Jacksonville Bankruptcy Lawyer Blog

With about half of Jacksonville, Florida homes under water combined with the decrease in overall income for people across the country, it comes as no surprise that people are getting behind on their mortgage payments. Many of those people, especially those in homes that are seriously underwater, would probably benefit most from a mortgage modification or the surrender of the property altogether. However, there is a segment of the population whose home is still worth near if not more than their mortgage(s). Some of these people think that the only way to catch up on their home mortgage is to convince a bank to grant them a modification -often the kind where there are lots of penalties and fees and where the arrearages are tacked on the end of the loan as a balloon payment. These mortgages are not always available and can take so much time to achieve that the penalties become unmanageable.
In many cases, filing a traditional Chapter 13 bankruptcy will help these people catch up on the arrearage on their home. This is especially helpful if there has been a recent increase in income. In a Chapter 13 we submit a plan for repayment which includes the regular monthly mortgage payment, but also amortizes the arrearage to a sixty month period to make payment more manageable. This way, if the debtor can afford it, they can catch up on their mortgage without the arduous frustration of trying to negotiate with the lender.
Filing a bankruptcy stalls any collection attempts so a case filed the morning of a foreclosure sale will cancel the sale or, if the sale occurs, will require the Judge to vacate the sale upon motion by the debtor's counsel. As long as the debtor intends to catch up on their home mortgage and indicates the ability to do so in their bankruptcy plan, the foreclosure will end there.
There are options when it comes to mortgage issues, such as mortgage modification, foreclosure defense or bankruptcy. You can learn the options for free if you contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 and ask for a free initial consultation.

Nearly half of Florida homes that have mortgages are worth less than the mortgage debt on the home. This, combined with the nation-wide decrease in incomes has lead to one of the greatest recessions our country has seen.
A home mortgage is essentially a contract. You promise to make payments according to the contract's terms, and the lender promises to transfer the home's title to you when you finish making your payments. The government regulates these contracts by creating laws that set out procedures for things like foreclosures. Of course, there is still an element of free contract which allows lenders and borrowers to negotiate the terms of their agreement at any time. The government is limited in how much they are allowed to interfere with contracts so instead of trying to force banks to offer mortgage modifications, they make programs like HAMP, which offers lenders tax deductions or other benefits to make deals with borrowers. Personally, I think that the government isn't offering the lenders enough in benefits because banks aren't particularly helpful in getting borrowers into the program. HAMP mods are done in-house by the banks and "can" lower a borrowers mortgage payments to 31% of their gross income if you qualify. But what if you don't qualify, and what if your payments are already below 31% of your gross income?
This is where lenders will begin the foreclosure process. They may offer you a so called, "in house modification", but offer or no, the foreclosure process will continue until either you are somehow successful in obtaining an in-house modification or your home is sold on the courthouse steps. This is because the judiciary can't force a bank to modify your loan. Honestly negotiated terms that were created in accordance with the laws can't usually be modified by the government due to our rights to free contract as citizens. That being said, a recent program out of Orlando creates an opportunity for people facing Jacksonville bankruptcies and foreclosures.
As previously stated, our government can't force lenders to modify contracts, but our Judges can order those lenders to attend mediation with the client. The primary excuses used by banks to justify to forbearance of a mortgage modifications are that the paperwork was not received, that it was outdated or that no one with modification decision making authority was available to review it. Now the judges in the Middle District Bankruptcy Court of Florida's Jacksonville Division are accepting motions on behalf of those who are bankrupt in Chapter 13 cases to order that lenders with decision making authority attend mediation with borrowers, and require that all up to date papers required to effectuate a modification be provided to both parties prior to the mediation. This method, although new, is reported to have greatly increased the success rate of borrowers obtaining modifications. This more direct approach should give borrowers a more direct approach when dealing with lenders by having a judge order them to mediation and gives lenders a bargaining chip they don't always have- if the bank refuses to propose a good modification, the borrower can simply surrender the property in the bankruptcy. Since banks have more houses right now than they know what to do with, this proposition should make them far more likely to want to strike a deal.
If you have questions about how to get a mortgage modification in the bankruptcy arena, contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free initial consultation.

