Florida Bankruptcy Attorney Blog

What is this you may be asking yourself, and more importantly how can you still take advantage of it? This Act is important to homeowners throughout Orlando, who are facing mortgages where their home is worth less than the principal balance of their first mortgage. Often the financial situation for these homeowners is untenable, and as the economy appears to be possibly entering a double dip recession, this Act will be important to many. The Act states that a debtor who will or has had their mortgage forgiven, partially or entirely, through settlement or Bankruptcy with a value less than 1 million dollars, if single, or 2 million dollars, if married, will NOT be taxed on the forgiven portion of that debt. Normally, without the act, debtors would be taxed by the IRS and have to pay a percentage of that settlement. This is extremely important for our local residents of Orlando and throughout the state of Florida. In Florida, Orlando and Central Florida especially, the amount of foreclosures and bankruptcy filings are still very high.

The Mortgage Debt Forgiveness Act only applies to your primary residence or home. It does not apply to second homes, investment properties, vacation homes, car loans, credit cards, equity loans, lines of credit, personal loans, student loans, collections, judgments or liens.

So don’t hesitate any longer if Bankruptcy, Foreclosure, Modifications, Refinancing, Restructuring, or Short Sale is eminent. You have one more year left in this act to not be taxed. The Mortgage Debt Forgiveness Act will expire in 2012.

Depending upon the jurisdiction in Florida or elsewhere, it may be better for a client to declare either a Chapter 7 or Chapter 13 for a client to protect his home. For those behind on their payments, a Chapter 13 bankruptcy is often touted as the best solution. But this is not necessarily the case. Sometimes it is better to fight and renegotiate your mortgage and then declare a Chapter 7, even though there is an element of risk doing this. Much of this kind of decision rests upon the amount of income you are generating. Factors to consider include things as minor as Trustee collection fees. For these and other complicated reasons it is always good to consult with a bankruptcy lawyer and not engage in this process without professional help.

As sad as it is to see people who have worked hard their whole lives lose their home, sometimes it is inevitable that the auction sale will commence and the house will be forced to sale. Often vulture type investors swoop up these houses at the auctions, looking for a good deal. Obviously, this has been happening alot around Florida lately, given that this state along with a few others have shared the brunt of what has become known as the "housing crisis", which has caused a high number of bankruptcies to be filed recently as well.

Apparently, though, one might be able to find better deals than these elsewhere. I unbelievably overheard someone on the radio today reporting being able to buy a two story brownstone style condominium for one dollar! This individual apparently has heard of others doing the same (for very small sums like $100.00). Maybe foreclosure auctions aren't the best places to find some good house prices after all. Of course, it is likely this person could just have been lying.

In recent months Florida has recorded an unemployment rate higher than the national average, and one of the highest unemployment rates it has had in years. Unemployment is presently hovering around 7.1 percent. Last year it was around only 4 percent. This is certainly something that could impact bankruptcy filings. The Bartlett Law Firm has seen the number of bankruptcy consultations rise. Much of the problem in Florida likely stems from its higher than average economic reliance on the real estate market, where prices have plummeted in percentage terms at rates not seen in decades. The Orlando area, while critically impacted, does not appear to have been impacted as greatly as certain cities along the Florida coastlines, especially Miami-Dade and north along the east coast, and portions of Tampa. During these stressful times for many, our firm has been instrumental in helping many people not only file for bankruptcy, but also save their homes, and protect their cars from repossession.

Sometimes, the best thing for a client is actually not to file for bankruptcy. We have had clients come to us for our free consultation almost demanding bankruptcy, and in all honesty we had to inform them they were simply not a good candidate. This is part of our job as a lawyer, to assess what is in the best interest of our clientelle.

Sometimes the better solution was to work out a negotiation with their mortgage lender, or defend a foreclosure proceeding that was already instituted against them. We have been successful in helping our clients negotiate better terms on their loans, and in vigorously defending their possessions from seizure. Our goal is to make our client ultimately happy with the results they obtain, and advise them on how to get there.