Bankruptcy and Foreclosure Attorney Blog

Florida is a lien theory state. As opposed to titled theory states, the borrower is transferred the deed and considered the owner of the property at the time of closing. In title theory states, the borrower is not transferred the deed until all payments on the mortgage are paid. When a borrower defaults on his or her mortgage payments, the lender has the right to file a complaint in the appropriate circuit court to initiate a judicial foreclosure proceeding. The borrower must be given 90 days notice before the foreclosure proceeding is held. During this 90-day period, a borrower has the opportunity to come in a "cure" the default by paying the defaulted amount to the lender. If the borrower is unable to cure, the home will be auctioned off at a foreclosure sale. A typical uncontested foreclosure can take up to 180-200 days. However, this process can be significantly longer if the borrower contest the foreclosure, seeks delays or files for bankruptcy.

Florida does have a statutory right of redemption. This statutory right permits the borrower to retain the home after it is sold at foreclosure if the borrower can make a payment in full of the sum of the unpaid loan plus costs. Note however, that there is a time limitation on how long the borrower has this statutory right of redemption, it is not perpetual.

Foreclosures are timely and costly. If you have defaulted on your mortgage payments and risk having your home foreclosed upon you should contact a Florida Foreclosure Attorney. An attorney can provide counsel and aid during such a difficult time. Contact Wood, Atter & Wolf, P.A., to speak with a Florida Foreclosure Attorney.

Considering whether to file for bankruptcy is a difficult decision for most people. Bankruptcy laws and procedures are intricate and confusing. Below is some helpful basic knowledge of basic bankruptcy laws and procedures:

1. Who can file for bankruptcy?
Any natural person residing, domiciled or having property or a place of business in the United States may file a Chapter 7 bankruptcy. Businesses may also file a Chapter 7. A "means test" is used under Chapter 7: an income vs. expense test is used. If the means test indicates you, as the debtor, have enough disposable income to pay a significant portion of your unsecured debts, then you must file a Chapter 13 bankruptcy.

2. Who can file for bankruptcy in Florida? In the Middle District - Orlando Division?
If you plan to file in the Middle District - Orlando Division of Florida, than you must be an individual who resides in one of Florida's central counties. Florida's central counties include Orange County, Seminole County, Volusia County, Lake County and other surrounding counties. Asset exemption in Florida only applies to those debtors who have resided in Florida for the previous two years. If you do not meet the requisite residential requirement then the exemptions of the state where you previously lived for two years is used.

3. What if I'm married? Can I file for bankruptcy jointly with my spouse?
Yes. Married debtors are permitted to file a bankruptcy petition jointly. In fact, married couples who have acquired a significant amount of debt jointly are encouraged to file jointly.

4. What bankruptcy petition should I file?
The most common consumer bankruptcy petitions are Chapter 7 and Chapter 13. Those who are borderline insolvent will typically qualify for a Chapter 7. If you have a sufficient amount of funds or income under the means test and meet the Chapter 13 debt ceilings, you may have to file a Chapter 13. Each chapter has different procedures for eliminating or repaying your debt.

Continue reading " Basic Bankruptcy Information That Debtors Need to Know " »

The Florida foreclosure mediation program is no more, for now. The program lasted just 18 months before chief Justice Canady terminated the program yesterday. Those cases which are currently in the "mediation" program may continue with the program until the case ends. As a foreclosure defense attorney, the move is not real surprising. The program did not meet legislature expectations and is being shut down for ineffectiveness. The legislature and other elected officials will continue to work and devise policies and procedures to help aid the ever growing foreclosure crisis.

In Florida, if your primary residence was being foreclosed on, you were entitled to participate in the mediation program. If the property being foreclosed was not your primary residence, the mediation program was not available. Although this program seemed logical and beneficial on paper, it never worked out the way the policy visionaries had hoped in a practical sense. Modifications and settlements were very rare to come by and the program became expensive as more and more cases were being filed.

Many times, homeowners/defendants would prepare and attend mediation looking to workout a temporary or permanent modification. However, a common practice among the banks (more so the bigger lending institutions) was to show up unprepared or send a representative that had no settlement authority. Both parties, including mediators, expended a large amount of time and effort but to no avail. The homeowner typically left these meetings upset and discouraged while the bank representative received all of the homeowner's financial information. If the homeowner appeared to make too much money or had substantial assets, then the bank most often would deny modifications. Furthermore, this disclosure allowed the banks to determine whether or not they would pursue a deficiency judgment in the event the property sold for less than what was owed.

Therefore, as a Northeast Foreclosure Defense Attorney, I made it a common practice to advise my clients to forgo the formal mediation (unless my client was adamant about going) and continue efforts to workout something through informal mediation. I just felt it was not in the best interests of my client to prepare for these meetings and gain a sense of false hope. Many attorneys will agree with this common practice and many may not. My job is to make the client aware of every nuance of the mediation and give them an opportunity to make an informed decision as to whether or not they wish to attend.

