Tampa Bankruptcy Law Attorney Blog

Florida's slow foreclosures may be good for homeowners and banks

2013-06-17T18:53:01Z

We’ve seen a lot of debate going back and forth about the slow foreclosure process in Florida. Does the sluggish foreclosure rate hurt homeowners or benefit them? Is it better for our state’s economic recovery to let home repossessions move slowly through court, or should they be sped along?

Today, Florida’s foreclosure process still moves along at a snail’s pace. The average foreclosure in the state lasts about 900 days. Judges say banks are to blame for over 350,000 foreclosure cases clogging up the court system. In many cases, foreclosures stall for so long that judges drop them.

]]> The head state lobbyist for the Florida Bankers Association says that overloaded courts are the cause of the “bottlenecked” foreclosure cases today. But a number of reasons for stalling foreclosures can actually work in banks’ favor: Banks don’t have to pay the costs for the upkeep, fees, and resale if they haven’t yet outright repossessed a home. It’s in their best interests financially to negotiate a deal with struggling homeowners and even allow them repay their loans with better terms.

This can be good news for homeowners struggling with financial challenges. With a slower foreclosure process, they have more time to short sell or to negotiate affordable loan modifications with their lenders.

A Florida bill has just passed that may speed foreclosures through the system again. Depending on your point of view, it could be good to get many of these stagnating cases out of the way--or it can make it more difficult for people who are trying to hang onto their homes.

Source: Tampa Bay Times, “Judges blame banks for foreclosure slowdowns, but some see good in delay,” Drew Harwell, June 1, 2013

Student loans higher than credit card debt, crippling economy

2013-06-13T16:40:00Z

President Obama said in a May speech that the burden of student loans that many young people face upon graduation is crippling our economy. Public university tuition and fees have doubled in the past couple of decades. The average college graduate owes over $26,000 in student loan debt, and with interest rates and today’s dismal employment options, it can take years or even decades for a Florida resident to pay off student loans.

For the first time in history, Americans owe more on student loans than credit card debt. At the end of last year, student loan debt was a staggering $966 billion, surpassed only by home mortgages.

]]> Unlike student loans, home mortgages drive the economy forward. However, with so many college graduates already facing overwhelming debt, many of them are putting off buying their first homes or first cars. This is resulting in a sluggish housing market and a stagnating economy.

Since most student loans can’t be discharged through bankruptcy, getting out from under a mountain of debt can be challenging for students who didn’t expect to encounter financial challenges right after college. Unexpected unemployment or life changes can change the future even for those who landed a well-paying job right after graduating.

What does the future look like for graduates going into the real world with crippling student debt? Unlike past generations, millions of young people are unable to buy homes, cars, and other major purchases while they attempt to deal with their debt. Media attention, as well as the president’s, has focused on student loan debt a great deal lately, so it can be hoped that someday soon we’ll see some positive changes that can help struggling graduates get back on their feet--and help to contribute to economy growth.

Source: The Street, “Students Graduate Into Debt, Dragging Down Economy,” Brian O’Connell, June 4, 2013

It's possible to get a fresh financial start after bankruptcy

2013-06-04T19:33:00Z

Bankruptcy isn’t always the end of the world financially, as many Floridians might fear. Yes, filing for Chapter 7 or Chapter 13 bankruptcy does negatively affect your credit rating for a while. It can also affect your ability to buy a home, borrow money, and open up lines of credit. But with some careful planning and discipline, anyone can begin to repair his or her credit score after bankruptcy.

A financial expert has offered some simple tips on how to recover after filing for bankruptcy. Maintaining a bank checking and savings account is a great step in the right direction, especially if you pay attention to building up some savings.

]]> In order to have good credit, you need to actually have credit. After a bankruptcy, an ideal way to start over with good credit is to open up a secured credit card, and later to open up one or two small credit card accounts. The key here is to pay off the entire card balance each month, and not to spend more than you can afford.

Your credit card bills, and every other bill you have, need to be paid on time in order for your credit score to improve. By ordering copies of your credit report from the major reporting agencies, you can compare notes and report any discrepancies or incorrect information that could be hurting your credit.

