Common Myths About Underwater Homes

Sometimes, it seems as though homeowners in Florida cannot catch a break. Just as the state was beginning to recover from the recession in 2008, the pandemic hit. Homeowners did not know how they were going to pay their mortgages and suddenly faced the possibility that they may lose their homes. Now, foreclosures are once again soaring in Florida, and that wave has also caused many home prices in Orlando to plunge. Sadly, many homes are now underwater, meaning the amount on their home loan is more than the home is worth. Many underwater homes do eventually end up in foreclosure, so it is important to understand some of the most common myths associated with them, which are found below.

The Lender Cannot Foreclose While I Am Negotiating With Them

This myth probably came about because some government and government-backed loans stipulate that the bank must stop any foreclosure action after a short sale, or loan modification. However, these procedures must already be filed in order for that law to come into effect. That means that the short sale must have already closed, or a loan modification must have been signed in order for it to be unlawful for the lender to proceed with a foreclosure lawsuit. Too many homeowners have lost their homes thinking that the lender could not proceed when in fact, they could.

I Do Not Have to Negotiate a Short Sale or Loan Modification Until the Foreclosure Sale Starts

One of the biggest mistakes homeowners make when they are facing foreclosure is that they simply wait too long before they start working with their lender. The truth is that once a foreclosure sale has started, there is typically little a borrower can do to stop it, and it is too late to start negotiations with the lender at that time. The best thing to do is to contact your lender as soon as you fear foreclosure, as you will have the most time possible at that point to work with them.

A Deed-in-Lieu of Foreclosure Is Better than a Short Sale

It is true that short sales have some consequences. For example, the lender may pursue a judgment against the borrower for the amount remaining on the mortgage. Or, the lender may make a request for an unsecured promissory note to be repaid to them. These are just two of the possible consequences of a foreclosure, but threatening the lender with a deed-in-lieu of foreclosure is no better than a short sale. Firstly, the lender must agree to both a short sale and a deed-in-lieu of foreclosure. More importantly, a deed-in-lieu of foreclosure carries all the same consequences as a short sale, so you will not be avoiding anything by going that route.

Even worse, some people think simply allowing the lender to foreclose is better than a short sale or a deed-in-lieu of foreclosure, which it is not. Foreclosures have a much more negative impact on a credit report than either alternative to foreclosure, so it is best to always try to negotiate with the lender and try to come up with an alternative solution.

I Have Filed for Bankruptcy, so the House is No Longer Mine

It is true that when a bankruptcy case is filed, there is a chance of losing the home. However, all debts, including your home loan, are yours until the bankruptcy is finalized. Due to the fact that Florida is a “lien theory” state, you own the home until you voluntarily sell it, or until the trustee or lender takes the home. If they fail to take these actions, the home is still considered your property.

Additionally, when you file Chapter 7 or Chapter 13 bankruptcy, you will fill out a Statement of Intentions. This statement is intended just as it sounds. It is your intention of what you are going to do with the home. Filling out this statement does not mean that the house is no longer yours.

Threatening Bankruptcy Will Force the Lender to Work with Me

First, it is never a good idea to threaten your lender when facing foreclosure. Lenders and their attorneys understand the laws of bankruptcy very well. Just as threatening to allow the lender to foreclose, threatening that you will file bankruptcy will not give you any leverage against the lender.

The Bank Cannot Foreclose if They Do Not have the Original Note

This myth is somewhat rooted in the truth. It is true that lenders must prove they own the original loan, which they can do with the original note. If they cannot produce this, there is a chance it could serve as a defense to foreclosure. However, even when the lender has lost the original note, there are some exceptions to the rule. A lender can still foreclose without the original note if:

• They present evidence showing they owned the loan at the time the note was lost;
• The note stipulates that the bank is entitled to start a foreclosure lawsuit; and
• The loss of the note was not due to the transfer of the owner.

Still, even with these exceptions, lenders will generally find the original promissory note and file it with the court when pursuing a foreclosure lawsuit. As such, it is generally not in your best interest to assume that because the lender lost the original note, they cannot foreclose on your home.

Our Florida Foreclosure Defense Lawyers Can Help with Your Case

There are many myths surrounding underwater homes and foreclosures. If your home is underwater and you are in fear of losing your home, our Fort Lauderdale foreclosure defense attorneys can help. At Loan Lawyers, we have helped thousands of homeowners keep their homes, and we know the defenses available that may help you keep yours, too. Call us today at (954) 807-1361 or contact us online to schedule a free consultation with one of our knowledgeable attorneys and to learn more about how we can help.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.

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How to Get Out of Debt As Soon As Possible

The pandemic has hit everyone in the country very hard, and millions of people have had to make sacrifices they never dreamed of. Unfortunately for those in Florida, the crisis has hit particularly hard. A recent study has shown that Florida ranks fifth in the country for the most residents that have suffered financial harm as a result of COVID-19.

