Foreclosure Surplus: What is it and am I entitled to receive?

In a foreclosure lawsuit, after a foreclosure sale of the property is held and after the proceeds from the sale of the property have been distributed as required by the Final Judgment of Foreclosure, there are leftover or extra funds. These funds are called surplus funds. The Clerk of Court will file a Certificate of Disbursements that can be located on the Court’s docket website that would show the amount of funds that would be categorized as surplus funds.

Pursuant to Florida Statute § 45.032(2), “There is established a rebuttable legal presumption that the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” This means that if you owned the property that was the property involved in the foreclosure lawsuit where it was determined that the surplus funds exist and you owned that property on the day that the lis pendens (formal notice of pending legal action) for the foreclosure lawsuit was filed, then you are considered to be the owner of record and are eligible to make a claim for the surplus funds. Owners of record may also grant or assign their legal right to make a claim for the surplus funds.

In the case of surplus funds, sometimes subordinate lienholders will also make claims for the surplus funds. Subordinate lienholders include but not limited to “a subordinate mortgage, judgment, tax warrant, assessment lien, or construction lien” as defined in the defined in the Florida Statutes. These lienholders are often named Defendants in the case, and you may be familiar with them as your homeowner or condominium association or second mortgage holders. These subordinate lienholders may make claims on the surplus if the full amounts of their liens were not paid from the proceeds of the foreclosure sale and as such, they seek to be paid out from the surplus funds.

It is also common that Plaintiff’s in the foreclosure lawsuit will have incurred additional costs or fees after the foreclosure sale. Provided that the Final Judgment of Foreclosure allows for Plaintiff to seek these amounts and provided that the Plaintiff provides evidence in support of the additional costs or fees sought from the surplus funds to the Court, Plaintiff may also make a claim for the surplus. If you are in a situation wherein a foreclosure sale has been held and you would like to know if you are entitled to make a claim for the surplus funds, please contact us.

Loan Lawyers has helped over 7,000 South Florida homeowners and consumers with their debt problems, we have saved over 3,000 homes from foreclosure, eliminated more than $100 million dollars in mortgage principal and consumer debt, and have recovered over $25 million dollars 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 Deal with Harassment from Debt Collectors in Florida

If you have fallen into debt due to a mortgage, credit card, student loan, or car loan, a debt collector will likely start calling you. While all borrowers dread these calls, many do not realize that debt collectors violate their rights. Debt collectors are allowed to contact you to try and recover the debt in many situations. However, they are not allowed to harass you or otherwise violate your rights. If a debt collector in Florida has contacted you, it is essential that you speak with a debt defense lawyer that can help you throughout your case.

Understand Debt Collection Harassment

Both state and federal law protects borrowers from harassing, abusive, or deceptive tactics from debt collectors. Specifically, these laws are the Fair Debt Collection Practice Act (FDCPA), which protects consumers throughout the country. The state law that protects Floridians is the Florida Consumer Collection Practices Act (FCCPA). Both of these laws are in place to protect debtors and to ensure that they are treated fairly. The laws became necessary when debt collectors started to use abusive and fraudulent methods to try and recover debt from consumers.

Debt collectors will use many different tactics to try and collect on debt, and many of them are illegal. Strategies included in the FDCPA and the FCCPA that are a violation of the law include:

• Threatening a wage garnishment if they have no intention of following through on it
• Threatening you with liens against your property, or to impound certain property, such as a vehicle, without the intention of following through
• Threatening an arrest
• Threatening to take any legal action against you without intending to follow through on the threat
• Contacting relatives, friends, or neighbors about your debt
• Calling multiple times a day
• Contacting you at your place of employment
• Trying to collect a debt you do not owe
• Trying to collect on a debt they can no longer recover because the statute of limitations has expired
• Calling before 8:00 a.m. or after 9:00 p.m.
• Trying to collect on a debt that was discharged in a bankruptcy case
• Contacting you after asking them to stop
• Being dishonest about the amount of the debt
• Contacting you when you have legal representation
• Using deception, such as lying to you, to try and recover debt
• Using abusive or improper language

The above tactics are a violation of your rights. If a debt collector has engaged in them, it is critical that you speak to a debt defense lawyer as soon as possible.

