by evolveAdmin | Jun 15, 2011 | Bankruptcy
Here’s the typical scenario: You owe more than what your home is worth. You have someone who will buy your house for what it’s currently valued at (called a short sale). Your mortgage lender agrees to the sale; the paperwork and sale are finalized. You give the keys to the new owner, move out and are relieved that you no longer are stuck paying for a home that just isn’t worth the money. You walk away and start over. But wait, it’s not over. You may still owe the bank the balance of your mortgage minus the money that was brought in from the short sale. This is called a deficiency and the bank has the right to collect that money from you even though you no longer live in nor own the house unless you received a “written waiver of deficiency judgment” from your bank upon the sale of the home. Florida law allows lenders up to five years to file for a deficiency judgment. Once the judgment is entered, your mortgage lender can collect the amount by garnishing your salary or bank accounts, placing a lien on any other real estate you may own or attacking any source of equity you may otherwise have other than your homestead. A deficiency judgment does not have to be pursued by your bank right away. In fact, many Floridians are just now receiving notices for homes that were sold by short sale two or three years ago. For many, a short sale may seem appealing as an answer to mortgage troubles. But, more often than not, bankruptcy is a better option. Whether you are...
by evolveAdmin | May 31, 2011 | Bankruptcy
Nationwide, the total student loan debt of $913 billion is more than total credit card debt. While those who are in credit card debt have options such as bankruptcy to get out of that debt, student loan borrowers do not; Florida students and recent graduates are feeling the financial pressure of student loan repayment. In this difficult job market, nearly two-thirds of graduates throughout the United States are in debt after finishing college. Many are unable to find a job at all, let alone one that will allow them to make payments on student loans. Nationally, an average of 7 percent of student borrowers defaulted on loan payments last year; 8.5 percent of Florida borrowers were unable to pay their student loans. With the national rate of default raising to almost 9 percent already this year, student loans continue to be a growing problem. Defaulting on, or not paying, a student loan can have drastic consequences. To collect on the debt, the government is able to: Garnish wages once a defaulting borrower does get a job Take money out of any federal income tax refund or Social Security payments Prohibit borrowers from entering military service Disallow receipt of a professional license Student loans are, for the most part, non-dischargeable in bankruptcy and will stay with the borrower until he or she pays off the loan. A borrower may have options for bankruptcy relief, however, if he or she has other debt, such as credit card debt or a mortgage that may be dischargeable in bankruptcy. Freeing up the money that was used to pay the dischargeable debts may allow him or her to...