It does not seem as though the virus is going anywhere anytime soon and, due to this, people are likely going to experience even more hardship, particularly here in Florida. One way Floridians can help prevent the negative impacts of the pandemic is to get out of debt as soon as possible before any debt collectors start legal action. That may sound impossible at a time when people are cash-strapped, but it is not. Below are some tips that can help you get out of debt, avoid legal action, and get the burden of that debt off of your shoulders once and for all.

Obtain a Copy of Your Credit Report

You may think that you know all of the debt you owe, but you may have forgotten about debt incurred long ago. Truthfully, if you do not know where you stand with your debt entirely, you can never properly address it. Contact at least one of the major credit reporting bureaus, such as Equifax or TransUnion, and obtain a copy of your credit report. The report will list all of the debt you still owe so you can start tackling it.

Stop Using Credit Cards

If you are like most Floridians, you have leaned on your credit cards more than ever during the pandemic. The time to stop doing that, though, is now. The more you spend on your credit cards, the higher your balance climbs. If you must use your card, try to avoid costlier transactions, such as cash advances. The interest on these transactions starts accumulating right away, so you will pay much more on it in the end.

Pay as Much as You Can Afford Every Month

Your first priority should always be to create an emergency fund. Once you have a little bit of money set aside, you should then use any disposable income you have to pay down as much of your debt as possible. Of course, the more you pay, the faster you will pay off your debt and the sooner you will be free of your obligations.

Looking at the little expenses you incur will help you better understand where you can save money so you can pay off more every month. For example, if you collected coupons and used them at the grocery store, use the savings you incurred towards your debt.

Cut Your Spending

The most obvious way to get out of debt as soon as possible is to cut your spending. Of course, most people find this much easier said than done. However, if you can find the little areas in which you are spending money unnecessarily, it is possible. If you regularly get coffee on your way to work or eat out at lunch, start making your own meals and watch the savings add up. If you cannot easily identify the expenses that you can cut, create a budget, including everything you spend in a day. Once you have it all on paper, you will be able to look at it and see the areas where you can cut.

Switch Your Payments

Paying off a credit card is something that you should feel very proud of. However, now is not the time to sit back and start spending. If you still have credit cards, take the payments you were paying on the credit card that is now paid off, and put them on another credit card. This will help you pay off that credit card faster and soon, you will not have any debt on any of your cards.

Do Not Splurge with Your Windfalls

You may find there are times in your life when you receive a windfall. Perhaps you will receive a significant inheritance, or maybe you got a tax refund. It is tempting to use that money on a vacation or something nice for yourself, but resist the temptation. Use that money to pay down your debt instead and you will feel much better about it in the end.

Freelance to Earn Extra Income

The Internet is a great place to make money these days, and many websites are dedicated to helping freelancers network and find extra income. Perform a Google search for whatever you are skilled at, such as web design, graphic design, or content writing, and you will find a whole list of websites ready to connect you with your next job that will help you get out of debt as soon as possible.

Pay Off Debts with the Highest Interest Rate First

Many people like the snowball method of paying off debt. With this method, you actually pay off the debt with the lowest interest rates first so you build momentum and get excited about paying off more debt. Generally speaking, it makes more sense to pay off the debt with the highest interest rate first, so the interest does not accumulate and you do not end up paying more on what you borrowed in the first place.

Treat Yourself

Paying off debt is important, and it is also incredibly difficult. At times, it may become depressing, but do not let it get you down. Once in awhile, treat yourself to something nice, and that you can afford without spending on your credit card, and congratulate yourself on the job well done.

Has a Debt Collector Taken Action? Call Our Florida Debt Defense Lawyers

Sometimes, people try to pay off their debt as quickly as possible, but a debt collector still takes action. If this has happened to you, our Fort Lauderdale debt defense attorneys at Loan Lawyers are here to help. We know the defenses available in these cases and we will use them to give you the best possible outcome in your case. Call us today at (954) 807-1361 or contact us online to schedule a free consultation so we can review your case.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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Getting a Mortgage After Bankruptcy

Filing for bankruptcy can be an effective means of managing debt that’s become more than you can bear. You’ll benefit from debt relief and a fresh financial start. You’ll be able to stop debt collectors from harassing you, taking action against you, and repossessing your property.

On the downside, however, you’ll have a mark on your credit. This will hurt your ability to obtain loans and credit cards in the short term. It’s good to understand how bankruptcy will affect your ability to secure a mortgage down the road.

Bankruptcy law is incredibly complex. Loan Lawyers is a foreclosure defense, debt defense, and bankruptcy law firm with consumer rights attorneys who fully understand the process and its ramifications. Call us now and take the first and most important step toward regaining your peace of mind and financial stability.

How Soon After Bankruptcy Could I Get a Mortgage?

Getting a mortgage after bankruptcy can present some challenges. Much depends on the chapter under which you filed, according to Experian, which is one of the nation’s major credit bureaus.

Bankruptcy can significantly lower your credit score, remain on your credit reports, and affect your ability to obtain new credit – including a mortgage loan. The impact can continue for up to 10 years. Fortunately, its impact lessens over time.

You should check your credit report before you apply for a home loan to make sure it’s accurate. Contact the credit agencies promptly and dispute any errors.

