Tampa Bankruptcy Law Blog

For most people, their home is the most valuable possession that they own. A home not only is incredibly important because it provides shelter from the elements, a place to sleep, a place to raise a family and a place to store other valuable possessions. A home also holds significant financial value.

When a person in St. Petersburg struggles financially, the thought of losing the homestead can quickly turn into fear. Many people turn to Chapter 7 bankruptcy as a way to start fresh. The process involves the liquidation of valuable assets, so does this include the home?

The Fair Debt Collection Practices Act is a law most debtors in Florida have at least heard about. Some may know a little more detail about the law, but many are unaware of the level of protection it affords debtors. The law is extensive, and individual debtors should not be expected to know every little detail. There are bankruptcy attorneys for that.

Some creditors take advantage of this lack of knowledge in order to collect debts that may no longer be legally due. Debts, believe it or not, have a shelf life. There is a statute of limitations -- a set number of years which varies from state to state -- in which a collector can sue to recover the debt owed.

Florida residents facing housing foreclosure received some potentially good news earlier this month. In late January, the Obama administration announced that it plans to expand its government foreclosure-prevention program as a way to help homeowners facing significant debt avoid losing their homes.

The administration also said that it would extend the Home Affordable Modification Program through 2013, according to a report from the Associated Press.

Some of the largest and most powerful banks in the United States, including Citibank, JPMorgan Chase, Bank of America, Wells Fargo, and Ally Financial, may be on the verge of reaching a settlement over what have been deemed misleading foreclosure practices. Negotiations on behalf of the government are being conducted by a number of state attorneys general, including Florida Attorney General Pam Bondi.

Some homeowners across the country have lost their homes because they were taken advantage of during the foreclosure process. Abuses included companies neglecting to check the accuracy of information and the illegal practice of "robo-signing," which involves the forging of signatures on foreclosure documents.

A single Florida home has caught a multitude of attention after the owner went into default on his mortgage. The home is located in Miami and the owner owes approximately $720,000 on the mortgage. JP Morgan Chase Bank has filed an action to foreclose the property in a Miami-Dade County court.

The owner of the home is OJ Simpson, a man who has had a less than quiet past. With the home in foreclosure, Simpson does not have the same ownership rights to his home. Knowing that, the advocacy group People For the Ethical Treatment of Animals has asked the JP Morgan's CEO Jamie Dimon to donate the home to their cause.

In some societies past, the debt obligations of the father were passed along to the son. Children were often burdened by family debts. This practice has passed, but debt collectors use the confusion between what they can collect and who they can collect it from, sometimes crossing the line from legal collection to unlawful creditor harassment of family members.

The practice of collecting debts of the deceased is not an illegal practice in Florida, but there are guidelines regulating what can be collected and who it can be collected from. Guidelines issued in a Federal Trade Commission policy set out some of those rules.

Second marriages are more successful if both parties pay close attention to financial details, especially as they relate to financial contracts incurred during a first marriage. For example, in Florida, if one ex-spouse is behind on mortgage obligations, and if their ex-spouse remains legally obligated for that debt, both may be subject to collection activities. This should be a concern to engaged couples as they plan a future together.

One question often asked is whether or not a divorced person can be held accountable for marital debts that were divided in a divorce decree. The answer is yes, they are still responsible unless they have been properly removed from that obligation. The details of the divorce agreement do not supersede financial contractual agreements made while married. If their ex falls behind on mortgage payments or on a second mortgage, a new finance may arrive at the altar of a second marriage with heavy financial baggage.

Statistics reveal that in 2011, more than 750,000 homeowners received default notices. Almost as many homes were repossessed. Unfortunately, many Florida homeowners continue to face default and remain at risk of losing their homes to foreclosure. Simply put, our country is facing a terrible mortgage and foreclosure crisis that as of yet has shown little sign of stopping.

Unfortunately, because scam artists are eager to take advantage of unsuspecting and vulnerable victims who are desperate to keep their homes, people whose mortgages are in trouble may be particularly at risk of losing even more money, and being left in a position in which they are more likely to lose their home, after they are taken for a ride by a scammer.