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!
Understanding Chapter 7 bankruptcy exemptions is crucial for anyone considering bankruptcy. A chapter 7 bankruptcy is based on a simple agreement with the bankruptcy court: surrender your property and you will receive a complete discharge forever for most debts, including credit card debt, mortgage debt, car loans, personal loans, medical bills and most other forms of debt. People considering bankruptcy ask, does this mean all my property? Will I be destitute, homeless and without any possessions? The answer is absolutely not! Even in bankruptcy, individuals and families are entitled to keep a certain amount of property. This is known as exempt property, and Chapter 7 bankruptcy exemptions define what you get to keep. What a person filing chapter 7 bankruptcy gets to keep is defined by the law of exemptions, which is different in every state.