Here’s a quick summary of how long you have to wait to apply for a post-bankruptcy mortgage:

Chapter 7: Liquidation

This type of bankruptcy will stay on your credit report for up to 10 years. However, you may still be able to get a mortgage during that time. You’ll need to wait until enough time has passed since your bankruptcy was discharged.

Chapter 11: Reorganization

This is typically used by businesses but can be filed by individuals under certain circumstances. It’s complex and expensive. After your Chapter 11 has been discharged, you should be eligible for a mortgage.

Chapter 13: Adjustment of Debts

This gives you the chance to repay your debts over three to five years. It can stay on your credit report for up to seven years.

Take time to research the different types of loans. Each mortgage loan has its own unique requirements.

Tips for Getting a Mortgage After Bankruptcy

If you plan to seek a mortgage after bankruptcy, start by rebuilding your credit before you apply. It may improve your chances of approval and get you more favorable terms.

Use these strategies to put yourself into a position to successfully secure a mortgage:

• Create a budget.
• Pay your bills on time.
• Get a secured credit card.

Mortgages: Chapter 7 versus Chapter 13

Buying a home after bankruptcy can be achieved. It’s helpful to understand Chapter 7 versus Chapter 13.

With a Chapter 7 filing, also known as a liquidation bankruptcy, you’ll have to sell your possessions to pay toward credit card debt, medical bills, personal loans and other types of unsecured debts. Chapter 7 is generally meant for people with limited incomes who lack the ability to pay back their debts.

Although it will stay on your credit report for up to 10 years, you may still be able to get a mortgage. You’ll need to wait until enough time has passed since your bankruptcy was discharged and make sure you have a substantial down payment and that you’ve worked on rebuilding your credit score.

Chapter 13 is referred to as a reorganization bankruptcy. Your property is not sold when you file for Chapter 13 protection. If you successfully complete a court-mandated repayment plan, you may be able to keep your property.

After completing the repayment plan in which you pay your creditors a portion of the outstanding debt over a fixed period of time, any remaining unsecured debts may be discharged. This means you’re no longer required to pay back the debt.

The federal Bankruptcy Code covers nearly every aspect of the process. You need seasoned attorneys who have your best interest at heart. To get the help you need, call Loan Lawyers, a foreclosure defense, debt defense and bankruptcy law firm.

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Things to Know About Judgments in Florida

People facing a debt collection lawsuit in Florida should always work with a debt defense lawyer who can help them win their case. Many people are not aware that there are many defenses available to these lawsuits, and an attorney will know what those are and how to use them effectively to help you win your case. Still, whether or not you work with an attorney during your debt collection lawsuit, there is still a chance that you may not win your case. In these instances, a post-judgment order may be issued against you.

Post-judgment orders allow the debt collector to come after you to recover the remaining amount of debt you owe. Many people think that these judgments are an order to pay money. However, they are simply an order that allows the debt collector to take certain steps to collect the money still owed. Often, debt collectors must take involuntary collection methods to receive payment. As such, it is important you understand some of the most basic components of any judgment issued against you.

Terminology in Judgments

If you have a judgment issued against you, it is important you understand some of the terminology used. This will give you a better understanding of the judgment, what is required of you, and the actions the debt collector can take.

Some of the most common terms in judgments are as follows:

• Judgment creditors: A judgment creditor refers to the party or parties that are still owed money once a decision has been made on the lawsuit. In most cases, this is the plaintiff, or the debt collector that took legal action against you.
• Judgment debtor: The judgment debtor is the person that still owes money once the lawsuit is finalized. In most cases, this is the defendant, which is most likely you.
• Execution: The execution of the judgment outlines the steps a debt collector is allowed to take to collect on the debt when you do not voluntarily repay it.
• Satisfaction: If you repay the debt, or otherwise meet the debt collector’s demands, they may draft a satisfaction document. The creditor named on the judgment must sign the document, releasing you from the obligation to pay the debt.
• Joint and several: The term ‘joint and several’ is one that confuses many people. It means that any party considered jointly and severally liable is responsible for repaying the entire debt, not just a percentage. For example, if there was a co-signer on the debt, you and the co-signer are both responsible for the entire debt and it is not divided between each of you.

Once you know the different terms of the judgment, you must then understand the ways in which a debt collector can collect on that debt.

Enforcing and Collecting on Judgments in Florida

Judgments are effective liens that can last up to 20 years in Florida. This means that a debt collector has up to 20 years to collect on the debt still owing within the judgment. The lengthy amount of time is shocking to many borrowers that thought their debt had simply fallen by the wayside and that they no longer had to deal with them.

Debt defense lawyers understand that many individuals facing financial hardship often do not understand the severity of a judgment or the remedies it provides debt collectors under Florida law. Lawsuits that result in a judgment being issued do not rely on the underlying action. Debt collectors have all of the same remedies available to them under Florida law, regardless of whether the judgment was for a personal injury case, debt collection lawsuit, foreclosure case, or another type of civil action.