The financial expert says that if each step toward financial recovery is taken carefully, you may even be able to purchase a home within two years of receiving a bankruptcy discharge. As you can see, filing for Chapter 13 or Chapter 7 isn’t necessarily the financial death sentence that many believe. By adopting a smart budgeting strategy and planning carefully, you can take the right steps toward a fresh financial start.

Source: Consumer Affairs, “Starting over after bankruptcy,” Mark Huffman, May 17, 2013

People with credit card debt less likely to seek medical care

2013-05-29T11:00:00Z

Medical bills can be difficult for Floridians to handle in even the best of circumstances. Everyone knows about the high cost of medical care, and few people are able to handle the bills on their own without some type of coverage. Some people even forgo medical care when they’re sick, to avoid falling further into debt.

A new study found that people with credit card debt are the most likely to avoid seeking needed medical treatment. Sociologists at the University of Michigan say that over 64 percent of Americans who need medical help have not seen a care provider because of their credit card debt, while 58 percent haven’t sought additional treatment because they’re already deeply in medical debt.

]]> Although it’s unknown for sure why having credit card debt is more likely to discourage sick people from seeking treatment, as opposed to other forms of debt, researchers believe the category of debt is a factor. Mortgages, car loans, and student loans are generally thought of as “good” debt with lower interest rates. A person with those types of debt is thought to be more able financially to handle medical costs. Credit card debt is commonly considered “bad” debt, with lower-earning consumers often accruing this type of debt as a way to stay above water, but rapidly becoming overwhelmed financially.

Those who avoid getting medical help when they’re sick can end up facing additional health and financial challenges, as illnesses can worsen and productivity and income is lowered. At this point, the potential cost to regain health can skyrocket. People in this situation shouldn’t have to suffer and worry about their finances. Speaking with a bankruptcy attorney may help to reveal options for those who are in debt and need medical attention.

Source: Fox Business, “Credit Card Debt Causes People to Forgo Medical Care,” Martin Merzer, May 21, 2013

How consumer debt can affect your credit score

2013-05-21T20:47:05Z

Every Florida resident knows that a bad credit score can negatively affect a person’s ability to purchase a home, car, or obtain a line of credit. There are many ways you can hurt your credit, and sadly it’s all too easy to do this. Several factors, such as too much credit card debt, opening up too many lines of credit at once, and keeping high balances on credit cards can all lower a credit score, sometimes alarmingly quickly.

There are other, less well-known ways to hurt your credit score that many financial experts warn against, or advise to at least use caution. One way to potentially devastate your credit is to co-sign on a student loan, only for the student to default. Even one missed or late student loan payment can stay on your report for up to ten years.

]]> Having too much credit can create a bill juggling act that can be very difficult to manage, especially when unexpected financial challenges come up, such as unemployment. This is why experts advise consumers to keep their credit card balances below 25 percent of their limit. It’s also a good idea to keep the amount of credit cards to a minimum.

Personal bankruptcy also negatively affects credit, but with the financial challenges that many Floridians face today, bankruptcy is quite common. It’s possible to rebuild credit after a bankruptcy or other stressful financial upheaval. By staying current on your bills, keeping a low balance, and paying down your debt rather than juggling or accruing new debt, you may be able to begin rebuilding bad credit sooner than you’d think possible.

Source: Source: Forbes, “Five Credit Score Misconceptions That Can Cost You,” Ashlea Ebeling, May 13, 2013

Same-sex Florida couple may have trouble with bankruptcy

2013-05-15T20:40:05Z

Bankruptcy affects people of all ages and financial situations. With the financial challenges that are still widespread in our state, it’s common for married couples to file for either Chapter 7 or Chapter 13 bankruptcy. But bankruptcy among married couples hadn’t been a gender issue in Florida until now. Lawyers are saying a recent bankruptcy filing will be a first in Florida, whether a same-sex married couple wins or loses their bankruptcy case.

The couple from southwest Florida had been legally married up north, then filed for bankruptcy some time after moving to Florida, when they began having trouble with their rental property investments. After filing for bankruptcy, the couple was shocked to find out their case could be thrown out, since Florida doesn’t recognize same-sex marriage.

]]> Such marriages in states that don’t recognize them can cause other financial problems for same-sex couples. Joint tax returns, social security benefits, and some types of insurance are not possible or difficult for same-sex couples to get in Florida. This may even add to the problems that would force a couple to file for bankruptcy.