Jacksonville bankruptcy attorneys, and attorneys everywhere have faced record numbers of new clients with debt problems. The last five years have been devastating, with home values plunging and politicians screaming across the country that they have new solutions to help us from drowning in debt. There is no doubt that the economy will be the largest issue of the upcoming Presidential Election.
Statistics are a staggering example of our economic squalor. There were 1.4 million bankruptcies across America in 2011, up about a million cases from 2007. A million extra cases per year in only four years is a motivating factor, but what can we do about it?
Most people aren't sure what to do. Their jobs have lowered their pay or laid them off altogether, many of them are coasting by on savings and hoping for the economy to pick up. Many are depending on loan modifications that may never be granted. Even the government's Home Affordability Modification Program (HAMP) has been called a Scam.
Using credit cards to survive is like clutching a life raft with a pinhole in it. You can put a little air into it occasionally to get by, but without fixing the problem you're eventually going to run out of air and the ship is going to sink. I urge people to use credit if they must, but to recognize that this cannot go on forever.
One of the worst things I see is when people mortgage their home or take 401K withdrawals to try and support themselves through the struggle. In Florida, 401K accounts and most homesteads are exempt from collection by creditors in bankruptcy. Too many people try and use these funds to coast a little closer toward dry land, but it's often not enough. When these people file bankruptcy, those funds they used trying to avoid filing are gone. This is often a loss of tens of thousands of dollars that could have been used for rebuilding.
According to Bankrate.com, a home mortgage should not exceed 28% of your gross annual salary. If your home mortgage now exceeds this due to a loss of income, you should contact an attorney immediately about your options. Although many take years to accept it, a bankruptcy may be the only way to get out from under a house. By realizing this now, you may be able to preserve assets and restore credit sooner instead of spending years with your mortgage debt looming.
If you don't have mortgage debt and you have only credit card debt, you can follow Bankrate.com's Back-end ratio to see if you can afford your payments. Your Back-end ratio will give you a monthly budget amount that you can afford to pay toward your debts. If the total of your interest only credit card payments comes close to or exceeds this number, you should probably consider filing for bankruptcy.
Once you have these factors under control, save three months of living expenses in a savings account. Then you should be in a very secure place.
By taking the steps to control where your debt is headed today, you can be better prepared for the hard times to come. By contacting a Jacksonville Bankruptcy Attorney, we can analyze your financial situation to see if bankruptcy or some other option is best for you. You may call us at (904) 685-1200 for a free initial consultation.

If you want to reaffirm a debt after filing for bankruptcy, your must executed a new agreement with your creditor. This reaffirmation agreement must be written and must be signed by both you and the creditor. Should you sign this reaffirmation agreement? Here are some pros and cons.

Pros
First, if you want to keep the property, you must sign the reaffirmation agreement. Also, if you do sign, you will be certain what your payments will be, what your interest rate is, etc. Signing a reaffirmation agreement may also help rebuild your credit, since you are taking responsibility for a pre-filing debt and are making regular payments on a debt.

If the collateral is something other than a car, say furniture or electronics, then you may be able to negotiate a lesser amount due before signing the agreement. This is because the alternative to reaffirmation for the creditor is to repossess and auction off the property -something that costs the creditor money. Sometimes creditors would rather renegotiate your contract than to go through this hassle.

Cons
By signing the reaffirmation agreement, you are stating that you are now going to be responsible for the debt again. So if you cannot pay in the future and default, you no longer have the remedy or protection of bankruptcy available to you (unless you file again). If you default, a creditor may be able to garnish your wages to cover your debt.

If you have a debt for which you would like to reaffirm, or have any other consumer law issue contact a Jacksonville Bankruptcy Lawyer today for your free consultation.

