Central Florida's Top Law Firm for Filing Chapter 13 Bankrupty
Orlando Chapter 13 (Reorganization) Attorney
In filing chapter 13 in Orlando, we file a plan for you showing how you will pay off some of your past due and current debts over three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property especially your home and car which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors. In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payment to get caught up on the amount you have fallen behind.
You should consider filing a chapter 13 in Orlando plan if you:
- Own your home and are in danger of losing it because of money problems.
- Are behind on debt payments, but can catch up if given some time.
- Have valuable property which is not exempt, but you can afford to pay creditors from your income over time.
- You have a second mortgage that may be eliminated if your house is worth less than what you owe on your first mortgage.
You will need to have enough income during your chapter 13 case to pay for your necessities and to keep up with the required payments as they come due.
A recent survey on government web sites purporting to offer advice and information to consumers facing foreclosure found that most of these web sites do not mention bankruptcy at all, despite the fact that Chapter 13 bankruptcy can get consumers caught up with their payments and even eliminate 2nd mortgages on 'underwater' homes.
These results shouldn't surprise you. After all, banks don't want you to file bankruptcy. Lenders hate it when borrowers file for bankruptcy because it puts you, the consumer, in the driver's seat, giving you rights that the bank is now forced to deal with. Unfortunately, most people don't know that an Orlando Chapter 13 bankruptcy can cancel out (known as 'stripping the lien') your 2nd mortgage as long as the appraised value of your home is lower than what you owe on the 1st mortgage. Allow me to explain.
Thousands of residents in Orlando, Kissimmee, Sanford, and all parts in between, are now 'underwater' on their home mortgages, and they are looking for a way out. If you have decided to walk away from your home because you feel you have no other options, schedule a FREE consultation with me first. What if you could effectively wipe out $50,000 / $100,000 or $200,000 of what you owe on your mortgage? Wouldn't it be much easier to save your home if you only had a 1st mortgage and no other payments? Also, when the market turns around, think of all the equity you could build back up years from now? Chapter 13 bankruptcy in Orlando Federal Middle District may help you do just that.
With declining real estate prices in the greater Orlando area, homeowners who have taken out a 2nd mortgage on their homes are facing financial difficulties that can be particularly hard to deal with. In most cases, a 2nd mortgage drastically reduces your home's equity, often leaving no equity at all! But I'm here to tell you, there is hope!
In the case of 2nd mortgages, if the value of the property falls below the loan amount of the 1st mortgage, current bankruptcy law allows judges to eliminate the 2nd mortgage. If the courts remove this 2nd mortgage, this is known as 'stripping the lien'.
Chapter 13 Lien Stripping Example:
- Home is appraised at $225,000.
- The 1st mortgage is for $245,000.
- A 2nd mortgage/Home Equity Line of Credit is for $150,000.
- The mortgage loans total $415,000 on a home currently valued at $225,000.
36 month Chapter 13 payment plan is set up paying original $1,500 for first mortgage payment every month.After filing a Motion to Strip Lien and completion of the 36 month plan, the new total owed is $191,000 thus; giving you positive equity in your home.
What I'm going to share with you now is POWERFUL INFORMATION for homeowners who have 2nd mortgages and are finding themselves 'underwater'. This is vital information you need to protect yourself and make an informed decision about your future!
- Lenders are only secured up to the value of the property.
- The second lender has nothing securing their lien. Their lien is unsecured because currently the property has no value left over from the first lien. Therefore, they are treated as an unsecured creditor.
- Most likely the second lender will not be able to collect on the mortgage lien after the bankruptcy discharge, and the homeowners (debtors) still get to keep the house.
- After completing the Chapter 13 plan, the homeowners would not even have to pay the lien when they sell the house.
Keep in mind that Chapter 13 Bankruptcy in Orlando is not without its drawbacks. It is more cumbersome, and it does takes longer; however, filing Chapter 13 does have its benefits as well. One major benefit is valuing your car at fair market value rather than what you still owe on your loan. For example, if you purchased your car more than 910 days before you file your bankruptcy petition, you are only responsible for paying an amount equal to the present value of the car. Numerically, this means that if you still owed $18,000 on a car but its fair market value is only $8,000, you would only be required to pay the $8,000 in your repayment plan. This means you could potentially save $10,000.
Filing Chapter 13 in Orlando
Usually there are two options for consumers for an Orlando Personal Bankruptcy: Chapter 7 or Chapter 13. There are many differences between the two types of bankruptcies. If consumers have a consistent source of income, here are several reasons why filing Chapter 13 in Orlando may be beneficial:
- You can dismiss the case at any time or even convert it to a Chapter 7.
- You can refinance or sell a house during the plan.
- You can stretch out your payments for a car or other secured debt.
- You can modify a plan if income changes or you decide to give up a house or a car.
- There are more debts that can be discharged - including some divorce payments and damages for malicious and willful acts.
- You can cure a tax problem or a Domestic Support Obligation (child support or alimony) over 60 months.
- A Chapter 13 will save a house from foreclosure as long as you can make the payments.
- You can challenge the costs added to your mortgage by the lender.
- You can strip a wholly unsecured 2nd mortgage.
- You won't lose non-exempt property.
- Amount owed on your car can be devalued to current value if you've owned it for more that 910 days.
- Trustees want the plan to succeed and will work with you to get it confirmed.
- Depending upon your income, a Chapter 7 case can be challenged by the US Trustee, but a Chapter 13 cannot be challenged.
During your FREE CONSULTATION, an Orlando bankruptcy lawyer like me will help you breakdown all the misconceptions of filing Chapter 13 and Chapter 7 in Orlando and discuss the pros and cons of both bankruptcy options. We will then work together to determine which bankruptcy type may be most beneficial for you, taking into consideration your specific set of circumstances. This consultation is FREE. All I ask is that you allow me the opportunity to provide you with the information you need to make an informed decision.