File a Complaint Against the Debt Collection Company

If you believe a debt collector has violated your rights, you can file a consumer complaint with the appropriate government agency. The Consumer Financial Protection Bureau investigates and enforces violations of the federal FDCPA. The Florida Office of Financial Regulations investigates FCCPA violations. It is important to file a consumer complaint against any unethical debt collector. In addition to your complaint, you may also be able to file a lawsuit against a debt collection company.

Whether you are filing a consumer complaint or a lawsuit to recover damages, the steps you take immediately after the harassment are crucial. First and foremost, it is critical that you document the deceptive, abusive, misleading, or harassing behavior you experienced from the debt collector. This documentation can include emails, letters, and even texts from the debt collector.

If you send any documents to the debt collector, particularly if it involves you denying the debt, asking the company to verify the debt, or requesting that the debt collection company stops contacting you, it is crucial to take copies of these so you have these documents for your own reference.

It is just as important to remember that you cannot legally record phone calls unless you have the other party’s permission to do so. Instead, just take notes about any contact you have had with the debt collection company. Write down where you received the call, when you received the call, and a summary of what was said during the call. These notes will help you when you start working with a debt defense lawyer who can then determine if your rights have been violated.

File a Lawsuit to Collect Damages

When a debt collector violates your rights, you then have the right to file a lawsuit against them to collect damages. Under the FDCPA, you may be able to obtain actual or statutory damages of up to $1,000. Under this law, you can also recover your attorney’s fees and any expense you incurred as a result of pursuing the lawsuit. To obtain these damages, you will have to show that you incurred harm as a result of the debt collection’s wrongful conduct.

Under the FCCPA, you can also obtain up to $1,000 in statutory damages, as well as your attorney’s fees and any cost you incurred as a result of the lawsuit. Actual damages are the losses you have suffered as a result of the debt collection harassment.

It is not always easy to determine the amount of damages you are entitled to because often, the losses sustained in debt collection cases are annoyance, aggravation, frustration, and other emotional issues. While you can claim emotional distress, these damages are not easy to quantify. A Florida debt defense lawyer can evaluate these damages and give you the best chance of success while trying to obtain them.

Our Debt Defense Lawyers in Florida Will Protect Your Rights

If a debt collection company has been contacting you over unpaid debts, they may have broken the law and you may not even be aware of it. At Loan Lawyers, our Florida debt defense lawyers can identify if your rights have been violated and if so, help you take the legal action that will protect you and allow you to obtain the full damages you deserve. Call us now at (954) 523-4357 or fill out our online form to request a free consultation and to learn more about how we can prepare the defense your case needs.

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9 Steps to Take if LVNV Funding, LLC is Suing You

Receiving notice that you are being sued is always alarming. It is natural to not know what to do, or what steps to take. A debt defense lawyer in Fort Lauderdale can help you through the proper steps and give you the best chance of success with your case. In the meantime, you can prepare yourself by gaining a general understanding of what to do next, and the appropriate steps to take, which are outlined below.

Know Who You are Dealing With

LVNV Funding, LLC is a third party debt collection company. They are based in Nevada, but they file lawsuits against people all over the country, including many right here in Fort Lauderdale. As of 2021, the company had 901 complaints against them in the last three years alone. LVNV Funding, LLC, often outsources the accounts of many borrowers to a company known as Resurgent Capital Services. Resurgent Capital Services has been given an A+ rating by the Better Business Bureau, despite the fact that the company has 4,978 complaints in the last three years, as of 2021.

Like other third party debt collection companies, LVNV Funding, LLC purchases debt from creditors such as hospitals, credit card companies, retail outlets, and more. As such, if you have been sued by them, or by Resurgent Capital Services, it is likely over debt you borrowed from someone else.

