Tag Archives: mortgage

Why YOU Should File Chapter 13 bankruptcy

Ch 13 pic

Hopefully you have read our prior blog discussing the various benefits of filing a Chapter 7 bankruptcy case. This blog will focus on the advantages of a Chapter 13 bankruptcy. In most instances, filing a Chapter 13 provides you more flexibility in restructuring your debt and the following benefits:

  • Automatic stay. As soon as you file a bankruptcy case, the automatic stay is effective. It prohibits creditors from taking any collection actions against you while your bankruptcy is active. The stay halts all collection calls, lawsuits and garnishments.
  • Debt consolidation. Your Chapter 13 plan allows you to reorganize your debt and consolidate it into one monthly payment that you make to the trustee, who then disburses the funds to your creditors as set forth in the terms of your plan.
  • Elimination of debt. Your unsecured debt, such as credit cards and medical bills, is paid a percentage of what is owed under your repayment plan. The percentage depends on your income and debt, but most debtors pay pennies on the dollar owed, if anything at all.
  • Cure delinquencies. If you have fallen behind on your mortgage loan payments or your vehicle loan payments, you can include small payments in your Chapter 13 plan to be applied to curing your delinquencies. A Chapter 13 case lasts three to five years, which typically gives you plenty of time to cure your payment defaults and get your secured loan back on track.
  • Lien stripping of inferior mortgages. If you have a second or third mortgage on your home, you may be able to “strip” the lien and treat it as an unsecured debt. To qualify, the value of your home must be less than what is owed on the first mortgage. To learn more about lien stripping, please read out blog titled Stripping Off Junior Mortgages in Bankruptcy.”

The above are just a few examples of the benefits offered by filing a Chapter 13 case. If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment.


How Chapter 13 is Better than Chapter 7

Hopefully you have read our blog titled “How Chapter 7 is Better than Chapter 13,” to learn more about the advantages of a Chapter 7 filing. This blog will focus on the many benefits of a Chapter 13 case.

Chapter 13 Bankruptcy Brevard County

Debt Consolidation in Chapter 13 Bankruptcy

A Chapter 13 filing is a reorganization process which allows you flexibility in how to deal with your debt. A Chapter 13 debtor creates a repayment plan that sets forth how you intend to pay your creditors, either fully or partially. You make one monthly payment to the Chapter 13 trustee who then pays your creditors as set forth in your plan.

Unsecured Debts

Your unsecured debts will be included in your Chapter 13 repayment plan and you are required to pay a percentage of them (0 to 100%), depending on your finances. In most cases, the debtor only pays a very small percentage of the unsecured debts owed, including credit card and medical bills.

Secured Debts

If you are delinquent on your mortgage or car loan payments, you can make small payments through your Chapter 13 plan and get caught-up on your secured loans. Since your plan lasts three to five years, the smaller monthly payments can be applied to the past due amounts.

Lien Stripping in Chapter 13 Bankruptcy

You may be able to eliminate a second or third mortgage in a Chapter 13 filing by using the lien stripping process. To learn more, please read our blog titled Stripping Off Junior Mortgages in Bankruptcy.”

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

Struggling to Pay your Mortgage? Short Sale vs. Bankruptcy

Foreclosure Defense and Bankruptcy Attorney Melbourne Florida

Bankruptcy Attorney serving Palm Bay, Florida

If you are past due on your mortgage payments and you want to avoid a foreclosure action, you may want to consider filing a Chapter 7 or Chapter 13 bankruptcy. Another option to consider is a short sale. Either choice has its advantages, but deciding which is more beneficial for you depends on your unique situation.

Are you limited on time?

If you are not in a time-crunch, the short sale may be a viable option for you. The short sale process can be lengthy because it involves several parties in a variety of negotiations. At the end of the short sale process, there is no guarantee that the sale will successfully close.

