Foreclosure of Real Estate and Bankruptcy Law
A Bankruptcy Attorneys Reaction To The Real Estate Crisis
Bankruptcy Lawyers and Attorneys in many parts of the United States are confronted with recent influx of Homeowners who cannot afford their homes, which may in the worst case may result in foreclosure. In Florida, this real estate crisis is especially severe. As a Bankruptcy Lawyer / Bankruptcy Attorney, I talk with many Floridians on a daily basis about this problem. I think there are numerous causes of this crisis:

	The large number of adjustable rate mortgage that have reset, causing payments to skyrocket.
	Many people during the real estate boom that ended in 2005 greatly overpaid for their houses, and now we have an issue of Sellers who are unwilling or unable to sell their houses at pre-boom prices and Buyers who are waiting for prices to fall;
	Property insurance and property tax increases; and
	Recent tightening of lending requirements.

All these factors in combination have created a real estate crisis that may not abate for years. In the past, when someone came to our offices with a Foreclosure on their home, usually they were seeking a solution to save their home. Today, the majority of my clients are intent on letting their houses go back to the bank. Why keep an asset that is simply unaffordable and depreciating in value.

At our Law Offices, there are many options our Bankruptcy Lawyers / Bankruptcy Attorneys can offer. Under the Bankruptcy Law, if you decide to surrender your house in a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, the filing of the Bankruptcy will give you additional time in the house to collect yourself and your finances in order to make the transition to new housing. The filing of a Chapter 7 Bankruptcy will slow down the Foreclosure process about 1-3 months and the filing of a Chapter 13 Bankruptcy will slow the Foreclosure process about 3-5 months. These figures are not based upon any official statistics but based upon my experience as a Bankruptcy Lawyer / Bankruptcy Attorney practicing Chapter 7 Bankruptcy and Chapter 13 Bankruptcy many years in this area - Middle District of Florida, Tampa Division.

If you decide you want to keep your house, then a Chapter 13 Bankruptcy will stop the Foreclosure and allow you to pay the arrearages or missed payments over a 36 to 60 month period. Although the Bankruptcy Laws do not allow your Bankruptcy Lawyer / Bankruptcy Attorney to lower mortgage payments, as a Bankruptcy Attorney, my strategy is usually to lower your overall bills - automobile, credit cards, etc- in order to make the mortgage payments more affordable. If you are able to make 12 consecutive on time payments in the Chapter 13 Bankruptcy, our mortgage division has a good chance of refinancing your home into a fixed-rate mortgage with a lower payment.

The Chapter 13 Bankruptcy will also give you additional time to try to sell your home. If the house is your Homestead (you need to consult with a Bankruptcy Attorney / Bankruptcy Lawyer as to the definition of Homestead), then generally you will be able to retain any proceeds from the sale.

Many clients now ask about a concept called a Short Sale. A Short Sale is when the mortgage company agrees to take less than the full balance of the mortgage in a sale of real estate. One would think Lenders are more likely now to accept a Short Sale, however, there is much resistance. One reason is lenders are being deluged by real estate agents requesting Short Sales even in cases in which a Short Sale may not be warranted. This has created an almost "knee-jerk" reaction by some Lenders against Short Sales.

Our affiliate company,  Julian Credit Management (www.JulianCredit.com) is a Credit Counseling Organization and offers:

An alterative to Chapter 7 Bankruptcy or Chapter 13 Bankruptcy in some cases is Loan Modification. Loan Modification is simply asking the Lender to alter the terms of the loan. Lenders are more willing today to discuss Loan Modification but there are several obstacles. Lenders typically do not have an organized structure to deal with Loan Modification requests (as is a problem with Short Sale requests). Lenders traditionally were in the business of lending and collecting monies and had not had to deal with the processes necessary for Loan Modification or Short Sales. It is not uncommon to contact a lender, be transferred 5-6 times and reach no one who can make a decision. Many frustrated clients come to our Bankruptcy Lawyers / Bankruptcy Attorneys with stories of calling Lenders for weeks and months on end with no progress.

If you are in a mortgage mess, call our office. Our Bankruptcy Lawyers / Bankruptcy Attorneys are trained in all the options discussed in this article.

Jay Matthew Weller, Attorney at Law
Bankruptcy Attorneys Tampa Bay Florida
and Debt Consolidation Legal Services
Florida Law Firm with Offices in
Tampa  Clearwater (Headquarters)  Lakeland  Port Richey
Phone:  1-800-407-3328 (DEBT)
www.jayweller.com