment and have made payments in accordance with your approved repayment plan. Then, some set of circumstances occurs and you are unable to make the payments in accordance with your current repayment plan. Can your previously approved repayment then plan be modified?

A debtor may find him or herself experiencing a change of circumstances that limits his or her ability to make the fixed payments. (Typical situations include: (1) A creditor objects or threatens to object to a plan, or (2) the debtor inadvertently failed to list all his/her creditors). In such situations, the initial repayment plan may be modified before of after confirmation. Requests for modification after confirmation are not limited to the debtor; the trustee or an unsecure creditor may also make these requests.

Modifications, and requests for modifications, occur frequently so they are not as difficult to obtain as they initially appear. However, make sure your request for modification is reasonable. Seek the advice of an experienced Bankruptcy Attorney to provide aid and counsel in your request for modification. Every bankruptcy court has its own set of rules and procedures. A Bankruptcy Attorney in your area will be familiar with the courts’ processes, thereby helping you during a stressful time and providing an easier transition into your modified payment plan. Contact Wood, Atter & Wolf, P.A. if considering filing for bankruptcy or modifying your current repayment plan.

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Many times debtors are hesitant or concerned about filing for bankruptcy relief when they are self employed. Recent precedent suggests that business property and shares are considered property of the estate for the individual debtord may not be protected from judgment creditors.

If a debt is personally guaranteed, the debt may be discharged against the individual but not necessarily against the business. The individual's shares and or business personal property (of single member LLCs and corporations) can be confiscated by the Trustee in a Chapter 7 case. In Chapter 13 cases, the personal property is protected, although you are in the Chapter 13 plan for a period of 3-5 years. That can bode burdensome for someone to be locked into a bankruptcy for that amount of time.

If the business is not profitable or does not own many assets, it may be best to just file the individual bankruptcy and let the business dissolve (depending on the creditors you owe for the busines) or allow the Trustee to seize the few assets that are available.

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What happens if I do not hire an attorney to Fight my Florida foreclosure? The bank will get a swift and easy judgment and you will be out of your home within a few short months. If you hire an attorney, chances are, you can stay on the property for an extended period of time. Even if you are having to pay for an attorney to fight the case, you are still able to save and stay in a place where you and your family are comfortable living.

You may even be able to work out a loan modification, principal reduction, deed in lieu or short sale. In some cases, it can take years for a foreclosure case to end. In the meantime, you are able to save your money (because you are not making a mortgage payment) for a possible lump sum offer with the lender to reinstate the loan, or for a new place, or for other bills.

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Borrowers defaulting on their mortgages is rising. There are several explanations for why this trend continues to move in the wrong direction. Because unemployment rates have stayed steady and have not increased significantly, many homeowners are questioning whether or not they want to continue paying on a home that is completely underwater. The theory is called "strategic default."

Many homeowners cannot justify to themselves paying substantial amounts for a property that will never see equity again. Another factor to contributing mortgage delinquencies could have to do with the adjustable rates that were so popular during the bubble burst. These rates are low for a period of time but then shoot up, making their payments go up. If the homeowner does not properly budget for this increase, it could cause them to get behind on the mortgage.

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Florida Bankruptcy and Foreclosure attorneys still see Florida as one of the highest foreclosure rates in the County. The Federal Government has recently sued Allied Home Mortgage, one of the largest privately held mortgage brokers in the County, over its fraudulent business practices.

m Allied Home Mortgage has had operations in Florida since 2003. The US District Court lawsuit alleges that Allied Home Mortgage has engaged in fraudulent lending practices for over a decade. Many unsuspecting homeowners, who borrowed funds from Allied, were ultimately unable to fulfill the terms of the loan and have faced or are now facing foreclosure. Nearly 32% of the home-loans originated by Allied Home Mortgage since 2001 have defaulted. Many of these loans were insured by the U.S. Department of Housing and Urban Development, more commonly known as HUD.

The culture of corruption in mortgage lending has gone unregulated for years, contributing to the biggest economic crisis in our country since the Great Depression. It is alleged that Allied Home Mortgage intimidated and threatened employees and even instructed some of its employees to sign certifications indicating that its branches met federal requirements used to originate mortgage loans insured by HUD. As a result, HUD has paid more than $834 million in insurance claims due to Allied’s alleged fraudulent practices.

Homeowners continue to be the biggest losers in this heavyweight battle. Tens of thousands of homeowners whose loans were originated by Allied Home Mortgage have faced foreclosure. Only time will tell if the Government will allow any recourse to deceived borrowers who borrowed from Allied.

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Many commercial tenants are caught in a tough situation if the landlord is getting foreclosed on. Although the landlord may be being foreclosed on, the tenant must continue to pay the rent or else could be considered in breach of the lease.

Breaching the lease can result in the Tenant being evicted. It is a highly debated topic whether or not commercial tenants enjoy or should enjoy the same rights as residential tenants. When a bank or a third party takes title and an existing lease was in place between the former borrrower and the tenant, the new owner must honor the lease or give the tenant at least 90 days to vacate the premises.

Whether or not commercial enjoy that same courtesy is not real clear. Most of the time, new property owners want viable, paying tenants and would be more than happy to let the tenant continue to occupy the premises

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