Get Ready to Take Action

LVNV Funding, LLC is hoping that you will receive notice of the lawsuit and simply ignore it. The company is known for preying on borrowers that are overwhelmed, struggling financially, and that cannot handle the paperwork and conflict that a lawsuit brings.

When they file a lawsuit against you, they are hoping that you will ignore it and not contest it or prepare a defense. They win many of their lawsuits this way, and it is the easiest way from them to recover the debt you allegedly owe. If you do not respond to the lawsuit, the company will obtain a default judgment against you. Once they have this, they can then take further action against you, such as garnishing your wages, without even notifying you first.

It is critical that you prepare yourself to take action if you have received notice of a lawsuit. You may not know that there are many defenses available, but there are and a Fort Lauderdale debt defense lawyer can explain what those are.

Read All Legal Paperwork Thoroughly

The paperwork you receive that notified you of the lawsuit will be full of complicated legal jargon. Still, it is important to read through the complete package completely and when doing so, it is important to focus on three components. Those are the time, dollars, and dates included in the package. Many times, understanding the wording of these documents is difficult, so it is important to speak to a debt defense lawyer that can help you make sense of it all.

Respond to the Lawsuit

In Florida, you have only 20 days to respond to the lawsuit. For this reason, it is crucial that you respond to the lawsuit as soon as possible. If you do not respond at all, LVNV Funding, LLC can obtain a default judgment against you. Likewise, if you rush to file your response at the last minute, you could make mistakes that could hurt you in the future.

When writing your response, remember that an inability to pay is not a defense. If the company can prove that you owe the debt, and that they own the account, they can still obtain a judgment against you. It is usually best to work with a Fort Lauderdale debt defense lawyer that can help you prepare a credible answer that shows you are taking the lawsuit seriously. A lawyer will be able to help you at a much lower cost, and can help you obtain an extended payment plan, if applicable.

Follow Up with Requests for Documentation and Information in a Timely Manner

You may have to provide additional responses after filing your answer to the initial lawsuit. Throughout the lawsuit process, the other side may ask you for certain information and documents. This generally happens during the discovery phase. If you do not respond to these requests appropriately, the judge may not look kindly on you and it could hurt your case.

Ask for Information

While LVNV Funding, LLC has the right to ask you for certain information, you also have the legal right to ask them for information. Ask for documentation that proves you owe the amount the company is asking for, and that justifies any penalties or fees they have added to the original debt. Demanding this information can provide the information you need for your defense.

Do Not Continue Making Payments

If the statute of limitations, or time limit, has expired on the debt, you can use that as a defense in your case. However, any time you make a payment, it can restart the clock on the statute of limitations. Making payments will not make the case go away, and could hurt you more than it could help.

Negotiate a Settlement

If you do owe the debt to LVNV Funding, LLC, they may be willing to negotiate a smaller amount in order to close the case. Work with a lawyer that can negotiate on your behalf and put any negotiated settlement into writing so there are no disputes in the future.

Contact a Debt Defense Lawyer in Fort Lauderdale

If you are being sued by LVNV Funding, LLC, it is critical that you speak to a Fort Lauderdale debt defense lawyer as soon as possible. At Loan Lawyers, we can help you take the above steps and represent you in court, if that is where your case is headed. We will prepare the best defense for your case and give you the best chance of a successful outcome. Call us now at (954) 523-4357 or contact us online to request a free consultation so we can get started on your case.

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Can I Modify My Mortgage in a Chapter 7 Bankruptcy?

When filing bankruptcy, you will have many questions. One of the most common questions our Fort Lauderdale bankruptcy lawyers here is whether or not they can save their home when filing Chapter 7 bankruptcy. While you can save your property when filing Chapter 13 bankruptcy, Chapter 7 bankruptcy does not provide such a mechanism. Still, you can file Chapter 7 and then approach your lender with a request for a loan modification, sometimes referred to as a workout.

