Paying taxes on debts that are forgiven or cancelled is a concern on the minds of many people who come to my office for advice. They are worried about having to pay additional taxes as a result of resolving issues with their creditors. These tax questions can surface in short sales, debt consolidation arrangements, mortgage modifications, bankruptcy, or any transaction where the bank or creditor receives less than the amount originally owed.
An experienced foreclosure attorney knows that Orlando homeowners in foreclosure face a deficiency judgment that can plague their finances for up to twenty years. Many homeowners who face foreclosure don’t yet feel ready to consult with a foreclosure lawyer. These homeowners may suffer unnecessarily from the “underwater home” crisis that is a plague to the Orlando community.
Many Orlando homeowners who consult with us are concerned that filing bankruptcy will leave them homeless. This is not true. Bankruptcy can be a very useful tool to protect your interest in a home and avoid losing it in a foreclosure action. An affordable bankruptcy lawyer can be invaluable in understanding this process.
The Orlando Sentinel recently reported that until last month, the Metro Orlando area was No. 1 in the country for its rate of mortgage foreclosures. This could explain why so many people have been calling my law firm with questions about mortgage foreclosure and bankruptcy. The intersection of bankruptcy and foreclosure is a place of confusion for many homeowners who are looking for options and answers. This week, a couple came to my practice with lots of questions about their mortgage foreclosure, even though they had completed a Chapter 7 bankruptcy with another lawyer several years ago!
In a mortgage foreclosure deficiency lawsuit, the bank sues the homeowner for the amount due on the mortgage loan after the foreclosure ends. A new Florida law relating to deadlines for mortgage foreclosure deficiency judgments brings good news to Florida homeowners who have lost their home in foreclosure in recent years. A mortgage foreclosure deficiency judgment is a major threat to a home owner’s financial well-being, even forcing a homeowner into bankruptcy. Under Florida law, the deficiency judgment is the difference between the total mortgage debt and the fair market value of the house when it is sold. Even after the homeowner loses their house in foreclosure, they still owe the bank for the balance of the mortgage loan debt, if the value of the house was not enough to pay off the debt. For many “underwater” homeowners in Florida, this difference can be significant.