The actions a debt collector may take when trying to recover debt are as follows:

• Garnishment proceedings: A debt collector may secure a wage garnishment or a bank garnishment as part of a debt collection lawsuit. With a wage garnishment, the employer will deduct a certain percentage of your paycheck and direct it to the debt collector. A bank garnishment can result in the debt collector withdrawing money from your bank account, or freezing the entire amount until the debt is repaid.
• Property liens: A property lien gives the debt collector an interest in your property so it can recover the debt you owe. A lien can give the debt collector the right to sell your property, or it may mean that if you sell the property voluntarily, the debt collector is paid first and you will receive the remaining proceeds of the sale.
• Discovery proceedings: Discovery is a legal process that can include written requests, depositions, entry into land for inspection, and a number of other invasive procedures debt collectors will use to discover the assets you hold.
• Foreclosure: One of the worst-case scenarios, a debt collector may secure a foreclosure action against you when that property is not exempted under Florida law.

The many options debt collectors have when they secure a judgment against you seem scary, but there is still hope. It is at this time, more than ever, that it is crucial that you reach out to a debt defense lawyer that can help with your case. Just as there are defenses to debt collection lawsuits, there are also defenses available in deficiency judgment orders. It is not uncommon, for example, for debt collectors to cut corners or fail to keep records properly maintained. A debt defense lawyer can prove these facts, and give you the best chance of a positive outcome.

Was a Judgment Issued Against You? Our Florida Debt Defense Lawyers Can Help

If you have had a deficiency judgment issued against you, or a debt collector has taken action, it is crucial that you do not wait to speak to a Fort Lauderdale debt defense lawyer. At Loan Lawyers, our attorneys have the experience necessary to effectively defend against these actions so you have the best chance of securing a successful outcome. Call us today at (954) 807-1361 or contact us online to schedule a free consultation with one of our skilled attorneys.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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What Is a Fast-Track Foreclosure in Florida?

Florida has one of the longest timelines in the country when it comes to foreclosure lawsuits. After a lender has filed a foreclosure action, it can take months before the property owner is forced out of their home, which can cause a great deal of stress for the lender, as they typically want these actions over with as soon as possible.

However, there are instances in which the lender can greatly shorten the amount of time it takes to complete the foreclosure action. Florida law allows lenders or subsequent loan owners to expedite the foreclosure process when the defendant, or the borrower, does not contest the case, or when the homeowner does challenge the foreclosure action but they do not have a valid defense.

When a lender or other loan holder decides to expedite the process, it is known as a fast-track foreclosure. If you are a homeowner facing foreclosure, it is important that you understand the fast-track process, and how to fight it. Doing so could provide you with much more time to live in your home without making a payment or work out a repayment plan or other solution with the lender.

Starting the Fast-Track Foreclosure Process

The fast-track foreclosure process begins with the plaintiff, either the original lender or a subsequent loan holder, filing a complaint for foreclosure with the court. This is standard procedure in any foreclosure case, but when the loan owner wants to fast track the process, they will also file a motion, or request, with the court to prove why the foreclosure case should not proceed.

Once the court receives the motion, they will review it to ensure it is verified. To verify the complaint, the plaintiff must show, under the penalty of perjury, that they have the right to foreclose under the promissory note on the property. In the event that the court finds the foreclosure complaint valid and that it satisfies all legal requirements, a judge will then issue an order stating that you must prove why they should not issue a final judgment in the loan owner’s favor.

You will receive this order to show cause after being served with the order and possibly the initial complaint. After receiving the order and complaint, you will only have a limited amount of time to respond. The court will also set a hearing date for your case.

Who Can Fast-Track a Foreclosure in Florida?

Florida law allows any lienholder to start the fast-track foreclosure process. While most homeowners think this only applies to the original lender, or a subsequent loan holder, it also applies to second lien holders and homeowners’ associations.

After a lienholder has started the fast-track foreclosure process, you then have the burden of proof to show why the foreclosure should not proceed. If you believe the foreclosure is improper, you must then file a response, generally known as an “answer,” or a “motion to dismiss.” Within your response, you should include any valid issues that represent a material fact or a legal defense proving why the foreclosure should not proceed. After you have filed your response, you will then also have to present these defenses at a hearing.

The Hearing

The hearing in which you will raise your defense must be scheduled within a certain period of time. The time frame must be 20 days after you were served with the order to show cause, 45 days within the service of the original complaint, or within 30 days of the original publication if the complaint was served through a publication such as the newspaper. The date in which your hearing is set must be whichever date is the latest of these options. At the hearing, you will need to present your defenses to why the foreclosure should not proceed.

Too many homeowners waive their right to a hearing and, often, they are not even aware that they are doing it. You may waive your right to be heard if you fail to file a response, if you file a response that does not challenge the foreclosure, or if you do not appear at the hearing. You may also lose at the hearing if your defenses are found to be invalid. In this case, the judge will enter a final judgment of foreclosure and tell the court clerk to begin a foreclosure sale.