The couple’s attorney says that Florida’s bankruptcy laws say married couples can file for bankruptcy, but the law doesn’t specify the spouses must both be of the opposite sex. With this case, the couple is undoubtedly relying on their attorney to help them through the process and to represent them in court. The judge’s decision may set a precedent as to how any future bankruptcies among same-sex couples are handled in Florida, if they had been legally married in another state.

Source: Fox 4, “SW Florida couple says sexuality could play role in bankruptcy,” Dave Culbreth, May 1, 2013

Florida veterans facing a multitude of financial difficulties

2013-05-06T18:53:00Z

Today’s job market and financial challenges are bad for millions of Florida residents, but experts say many veterans face a unique set of challenges and setbacks. It’s fair to say that once they’re discharged from the military, veterans should be allowed to enjoy financial security after serving our country. Unfortunately, many veterans are finding themselves in just the opposite position, with unemployment, debt, and even foreclosure being part of a list of problems that add stress to the lives of former servicemen and women.

A lengthy backlog to wait for federal disability benefits, and sometimes the spending habits after a veteran returns home, can cause tremendous financial and emotional strain on a vet and his or her family. The unemployment rate for veterans is two points higher than the civilian rate, and many veterans already have difficulties integrating into civilian life after their service is complete.

]]> One Florida Navy veteran couldn’t even find a job at McDonald’s after he came back from the military. With a wife, daughter, a maxed out credit card, a home in foreclosure and two cars lost to repossession, he started thinking about suicide. He has since moved his family to Oregon to complete his education, and is planning on filing for bankruptcy.

Experts say the suicide rate among returned veterans is rising. However, the Florida vet’s experiences have shown that even terrible challenges can be overcome. Although not in an ideal situation, his family is starting to pick up the pieces and his mental health is improving. Veterans facing the upheaval of financial and emotional problems after returning from active duty don’t have to try to overcome their challenges alone.

Source: In Plain Sight, “Financial strain pushes many veterans to the breaking point,” Bill Briggs, May 4, 2013

Types of Student Loans

2013-05-03T21:58:44Z

There are three types of student loans, Federal, State or Private. The difference is important to know because each has different options for payments and borrower rights. Federal loans are backed by the Department of Education. If the loan is not guaranteed by the Department of Education then it is either a state or private loan. The promissory note will indicate what type of loan it is. To check to see if your loan is Federal, you can log into National Student Loan Database System. After establishing a PIN you can get a complete history of your federal loans. If a loan is not listed there, it is either a state or private loan. You may also check your credit report or you can ask the debt collector or the person calling. The NSLDS is important as it contains who the originator of your loan. This will lead you to be able to determine what type of federal loan you have, such as a direct loan or FFEL. The type will dictate what remedies are available for repayment. For more information, contact the Law Offices of Timothy J. Sierra.

More than half of Florida residents uninsured or underinsured

2013-05-02T19:15:00Z

With the many different types financial difficulties Floridians have to contend with, such as foreclosures, credit card debt, student loans, and unemployment, it’s really no surprise that problems paying medical bills are just another aspect to the problem. Many people in the state have issues with overwhelming medical debt. A recent survey has released numbers that show the true depth of the problem.

According to the Biennial Health Insurance Survey by the Commonwealth Fund, 54 percent of Florida residents did not have health insurance or were underinsured during at least part of 2012. This staggering number was one of the highest in the country, but highlighted a problem that affects at least 80 million Americans today.

]]> The survey disclosed that 41 percent of Americans are having problems paying their medical expenses. About 84 million of them were underinsured or without insurance last year. Almost half of those surveyed didn’t seek medical care or fill needed prescriptions because of the high cost of medical care and medicines.

The Commonwealth Fund went on to explain that the Affordable Care Act's options will start in October in all states. Those with insurance issues will be able to see if they can find some type of help. As of yet, it's unknown how the healthcare overhaul will affect the millions of Americans who are having problems with their medical expenses. A bankruptcy attorney may also be able to help Floridians understand what other options are available to them as they seek relief for their unmanageable debt and medical expenses.

