Florida Foreclosure Help

[suedan217]

Please guys, I need some help.

I live in Florida. We filed Chap 7 Bancruptcy last year and it has been discharged. We did not include our home. I just have a few questions.

1. What are the chances that the lender will enter into a deficiency judgement against us?

2. Does our filed bancruptcy have any effect on the proceedings?

3. In your opinion, would you stay in the home and save before you moved out to another residence.

A little background is that we now live in a home that is worth less than what we owe on it. We never thought we would be in this type of situation, but we want to make a clean start. We know that it is going to be difficult for our family, but in the end, it will be the best. We just have to have some answers before we take the plunge. Thanks in advance to all of you.

[lrprn]

I live in Florida. We filed Chap 7 Bancruptcy last year and it has been discharged. We did not include our home. I just have a few questions.

Two questions first:

Are you asking what the consequences would be if you surrender your home back to the lender now and allow foreclosure to proceed?

You said your Ch 7 was discharged. Has it been closed as well?

[suedan217]

I am asking about the consequences if we got behind on payments and allowed a foreclosure to proceed. We are not currently behind on any payments.

Our bancruptcy has been discharged. We owe the trustee some money, so I don't think that it has been closed.

[lrprn]

Our bancruptcy has been discharged. We owe the trustee some money, so I don't think that it has been closed.

If your mortgage is more than you can handle now when you are not paying your unsecured debt any longer, then that's worrisome. Unless you sort out how to increase your family income, reduce your expenses, or give up another asset, the home will likely end up surrendered anyway. Better to do it when you have the most control over the process.

You originally asked three questions -

1. What are the chances that the lender will enter into a deficiency judgement against us?

Another question - did you reaffirm the mortgage when you filed?

If you reaffirmed the mortgage and the lender signed the agreement, then you'll be held responsible if you surrender the house for the difference between what you owe and what the house auctions for.

However, if you didn't reaffirm, then you can walk away from the house anytime and owe nothing.

2. Does our filed bancruptcy have any effect on the proceedings?

Since your bankruptcy is still open, if you are going to surrender your house and you didn't sign a reaffirmation agreement, then now is the time to do it. That way the foreclosure and bankruptcy are close in time - lenders look on that more favorably than a bankruptcy and then a foreclosure after the bankruptcy is officially closed.

3. In your opinion, would you stay in the home and save before you moved out to another residence.

Staying in a home not making mortgage payments while the foreclosure process plays out can save you thousands of dollars. That can be very helpful when you are looking in the rental market because that extra money gives you some bargaining power like putting down 1-2 extra months of deposit to entice a rental owner. The extra money also helps with moving costs, start up utilities, etc. Most lawyers will recommend staying in the house as long as possible while looking for a good rental that meets your family's needs.

Keep asking questions - we'll help you sort things out as best we can.

[suedan217]

Thanks for answering my questions. I don't remember signing a reaffirmation agreement with my mortgage company at the time of the bancruptcy. It is possible that we may have because we were signing so many forms at that time. It was hard to keep up. I will update tomorrow after I called the attorney. Would you know that chances of them collecting or getting a judgement if reaffirmation was signed?

How long should we stay at the property? Until eviction notice or just a little after we are served. We want to save, but want to avoid this being more messy than it has to be. Can we take our appliances with us and the improvements that we have done to the house?

Lastly, does foreclosure stay on your credit stay your credit report and public records for 10 years like a bancruptcy?

Thank you again.

[lrprn]

Would you know that chances of them collecting or getting a judgement if reaffirmation was signed?

If you did sign a reaffirmation for your mortgage, since your case hasn't been closed yet ask your lawyer if it can be cancelled.

If there's no reaffirmation, then there's nothing your mortgage company can do if you walk away from the house.

However, if there is a signed reaffirmation and it can't be cancelled, then you will be held responsible for the difference between what you owe and what the foreclosed house sells for at auction. If you try not to pay, then judgments, liens against other assets, and wage garnishments can be won in court by your lender to force you to pay.

How long should we stay at the property? Until eviction notice or just a little after we are served. We want to save, but want to avoid this being more messy than it has to be.

Most lawyers will suggest staying in the home as long as you can - usually until the auction date is set - to take advantage of free housing and save up cash to find a rental and move. However family circumstances (school starting, etc) can be more important - only you can decide when the best time to move out is for you.

Can we take our appliances with us and the improvements that we have done to the house?

If the appliances and improvements are not permanently attached to the home, typically yes. State and local laws can impact this, so ask your lawyer what's allowed in your area.

Lastly, does foreclosure stay on your credit stay your credit report and public records for 10 years like a bancruptcy?

Foreclosures can be removed from your credit report after seven years, although you may have to request the removal by sending a written request to each credit agency.

And since we're talking how long things stay on a credit report, only Ch 7 bankruptcies stay on for 10 years. Successfully completed Ch 13 bankruptcies drop off after seven years like foreclosures.

[suedan217]

Ok, it took me a little while to get the information back from the attorney. It seems as if I did not sign a reaffirmation. Does that mean that everything is a go? Am I forgetting something. I also called the lender and they also confirmed that no reaffirmation was signed.