If the thought of your mounting debt leaves you feeling overwhelmed, filing for bankruptcy might provide you with the relief you desperately need. Even though filing for bankruptcy is never an easy decision, it might just be the right one. Bankruptcy laws are aimed at providing debtors with a fresh start, particularly after devastating events such as the loss of a job or a sudden illness. For those of you contemplating bankruptcy, it is important to understand which filing is right for you. Most debtors file under Chapter 7 (straight liquidation) or Chapter 13 (reorganization). When a debtor files under Chapter 7, the bankruptcy trustee gathers and sells the debtor's nonexempt assets and uses the proceeds to pay off creditors. Before filing for bankruptcy, there are certain requirements a debtor must meet. For instance, a debtor must, within 180 days before filing, receive credit counseling from an approved counseling agency. This process doesn't take too long and is relatively inexpensive, but it provides the debtor with a good understanding of their financial situation.
Chapter 13 allows debtors with a regular income to develop a repayment plan in order to pay all or part of their debts. Debtors make installments to creditors through a bankruptcy trustee over a period of three to five years. After successful completion of the repayment plan, debts are discharged. For individuals facing foreclosure, they may be able to temporarily stop the sale of their home by filing for bankruptcy under Chapter 13 (automatic stay). Even though filing for bankruptcy will not get rid of a mortgage debt, a debtor may be able to work out a payment plan to get caught up on missed mortgage payments. Furthermore, filing for bankruptcy will provide a debtor with additional time to look at other options.
Regardless of which chapter you file under, it is important to note that some debts are generally not dischargeable. For example:
- Student loans
- Alimony and child support
- Taxes
- Debts for willful and malicious injuries to person or property
Bankruptcy relief was meant to help debtors resume and take control of their lives. It is important to speak with an attorney and determine whether bankruptcy is right for you.
Thursday, April 15, 2010
Thursday, April 8, 2010
Are You Renting Property That Has Gone Into Foreclosure?
For many, it is no surprise that the recent economic downturn has led to a significant increase in foreclosure filings. Not only have homeowners felt the devastating consequences of a foreclosure, but so have the tenants renting these distressed properties. Imagine being informed by your landlord that they've been served with a foreclosure suit. Do you immediately stop paying rent and look for another apartment? Not really. It is important to note that up until the actual auction and sale of the property, you and the landlord still hold the same obligations and responsibilities to one another. Another question arises, though, if the residential property is sold at auction, and NOW, a new owner enters the picture. The real issue that remains - does the new owner have the right to force you out immediately? To the relief of many tenants, recent legislation has answered this question.
Protecting Tenants at Foreclosure Act, which became effective May 20, 2009, states that the new owner of a foreclosed residential property is required to take certain steps before forcing a tenant to leave. Specifically, a new owner must give an existing tenant 90 day notice to vacate the property OR allow the existing tenant to remain in the property until the end of their lease term (whichever is longer). The only exception to this requirement is when the new owner will occupy the home as his or her primary residence. In that case, the remaining lease term does not have to be honored, BUT a new owner must STILL give the existing tenant 90 day notice.
So what does this mean? Practically speaking, the law provides tenants at the very minimum 90 days to look for another place to live, and any threats by a new owner asking them to leave immediately is in direct violation of the law.
It is important to note that only bona-fide tenants are protected, which means:
- The pre-existing tenant can't be the debtor of the mortgage debt that is being foreclosed
- The lease must have been the result of an arms-length transaction (a fair deal)
- The rent can't have been substantially less than fair market rent for the property.
For tenants facing this dilemma, it is important to understand your rights. If you are a tenant and feel that your rights have been violated, seek the advice of an attorney.
Protecting Tenants at Foreclosure Act, which became effective May 20, 2009, states that the new owner of a foreclosed residential property is required to take certain steps before forcing a tenant to leave. Specifically, a new owner must give an existing tenant 90 day notice to vacate the property OR allow the existing tenant to remain in the property until the end of their lease term (whichever is longer). The only exception to this requirement is when the new owner will occupy the home as his or her primary residence. In that case, the remaining lease term does not have to be honored, BUT a new owner must STILL give the existing tenant 90 day notice.
So what does this mean? Practically speaking, the law provides tenants at the very minimum 90 days to look for another place to live, and any threats by a new owner asking them to leave immediately is in direct violation of the law.
It is important to note that only bona-fide tenants are protected, which means:
- The pre-existing tenant can't be the debtor of the mortgage debt that is being foreclosed
- The lease must have been the result of an arms-length transaction (a fair deal)
- The rent can't have been substantially less than fair market rent for the property.
For tenants facing this dilemma, it is important to understand your rights. If you are a tenant and feel that your rights have been violated, seek the advice of an attorney.
Friday, April 2, 2010
What Happens to a Security Deposit at the end of a Lease?
For many of you renting an apartment, a security deposit is nothing out of the ordinary. Landlords commonly require it to cover any damages made to the apartment during the life of the lease, or to cover any unpaid rent. What many do not realize, though, is that under Florida law, there are specific restrictions in the way a security deposit is handled.
When a landlord first receives your security deposit, he or she must notify you (in writing) within 30 days of the manner in which they are holding the deposit. For example, if the security deposit is held in a trust account, a landlord must notify you of this AND must pay you either 75% of the interest the money earns or 5% a year on the money.
So what happens to the security deposit AFTER you've packed all of your belongings and moved out? First, a landlord has 15 days to return the money used for the security deposit OR notify you of any claims made against it within 30 days. If a claim is made, you have 15 days to object. If no objection is made, the remaining balance (if any) is returned to the tenant. If an objection IS MADE, and no agreement is reached, a resolution might have to be reached before a court of law.
Many disputes regarding security deposits are fact-specific and vary from one to the other. For example, did the tenant terminate the lease prematurely, or was the tenant given a defective 15-day notice? If you have any concerns regarding your security deposit, seek the help of an attorney.
When a landlord first receives your security deposit, he or she must notify you (in writing) within 30 days of the manner in which they are holding the deposit. For example, if the security deposit is held in a trust account, a landlord must notify you of this AND must pay you either 75% of the interest the money earns or 5% a year on the money.
So what happens to the security deposit AFTER you've packed all of your belongings and moved out? First, a landlord has 15 days to return the money used for the security deposit OR notify you of any claims made against it within 30 days. If a claim is made, you have 15 days to object. If no objection is made, the remaining balance (if any) is returned to the tenant. If an objection IS MADE, and no agreement is reached, a resolution might have to be reached before a court of law.
Many disputes regarding security deposits are fact-specific and vary from one to the other. For example, did the tenant terminate the lease prematurely, or was the tenant given a defective 15-day notice? If you have any concerns regarding your security deposit, seek the help of an attorney.
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