A personal bankruptcy provides you instant financial relief. The automatic stay stops all collection activity against you while your case is pending. A Chapter 7 filing typically lasts three to five months, while a Chapter 13 lasts three to five years. In a Chapter 13, a homeowner can cure delinquent mortgage payments. In both types of filings, when you complete your case you will receive a discharge of debt that eliminates a large majority (if not all) of your debt.

Will your lender pursue a deficiency balance?

If your short sale is successful, you will still be left with a deficiency balance. The home was sold for less than what you owe on your mortgage, which leaves your lender “short.” Depending on where you live, this can leave you in a financial bind. Most states do not require a lender to waive the deficiency in a short sale, but there are a few states that require the lender to accept the short sale as payment in full. It is important to confer with a seasoned attorney to discuss this issue in your state.

When you file a bankruptcy case, a debtor can usually discharge all of the deficiency balance left on the mortgage loan. This can save you thousands of dollars!

Is mortgage debt your only debt?

A short sale only deals with your mortgage-related debt. Thus, if you are overwhelmed with credit card or medical debt, a short sale will not provide you relief from these creditors. In a bankruptcy, you deal with all of your debt. Bankruptcy is one of the most comprehensive means for dealing with all of your creditors at once.

If you are behind on your mortgage payments or your lender is threatening foreclosure, contact us to discuss all of your debt relief options.


Foreclosure versus Deed-in-Lieu

House changing hands

If you are struggling to make your house payments, you are probably investigating all of your debt relief options. There are several options that may be available to you, but this blog focuses on the pros and cons of foreclosure versus a deed-in-lieu of foreclosure.

Some mortgage-holders offer a deed-in-lieu to their borrower as a means for avoiding the foreclosure process. A deed-in-lieu is another name for surrendering your property back to your mortgage lender. Although it has its benefits, it is important to understand that a deed-in-lieu also has some significant disadvantages.

A lender benefits from obtaining a deed-in-lieu because it saves it the time and money expended in the foreclosure process. In order to avoid foreclosure, your mortgage-holder may ask that you sign over the deed to your house. This legally transfers title to the property to your lender. As the borrower, it allows you to handle the transaction quickly and privately. A homeowner may be able to negotiate certain benefits with the lender in exchange for the transfer. Of primary concern is negotiating a waiver or a reduction of the deficiency balance that you will otherwise remain liable to pay after the property has been auctioned.

Another important factor to consider is that if you use the deed-in-lieu process, the Internal Revenue Service (IRS) considers it “debt forgiveness.” This means that the amount forgiven by your mortgage lender will be considered as income by the IRS and you will be taxed on it. If you are not prepared, this can be financially devastating.

If you are facing a foreclosure and trying to decide whether or not to give your lender a deed-in-lieu, you may want to consider filing a personal bankruptcy. A Chapter 7 or Chapter 13 case could allow you to discharge or eliminate the deficiency balance that is left owing after your home is auctioned. A bankruptcy may also help you deal with your taxes.

To learn more about your debt relief options, contact the legal team at Faro Crowder, PA. We will review your individual circumstances and help you understand the best strategy for dealing with your debt.


How Can You Defend a Foreclosure Lawsuit?

Home being sold

There was a time when homeowners had few defenses available when it came to foreclosure actions. However, times have changed and now there are numerous defenses that allow a homeowner to successfully defend a foreclosure lawsuit. Below are a few examples:

  • Unfair mortgage terms. If a provision of your mortgage loan “shocks the conscience” of the court, you have a valid defense to the foreclosure action. We can review when your mortgage was signed and the circumstances surrounding it to determine whether there are unconscionable terms in your loan agreement.
  • Insufficient documentation. As soon as your lender begins threatening a foreclosure lawsuit, you should request that your lender proves it owns the mortgage. Most mortgages are assigned numerous times and it is common for errors to occur in the documentation. You have a valid defense if the plaintiff seeking to foreclose your home does not have the proper paperwork to support the action.
  • Active military. There are special protections afforded to active duty service-members. For example, The Service Members Relief Act (SCRA) allows military personnel a nine month postponement if the foreclosure lawsuit is initiated while they are on active duty.
  • Unfair lending practices. If your mortgage lender violated the law in extending your loan to you, it is a valid defense to a foreclosure lawsuit.
  • Procedural requirements. You may be able to defend a foreclosure suit if the lender failed to follow certain procedural requirements.
  • Personal bankruptcy. When you file a bankruptcy, all collection efforts against you (including the foreclosure) must come to a stop. This may only provide temporary relief, but it will give you time to understand all of your available options, as well as negotiate with your lender.