The Federal Housing Finance Agency is reviewing a proposal that would permit Judges of Chapter 13 cases to give 0.00% interest rates on FHFA loans during the duration of the five year cases. Since about 90% of all U.S. Mortgages are FHFA backed, this would allow nearly all mortgages to have zero interest rates for five years. This comes on the heels of the Federal Housing Finance Agency's plan to allow Chapter 13 bankrupt to enter modifications and attempt to reduce their principle balances.

The proposal comes with two caveats: 1. The home must be worth less than it's mortgage (46% of Florida homes are underwater) and 2. whether or not to grant the modified interest rate would be up to the bankruptcy judge.

White House spokeswoman Amy Brundage told the Financial Times that the administration is not considering this particular idea. Fortunately, this bill can become law without approval from the White House. Even if a President were to use their veto power, the bill could still be passed by a 2/3rds majority vote by both houses of Congress.

Since the creation of this bill is only under consideration, it is likely that the 2012 election will have passed by the time it gets to the president, whose policies may be different than our current leader of the executive branch.

Singer Beyonce Knowles, recently sold her Miami, Florida condo for nearly 25% of what she paid for it. According to TMZ, Beyonce bought the 190 square foot condo in 2002 for $465,000 only to sell it this November for $110,000. This is a $355,000 loss on what TMZ suggests was essentially a private restroom. This is a far greater loss than most mortgage holders face, but this also wasn't Beyonce's homestead, it was a luxury property. With so many homes underwater in Florida, it's no wonder the star lost out on this investment. One things is for certain, with an income like hers, a small property like this won't be irreplaceable.

Unfortunately, bankruptcy and foreclosure are often very related issues. Financial troubles leave many homeowners thinking they should simply walk away from their homes, especially if they owe more on the home than it is actually worth.

There may be good news on the horizon. Florida state courts currently have a mediation program that is intended to help homeowners negotiate with their mortgage lender and reach a mutually beneficial agreement. But the program has met a fair amount of criticism as not encouraging honest participation. Parties sometimes fail to show up and don't always follow the terms of the agreement.

The program was a step in the right direction, however, and Florida's federal courts have taken notice. And unlike Florida's state program, the federal program has been very successful so far. It is still a relatively young program, but 90% of those who have used it have been approved for mortgage modifications.

Because it is a federal program, homeowners must first have a reason to be in federal court. The program is based in Chapter 13 bankruptcy for this reason. In other words, a homeowner does not qualify for this federal program unless she first files bankruptcy under Chapter 13.

Not everyone qualifies for Chapter 13, and you should speak with a Jacksonville Bankruptcy Attorney to see if a remedy this available for you.

Plus, the program itself can be complicated and, because it is relatively new, it has not been completely developed. Nor is it available to all Floridians just yet: the program is currently available in Orlando, with immediate plans to move into Manatee and Sarasota counties. It is also now available to Jacksonville residents as well.

Hopefully the program will help lenders and homeowners alike. Lenders will benefit by not having to foreclose on homes that sell for less than they're worth, while homeowners obviously benefit by being able to stay in their homes with lower payments.

If you are considering filing Chapter 13 Bankruptcy contact a Jacksonvile Bankruptcy Attorney today to discuss Chapter 13 and see if this program will benefit you.

To say that the state court run Residential Mortgage Foreclosure Mediation program has been a failure is an understatement. This program was created by the Florida Supreme Court in an attempt to help Florida citizens modify their home loans so that they'd not be foreclosed upon for being unable to pay. With only a 3.6 success rate, the Supreme Court of Florida is now considering termination of the program.

On the heels of this debate comes an attractive Federal Court alternative: forcing modification in a Chapter 13 bankruptcy and using the threat of giving the home to the bank as a means of lowering principle and interest payments. This method started last year in Orlando, it appears to be working, and it makes total sense.

