Bankruptcy is typically the last resort when a person is in dire financial straits. Nonetheless, a person who is at risk of losing his primary residence in a foreclosure action might consider filing bankruptcy to delay or stop the foreclosure. This strategy may have its merits, but it also has its detriments. If you are considering bankruptcy as a foreclosure defense, make sure you understand its benefits and limitations before you pursue that option.
Depending on your specific situation, you might file for bankruptcy on Florida under Chapter 7 or Chapter 13. With a Chapter 7 bankruptcy, all debt collection activity against you, including any foreclosure actions, will be temporarily stopped. Your lender can petition the bankruptcy court to lift that stoppage for the foreclosure action, and in a majority of cases the court will grant the lender’s request. A Chapter 7 bankruptcy will therefore delay the progress of the foreclosure for two to four weeks (or however long it takes for a lender to petition the bankruptcy court), but it will not stop the foreclosure.
A Chapter 13 bankruptcy may be appropriate if you have missed several mortgage payments but you are able to start making payments again. The Chapter 13 process will involve the negotiation of a payment plan under which you will be required to make payments against all past due amounts, typically over a three- to five-year period. During that time, your case will remain under the jurisdiction of the bankruptcy court and you will be absolutely required to make all payments under the court’s negotiated payment plan.
Many homeowners who are facing foreclosure believe that bankruptcy is their only option that might allow them to keep their primary residences. The attorneys at the law offices of Jonathan Kline, P.A. have the expertise to develop several other mortgage foreclosure defense alternatives that can accomplish a similar or better outcome than bankruptcy. If you are facing a foreclosure action in Florida, please contact us to schedule a consultation on how we can help you to protect and retain your home.