If you do raise a valid defense to the foreclosure process, the judge will not enter a final judgment. Instead, the case is considered to be in dispute. The discovery process will begin and the case will have a trial date set. At the trial, you will have a chance to raise your defenses again, as will the loan owner. After both arguments have been heard, a judge will then make a final decision on the case.

Deficiency Judgments in Fast-Track Foreclosures

When foreclosure cases are not fast-tracked, the loan owner can pursue a deficiency judgment against you. If they are successful, they can then take additional measures, such as garnishing your wages, to recover the amount of debt you still owe. However, when a loan owner is successful in a fast-tracked foreclosure case, they cannot also receive a deficiency judgment. Still, the loan owner can file a separate lawsuit against you to obtain a deficiency judgment when the price a purchaser paid at a foreclosure sale is not enough to cover your entire mortgage debt.

Our Florida Foreclosure Defense Lawyers can Fight Your Case

Foreclosures are one of the most stressful things a homeowner could ever face. When the process is fast-tracked, it is even more nerve-racking and you could be forced out of your home even sooner. At Loan Lawyers, our Fort Lauderdale foreclosure defense lawyers know the defenses that are available in these cases and we will use them to give you the best chance of a positive outcome. Call us today at (954) 807-1361 or contact us online to schedule a free consultation with one of our skilled attorneys.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.

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How to Remove Old Debts From Your Credit Report

Sometimes, when people are drowning in debt that they cannot repay, the only hope they have is to wait out the debt until it comes off their credit report. Although this can take seven to 10 years depending on the type of debt, it is sometimes the only option for individuals who have an immense amount of debt they cannot pay but who want to eventually rebuild their credit.

Old debt left on a credit report even after it should have been taken off can hamper these goals. So, if you have old debts still on your credit report, how do you get them taken off so you too can once again start rebuilding your credit? Just follow the tips below.

How Long Should Debt Stay on Your Credit Report?

Most debts should come off your credit report within six or seven years. Some debts have a charge-off period of 180 days. This means that even if the debt is supposed to be removed within a certain period of time, such as seven years, the charge-off period of 180 days may be added to that, resulting in a total time of seven years and 180 days before the debt is removed from your credit report.

However, there are some exceptions. For example, a bankruptcy can stay on your credit report for up to 10 years. After filing bankruptcy, you should still always obtain a copy of your credit report. While you will see the bankruptcy listed, you should not see any of the debts that were discharged as part of your case. Still, even with a bankruptcy on your credit report, instilling healthy credit habits will help ensure the  black mark on your credit report does not completely decimate your credit score so you can still start rebuilding your credit.

Once you obtain your credit report and see that old debts are still showing even though they should be removed, it is important that you know what steps to take.

Send a Letter Disputing the Debt

In most cases, you do not need to do anything to have old debts removed from your credit report. The credit bureaus will schedule when they should remove the debt and the process will happen automatically. Keep in mind that this only applies to old debts and other negative information. Credit bureaus have their own guidelines pertaining to when to remove other information, which is not regulated by law. However, if negative information is not removed in the time required, you can start the dispute process by sending a dispute letter to the credit bureau that is still reporting your debt.

A dispute letter is just that. It is a letter you send to the credit reporting bureaus that states that the debt is old and that you would like it removed from your credit report. When sending your letter, include any evidence that supports your claim, such as documentation pertaining to the debt that shows the last date of delinquency.

Under the Fair Credit Reporting Act, the credit bureau should respond to your letter within 30 days of receiving your letter. This is one reason it is so important to send your letter via certified mail, as the receipt will show you what date the agency received your letter.

After receiving your letter, the credit reporting agency should conduct an investigation. This process involves the agency contacting the lender or debt collector that initially reported the delinquency. Sometimes, lenders and debt collectors place a new date on the debt, which is illegal. If, after the credit bureau’s investigation the debt is still not taken off your report, you will need to take additional steps.

Starting a Dispute with the Creditor

When a dispute with the credit reporting bureau does not result in an old debt being removed, your next step is to dispute the debt with the creditor that reported the negative information to the bureau. Your dispute letter to the creditor will look very similar to the dispute letter you sent the credit reporting bureau. You should indicate that there is an incorrect delinquency date for the debt and, if you have proof of the last date of delinquency, you should include this in your letter as well. Documentation may include an old past due notice, billing statement, or previous credit report.

Creditors and debt collectors, just like the credit reporting bureaus, must conduct an investigation into your dispute. They also must respond to your dispute within 30 days of receiving your letter, which is why it is also important that you again send the letter by certified mail. After the investigation, the creditor or debt collector must provide proof that the debt is not old and, therefore, will remain on your credit report. If they cannot provide this proof, they must remove the debt from your credit report.

Credit Reporting Time Limit vs. Statute of Limitations

Many people confuse the credit reporting time limit with the statute of limitations on their debt. It is crucial that you do not make this same mistake so that you are only disputing debts that should be removed from your credit report.

Again, the credit reporting time limit is six to seven years, after which time the debt must be removed from your credit report. The statute of limitations on debt, on the other hand, is five years in Florida. This means that once your debt is five years old–and if you have not made any payments on it–the creditor cannot file a lawsuit against you to recover that debt. However, a debt can still appear on your credit report even once the statute of limitations has passed.