Still, whether or not you are given a modification is entirely at the discretion of the lender. Even if they agree, you will also still likely have to wait until the lender determines that the bankruptcy trustee will not sell the home to distribute the proceeds of the sale to your creditors.

Control of Your Home when Filing Bankruptcy

The typical Chapter 7 bankruptcy case takes approximately four to six months before it is finalized. In the best of cases, this means that your debt has been discharged and you will no longer be responsible for those debts. As you move through your case, your property is moved over into the bankruptcy estate. You can still access your property during this time, and you will also retain control over it. However, you will share these rights with the bankruptcy trustee that oversees your case. The court will appoint the bankruptcy trustee at the beginning of your case and you will work closely with them throughout the entire process.

Your Property and the Trustee

Once your home becomes part of the bankruptcy estate, you are prohibited from taking certain actions. For example, you cannot try to sell the home or encumber it in any way, which includes requesting a loan modification from your lender. The only way you can do this is with permission from the court. The reason you cannot take action is because the bankruptcy trustee has to determine whether the creditors you owe money to have a claim over the property, or any proceeds from its sale.

There is a chance that the bankruptcy trustee will abandon your property. When they do this, they have determined that the home will not benefit the estate and essentially, that it cannot be liquidated to distribute the proceeds to your creditors. If the trustee decides that abandoning the property is the best decision, they will file a notice with the court. This notice will release control of the home from the bankruptcy trustee and the property will return to your control. If the case is not very complex, the trustee will attest at the 341 meeting of the creditors that your case is one that does not involve any assets.

A 341 meeting of the creditors is a meeting in which you will meet with your creditors and the bankruptcy trustee. During this meeting, the creditors you owe money to will have a chance to ask you questions, which you must answer under oath. The questions will pertain to your assets, debts, and anything else relevant to your bankruptcy case. If the bankruptcy trustee has deemed that your case is one that does not involve assets, they will file a no asset report with the bankruptcy court after the 341 meeting.

There is a possibility that the bankruptcy trustee will not abandon your property. If this is the case, it is likely due to the fact that the home still has value that cannot be protected with a bankruptcy exemption. When this is the case, the bankruptcy trustee can use any assets that are non-exempt to pay your creditors. Anyone who files for bankruptcy can exempt certain assets, such as your home, from the bankruptcy process. In reference to a home, you can generally protect up to a certain value using an exemption.

The value that can be protected in a bankruptcy state varies from state to state. In Florida, the homestead exemption protects a residence if it is the primary residence of a borrower, and the homeowner has lived in the home for 40 months or more, and the property is smaller than one-half acre in a municipality, or smaller than 160 acres elsewhere.

If your home has more equity in it than you can exempt, or the property is otherwise ineligible, such as being larger than one-half acre, the bankruptcy trustee may decide to sell it so the proceeds can be used to pay your creditors. Before the home can be sold though, the bankruptcy trustee will have to repay the balance of the mortgage, cover the cost of the sale, and their own commission. The bankruptcy trustee must also provide you with the value you are allowed to exempt.

Obtaining a Loan Modification

Bankruptcy trustees need a lot of time to evaluate the situation and go through the complex process of selling the homestead. During the time in which the bankruptcy trustee is making this decision, you can approach your lender and ask them to modify the mortgage loan. The lender may even contact your lawyer in writing inviting you to do this.

If the bank approves the loan modification request, and the bankruptcy trustee has not yet abandoned the home, you will need to take one of two actions. You will either need to file a motion with the bankruptcy court asking them to approve the loan modification, or you will have to contact the bankruptcy trustee and ask them to file notice that they are abandoning the property.

Our Bankruptcy Lawyer in Fort Lauderdale Can Assist with Your Case

Bankruptcy will offer you a chance at a fresh start, but the process is a complex one. At Loan Lawyers, our Fort Lauderdale bankruptcy lawyer can help you through the process, answer all of your questions, and give you the best chance of a positive outcome. Call us today at (954) 523-4357 or contact us online to schedule a free consultation and to learn more about how we can help.

