Vacate my home after bankruptcy? << Defend My Florida Home

Many homeowners who are in default on their mortgage or have been sued for foreclosure consider filing bankruptcy.  The decision of when or if to file bankruptcy must be considered on a case by case basis, and should be decided after consultation with an attorney.

Filing for bankruptcy protection may include surrendering your home to the bankruptcy trustee.  The distinctions between types of bankruptcy chapters is not important to the subject of this post.  The discussion applies to anyone who has surrendered their home to the bankruptcy trustee.

The act of surrendering the property to the trustee is basically giving the trustee permission to sell the property as part of the bankruptcy estate.  Meaning the trustee may sell the property and distribute the proceeds to satisfy debts you are seeking to discharge and are included in your bankruptcy plan.

In many cases the debt secured by the property surrendered equals or exceeds the value of the property.  In this instance the trustee may decide not to sell the property.  If the trustee does not sell the home it remains the property of the homeowner until such time as a secured party enforces its lien on the property.

When the property is surrendered under the bankruptcy plan but is not sold by the trustee, the homeowner is personally discharged from the debt.  Following discharge the homeowner has no more legal obligation to pay the mortgage; But, if the owner doesn’t pay the mortgage the bank can foreclose to take title to the property.  The distinction is whether the homeowner is personally liable for the debt.

The homeowner has no obligation to, and should not vacate the subject property until the bank completes its foreclosure and takes title to the property.  Until such time as title is legally transferred the homeowner remains responsible for various recurring charges that come due following the bankruptcy discharge date, e.g. community association fees, property taxes, etc.  During the time you are still legally obligated to pay these fees you should remain in the home you are maintaining.

As for the banks burden in foreclosing its lien and taking title to the subject property, it still must prove it owns your loan, has met all conditions the loan requires before filing suit, and must overcome all defenses you may have to the foreclosure action.  The bankruptcy does not relieve the bank of any of its burden to prove its case before it can obtain final judgment.

If you are in foreclosure or default, and considering filing bankruptcy, please call me so we can discuss how I can help.

This post is not intended to be legal advice.  Before making any decisions regarding bankruptcy, foreclosure, or other decisions affecting your obligations to pay debts, you should seek the advice of an attorney who is familiar with your particular situation.

homeowners and “strategic default” / CBS News

CBS News report discussing strategic default from June 2011.  Businesses have always used “strategic default” as a tool to manage their finances. The current recession has forced many homeowners to start making decisions regarding their biggest investment, their home, as business decisions not moral ones.

It isn’t your responsibility to take care of the bank.  It is your responsibility to provide for yourself and your family.

If you are facing foreclosure, please call so we can discuss how I can help.

They Keep Stealing – Why Keep Paying? | Dylan Ratigan

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As a homeowner you didn’t cause the financial crisis, and you didn’t cause the housing bubble or the inevitable bust.  You bought a house you thought you could afford at the time, but we’re very unlucky in your timing. This article discusses how banks and the government were using housing to recover income lost to crashes in other sectors of the economy. It is not your responsibility to ensure banks make money. It IS your responsibility to make sure you can provide for yourself and your family in the future. The article makes the case for walking away away from your mortgage to make sure you can.

http://www.dylanratigan.com/2011/02/03/they-keep-stealing-why-keep-paying/

Also see this article about how Florida ranks number 2 behind California in number of households that spend at least half their income on housing costs.

http://www.tampabay.com/blogs/venturebiz/content/despite-drop-housing-prices-affordability-florida-declines-working-households

Florida No. 2 on Trulia’s Housing Misery Index | House Keys blog

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Florida is behind only Nevada on this housing misery index calculated by Trulia.com. 43% of working households in South Florida spent more than half their take home pay on housing in 2010. Owners shouldn’t spend more than 30% of their income on housing costs.

To calculate the index Trulia combined the percentage of decline in home value since the peak of the housing boom and the number of mortgages that are at least 90 days past due.

The housing market was already suffering from inflated prices, but the recession has made things worse. The average owner’s housing expenses are the same or more than before the recession begain, but now home values are dramatically lower.

If you find yourself in this situation and are facing foreclosure, please call so we can discuss how I can help.

http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2012/02/florida_no_2_on_trulias_housin.html

NPR.org » Gen X Takes The Housing Hit; Boomers Only Grazed

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Based on student loans and mortgage debt members of Generation X have been disproportionately harmed by the recent economic downturn. If you own a home that is substantially underwater you need to evaluate if keeping an asset that is devastating your net worth is something you want to do.

Attack the Citadels

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While Baby Boomers (born before 1965) are a more wealthy demographic than the generation that predeeded it, Generation X (born 1965-1982) is less wealthy than the Baby Boomers. The reason is the housing bubble. Most of a middle class American’s wealth is in equity in their home. Based on when Generation X was in the market to purchase a home very few have any equity in their homes and in fact have significant negative equity that is destroying their net worth. Many Gen X’ers are therefore presented with the decision to walk away from an underwater home, or stay in a home that will never be worth what they paid for it.

http://m.npr.org/story/142275958?url=/2011/11/13/142275958/gen-x-takes-the-housing-hit-boomers-only-grazed

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