Are You Facing a Debt Lawsuit? Our Florida Debt Defense Lawyers can Help

Learning that a creditor or debt collector has filed a debt lawsuit against you is scary, and you may not think there is anything you can do about it. At Loan Lawyers, our Fort Lauderdale debt defense attorneys know that is not true, and that there are several defenses to these lawsuits. When someone has taken legal action against you in regards to debt, call us at (954) 807-1361 or contact us online to schedule a free consultation.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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Back to Basics: What is Bankruptcy?

No one ever wants to file bankruptcy but, sometimes, it is the only option. Many people understand that bankruptcy is a way for people to discharge their debt so they can get a fresh start and begin rebuilding their credit. Unfortunately, this is the extent of the knowledge many people have on the subject before they file. What is bankruptcy, though, and what is involved in the process? These are important things to understand before you even file or embark on the process. Understanding the bankruptcy process will ensure you know what to expect, and the positive and negative effects you may face afterward.

What Is Bankruptcy?

Bankruptcy is a legal process that allows individuals, couples, and even businesses to discharge their debts when they are unable to pay them. Each type of bankruptcy has different processes and different qualifying factors. Essentially, bankruptcy allows people to get a fresh financial start by clearing the slate.

A discharge is a court order that prohibits any debt collector or creditor from trying to recover the debt from the borrower. Discharges are also sometimes known as bankruptcy injunctions. A judge will only issue a discharge order after the borrower has met all the terms of the bankruptcy agreement and adhered to the payment plan created during the process, or if the bankruptcy court decides otherwise. The terms are different for varying bankruptcy cases, depending on the type of bankruptcy being filed.

The Different Types of Bankruptcy

The Bankruptcy Code outlines six different types of bankruptcy, although most people only think of the two most common types.

• Chapter 7 bankruptcy is by far the most common type of bankruptcy people file. This type of bankruptcy is best suited for people that have little hope of repaying their debts. During a Chapter 7 bankruptcy, a person’s assets are divided into exempt and non-exempt property. Any property that is not exempt is sold and the proceeds are distributed to the creditors the borrower still owes in an attempt to repay at least a portion of the debt. In turn, the borrower’s debts are discharged and they no longer owe them, nor can creditors attempt to collect on the debt.
• Chapter 13 bankruptcy is another very common type of bankruptcy, although it is less commonly used than Chapter 7. During a Chapter 13 bankruptcy case, the borrower’s debts are not necessarily discharged. Instead, the borrower meets with the bankruptcy trustee and creditors to devise a repayment plan. Over a period of three to five years, the borrower then repays the debt. In a Chapter 13 bankruptcy, the amount of the debt is often reduced, making the payments even more affordable.

Other types of bankruptcy include:

• Chapter 11, used by businesses
• Chapter 9, used by municipalities and their organizations, such as hospitals and school districts
• Chapter 12, used by family fishermen and family farmers
• Chapter 15, used by foreign borrowers that have actions pending in other countries

Anyone considering filing for bankruptcy should speak with a bankruptcy lawyer who can help them determine which type of bankruptcy they should file.

How Does Bankruptcy Work?

Borrowers can only file for bankruptcy if they are in good standing with the courts. Debtors are also required to attend a credit counseling course with an approved agency within 180 days prior to filing bankruptcy. The courts do not want to discharge a person’s or company’s debt only for them to accumulate mass debt in the future and have to file bankruptcy again. This is the reason anyone filing must take the credit counseling course. The court will not discharge any debt for a borrower who has not taken the course.

Other than the above requirements, each type of bankruptcy will also have its own set of rules and regulations. However, there are some similarities between each type of bankruptcy. Namely, these include the use of trustees and the objective of getting debts discharged.

The U.S. Bankruptcy Courts govern bankruptcy cases as dictated by the U.S. Bankruptcy Code. Due to the fact that bankruptcy is a federal process, the bankruptcy courts are branches of the federal district court system. Bankruptcy judges are appointed by federal judicial committees and they govern the process in bankruptcy court.

Bankruptcy trustees are also an integral part of the bankruptcy process. Trustees are not judges, but they do oversee the case and review any documents submitted by the borrower. During a Chapter 7 bankruptcy, the trustee will try to sell any property of the borrower that is not exempt from the bankruptcy process. In a Chapter 13 bankruptcy case, the trustee will help devise the repayment plan and coordinate payments the borrower makes to the different creditors. In any bankruptcy case, the trustee will also look for any fraudulent activity, such as when a borrower fails to disclose important information. Trustees have a fiduciary duty to creditors and must work to collect as many assets from the borrower as possible to repay the creditors and debt collectors.

After a judge approves a bankruptcy for a borrower, creditors can no longer try to collect on the debt, as long as the borrower meets all terms and conditions of the bankruptcy. A borrower’s debt is only discharged once they have met all of these terms and conditions. It is important to note that while a bankruptcy discharge provides relief from many different types of debts, it is not all-inclusive. Certain debts, such as outstanding taxes and child support, cannot be discharged through bankruptcy.