For a long time banks have been foreclosing on the homes of good people who can't make their payments only to be unable to sell the property for anywhere near the debt owed. The banks can write-off this difference as a tax loss, but they can only claim so much tax loss each year. Jacksonville judges are now allowing debtors to file motions to force the lenders into mediation where we can show them what they'll get if the debtor gives the house up in the bankruptcy vs. what they'll get if they willingly drop principle and interest on the loan.

This is all fine and dandy in theory, but what about real life?
One law firm stated a 90% success rate for mortgage modifications with 20% of those receiving a reduction of the principle amount owed. One case in particular reduced their principle by $160,000 on a $618,000 loan.

If you are unable to make your mortgage payments and would like to attempt forcing your bank into a mediation, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.

Jacksonville Bankruptcy judges are following Orlando judge's lead in granting bankruptcy debtors motions for court ordered mediation. These motions not only require banks to attend mediation in good faith, but they also require the debtor and banks to come prepared -with all the information and documentation that is required to do a modification. Taking things further, the court will require the bank to send an agent who has actual authority to perform the modification.

Many people fail to get loan modifications because the bank either, "lost the paperwork" or the documents became outdated when the bank had time to reviewed them. A lot of these people are eventually foreclosed on and are forced to bankrupt themselves to remove the liability.

Yes, for this to work the debtor will need to file bankruptcy, but it may be just what some debtors need to force banks to modify loans and keep their homes. If you've been trying to modify a loan and found the banks unresponsive and/or impossible to deal with, contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation and we'll explore your options.

A reaffirmation agreement is an agreement between you and the creditor that holds a secured lien on collateral that you have previously purchased. This reaffirms the debt that you owe the creditor. So if you own a car and you file Chapter 7 bankruptcy, you can either surrender the collateral (give it back to the creditor), redeem the collateral (refinance through another company), or you can reaffirm the collateral by signing a reaffirmation agreement with the creditor and filing it with the court. This reaffirmation agreement basically says that you will be responsible for the debt just as you were before you filed the bankruptcy. If you do not do one of the above options, the creditor can repossess your vehicle.

As for your home, In re: Linderman dictates that you must also do one of the above options for your real property. So if you file a Chapter 7 bankruptcy and want to keep your home, you must sign a reaffirmation agreement with your mortgage company.

If you need help with your bankruptcy or want to know how to file a reaffirmation agreement, contact a Jacksonville Bankruptcy Attorney today.

No, there is not a minimum amount of debt that you must have in order to file a bankruptcy. You can file with any amount owed to any creditor. However, you will want to analyze whether a bankruptcy is in your financial best interest. Meaning that if you have a very low amount of debt with only a few creditors, it may be in your best interest to negotiate with those creditors to try to lower your amount due to them. A Jacksonville Bankruptcy Attorney can possibly negotiate a debt settlement with your creditors for you. If the creditor has already filed a lawsuit against you, the Jacksonville Bankruptcy Attorney can defend the suit on your behalf and try to reach an amicable solution between you and your creditor.

Contact a Jacksonville Bankruptcy Attorney at 904-685-1200 today for all your consumer law needs!

Filing for bankruptcy will stop the future sale date of your home, even if there has been a final order foreclosing the property. This is due to an automatic stay that is immediately put into place upon filing for bankruptcy. Under the automatic stay, a creditor cannot take any action against you to try and collect a debt. So your foreclosure suit will halt immediately and your sale date will be cancelled; no more action will be taken in the case until the automatic stay is no longer in place.

The automatic stay will be effective until the conclusion of your bankruptcy. In a Chapter 7, this will probably be a short amount of time, around 4-6 months. But this extra time may give you the opportunity to catch up on your mortgage, achieve a modification, or sell your property. However, in a Chapter 13 bankruptcy, your case will not be concluded until after your Plan payments are finished. This will be anywhere from 3-5 years. Within those years, your Plan will allow you the opportunity to catch up on arrearages and so cure your deficiency with your mortgage company.

