Bankruptcy Versus Foreclosure in Florida
For any individual who is struggling financially, including with a home mortgage, they might be looking at options of filing for bankruptcy or facing the fact that a foreclosure of their home could soon be imminent. It is extremely important to know that filing for consumer bankruptcy can prevent a foreclosure, but more importantly, depending on the type of bankruptcy, it may be able to help you catch up on back-owed mortgage payments and remain in your home. To understand your options, it is essential to discuss the details of your financial circumstances with a West Palm Beach bankruptcy lawyer who can assist you. In the meantime, we can provide you with general information about bankruptcy and foreclosure in South Florida.
You Could Have More Options Than Bankruptcy or Foreclosure
Before you assume that your only two options are bankruptcy or foreclosure, it is critical to seek legal advice. You could be eligible for other options to avoid foreclosure, especially if you are not also dealing with a significant amount of other types of debt. There are often other options for loss mitigation when it comes to your mortgage and foreclosure. For example, you could potentially be eligible for a loan modification, a short sale, or a deed in lieu of foreclosure. In situations where mortgage debt is just part of the problem, however, bankruptcy might be the best option and might look like the only option against a looming foreclosure.
How Bankruptcy Can Stop the Foreclosure Process
When you are facing foreclosure in South Florida, you should know that immediately upon filing your bankruptcy petition, all pending foreclosure actions will be put on pause due to the “automatic stay.” The automatic stay is an injunction that is part of all consumer bankruptcy cases, and it halts all aspects of a foreclosure. Since Florida is a judicial foreclosure state, the automatic stay often prevents the court case from moving forward that would ultimately allow the lender to foreclose on your home.
When Bankruptcy Can Prevent Foreclosure and Allow You to Keep Your Home
Liquidation bankruptcies (filed under Chapter 7) stop the foreclosure process, but they do not allow you to keep your home. While you can exempt an unlimited amount of equity in your home through Florida bankruptcy exemptions if you qualify, Chapter 7 bankruptcy does not give you a route to remain in your residence. Chapter 13 bankruptcy does, however. If you file for Chapter 13 bankruptcy, you will create a repayment plan through which you reorganize your debts over a period of three to five years, including your mortgage. Over that time, you can catch up on what you owe your lender and can ultimately remain in your home if you choose to do so.
Contact a West Palm Beach Bankruptcy Attorney Today
Do you have questions about filing for bankruptcy in South Florida in order to avoid foreclosure? One of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller, PLLC can speak with you today about the details of your case and the options that may be available to you. Contact us for more information.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0702/0702.html
law.cornell.edu/uscode/text/11