It is also important for borrowers to understand that the impacts of bankruptcy will be felt for several years. A bankruptcy can stay on a person’s credit report anywhere from seven to 10 years, making it harder for the borrower to obtain credit, housing, employment, and other opportunities.

Our Fort Lauderdale Bankruptcy Attorneys Can Help with Your Case

If you are drowning in debt and need a way out, you may have considered filing for bankruptcy, but you should not do it alone. At Loan Lawyers, our Florida bankruptcy attorneys will ensure you file correctly, ensure you meet all requirements and conditions, and give you the best chance of a successful outcome. Call us today at (954) 807-1361 or contact us online to schedule a free consultation.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.

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Facing Foreclosure? You May Be Able to Stop It

The coronavirus pandemic has caused economies to shut down throughout the country, and millions of people have been furloughed, or have lost their job for good. Experts are predicting that due to these challenging conditions, hundreds of thousands of homeowners will face foreclosure within the next year. In Florida alone, some believe the foreclosure rate will increase by 300 percent. So, if you are a homeowner in the Sunshine State and you are in fear of losing your home, it is important that you understand the steps to take to stop it.

What Not to Do When Facing Foreclosure

Before taking steps to stop a foreclosure, it is important that all homeowners know what to avoid.

If you are facing foreclosure, you should be wary of:

• Individuals who claim they can stop the foreclosure if you sign over the title to your home.
• Individuals who want you to authorize them to set up financing they claim will save your home.
• Foreclosure prevention companies or loss mitigation companies that charge exorbitant fees.
• Mortgage brokers who want to charge you upfront, which is illegal under Florida law.
• Mortgage brokers, attorneys, and other professionals that cannot prove they are licensed in the state.
• Individuals or companies who offer to purchase your home in a foreclosure sale and rent it back to you in a rent-to-own strategy.
• Anyone who offers to negotiate with your servicer or lender and that is not a mortgage broker or lawyer.
• Any company that charges an upfront fee, claims they can stop the foreclosure and encourages you to stop making payments.

Now that you understand what not to do, it is important that you also know the steps you should take. There are several ways to stop a foreclosure and the one you choose will likely depend on whether or not you want to keep the home.

Keeping Your Home when Facing Foreclosure

Homeowners facing foreclosure often think the situation is hopeless and that losing the home is inevitable. Fortunately, this is not always true.

There are many possible solutions that can help you keep your home, including:

• Loan modification: A loan modification will permanently change one or more of the terms of the mortgage loan. Loan modifications can change the interest rate, the length of the loan, and even the principal amount. Of course, your lender has to agree to a loan modification so, when requesting one, it is best to work with an attorney who can negotiate on your behalf.
• Forbearance: A solution that many have turned to during this very difficult time, a forbearance temporary suspends or reduces your mortgage payments. However, forbearance does not usually suspend the interest that will accrue. Lenders are often willing to offer a forbearance if the homeowner can show that they will soon get back on their feet financially and continue to make mortgage payments.
• Reinstatement: Reinstatement works quite simply – you agree to pay a lump sum that will bring your mortgage out of default, and you must pay that lump sum by a certain date. Always ask your lender about any penalties, fees, and other expenses that can drive up the amount of the lump sum, as they are sometimes quite high.
• Repayment plan: A repayment plan works similarly to reinstatement. The lender will add up the amount you are overdue and will add a small percentage of that amount to your monthly mortgage payment. Due to the fact that you will only pay back a little bit at a time, a repayment plan takes longer than reinstatement to bring your mortgage up to date.
• Refinancing: Refinancing a mortgage is not the best option for everyone who is facing foreclosure, but it can work in certain situations. Refinancing is different from a loan modification because it gives you an entirely new mortgage instead of simply changing the terms of your existing loan.

In some cases, your lender may combine these options. For example, they could agree to a loan modification and a repayment plan.

Not Keeping the Home when Facing Foreclosure

No one wants to think about losing their home but, in some situations, it is the only way to avoid foreclosure. Although the below options will not help you keep your home, they will keep the foreclosure off of your credit record, which is extremely harmful.

The three most common ways to avoid foreclosure when you do not plan on keeping the home include:

• Short sale: A short sale occurs when the homeowner sells a home to a buyer for less than what is owed on the mortgage. The lender may write off the difference, or they may pursue a deficiency judgment against the original homeowner.
• Deed-in-lieu: Sometimes, a lender will agree to accept the deed to the home in lieu of filing a foreclosure lawsuit. A deed-in-lieu will not work if there are additional mortgages on the property or if there are liens against the property, such as those for unpaid taxes.
• Assumption: This option is not as common as the other two, but is still sometimes a possibility. An assumption occurs when a buyer purchases the home and takes over the debt on the mortgage.

No matter the solution you choose for avoiding foreclosure, you will have to work and possibly even negotiate with your lender. A foreclosure defense attorney can take on this task for you, and give you the best chance of a positive outcome.

