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Orlando Bankruptcy Law Blog

Recent loan modification defaults faster than in previous years

A prominent credit rating agency has published a report on lending trends in Florida and across the country. One area of interest was the default rate for loans that were modified. The study states that a loan modification that took place since 2014 was more like to re-default faster than a loan that was modified earlier.

The agency cites that of those loans that re-defaulted, 75 percent of them defaulted within two years of their modification. Experts say that this percentage is reflective of the credit history of the consumers who need their loans modified. They typically have lower credit scores and may even have had a prior loan modification that failed.

Eliminate anchoring to reduce credit card debt

A noted business school has published a study that suggests there are psychological factors when it comes to paying bills. Households in Florida and throughout the country maintain an average balance of $16,000 in credit card debt at any given time. Many consumers pay only the minimum payment due each month, even if they in a position to pay more.

Recipients of a bill often look at the minimum payment printed on the statement and simply remit that amount each month. Many could afford to pay more, but choose not to do so. The belief is that as long as someone is making the minimum payment, they are doing well, regardless of the balance on the account.

Credit card debt is an emotional issue for many

Florida residents and others throughout the country often get into debt for a variety of reasons. A recent survey conducted by a personal finance website asked questions regarding credit card debt. The survey revealed that emotions play a big part in how consumers view debt.

Many believe that consumers in this country incur credit card debt by overspending on unnecessary purchases while others suggest that people go into debt to help make ends meet. Roughly half of those surveyed say that their spending habits are influenced by emotion. Some may overspend because of stress, while others report that sadness is the cause. The survey also reported that excitement may be a factor in overspending for some. Whatever the emotion, advisors say that it is important to limit emotional spending.

End of federal program will change loan modification program

The new administration in Washington has no plans to replace a program that expired in December after being in place for the past eight years. The Home Affordable Modification Program was established in 2009 in an effort to help struggling families during the mortgage crisis. Many Florida residents and others across the country whose objective was avoiding home foreclosure through loan modification hoped to participate in the program. However, the program was not as successful as the former administration had hoped.

The program was not mandatory for financial institutions. Even those that did participate were not very positive in their assessments of the effort. Critics claimed that the program did not do enough to help homeowners who were in financial trouble. Since the government is not planning to develop a new plan to address these issues, the responsibility will fall to the private sector.

The vital role of credit counseling in your bankruptcy case

Much of the focus on bankruptcy is about how to reduce or eliminate your debt and have a fresh financial start. While it is important that you have good information on the right bankruptcy approach for your situation, there is more you need to know. Since 2005, U.S. bankruptcy law has required that consumers take a credit counseling course as part of their bankruptcy filing. Understanding what this means and how to go about it can save you time and money.

Pay off credit card debt with this trick

About 25 percent of the people in this country think about money more often than any other topic. Florida residents are no exception. There are many strategies to develop financial strength, but one practice can be beneficial in several ways. Paying down credit card debt can reduce minimum monthly payments, thus potentially increasing available cash flow.

Eliminating credit card debt can also save a significant amount of interest. Annual percentage rates can be quite high in some instances, and smaller credit card balances mean lower interest payments. Credit scores can be negatively affected by high credit card balances as well.

Home foreclosure cases would be affected by Florida House bill

A Jacksonville representative recently filed a bill in the Florida House that would give lienholders more rights in foreclosure proceedings. The bill proposes legislation that would allow documentation from bankruptcy cases to be considered in home foreclosure actions. A new section of Florida Statute, titled "Actions in Foreclosure," would be created as a result of the bill.

A lienholder would be able to include any documentation from a bankruptcy case that could show that the defendant planned to surrender the mortgaged property. If a bankruptcy has been discharged, this documentation would indicate that the defendant had relinquished interest in the property and would not defend the foreclosure. The representative explained that a wildcard exemption loophole would be closed by the bill.

Credit card debt payoff can take years

Over 2,500 cities across the county were included in a study conducted by a personal finance website. The amount of credit card debt was analyzed, ranking the participating cities from least to most debt. A determining factor in the ranking was how long it would take to eliminate the debt. Florida residents in some cities unfortunately found themselves near the top of this list.

The study showed that after taking finance charges into account, Jacksonville borrowers would need 51 months to pay off their credit card balances. While Jacksonville Beach residents actually had higher overall balances, the average time to pay off their debts was lower due to a higher median income level there. Elsewhere in Florida, St. Augustine was higher on the list with both a larger average credit card balance and a longer payoff time. 

Florida developer files for Chapter 7 bankruptcy

Florida residents may at times find themselves facing difficult financial situations. They are often overwhelmed by debt and struggle to make ends meet each month. Many consider filing for Chapter 7 bankruptcy as a means to regain financial stability in their lives. A former Orlando developer in such a situation recently filed for personal bankruptcy.

The developer, who now claims almost $23 million in liabilities, once rose to success in 2007 when he started buying numerous properties in Orlando. His business acquisitions soon expanded into other areas in Florida, as well as Georgia and Louisiana. He employed 70 people at one time.

Home foreclosure activity in Florida highest in U. S.

According to a recent report, Florida is tops in the nation. However, in this report, first place was not the ranking Floridians would have chosen for their state. In the past year, Florida led the nation in home foreclosure activity. Studies show that 12 percent of all foreclosures completed in the country occurred in Florida. While Florida had the highest level, the number of foreclosures actually declined in the last 12 months.

Foreclosure activity is declining nationally as well. Experts attribute this trend in part to steady growth in home prices. This appreciation in home prices has increased the amount of equity owners have in their homes. This has resulted in more stable financial positions for homeowners and, subsequently, fewer defaults in their mortgages.

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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