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Can Bankruptcy Help Save Our Home?

Can Bankruptcy Help Save Our Home?

For most Americans, our homes are not only one of our most valuable assets, but they also have irreplaceable sentimental and emotional value. The years we spend spent fixing, enhancing, and making our homes our own represents an invaluable investment of time and energy. The personal nature of a home makes it feel as though it is an extension of ourselves. The possibility of losing what we worked so hard to care for can be a very scary proposition.

In Florida, residences are protected from all creditors, with very limited exceptions. One such exception is that lending companies can foreclose on a home if its owner fails to pay their mortgage. If you are behind on mortgage payments, filing for bankruptcy can provide distinct benefits for you.

Chapter 7 Bankruptcy & the Automatic Stay

Chapter 7 bankruptcy can provide homeowners with additional time at the end of a foreclosure case to explore loss mitigation or other options. This additional time is due to what is known as the “automatic stay” period, which commences after filing bankruptcy. An automatic stay period has the practical effect of stopping all collections and pending legal proceedings to collect debt. As a result, bankruptcy courts have superior jurisdiction over state courts, so all creditors must seek relief through that venue.

Filing for a Chapter 7 bankruptcy should only be an option when you have reached the end of a foreclosure case against your home and are facing a pending public auction of your property. Even then, you should consult with an attorney before filing a Chapter 7 to make sure doing so would be beneficial under your specific circumstance. Filing a Chapter 7 bankruptcy without any practical loss mitigation options may be more harmful than helpful.

Chapter 13 Repayment Plans

If you have enough income to make your current mortgage payments and arrears, filing a Chapter 13 bankruptcy can allow you to keep your home and clear all your debt. Chapter 13 bankruptcies involve a repayment plan with a three- or five-year duration, during which you make payments to the bankruptcy trustee according to the plan. This includes payments on your current mortgage balance and a portion any past due amounts.

Essentially, a Chapter 13 repayment plan gives a person with sufficient income three or five years to catch up on their mortgage arrears. Meanwhile, the automatic stay prevents any further collection and foreclosure attempts. This is a very effective strategy for getting your payments back on track and keeping your home.

Consult Powell, Jackman, Stevens & Ricciardi, P.A. for Bankruptcy Advice

If you are behind on your mortgage payments and facing foreclosure, you should seek advice from an experienced bankruptcy attorney to make sure that you are making the right choice. At Your Advocates, our legal team includes skilled attorneys with experience handling bankruptcy cases, such as Chapter 7 as well as Chapter 13 filings.

Call our office at (239) 970-6844 or contact us online today to schedule a free consultation.


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Request your free consultation today and let our experienced attorneys help you.

We do not represent tenants.

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