Continue reading " Florida Foreclosure Mediation Program Coming to an End " »

After servicing many Northeast Florida clients in foreclosure defense, one of the many issues I see with foreclosure complaints is the probability that the wrong party is bringing the foreclosure action. Typically, when a borrower purchases or refinances a piece of property, the debt is sold and transferred to either a separate entity or investors. Many times that transfer is not well documented and causes problems when and if there is a default. Many times, the borrower has never even heard of the entity bringing the lawsuit or had no idea that their home loan was affiliated with that entity. A qualified written request (aka "QWR") can help resolve some of those issues. QWRs are basically a loan audit and the borrower is asking for a life of loan history.

The lender must acknowledge receipt of the request and must send the response in a timely manner. Failure to do so could result in federal and state law claims. Many times the QWR response is different than what is actually filed in the case. If a party does not have "standing" to bring an action, then the case should be dismissed. The correct party typically has 5 years to bring a lawsuit to foreclose on the property. The five year date begins to run the day the borrower goes into default. If the entity does not bring the lawsuit in a timely manner (aka within the 5 years from date of default) the party is barred by the statute of limitations. This happens in rare circumstances but quiet titile actions may become more frequent as we move into 2012 and the following years to come. What is a quiet title action? A quiet title action is basically the borrower asking the courts to remove the lien that encumbers the property. Essentially, if there were a balance on the note, the borrower would take title to the property loan free. However, if there is another encumberance on the property such as a Home Equity Line of Credit or a 2nd Mortgage, that debt would not be wiped out (unless the statute of limitations had expired on those claims as well).

With the QWR response, an attorney may be able to use that to his or her advantage in the foreclosure case. Although the case may be dismissed for lack of "standing," it would be dismissed without prejudice. All this really means is the creditor has another chance to file appropriate documents in order to sustain the action. This is where it gets tricky and borrowers should be aware that mortgage fraud could be at play. If a case is ever dismissed with prejudice, that means the party cannot bring that same action against the defendant ever again. It is forever barred. Recovering attorneys fees and costs will probably be available in a case that is dimissed with prejudice. It is almost treated as a sanction.

Continue reading " What is a Qualified Written Request (QWR)? " »

The answer to this question really depends. Most of it depends on whether the homeowner hires an attorney to defend the lawsuit. After the foreclosure case is filed (assuming in Florida), the Plaintiff (bank) usually has 120 days to serve the complaint and the summons on the homeowner or tenant residing on the property. There are strict rules for service of process and many times there are issues with the service itself. Assuming service is valid, the defendant(s) has 20 days to file a response to the Complaint or else the Plaintiff may look to get a clerk's default.

If a default is entered by the clerk, it acts as a final order. The order can be set aside for good cause, but it is best to avoid having to set these aside. If you are able to file an answer or an extension of time with Plaintiff's consent (or by filing the motion, getting it set for hearing, and getting the judge's permission for more time) then so be it. The response can either come in the form of a motion to dismiss or an answer. Failure to raise certain defenses in either response could result in your waiving those defenses. Motions to dismiss are very difficult to win on, but it is possible. Pleadings must be filed in good faith and cannot be filed for the purpose of delay or hinder.

The court could sanction the attorney or the entity filing the motion if it is not on a good faith basis. During the response stage, both sides may choose to request certain documents from one another. In many instances, depositions may be taken and interrogatories sent. If the documents are not provided in a timely manner, the opposing party may ask the court to force the party to produce the documents. If the other side fails to comply after a court order has been entered making them comply, the moving party can seek attorneys fees, sanctions, and possible dismissal of the case.

After all discovery takes place, the bank may file a motion for summary judgment. This allows the bank to win the case without going to trial. It essentially says when everything is taken as true for both sides, there is no material issues left to litigate or argue. There are many ways to defeat a motion for summary judgment. If the motion is defeated then the parties set the case for trial or resolve the matter before it reaches trial.

Continue reading " What is the Normal Process of a Florida Foreclosure? " »

In a chapter 7 bankruptcy case, the debtor may be presented with a decision about real and personal property if the property is secured by debt. If the debtor is asked to reaffirm the debt, the creditor is asking the debtor if he or she wants to keep the property then they must sign the agreement. This agreement tells the bankruptcy court that the debtor does not want the debt discharged and wants to keep paying on it after the bankruptcy. If the debtor fails to sign the agreement, then the creditor may repossess the property after the bankruptcy case even though the debtor may be current on the payments.

Many times creditors will ask a debtor to reaffirm personal property that is worth more than what property is really worth. In that instance, the debtor may be able to "redeem" the property if the good is an ordinary household good.