Don’t assume you cannot defend a foreclosure lawsuit! Let us review your individual circumstances and help you understand what defenses are available to you. Contact the skilled attorneys at Faro & Crowder to schedule a free consultation.


Bankruptcy or Short Sale: Which is better?

If you are a homeowner struggling to pay your mortgage, it is important to consider all of your debt relief options. Two options you should educate yourself about are filing for bankruptcy and short sales.

A short sale is the process that permits you to sell your house for a lower amount than what you owe on your mortgage loan. The sale proceeds are used to pay a large portion of your mortgage debt, but the lender is still “short” or owed money after the transaction has been completed.

In deciding whether filing a bankruptcy or pursuing a short sale is more beneficial for you, there are numerous factors to consider. Below are a few things to think about:

  • Time. The short sale process can be complicated and very time-consuming. You must obtain your mortgage lender’s approval to pursue a short sale and many lenders take a long time to review the documentation and provide the necessary approvals. Also, there is no assurance that your short sale will close. If you file a Chapter 7 or Chapter 13 case, you are provided instant relief from your creditors because the automatic stay prohibits any further collection efforts against you while your bankruptcy is pending. Once you obtain your discharge order, you eliminate most, if not all, of your debt.
  • Deficiency balance. In a short sale, there is always a deficiency balance remaining on your mortgage after the sale of your home. Thus, it is vital to determine in advance whether or not your lender will waive the right to collect the deficiency balance as part of the short sale agreement. If not, you will remain liable to pay the remaining amount. In a bankruptcy case, you can eliminate the deficiency balance after the short sale or foreclosure of your home.
  • Total debt. If you have a significant amount of debt in addition to your mortgage, such as medical bills or credit card debt, a short sale might not be the best option. However, if your mortgage loan is the cause of your financial troubles, a short sale could be a good solution. Filing a bankruptcy is the most comprehensive means for dealing with numerous different types of debt at one time. All of your creditors are included in a bankruptcy, so you are able to obtain a fresh financial start at the conclusion of your case.

If you are interested in learning whether a short sale or bankruptcy is the best option for you, contact us for a free consultation.


Will Filing Bankruptcy Stop My Foreclosure?

The thought of losing your home can be devastating. If you are facing a foreclosure action, it is important to seek legal assistance and learn what your options are for dealing with it. One option you may want to consider is filing a Chapter 7 or Chapter 13 bankruptcy. Many bankruptcies are filed by homeowners attempting to halt or avoid foreclosure of their home.

Will bankruptcy stop foreclosure? Brevard County Bankrupty Attorneys

A qualified bankruptcy lawyer will help determine if you qualify to file a Chapter 7 or Chapter 13. There are pros and cons to each type of bankruptcy, but both implement the automatic stay as soon as your petition is filed. The automatic stay halts all collection activity against you, including the foreclosure process.

Chapter 7

A Chapter 7 is often referred to as a “liquidation” bankruptcy because your non-exempt assets can be sold to pay your creditors. However, in the majority of Chapter 7 filings, the debtor has few (if any) non-exempt assets so there is nothing for the trustee to seize and sell. Additionally, a Chapter 7 will halt a foreclosure proceeding and provide you a few extra months in your home and the possibility of negotiating a settlement with your mortgage lender. However, your lender has the ability to file a motion for relief from the automatic stay. If the court grants the lender’s motion, the stay is lifted and the lender can proceed with the foreclosure. The good news is that if your home is foreclosed, the Chapter 7 filing allows you to discharge or eliminate any deficiency balance remaining after the home has been sold at auction. This often saves the homeowner from being liable to repay thousands of dollars.

