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Surrender in Florida Foreclosures

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When debtors file for bankruptcy, they must address how they want to treat real estate. Oftentimes, homeowners cannot afford their mortgage and must file for bankruptcy and give up their homes and walk away from the debt. But since it takes a fair amount of time to foreclose, some debtors remain in the home.

While it is generally fine to stay in the home until the foreclosure process is complete, some people are defending state court foreclosure proceedings. Recently there has been some repercussions from debtors stating an intention but surrender the property in bankruptcy but who continue to fight the foreclosure in state courts.

However, Florida bankruptcy judges are now taking sides and enforcing the banks' foreclosures.

For debtors' during bankruptcy, they generally have two options for dealing with their homestead:

1. Reaffirming their mortgage debt and continue to make payments

2. Surrender the property for foreclosure or be sold by a trustee for any equity

Nevertheless, Florida states courts have seen multiple cases of debtors who fight the lenders post-bankruptcy case when the debtors have indicated their intent is to surrender the property. .

Banks are becoming frustrated with this loop hole and are demanding that it's "not fair, and that those who agree to surrender do so or face penalty."

Judge Michael G. Williamson, states in a bankruptcy case that "'Surrender' means a debtor cannot take an overt act that impedes a secured creditor for foreclosing its interest in secured property."

Judge Williamson isn't the only judge, there are others faced with the same argument in courts and are speaking out about it.

South Florida Judge, Erik Kimball simply said "When a debtor says, 'I Surrender,' that means you need to throw up your hands and not fight anymore."

Although this is not good news for foreclosed debtors, this is however all the more reason to avoid any delinquent mortgage payments.

We at Timothy J. Sierra Attorney at Law would like to state that our blog posts and links, on our web page or any other social media outlet, to any other web pages are not intended for legal advice. We are not responsible for third party website information. If one is in need of legal advice please contact an attorney directly.

Source: Tampa Bay Times | Business Section

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