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Is Credit Corp. Solutions Suing You for Unpaid Debt?

Credit Corp. Solutions is one of the biggest debt collectors in the country, but that does not automatically mean they always follow the law. The company has had many complaints filed against it, mainly for harassing phone calls and other forms of contact. If the company has threatened you with a lawsuit, or they have already taken legal action against you, it is important that you do not ignore it. Many people panic at the thought of a lawsuit and they think ignoring it will make it go away. Unfortunately, that will not happen.

If you ignore a lawsuit that Credit Corp. Solutions files against you, the company will likely win their case, and could then garnish your wages or take other negative action against you. Instead, it is best to speak to a Broward County debt defense lawyer that can review your case and determine the defense that is best suitable for your case.

Who is Credit Corp Solutions?

Credit Corp. Solutions is a third-party debt collection company that is based out of Utah, but they collect debts around the world. Many of the borrowers they take legal action against are right here in Broward County.

Like so many other debt collection companies, Credit Corp. Solutions does not always comply with the law when they are trying to collect from borrowers. Also as with so many other debt collectors, the company has been the subject of many formal complaints. These complaints vary, but one of the most common filed against the company is that they cannot verify the debt. This type of practice violates the Fair Debt Collections Practices Act (FDCPA). If Credit Corp. Solutions has contacted you, or they have already filed a lawsuit against you, it is crucial that you know your rights before contacting them.

Is Credit Corp Solutions a Scam?

As so many other debt collection companies do, Credit Corp. Solutions often harasses borrowers by constantly calling them, or even using threatening language. Due to these unscrupulous tactics, it is easy to assume that the company is a scam. Unfortunately, it is not. Credit Corp. Solutions is a legitimate business that has been listed with the Better Business Bureau (BBB) since 2016, but the BBB recognizes that the company has been in business since 2011.

The company does business under other names, as well, namely Tasman Credit and Tasman Credit Corp. If you receive notice of a lawsuit under these names, Credit Corp. Solutions are suing you. Regardless of the name used, the organization takes in approximately $1.7 million in profits every year, and that comes from borrowers the company claims owe debt, even when they do not. That amount may make it seem as though there is nothing you can do about the lawsuit but fortunately, that is not true.

Credit Corp. Solutions Collects on Many Types of Debt

Credit Corp. Solutions may be based in Utah in the United States, but the company was actually established over 25 years ago in Australia. Today, the organization collects debts from Americans, but they also still operate in Australia and New Zealand, as well. The company will try and collect on any type of debt it can purchase but they mainly focus on sales finance credit cards, retail financing, and personal loans.

According to the organization, their mission is to use controls and systems to collect on debt, and to benefit overall society in the long-term. They also state that they treat borrowers fairly and responsibly at all times, and that they simply want to help debtors improve their financial position. Sadly, this is untrue. The priority for Credit Corp. Solutions, like most other debt collection companies, is to make as much profit as possible. To do this, they file many lawsuits against borrowers all over the world, even when there is no solid basis for the legal action.

Complaints Against Credit Corp. Solutions

Like so many other debt collection companies, Credit Corp. Solutions has had many complaints filed against it. The BBB has closed only four complaints against the organization and three of the cases were in 2019, so the amount of complaints filed against the company could be increasing. The company has had 15 complaints lodged against it since 2015.

Why is Credit Corp. Solutions Filing a Lawsuit Against Me?

If Credit Corp. Solutions has filed a lawsuit against you, it may be because you have an unpaid debt and they are trying to recover it. Still, Credit Corp. Solutions often file illegitimate lawsuits against borrowers in an attempt to boost their own profits. They hope that debtors will ignore the summons, which is essentially not taking any action to defend themselves.

When that happens, the company will then attempt to obtain a default judgment against the borrower. A default judgment will mean that the company automatically wins their case, and you will automatically lose. In this case, Credit Corp. Solutions may try to garnish your wages, levy your bank account, and take other negative action against you.

