Mortgage foreclosures and what options you have
As an experienced bankruptcy attorney in Miami and Ft. Lauderdale, I have been getting a lot of calls from people who are about to go into foreclosure or who are already in foreclosure. A normal foreclosure takes somewhere between six months to a year to complete in Miami and Ft. Lauderdale. Right now, because of Covid-19, state courts are backed up with cases. Mortgage lenders were prohibited from filing foreclosures for a long time. Many mortgage lenders worked out agreements with borrowers to suspend the collection of mortgage payments or even agreed to put the monthly payments that were not made at the back end of the loan. Courts are still not back to normal activity as far as jury trials as Covid-19 is preventing the courts from assembling jury panels and the actual jury’s from being in the courthouses. The state court judges do not want to subject potential jurors to Covid-19. Because of this, there is a backlog of cases to be heard by the state court. Not just mortgage foreclosure, but all types of cases. Because of this, mortgage foreclosures might take even more than a year to complete.
If you are one of the people who have mortgage arrears or are already in foreclosure, you still have several options. The first is to see your house. This may be a good option as home values are very high right now. But, if you are so behind on your mortgage that you have used up all the equity in your house, this may not be an option. Also, because the prices of other homes are very high, it may be very difficult for you to buy a new home. Also, if you are in foreclosure, your credit may be affected so much that you will not be able to get a traditional loan at a normal interest rate. Additionally, rental costs are skyrocketing. So that may not be an option. If you have children, it may be difficult to move them out of school as well. If you have not been placed in foreclosure yet, refinancing may be another option. If your credit is still good and you have the ability to pay the new loan, you may be able to get your home refinanced. For people who have worked out deals with their mortgage lenders, the mortgage lenders will not report any negative activity on their credit reports. Therefore, there will be a short window to refinance. However, you must be working, and you must have equity in your house. The final option is to file for Chapter 13 bankruptcy. Filing Chapter 13 bankruptcy in Miami and Ft. Lauderdale will allow you to catch up on any mortgage payments that you are behind. This includes real estate taxes and any other debt you may have. Many people have been living off credit cards while out of work due to Covid-19. Many people live off credit cards generally, but especially now, credit card debt has sored. When you file a Chapter 13 bankruptcy in Miami and Ft. Lauderdale, you will only be required to repay a very small amount of the credit card debt that you have. The main purpose of filing a Chapter 13 bankruptcy in Miami and Ft. Lauderdale is to consolidate your debts into one payment, repay what you must on secured debt (mortgages or car loans), and pay a very small percentage of your unsecured debts. The reason you only pay a small amount to unsecured creditors (credit cards and medical bills) is that if you filed a Chapter 7 bankruptcy in Miami and Ft. Lauderdale, unsecured creditors would get nothing. Because they would get nothing in a Chapter 7, they would only be required to get at least that amount in a Chapter 13 in Miami and Ft. Lauderdale.
An additional benefit that you get when filing a Chapter 13 bankruptcy in Miami and Ft. Lauderdale is that your credit gets a benefit. If you have a lot of credit card debt, and you are behind on your mortgage or are in foreclosure, your credit is not good. You will not be able to obtain credit for a home or a car. If you do obtain the credit for those types of loans, the interest rate will be very high. Aftaer a Chapter 13 bankruptcy is filed in Miami and Ft. Lauderdale, it’s like your credit report is starting over. You will need to rebuild your credit again, but at least you will have no debt and your future creditors will see that the bankruptcy was filed. That explains where all the prior debt went. During the bankruptcy, which lasts between three to five years, you will be able to rebuild your credit. When you are done with your Chapter 13 bankruptcy in Miami and Ft. Lauderdale, your credit score will be in the 700’s and you will have no debt.
