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Miami Bankruptcy Law Blog

Deficiency judgment considerations after repossession

In last week's post, we briefly discussed deficiency decrees and how those can affect homeowners who are facing foreclosure. Our readers in Florida might like to know more about deficiency judgments and how they work.

In Florida, the court has the sole authority over whether a deficiency judgment will be issued. This type of judgment is one that mortgage holders sometimes request to try to recoup money they lost because of the foreclosure.

Deficiency judgments can haunt Miami debtors

Miami residents who went bottom up in the recent mortgage crisis and who wound up with underwater mortgages and had to walk away may just now be getting back on their feet. Most may assume that the worst is over and they can begin again on surer financial footing.

Unfortunately, they could be really wrong in their assumption. Even though the banks and mortgage holders took possession of the homes long ago, they may have been unable to sell them for enough to cover the loan amount when coupled with legal bills, fees and penalties associated with the foreclosure process.

Chapter 7 bankruptcy: Not a do-it-yourself task for most people

There are certain things in life that are suitable for do-it-yourself projects. Keeping track of your finances is something that many people choose to do on their own. When the financial situation gets complicated and debts start to pile up because of a job loss or unexpected expenses, the time might be nearing when you will need someone to step in and help you with your finances.

One option that we have discussed at length for Florida residents who are facing mounting credit card and other debt is to file for bankruptcy. While the process might seem fairly easy, there is more to it than meets the eye.

What is the Bankruptcy Means Test for filing Chapter 7?

Florida debtors who have decided to file for Chapter 7 bankruptcy proceedings must usually pass a standardized, objective test called the Bankruptcy Means Test. This became the new standard after the the Bankruptcy Protection Act of 2005 was passed by Congress to tighten the criteria for filing consumer bankruptcy.

The monthly income of the debtor is averaged for the last six months and compared to Florida's median family income. Those debtors whose income is equal to or less than the state median may file for Chapter 7, although this is subject to approval by a trustee. In calculating income, debtors must include all of the following:

Legal and illegal practices used by debt collectors

By now, our readers know that we take a firm stance against debt collectors who use unethical and illegal practices to try to collect debts. It is important that all of our Florida readers know and understand how to handle debt collectors who don't follow the legal methods of debt collection. You probably know some basics, such as debt collectors can't swear at you or make false claims. There are some other things they can and can't do.

Debt collectors aren't allowed to harass you or use deceptive practices to collect a debt. This doesn't mean that they can't contact you. They are allowed to fax you, call you and send you mail. They can also contact you in person. You should know that they can only talk to you about your debt. The only exception to that is if they speak to your attorney. They aren't allowed to speak to any of your family members or friends about your debt.

Are there steps I can take to stop foreclosure?

Many Florida homeowners who were victimized by predatory lending practices or who fell on hard economic times can find themselves on the brink of foreclosure of their homes. That is a very scary and precarious position to be in, especially if they have families.

But no matter how hopeless the situation first appears, there are steps that can be taken to mitigate the damage or stop the foreclosure in its tracks.

Will a mortgage modification stop foreclosure on my home?

For some homeowners who are facing foreclosure, a mortgage modification is a possible way to stop the foreclosure. Because these loan modifications can be complex, having someone familiar with them by your side as you go through the process is vital. For Florida homeowners who are considering mortgage modifications, knowing some basic information might help them to make a decision about how suitable this program is for their case.

Are there financial guidelines for a mortgage modification?

Don't believe everything a debt collector tells you

Anyone who has or is receiving calls from debt collectors knows how unpleasant and stressful they can be. The people who call often do whatever they can to get money from you. They can be verbally abusive and intimidating. They also sometimes lie and even break the law.

There are limits under the Fair Debt Collections Practices Act to what debt collectors can legally say and do. However, that doesn't mean they all adhere to the law. One personal finance expert lists some lies that debt collectors use to extract payment.

Understand how your assets are affected by Chapter 7 bankruptcy

A fresh financial start is a dream some people have. They don't want to be stuck in the debt rut, but they can't really figure out how to get back in control. This can be a very scary place for anyone, and we understand that. When it comes to finding a way out of debt, some people might opt to turn to bankruptcy. While it can be a very effective tool for people who are struggling, it has to be used in the right way so you can protect your future.

Chapter 7 bankruptcy, which is also known as liquidation bankruptcy, is one of the options some filers may have. In this type of bankruptcy, your assets are sold off to satisfy the debts you have accumulated in a manner that allows those debts to be discharged. The issue with this type of bankruptcy is that some of the assets that might be liquidated are those that can you count on. You probably can't afford to lose your home, car or retirement accounts because you need to file for bankruptcy protection.

To foreclose or not to foreclose in the Miami housing market

Miami homeowners have experienced their share of housing troubles in the past decade. Defaults on subprime mortgages turned neighborhood subdivisions into eerie ghost towns dotted with properties worth far less now than when they were built.

Repossessions and foreclosures have occurred at alarming rates and have damaged many residents' credit histories for years to come. Even renting a house or apartment becomes difficult when a credit report is run during the screening process. Those who had open lines of credit may have seen the stream turned into a trickle or shut off entirely.

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