It is essential that you speak with a Broward County debt defense lawyer if Credit Corp. Solutions has threatened you with legal action. Debt collectors cannot threaten to file a lawsuit against you, or take any other legal action, unless they fully intend on following through on that threat. A lawyer will review the facts of your case, determine what defense strategy is best for you, and represent you throughout your case.

Our Debt Defense Lawyer in Broward County Can Fight the Lawsuit Filed Against You

If you have been named in a lawsuit filed by Credit Corp. Solutions, it is critical that you speak to a Broward County debt defense lawyer as soon as possible. At Loan Lawyers, our skilled attorneys will review the facts of the case, determine which defense is the best strategy in your case, and represent you throughout the entire case. Call us today at (954) 523-4357 or contact us online to schedule a free case review and to learn more about how we can help.

People Also Ask:

• Does Credit Corp Solutions sue?
• What happens when a collection agency sues you?
• Can you be sued for a charged off debt?

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How Can a Chapter 13 Bankruptcy Help Me as I Emerge From a Mortgage Loan Forbearance?

Millions of homeowners around the country availed themselves of forbearance plans due to the COVID-19 pandemic. Forbearance plans allow a homeowner to miss mortgage payments for a given time period. In the short term, this is great for a struggling homeowner. However, what the banks and loan servicers don’t tell you is what will happen when the forbearance plan ends. We have seen a wide range of offers. Most of the time, we see the loan servicer requiring all missed mortgage payments to be made immediately at the end of the forbearance.

If someone was struggling and could not make payments, where in the world are they going to come up with 6 months of missed mortgage payments at one shot? Plus, many people were delinquent on at least one mortgage payment when they entered the forbearance and for these homeowners, paying all of the missed payments is the only option that we have seen loan servicers offer homeowners in this position.

For many homeowners stuck in this position, a chapter 13 bankruptcy may be a great option to explore. In a chapter 13 bankruptcy, you may be able to get a plan to start making your normal mortgage payments again and get 5 years to catch up on any missed mortgage payments during a forbearance. For someone who is back on their feet and already has a low-interest rate, this could be a great option.

If you are back on your feet but have a high-interest rate, you may want to consider going straight to loan modification or possibly still file a chapter 13 bankruptcy and enter the mortgage mediation modification program in bankruptcy if you live in South Florida. There are many paths that someone could take after a forbearance and navigating the options can be daunting.

It is important to find an experienced South Florida law firm that does loan modification, bankruptcies, and foreclosure defense to help you determine which option may be the best option for you. If you go to a law firm that only offers one of these solutions, they are going to throw your case in the same bucket as everyone else’s case, even if that’s not the best option for you. These options are very nuanced, and it takes many years of experience in saving homes to properly advise someone on which path to take.

At Loan Lawyers, we have helped thousands of Florida families navigate through the stressful process of saving their homes and you can put our experience to work for you. As more and more people need help saving their homes, more and more scams and inexperienced lawyers are going to start popping out of the woodwork. You need the best legal advice and assistance you can get, so call Loan Lawyers today for your FREE legal consultation with one of our attorneys. We will walk you through your options provide you with a solution that is suited to give you the best chance of saving your home. Call us today at 1-888-FIGHT-13 to schedule your free consultation.

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Can I Modify My Mortgage in a Chapter 7 Bankruptcy?

When filing bankruptcy in Florida, you will have many questions. One of the most common questions our Fort Lauderdale bankruptcy lawyers here is whether or not they can save their homes when filing Chapter 7 bankruptcy. While you can save your property when filing Chapter 13 bankruptcy, Chapter 7 bankruptcy does not provide such a mechanism. Still, you can file Chapter 7 and then approach your lender with a request for a loan modification, sometimes referred to as a workout.

Still, whether or not you are given a modification is entirely at the discretion of the lender. Even if they agree, you will also still likely have to wait until the lender determines that the bankruptcy trustee will not sell the home to distribute the proceeds of the sale to your creditors.

