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.