Florida is one of many states still working hard to recover from the foreclosure crisis. As many families continue to work to resolve mortgage debts and save their homes, Florida bankruptcy courts have been busy helping achieve their financial goals.
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One of the best things about the bankruptcy process is the ability to halt all collections, foreclosure, repossession and garnishment efforts. The benefits of the automatic stay are far reaching and provide immediate relief to debtors fighting an uphill battle for debt relief. Without the burden of collection efforts on their backs, the true focus of debt resolution can shine through.
Resolving a foreclosure in bankruptcy can be achieved in two ways, through a Chapter 7 or a Chapter 13 bankruptcy filing. In a Chapter 7 bankruptcy, the court can only protect the home if the debtor is current on their payments, lacks equity in the home or can claim an exemption.
However, there are other solutions like negotiating a mortgage modification or forbearance agreement that can keep the home out of foreclosure outside of the Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, the foreclosure can be stopped by rolling missed mortgage payments and delinquency fees into the wage earners repayment plan. As long as the debtor makes payments, as outlined by the court, the home is safe from foreclosure.
It is important to note that there have been an increase number of cases in which debtors are seeking the help of Florida courts to undo a completed foreclosure. Unfortunately, there isn’t much that can be done to reverse a completed foreclosure, even if it was deemed unlawful on the part of the lender. However, the Middle District of Florida, Tampa Division, court has implemented to programs to better avoid foreclosure through mortgage modifications and loss mitigation.
An experienced Tampa bankruptcy attorney can help prevent, stop and defense foreclosures; as well as negotiate loan modifications and other solutions to your mortgage debt troubles.