Source: eCreditDaily, “Medical Care Too Costly for 80 Million U.S. Adults,” April 26, 2013

WE ALL PAY FOR STUDENT LOAN DEBT

2013-05-02T18:07:27Z

Young people are less likely these days to take out loans to buy a house or a car because they are overloaded with student debt. The Federal Reserve Bank of New York had a study that showed 43% of Americans under the age of 25 had student debt in 2012, averaging $20,326. In 2003, only 25 percent had student debt in the amount of $10,649. In the past, younger Americans with student debt were more likely to own homes that those without student debt. However, that trend is reversing because student debt payments may be taking income away from a mortgage payment. The auto market as well could be affected by the amount of student loan debt being carried by younger Americans. This fact could have greater implications for the US economy as it has been driven largely by the housing and auto markets.

Chapter 7 may help you get a fresh financial start

2013-04-26T17:56:58Z

Many Floridians are struggling with debt, and are probably at their wits' end as to how to get themselves out of their financial mess. There are a few options for debt relief, such as mortgage modification, debt consolidation, and even short-term loans. Many of these options, particularly adding new loans to your debt, can result in even worse financial challenges. A growing number of people are considering filing for Chapter 7 to give them a fresh financial start.

Chapter 7 bankruptcy can be an attractive option for people with overwhelming debt. However, no form of bankruptcy comes without consequences, so it's important to be informed as to what can happen during and after a bankruptcy. It also helps to know whether you would qualify for Chapter 7, and if the option would be best for your particular situation.

]]> Chapter 7 bankruptcy is usually best for people with few assets, including equity in their homes. People who are interested in this type of bankruptcy need to pass a "means test" to qualify. Non-exempt property must usually be surrendered to pay off creditors before the rest of the debt is discharged. In most cases, people under Chapter 7 bankruptcy will be allowed to keep the tools of their trade, clothing, and household goods.

Chapter 13 bankruptcy is another option, for individuals who have assets and would be willing to repay their debt within three to five years, as established by the bankruptcy court. During the bankruptcy process, consumers are protected from foreclosure, collections, and repossessions.

However, filing for bankruptcy is seen by many as a last resort, since it will affect your credit for seven to ten years. It's recommended to speak with a bankruptcy attorney to see if this is the right decision for you.

Source: Jackson Sun, "BBB: Learn the ins and outs of bankruptcy filing," Randy Hutchinson, April 18, 2013

Identity theft hits kids with fraudulent consumer debt, mortgages

2013-04-20T19:59:42Z

It's hard enough for many Floridians without the added stress of identity theft. Unfortunately, this type of crime is growing alarmingly fast, and it's negatively affecting people's credit all over the country. This can have serious consequences, from having credit card applications denied to being unable to get a car or mortgage loan. Victims of identity theft often have their credit ruined through no fault of their own, and in many cases they have no idea it's happened to them.

Even children can become victims of identity theft. Children are victimized 35 times more than adults because their credit history is clean, and it's easy for thieves to gain access to their Social Security Numbers and other personal information through social media, tax forms, and other avenues.

]]> Usually children don't even realize they're victims of identity theft until they grow up and apply for credit or employment, only to find that someone else has racked up massive amounts of credit card debt, mortgages, auto loans, and more in their names. Even crimes committed under false identities can be associated with a child's information.

Parents can take safeguards to protect their children from becoming victims, such as keeping their Social Security cards in a safe place and educating their children about the dangers of sharing too much information online. Regularly ordering a free credit report, even for kids, is vital in making sure nothing is amiss.

If it's discovered that a child has become an identity theft victim, it's possible to reverse the damage and protect a child's credit; however, in many cases fraudulent charges and lines of credit are massive, and untangling the mess can be complicated. It can be helpful to speak to an attorney in order to stop the identity abuse and start fixing the damage.

Source: The Jackson Sun, "Stolen futures: Child identity theft is on the rise," Nichole Manna, April 14, 2013

Can a lender sue to collect 2nd mortgage after Chapter 7?

2013-04-08T21:19:20Z

Many times, filing for bankruptcy in Florida will give a person some debt relief while still being able to keep his or her home. Chapter 7 bankruptcy discharges most debt and lets people obtain a fresh financial start. However, if someone has been faithfully paying a second mortgage after successfully completing a Chapter 7 bankruptcy, what happens if they later find out the bank had written off the loan rather than reaffirming it? Are they off the hook if a collection agency took over the debt, even if the homeowner never heard from the agency?