Our Florida Foreclosure Defense Lawyers Are Here to Help

If you are facing foreclosure, it is important to understand that there are ways to avoid it and keep the foreclosure off of your credit report. At Loan Lawyers, our Fort Lauderdale foreclosure defense attorneys will review your case, outline the options and advise on the one best for you, and communicate with your lender on your behalf. Call us today at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations.  Contact us for a free consultation to see how we may be able to help you.

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Wage Garnishment FAQs

The term ‘wage garnishment’ is enough to strike fear in the heart of just about anyone. Everyone relies on their income to pay for daily expenses including their mortgage, utilities, and groceries. So, learning that a portion of your paycheck is going to be withheld is very scary. Although wage garnishment is a legal option for debt collectors and creditors, it does not give them complete power like so many people believe.

Wage garnishment is a very misunderstood process and it is natural to have many questions, particularly if you have just learned that you may lose a portion of your income. Below are some of the most frequently asked questions about wage garnishment, and the answers to them.

What Is Wage Garnishment?

A wage garnishment is a legal procedure in which a portion of a person’s paycheck is withheld due to the non-payment of a debt. Employers withhold a portion of the debtor’s paycheck and send it to the creditor or debt collector. To obtain a wage garnishment, a debt collector or creditor must go through a legal process and obtain a court order to have a person’s paycheck withheld.

Although wage garnishments obtained by creditors are the most common type of wage garnishment, there are others as well. The IRS or a Florida tax collection agency can also obtain a wage garnishment when someone has not paid their taxes. Federal agencies such as the IRS may also obtain an administrative garnishment for debts owed to the federal government that are not taxes.

When a person volunteers to have their employer withhold a certain amount of their income to repay a creditor, that is considered a voluntary wage assignment. As such, they are not considered wage garnishments. Other deductions, such as payments made to the employer for uniforms or other items necessary for a person’s employment are also not deducted from a person’s gross income when calculating the wage garnishment.

What Rights Do Consumers Have?

It is important that anyone in fear of a wage garnishment understands that they have rights. The Consumer Credit Protection Act allows creditors to take only a certain amount of an employee’s income. The Act also prohibits employers from firing employees when their check is garnished for just one debt.

Who Does the Law Apply To?

The Consumer Credit Protection Act is a federal law, meaning that it applies to all Americans in every state. The law also protects all personal earnings a person receives. This applies not only to paychecks, but also to pensions and other retirement accounts. In most cases, tips are not considered personal earnings under the law.

Can My Employer Fire Me for a Wage Garnishment?

Employers generally do not like wage garnishments. The responsibility of withholding an employee’s income and sending it to the debt collector is theirs, and employers generally do not want to deal with the additional hassle. As such, it is natural for employees to worry if their employer will fire them over a wage garnishment. The answer is that it depends.

The Consumer Credit Protection Act makes it illegal for employers to fire an employee over a single wage garnishment. However, if an employee has two or more distinct garnishments for two or more debts, the law does not prohibit an employer from firing an employee.

How Much Can Creditors Withhold?

The income amount that is subject to garnishment is based on a person’s disposable earnings. This is the amount of earnings remaining after deductions required by law, such as taxes, are subtracted. However, other deductions that are not required by law, such as a voluntary wage assignment, are not excluded from an employee’s gross earnings when calculating the amount to be withheld from their disposable earnings.

The law does set limits on how much of a person’s income can be obtained through a wage garnishment. For most garnishments, including those related to an unpaid debt, the law places a limit of either 25 percent of the debtor’s disposable earnings, or the amount by which a person’s disposable income is more than 30 times the federal minimum wage.

If a person makes $217.50 in disposable earnings in one week, those earnings cannot be garnished. Any income over that amount may be subject to garnishment. When an employee’s disposable income is more than $290, a debt collector may garnish up to 25 percent. If, on the other hand, the pay period incorporates more than one week, a calculation must include multiples of the restrictions on earnings to determine how much income is to be garnished.

Although the above outlines federal law, Florida also has state laws surrounding wage garnishment. Under Florida law, any disposable income that is less than 30 times the minimum wage cannot be subject to wage garnishment. In the event that state law deviates from the federal law, creditors and debt collectors must garnish the smaller amount.

Are Wage Garnishments for Child Support and Alimony Different?

When a person’s wages are garnished for child support or alimony, the law is slightly different. For these debts, an employee may have up to 50 percent of their disposable earnings garnished if they are supporting another spouse or child. If the employee is not supporting another spouse or child, they can have up to 60 percent of their wages garnished.

Do I Need a Florida Debt Defense Lawyer?

Creditors and debt collectors do have a lot of rights when it comes to wage garnishment. However, they also have certain limitations and they do not always want to comply with the law. For this reason, it is crucial to speak to a Fort Lauderdale debt defense lawyer who can help.

At Loan Lawyers, our knowledgeable attorneys will fully explain how wage garnishment works, and answer any questions you have. We will always work in your best interests and ensure your rights are upheld. Call us today at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.

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