Use Bankruptcy When Facing a Foreclosure in Miami, Florida
Stopping foreclosure means teaming up with an effective, knowledgeable legal team. With the right legal help, many foreclosure options are available to you even if you are severely behind in your payments. These can include things like loan modification, mediation, and more.
Bankruptcy is always considered a last resort when dealing with foreclosure. When it comes to
bankruptcy laws Florida residents can benefit from, however, there are several options. It is often possible to protect your property and many of your assets throughout this process.
This is a powerful tool, because entering into proceedings will halt most collection activity — including foreclosure. Creditors won’t be able to pursue the matter further until the bankrupt individual has gone through all related court hearings and adjudication.
There are two different options to consider:
Chapter 7 Bankruptcy in Miami
Chapter 7 bankruptcy is typically effective in delaying foreclosure. However, choosing this type of bankruptcy leaves you at an increased risk of eventually losing your home. During a Chapter 7, all unsecured debts are eliminated. This is an ideal option for someone facing financial difficulties as a result of credit card debt, for example.
Although it is still possible to ultimately suffer foreclosure in Chapter 7, you are left with much greater financial flexibility. Eliminating unsecured debt typically leaves the bankrupt individual with greater disposable income and an easier time getting current on mortgage debts.
Once this is done, the threat of foreclosure will eventually pass.
Chapter 13 Bankruptcy in Miami
Chapter 13 is typically preferred when maintaining legal control over a mortgaged home is the biggest concern. Under Chapter 13, individuals are provided with expanded opportunities to prevent the worst consequences to their credit and finances. Over a period of three to five years, an income-based budget is followed that allows for reduced, regular payments to trustees.
These trustees, in turn, are responsible for paying outstanding debts. Secured debts, such as tax obligations and mortgage payments, are always considered first. Credit cards, medical bills, and other unsecured debts are paid last. Since this typically leaves the bankrupt person with very little free cash, debts can often be settled for a few pennies on the dollar.
At First Legal, we’re the experts on bankruptcy foreclosure in Florida. To find out more about your bankruptcy options, contact us today for a free case evaluation. We look forward to helping you as we’ve helped people all across the Sunshine State to fix their finances.