Control of Your Home when Filing Bankruptcy

The typical Chapter 7 bankruptcy case takes approximately four to six months before it is finalized. In the best of cases, this means that your debt has been discharged and you will no longer be responsible for those debts. As you move through your case, your property is moved over into the bankruptcy estate. You can still access your property during this time, and you will also retain control over it. However, you will share these rights with the bankruptcy trustee that oversees your case. The court will appoint the bankruptcy trustee at the beginning of your case and you will work closely with them throughout the entire process.

Your Property and the Bankruptcy Trustee

Once your home becomes part of the bankruptcy estate, you are prohibited from taking certain actions. For example, you cannot try to sell the home or encumber it in any way, which includes requesting a loan modification from your lender. The only way you can do this is with permission from the court. The reason you cannot take action is because the bankruptcy trustee has to determine whether the creditors you owe money to have a claim over the property or any proceeds from its sale.

There is a chance that the bankruptcy trustee will abandon your property. When they do this, they have determined that the home will not benefit the estate and essentially, that it cannot be liquidated to distribute the proceeds to your creditors. If the trustee decides that abandoning the property is the best decision, they will file a notice with the court. This notice will release control of the home from the bankruptcy trustee and the property will return to your control. If the case is not very complex, the trustee will attest at the 341 meeting of the creditors that your case is one that does not involve any assets.

A 341 meeting of the creditors is a meeting in which you will meet with your creditors and the bankruptcy trustee. During this meeting, the creditors you owe money to will have a chance to ask you questions, which you must answer under oath. The questions will pertain to your assets, debts, and anything else relevant to your bankruptcy case. If the bankruptcy trustee has deemed that your case is one that does not involve assets, they will file a no-asset report with the bankruptcy court after the 341 meeting.

There is a possibility that the bankruptcy trustee will not abandon your property. If this is the case, it is likely due to the fact that the home still has value that cannot be protected with a bankruptcy exemption. When this is the case, the bankruptcy trustee can use any assets that are non-exempt to pay your creditors. Anyone who files for bankruptcy can exempt certain assets, such as your home, from the bankruptcy process. In reference to a home, you can generally protect up to a certain value using an exemption.

The value that can be protected in a bankruptcy state varies from state to state. In Florida, the homestead exemption protects a residence if it is the primary residence of a borrower, and the homeowner has lived in the home for 40 months or more, and the property is smaller than one-half acre in a municipality, or smaller than 160 acres elsewhere.

If your home has more equity in it than you can exempt, or the property is otherwise ineligible, such as being larger than one-half acre, the bankruptcy trustee may decide to sell it so the proceeds can be used to pay your creditors. Before the home can be sold though, the bankruptcy trustee will have to repay the balance of the mortgage, cover the cost of the sale, and their own commission. The bankruptcy trustee must also provide you with the value you are allowed to exempt.

Obtaining a Loan Modification

Bankruptcy trustees need a lot of time to evaluate the situation and go through the complex process of selling the homestead. During the time in which the bankruptcy trustee is making this decision, you can approach your lender and ask them to modify the mortgage loan. The lender may even contact your lawyer in writing inviting you to do this.

If the bank approves the loan modification request, and the bankruptcy trustee has not yet abandoned the home, you will need to take one of two actions. You will either need to file a motion with the bankruptcy court asking them to approve the loan modification, or you will have to contact the bankruptcy trustee and ask them to file notice that they are abandoning the property.

Our Bankruptcy Lawyer in Fort Lauderdale Can Assist with Your Case

Bankruptcy will offer you a chance at a fresh start, but the process is a complex one.  At Loan Lawyers, a Fort Lauderdale bankruptcy lawyer can help you through the process, explore loan modification, answer all of your questions, and give you the best chance of a positive outcome. Call us today at (954) 523-4357 or contact us online to schedule a free consultation and to learn more about how we can help.

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