A bankruptcy adviser says the lender of a second mortgage can't sue the homeowner after Chapter 7 bankruptcy, and doesn't have a legal right to pursue the loan. But bankruptcy doesn't remove the liens placed on the home from first and second mortgages. These loans, and liens, would be owned by the new collection company. The homeowner would be protected from lawsuits to collect the debt, but the collection agency would be able to foreclose if monthly payments weren't being made.

]]> Homeowners in this situation may be able to contact the new company and renegotiate a reduced monthly payment or settle the balance, to take care of the lien on the property. The laws regarding bankruptcy can be complicated, and any mistakes made by trying to navigate the system alone can negatively affect a consumer's recovering credit, or cost his or her home. It's recommended to consult with a bankruptcy attorney both during a bankruptcy, and afterwards to address any lingering issues.

Source: Fox Business, "After Bankruptcy, do I Owe on 2nd Mortgage?" Justin Harelik, Mar. 20, 2013

Online scams promise to cut mortgage payments, relieve debt

2013-04-05T19:17:04Z

Consumers are being warned to watch out for online companies that use deceptive businesses practices to trick people with financial challenges into believing they're going to receive mortgage assistance. The Federal Trade Commission and consumer advocate agencies are cracking down on companies that can scam a family out of hundreds or even thousands of dollars, without delivering on their promises. Florida residents are urged to fully check out an online company before doing business with them.

Because online shopping is so easy and convenient, internet financial companies can be attractive for people in all areas of the country. But one family found out that even legitimate-looking companies can be online scammers. When the husband lost his job, his wife contacted a debt adjustment firm, State Law Group, who promised to get a loan modification through their mortgage lender.

]]> The couple paid $2,750 in fees and waited over a year, but their mortgage payments were never reduced as the firm promised. The wife saved emails from multiple agents saying they'd sent her lender the appropriate documents for the loan modification application, but the bank claimed they didn't receive any paperwork from the firm since the initial application. They'd started foreclosure proceedings, since they hadn't paid their mortgage for over a year, as State Law Group had advised.

The FTC warns consumers to never do business with a company that advises its customers to stop paying their mortgage, requires a fee in advance, and guarantees to stop foreclosure or modify their loan. Homeowners facing foreclosure have other options before resorting to online companies that can be scam artists. They may wish to speak with a bankruptcy attorney about safer steps to take to save their home.

Source: PhillyBurbs.com, "Beware of scams promising financial, mortgage assistance," Peg Quann and Rose Krebs, Mar. 25, 2013

Foreclosure rate is still high in Tampa Bay

2013-03-25T22:44:19Z

Times have been tough for homeowners in Florida for several years now, and they don't appear to be improving just yet. Florida has been at the top of the nation's foreclosure list for six months in a row, and Tampa Bay has been one of the areas hit the hardest. While foreclosures in the rest of the country dropped by around 25 percent last month from where they were in February last year, foreclosure activity continues to rise in Tampa Bay.

The internet data firm RealtyTrac says Tampa Bay had the 4^th-highest foreclosure rate last month. Foreclosure activities, including auctions, repossessions, and over 5,000 notices of mortgage default, rose 23 percent over February of last year. RealtyTrac says a great number of these can be a result of old defaults still lagging in the courts from years ago, as well as the banks' "robo-signing" scandal.

]]> Some financial experts are saying the way for Florida to begin recovering from the mortgage crisis is to clear out the backlog of foreclosures. With the average foreclosure in Florida lasting two years, abandoned homes are pulling down the prices of other homes in their neighborhoods. A proposed bill would fast-track home repossessions in certain cases and get things moving again in foreclosure court.

However, many consumer advocates claim that rushing foreclosures through the courts don't give homeowners with financial problems enough time to prepare a defense. Homeowners wishing to stop foreclosure may need to explore additional options, such as consulting with a bankruptcy attorney.

Source: Tampa Bay Times, "Tampa Bay posts nation's fourth-highest foreclosure rate in February," Drew Harwell, Mar. 13, 2013