Jacksonville Bankruptcy Lawyer Blog

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by banks to justify to forbearance of a mortgage modifications are that the paperwork was not received, that it was outdated or that no one with modification decision making authority was available to review it.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.

As I've said before, there has been a steep decline in foreclosure filings, however a recent article in The Florida Bar News by Gary Blankenship, explains that despite the decrease in foreclosures last year, there appears to be an enormous backlog of foreclosures yet to come.
Linda Goodner, a States Courts Administrator recently appeared before the Senate Criminal and Civil Justice Appropriations Subcommittee to discuss what changes would be needed to handle the estimated 368,000 foreclosure cases pending in courts across Florida as well as the cases that are yet to be filed. In her estimation, there will be another 380,000 cases filed by 2016 -at which point she anticipates that foreclosures will return to normal.
One proposal came from Representative Shawn Harrison who proposed that banks be given the ability to pursue non-judicial foreclosure in exchange for giving up their rights to file deficiency judgments. This is an interesting proposal.
To allow banks to foreclose on homes non-judicially could mean infringements on home-buyer's rights. We've already seen numerous procedural violations by a multitude of lenders. Obviously, taking the judicial process out of the equation could be unreasonably risky for lenders who wanted to keep their homes. On the other hand, the forfeiture of the right to assess a deficiency judgment could drastically reduce the need for bankruptcies, which would be a huge financial and credit benefit to many Americans.
It is impossible to say what the best system for handling foreclosures in our current dilemma is, but a change in judicial procedure would be welcome.

The average American isn't the only one facing the effects of a sunken housing market as recent sales show that even very wealthy celebrities have failed to sell their homes for near their asking price. Regis Philbin recently sold his Greenwich, Connecticut home for $3 million dollars. This may not seem like a hardship, but it's a far cry from the original $5.9 million he started at in 2008. Regardless of the price, taking three years to sell and having to drop the price by nearly half is not a good economic sign.
Mel Gibson is having similar problems selling his Greenwich home, but he is also facing a divorce- putting the actor on a tighter time line to sell. Mr. Gibson first listed him home for $38.5 million, but the price has dropped by nearly $10 million since then and it still hasn't sold.
Neither of these celebrity home sale losses are as great in percentage as Beyonce's recent sale of a condo she'd purchased for $465,000 but sold for $110,000.
Unfortunately, most Americans don't have the financial strength to handle this kind of loss. They don't actually own their homes and having to sell for less than owed forces them into bankruptcy. If you're one of the many Americans who is trapped in this situation and aren't mega rich, contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.

Under a chapter 7 bankruptcy, you can keep your home by reaffirming the debt. This means that you will, through a Statement of Intention, tell the creditor that you wish to keep the property and will continue to be liable for the loan.

If you are behind in payments and able to make the current payments, you may want to file a chapter 13 bankruptcy. This will allow you to keep your home and pay the arrearages that you owe through your chapter 13 Plan. This Plan will be anywhere from 3-5 years in length and will allow you to catch up on all the monies owed to keep your house. You can put all your creditors in the Plan, including liens by homeowner's associations, second mortgages, tax debt, etc. You can even, through the Plan, catch up on arrearages for your vehicle.

If you are thinking of filing bankruptcy and you want to learn more about how to keep your home, contact a Jacksonville attorney today for a free consultation.

Yes it is possible with a Florida bankruptcy to keep one property but not the other. When a bankruptcy is filed, you have the option to keep or surrender secured collateral, including real property. So you can decide, with the help of your Jacksonville bankruptcy attorney, for each property that you own what would be in your financial best interest: to surrender the property to the creditor or to retain the property and continue payments. But be mindful that in Florida, you can only take one homestead exemption in bankruptcy. If you are behind on your payments, this can be cured. You can pay the arrearages that you owe through your Chapter 13 Plan. Talk with a Jacksonville bankruptcy lawyer to decide if keeping both a homestead and rental property would be in your financial best interest.