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Orlando Bankruptcy Law Blog

Stripping a second mortgage is possible for some in Florida

The housing market crashed significantly hard in Florida. Even though there have been some signs and economic indicators that point to a massive improvement the last few years, some people in Florida simply continue to struggle to pay their mortgage each month, particularly if those people have a second mortgage to meet also. The good news for some families is that there are ways to go about stripping a second mortgage.

It is no secret that taking on a second mortgage and borrowing against the equity in a home was something the banks encouraged just a few short years ago. While a good idea at the time, the crash of the economy meant that equity melted away. In fact, homes were not even worth the amount of the first mortgage, much less the combined amount when the second mortgage was considered. When this scenario is present, there are ways to strip that second mortgage through bankruptcy.

Chapter 13 bankruptcy may be right choice for you

When financial troubles hit, and hit hard, bankruptcy can often be the best way to rein in those troubles and get a fresh financial start. But, some may not realize there are several bankruptcy options available for Florida families, and the exact nature of the financial troubles can determine which type of bankruptcy is best. Knowing the facts about Chapter 13 bankruptcy compared to other types can help you decide if it is or is not the best option for your situation.

Chapter 13 bankruptcy is, in essence, a type of repayment plan. Debt is divided up into secure debt and unsecured debt. With this type of bankruptcy, all of your secure debt is paid back over a time period of three to five years. A percentage of unsecured debt, such as credit card debt and medical bills, may still be owed.

Credit card debt help should be from legitimate source

Those who struggle with credit card debt may feel overwhelmed and distressed when it comes to finding ways to eliminate or control that debt. Florida residents plagued by credit card debt may find it impossible to know whom to trust or what steps to take to control that debt. Knowing the difference between a legitimate source of help and a scam is vital and can save both time and money.

Recently, a case in Florida unfolded as a company was involved in scamming people who had troublesome debt. The scam reached consumers nation-wide. After being identified as a scam, the company was shut down and its assets were frozen. Unfortunately, the scammers had already bilked customers for millions of dollars.

Rise in Florida home foreclosure rate may be fluke

As the economy continues to recover, a noticeable decrease in the home foreclosure rates across the country has been tracked and seen as an important sign of economic progress. Despite this trend toward lower home foreclosure rates in Florida and the rest of the country, new statistics have raised concern for many. The latest figures coming out of Florida show an increase in home foreclosure numbers, underscoring that many homeowners may still be struggling despite the marked improvements across the country.

The latest numbers compare this July to last July. The rate of home foreclosure rose by 16 percent compared to last July. The rise is somewhat alarming considering the rate of home foreclosure in Florida had been on a decline over the last 10 months.

Bankruptcy can help you deal with home foreclosure in Florida

Nothing may be more stressful than a missed mortgage payment except knowing more missed payments are possible due to a financial strain. Those missed or late payments can put a responsible Florida homeowner on the track toward home foreclosure. While in an ideal world anyone behind in mortgage payments would simply be able to catch up, that is not always the case, and people may need to seek options such as bankruptcy to regain control of finances.

Different types of bankruptcy affect the home foreclosure process differently, meaning it is imperative to understand exactly what will occur. Chapter 7 bankruptcy is the most common and will immediately halt the foreclosure process. While a foreclosure may be halted, you will still have to pay back the mortgage if you wish to keep the home. This may not be possible for some.

Drawn out home foreclosure process puts some in bind

Anytime a family faces the possibility of home foreclosure, the stress and actual process can be the start of a lengthy nightmare. Some families in Florida and elsewhere have found the timeline for a home foreclosure has disrupted virtually every other aspect of their lives. For some, there may be limited options, while for others, bankruptcy can be the tool to minimize the overwhelming process and after-effects.

For those who are fighting a foreclosure and trying to keep a home, the family has to essentially double up on housing, meaning maintain two places at once. This can make an already stressful or impossible financial crisis even worse for a family. It can also lead to the decay of neighborhoods as some houses stand empty while a family lives elsewhere trying to muddle through the foreclosure process.

Know the facts and numbers about a loan modification

During the height of the recession, homeowners explored various options for keeping their homes and avoiding foreclosures. One option that gained steam and helped many in Florida was the ability to get approval for a loan modification. Before pursuing that route, a homeowner should understand the statistics, glitches and other options, like bankruptcy, that may work out better in certain cases.

New numbers reveal the path to mortgage loan modification has been difficult for a majority of the homeowners who applied. It has been estimated that 72 percent of applications have been rejected. One bank in particular had a rejection rate of 87 percent. The banks have fired back by stating that many borrowers did not complete paperwork correctly or that homeowners did not make the first payment once approved.

Credit card debt can be managed with bankruptcy

There are many reasons an individual or family may consider filing for bankruptcy. Credit card debt is one of the most common reasons Florida residents turn to bankruptcy as a means of regaining control over their financial futures. When that credit card debt becomes unmanageable, it is vital to understand the different types of bankruptcy and how each type may be beneficial depending on the details of the situation.

For those looking to completely wipe out credit card debt altogether, Chapter 7 bankruptcy may be the best option. Under this type of bankruptcy, credit card debt and other debts can be discharged. This means you will not have to pay back any of the debt if you qualify for this type of bankruptcy.

Florida city leading the charge in credit card debt

Credit card debt in and of itself is not necessarily an indicator of financial hardship. However, a sharp increase in credit card debt or a failure to pay off that credit card debt in a timely manner may be one. Miami, Florida, recently made news as a leading area when it comes to the growth of credit card debt. Already an area struggling to fully recover from the recession, Florida residents may need to look into bankruptcy or other solutions to keep credit card debt from ruining a financial future.

The latest figures indicate the amount of credit card debt rose almost 10 percent in the second quarter of this fiscal year compared to the same quarter last year. The national average rise was only just over 5 percent. This puts the amount of credit card debt for the area at nearly $10 billion.

Chapter 7 bankruptcy may be right fit for some in Florida

Not every family suffers from the same financial problems. Therefore, the same solution to financial problems will not fit every family's needs. For some struggling in Florida, one option that may be a good fit for regaining control over finances is filing Chapter 7 bankruptcy.

Chapter 7 bankruptcy can be a beneficial tool for some who have certain types of debt. Debt such as medical bills, credit card bills and payday loans can be discharged. This means the debts can be written off and do not need to be paid back. This can be invaluable when these are the types of debt that have led to financial problems and affect the future of a family.

Paul Urich
Orlando Office

Law Office of Paul L. Urich, P.A.
1510 East Colonial Drive
Suite 204
Orlando, FL 32803
Phone: 407-896-3077
Fax: 407-896-3041

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