South Florida continues to struggle with foreclosures

According to the most recent data, areas of South Florida are still feeling some aftershocks from the recession of 2008. According to data released by RealtyTrac, one out of every 87 homes in Miami-Date, Palm Beach and Broward counties is in foreclosure, making the area the sixth highest foreclosure rate of all major metro areas in the U.S. Unfortunately, this is not an isolated incident, as there are 95,000 homes in foreclosure across Florida. This means that one out of seven of the nation’s homes in foreclosure are located within the state.

Although these statistics prove that you are not alone if you are one of the Floridians facing foreclosure, it is cold comfort. You likely feel stressed out and powerless. However, in reality, you have options. One of which is bankruptcy, which has helped millions stop foreclosure and save their homes.

How Chapter 7 can help

Once you file either type of bankruptcy, the automatic stay kicks in and stops your lenders from continuing the foreclosure. However, the protection that the stay provides differs depending on the type of bankruptcy you file. As a result, it is necessary to think carefully about the right type of bankruptcy for you before you file.

During Chapter 7, the stay’s protections against foreclosure do not last the entire length of the bankruptcy. If you are unable to catch up with your mortgage within a few months, your lender may ask the bankruptcy court to lift the stay and allow the foreclosure process to continue.

Although this fact may make it seem like Chapter 7 is unsuitable for those struggling with foreclosure, this is not always the case. Chapter 7 can help by quickly discharging your credit cards, medical debt, personal loans and other unsecured debts. Once free of this debt, you can devote your finances to becoming current on your mortgage. For some, the quick discharge of other debts is sufficient to enable them to catch up with their mortgage.

Chapter 13 offers more help

Although some people can save their homes through Chapter 7, it is not always the right decision for everyone. If you have a regular income and need more than a few months to catch up with your mortgage, Chapter 13 can help. During this type of bankruptcy, the stay’s protections last the entire duration of the bankruptcy, provided that you continue to keep up with your obligations.

During Chapter 13, the overdue portion of your mortgage becomes part of the payment plan. Under the plan, you make a monthly payment towards it over three to five years. Since the payments are stretched out over several years, and the amount you must pay each month is calculated according to your disposable income, you will find that the plan payments are affordable. In addition, the Bankruptcy Court has a loan modification program with a very high success rate where your lender is obligated to attend a mediation to review you for a permanent loan modification. This program allows you to make a payment to save your home based upon your income.

During the entire duration of the repayment period, the automatic stay is in effect, which prevents your lenders from restarting foreclosure proceedings, provided that you keep up with the monthly payments. Of course, you may remain in your home throughout the entire repayment period. Once you have made the last payment under the plan, you are caught up on your mortgage and free of most other pre-bankruptcy debts.

An lawyer can advise you

Since bankruptcy may or may not be the best way to save your home, it is vital to consult with an experienced bankruptcy lawyer before engaging in any kind of debt relief solution. a lawyer can review your situation, advise you on effective and legal solutions to your problem and recommend the one that would best fit your unique needs.