There are many ways in which a bankruptcy might be in your financial best interest. Help with mortgages that are in default is just one way a Jacksonville Bankruptcy Attorney can help you. Call us today at 904-685-1200 to schedule a free consultation.

Many people find that bankruptcy is the right option for them if they are having problems paying their mortgage. First, a Chapter 13 bankruptcy can give you time to catch up on the arrearages that you owe through a Chapter 13 Plan. Also, your Jacksonville Bankruptcy Attorney can file a motion within your bankruptcy requesting that your Judge order the mortgage company attend mediation, where your Jacksonville Bankruptcy Attorney can negotiate on your behalf to reach an amicable resolution. Finally, if you feel that you cannot or do want to catch up on your mortgage and are ready to walk away from your house, surrendering the property in your bankruptcy will shield you from any liability from a deficiency judgment.

If you are behind on your mortgage, contact a Jacksonville Bankruptcy Attorney today to discuss your options.

There are many reasons that it would be advantageous to file for bankruptcy, but here are some of the most common reasons:

1. The first reason to file for bankruptcy is to stop a foreclosure sale. Filing for bankruptcy immediately stops a halts a foreclosure suit against you. This can give you time to reorganize your finances, try to sell your home, negotiate a modification, or find another place to live. Your chapter 13 Plan can let you catch up on your arrearages over a 5-year time span and so cure your default. If your home has been foreclosed upon, bankruptcy might be a good option for you.

2. Filing for bankruptcy not only stops a foreclosure suit, it halts almost all legal actions taken against you, such as a garnishment or auto repossession. If your auto is in danger of being repossessed, filing for bankruptcy will keep the creditor from doing so. You can value your auto in the bankruptcy and pay only fair market value to the creditor. This means that if you owe $20,000 on your auto and it is only worth $10,000. you can pay the $10,000 to the creditor through your bankruptcy and own the vehicle outright after your Plan is completed.

3. If debt collectors are hounding you too much, filing for bankruptcy can help. Immediately upon filing, creditors must stop from trying to collect the debt. This means the harassing phone calls and letters will stop. For most, this is a big relief.

4. If you are simply behind in your bills and need a chance to catch up or for the debts to be discharged altogether, bankruptcy probably is a great option for you. Some people are just too in debt and need a fresh start. Bankruptcy can provide this to you.

5. If you would like to surrender your property to the creditor and not be liable for any deficiency amount, bankruptcy will allow you to do this. If you surrender the property back to the creditor outside of bankruptcy, the creditor can almost always sue you for the deficiency amount (the difference in what you owe on the property and what they can sell the property for). If you do the surrender through the bankruptcy, the creditor cannot come after you for this money.

These are just some of the reasons that filing bankruptcy might be in your best interest. There are many more, and every case is different. To schedule a free consultation with a Jacksonville Bankruptcy Attorney, call 904-685-1200 today.

An attempt to pass a law that would allow Bankruptcy judges to modify mortgages never made it passed the Senate. So a judge cannot automatically modify the terms of your existing mortgage. However, filing bankruptcy in Florida can help in other ways.

First, if you are behind on payments, filing a Chapter 13 bankruptcy allows you to catch up the arrearages over time so you are no longer in default. Second, filing bankruptcy oftentimes serves as a strong negotiation point with lenders. Lenders might be willing to work with you more if they know that there is a strong possibility that you might just walk away from the house if they do not work with you. Third, your Orange Park bankruptcy attorney can file a motion within your bankruptcy proceeding to require your mortgage company into mediation with you. So the judge cannot automatically change the terms of your mortgage, but s/he can order your mortgage company into mortgage modification mediation with you. Finally, if your home is in foreclosure, filing bankruptcy will halt the foreclosure proceedings. The automatic stay will go into effect immediately and all activity in the foreclosure case will cease.

To see if filing for bankruptcy is in your best interest, contact an Orange Park bankruptcy attorney today to discuss the particulars of your situation.