Chapter 13

A Chapter 13 debtor files a plan of reorganization that sets forth how you intend to repay your creditors. A Chapter 13 plan lasts for a period of three to five years. Your plan can include a provision allowing you to cure your past due mortgage payments and bring you current on your loan. Thus, as long as you are making your Chapter 13 plan payments, the foreclosure process is stopped.

Contact Faro & Crowder, PA for a Free Initial Bankruptcy Consultation

Don’t face your foreclosure alone. Contact us for a free consultation to explore your options for trying to save your home. Our office is located on Sarno Road in Melbourne, Florida.

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

Florida Foreclosure Process

Home2

If you are past due on your home loan payments, you are considered to be in default and the mortgage lender has the right to foreclose on your home. Your lender will typically send you notice of your default and the lender’s intent to accelerate the total amount due on the loan if you do not cure your default within a certain period of time.

If you fail to timely cure your default, the mortgage lender or servicer will refer your loan to an lawyer to pursue a foreclosure action. The lawyer will file a Lis Pendens in the county where the home is located, which provides notice to any other interested parties that there is a lawsuit being filed which impacts title to the property. A Complaint and summons are filed with the court clerk and they will be served on you.

Once you have been properly served, you have 20 days to respond to the allegations in the Complaint. If you fail to do so, the lender can obtain a default judgment against you. If you do respond, you can raise defenses, request documents and information regarding the lender’s claims, and other actions to protect yourself. At this point, the lawsuit proceeds until a settlement or judgment is reached.

If the lender is granted judgment against you, the court clerk will schedule a foreclosure sale. If no objections to the sale are filed, the clerk will transfer title to the property to the party who purchased it at the auction. Once title has transferred to the purchaser, you are no longer the property owner and you can be evicted if you are still living in the home.

The above is a very general summary of the foreclosure process in Florida and it is important to remember that no two cases are identical. If you believe foreclosure is in your future, contact us for a free consultation. The sooner we get involved in your case, the better. Our office is located in Melbourne, Florida.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

Foreclosure Deficiency Judgments in Florida

Florida has one of the highest foreclosure rates in our country. If you are facing foreclosure, it is important to be mindful that there are certain companies purchasing a large number of mortgage foreclosure judgments in the State. Once they are the owner, the company sues you for a deficiency judgment after the foreclosure of your home is finalized. Losing your home is difficult, but facing a judgment against you for a large sum of money can be devastating.

Foreclosure Deficiency Judgment | Brevard County Foreclosure Defense

There are two main steps involved in the foreclosure process. First, the mortgage lender or servicer files a foreclosure lawsuit seeking a judgment from the court granting the lender the authority to foreclosure and sell your home. This judgment may include the ability of the court to enter a deficiency judgment after completion of the foreclosure sale if the house is sold for less than the judgment amount. The deficiency balance is usually a significant sum.

Florida residents who have had their home foreclosed can obtain some relief under the “Florida Fair Foreclosure Act.” Among other things, this Act significantly reduced the statute of limitations and a creditor’s ability to pursue a deficiency judgment from five years to one year. The Act also increased the pleading requirements the plaintiff must meet in order to pursue a deficiency judgment, and it in some cases it may reduce the deficiency balance. However, because the Act makes the process move faster, it can inhibit a homeowner’s ability to investigate and discover valuable defenses. Thus, if you believe a lender will pursue a deficiency judgment against you, it is imperative to obtain legal assistance as quickly as possible.

If you are delinquent on your mortgage payments or you have a foreclosure action pending against you, contact us for a free consultation to learn how filing for bankruptcy could help. Filing a personal bankruptcy may allow you to discharge the full amount of the deficiency balance left after your home is foreclosed.

Contact a Brevard County Foreclosure Defense Attorney at Faro & Crowder, PA

If you are interested in learning more about how a deficiency judgment will affect you, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

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