When a debtor redeems property, the debtor is paying not the balance the creditor wants the debtor pay but what the property is actually worth. This could save the debtors hundreds maybe even thousands of dollars. However, in order to redeem the property, the debtor must pay the lump sum owed as opposed to a payment plan (found in reaffrimation agreements). As is often the case, debtors typically do not have that kind of cash or finances available to redeem the property. Bankruptcy attorneys can and usually require a separate fee to negotiate or workout one of these options. The redemption option is not something many creditors will inform the debtors of. Why would they? They would be getting less money if the the value is less than what is owed.

Typically, if the debtor wants to redeem personal property (and assuming the creditor opposes) the debtor can have a motion filed with the court which would give notice tohe creditor of the debtor's intent. If the creditor fails to object to the motion and call it for hearing, the judge can sign off on the motion at whatever value the debtor listed the property as in the motion. An experienced bankruptcy attorney should be able to negotiate and advise as to whether reaffirming or redeeming the property is a the ideal option.

Continue reading " What is the difference between Redemption and Reaffirmation? " »

This depends on what exemptions the debtor is allowed. Florida exemptions allow a debtor to exempt $1000.00 towards one motor vehicle equity and $1000.00 in personal property. An additional $4000.00 is permitted if the debtor does not claim the homestead exemption.

In the Middle District of Florida, debtors do not have to claim the homestead exemption if they do not own the home they live in or if if they do own the home, the property has no equity. In addition, the debtor can choose not to keep the home and surrender the property and claim the additional $4000.00 property exemption.

If the vehicle has leftover equity after the exemption is applied, then that equity could be liquidated or the Trustee may choose to allow the debtor the opportunity to buy back the equity. This concept is only applicable in a Chapter 7. In a Chapter 13, the debtor does not have property liquidated because the debtor is making payments to secured and unsecureed creditors. Again, this is all contingent on whether or not the debtor is able to use the Florida exemptions. The debtor can use Florida exemptions if the debtor has lived in the state of Florida for at least the last 2 years. If the debtor has not lived here for the requisite time period, then you look to where the debtor resided the longest 180 days prior to the debtor moving to the state of Florida.

Continue reading " Can I keep my car if it is paid off in a Florida Bankruptcy? " »

Many debtors have limited income and their only source of income comes from Social Security. In the event a creditor, other than the IRS, obtains a judgment for relief against a debtor and that debtor's sole source of income is from social security, the creditor cannot or should not look to that stream of income to satify the judgment.

The stream of income is exempt from creditor attachment. Even if the income is deposited in a bank account, it does not lose its exempt status. If the creditor knowingly looks to garnish an exempt asset, the creditor may be held liable for damages, fees and costs. Also exempt from attachment in Florida is unemployment income. IRS and domestic support obligations are usually the exception to Florida exemptions.

If the debtor has a joint banking account with a spouse and the account was opened as tenants by the entireties, while the couple was married, then that account is exempt from creditor attachment if only one spouse is in debt to the creditor.

Continue reading " Can my Social Security become garnishable? " »

This is a very litigated upon answer and can be discussed for a substantial period of time. The answer varies by district but for home values, most Trustee's like to use Zillow to research a value on a piece of real property. Property tax and formal appraisals can also be used to list home values. For personal property values, the Bankruptcy Code requires the property to be valued at "replacement" or "fair markert" value. Many Trustees will employ appraisers to visit a debtor's home and conduct an inventory of all assets in the house. This is why it is important to list all assets accurately on your petition and schedules.

If the debtor(s) have appraisals on jewelry or antiques or any other asset, it may be considered when determining the real value. If the Trustee appraises something that seems excessive, the debtor (or debtor's attorney) can object to the value but then it must be shown what the true value should be.

If you have questions about bankruptcy, you should contact an experienced bankruptcy attorney.

Continue reading " How should I value my Assets When Filing for Bankruptcy? " »

Many times landlords fall behind on mortgage payments where tenants reside or conduct business. In the event a foreclosure is filed, can the landlord continue to accept rent? If so, what if the tenant fails to make the payments? Florida law provides that the landlord can continue to accept rent even though the property is in foreclosure and the bank is no longer accepting payments.

In fact, if the tenant refuses to continue to pay because the property is in foreclosure, the landlord can give proper notice and evict the tenant. If the tenant is not paying because of a defect in the property, that prohibits the tenant from residing or operating the business in a habitable manner, the tenant may be able to vacate the premises and terminate the lease.

From a moral perspective, it may be best to inform a potential tenant that foreclosure has been filed if the tenant has not yet entered into the lease. The notification should be made in writing in the event the tenant tries to claim that the landlord failed to disclose or notify of the property's true status.

Continue reading " Can I Continue to Accept Rent if the Property is in Foreclosure? " »