Can Filing for Bankruptcy Stop a Foreclosure in Florida?

Posted on : February 22, 2019
Foreclosure when filing a Bankruptcy in Orlando

Bankruptcy And Foreclosure In Florida

During their life, many people face economic hardships that make it difficult to meet their financial obligations. For some people, an economic hardship is a one-time problem or it comes and goes. For others, dealing with financial challenges is integrated into their everyday life. Regardless of whether you fall on hard times rarely or often, things change when you are faced with foreclosure.

When your home is at stake, it’s important that you take action right away. Can filing for bankruptcy stop a foreclosure under Florida law?

Getting an Automatic Stay

When you file for bankruptcy in Florida, the court issues what is known as an automatic stay. This informs your creditors that you are filing for bankruptcy and requires them to cease collection activity immediately. Your creditors cannot contact you or take collection action against you while the bankruptcy is pending, which is usually about three to four months, and it applies not only to your mortgage but any other debt you owe.

What Can Creditors Do After You File for Bankruptcy?

Creditors can file what is called a motion to lift the automatic stay. If the creditor is successful, they can resume collection activity against you before your bankruptcy case is heard. It’s more common for mortgage lenders to be successful at a motion to lift the automatic stay versus collection agencies and other types of lenders. Even if the motion is granted, you still typically get a couple months before the motion can be filed and heard.

What to Do If You Have No Way to Get Caught Up Before Foreclosure

If the automatic stay gives you enough time to get current on your mortgage, you’re in good shape. If you don’t have any way to get caught up on your payments before the foreclosure date, you’ll need to file for a Chapter 13 bankruptcy. With this type of bankruptcy, your past due balance is added in your future payments and you resume paying your mortgage as you normally would, only in the new amount.  

Get Legal Support to Stop Your Home from Being Foreclosed On

When you receive a notice of foreclosure, your next move should be to talk to an experienced bankruptcy attorney. Your lawyer will assess your situation and help you figure out the best course of action to keep your home.

Contact the Caplan Bankruptcy and Family Law Firm today to learn more about bankruptcy and foreclosure or to schedule your consultation to discuss your case. Call now at 407-543-1801.