Miami, Florida tops the list of most troubled real estate markets in the united states! According to an article I read this morning on Yahoo Real Estate by Forbes.com writer Stephanie Fitch, the delinquency rate in the greater Miami area is  28.8 percent. In the article, the greater Miami area includes Fort Lauderdale and West Palm Beach, which has one-quarter of mortgages 90 days past due or worse. In Miami proper, one-fifth of mortgages are in foreclosure or have been converted to REO. With regard to Miami, the article states: "Worst in the country by far." To see the complete article click here.

Clearly, despite the reports that things are getting better in the economy there are still major issues in South Florida with regard to the real estate market. The delinquency rates indicate that there are many more people who are struggling to keep their home. These homeowners need to be proactive in their approach in dealing with their situation. All options need to be considered, including bankruptcy.

Bankruptcy can provide options for homeowners currently struggling with their mortgage. First by using a chapter 7, a homeowner that has made the decision to walk away from their home because they are upside down on it or cannot afford the payments and cannot get a modification can avoid a deficiency judgment. If the lender forecloses on the home they typically seek a deficiency judgement, which is the difference between what the house is worth now and what was owed on the mortgage plus attorney fees, court costs etc. This can quickly add up to a lot of money! The banks can sit on these judgments for 10 years before they try and execute on them, all the while the judgments are collecting interest. They can even renew them after 10 years, so there is the possibility of a judgment following a homeowner around for 20 years, again all the while collecting interest! It has not happened yet, but I firmly believe the next major trend to follow foreclosures will be lenders and debt buyers attempting collect on these deficiency judgments. A chapter 7 bankruptcy would eliminate this possibility by allowing a homeowner to discharge this debt completely if they qualify for Chapter 7 Bankruptcy and payback nothing to the bank for the deficiency.

As for the second possibility, if a homeowner did not qualify for Chapter 7 there is the possibility of using a Chapter 13 Bankruptcy to handle the deficiency issue with some level of repayment based upon the disposable monthly income available over a 3 to 5 year period. A Chapter 13 Bankruptcy also offer homeowners who want to retain their home the ability to structure a plan over 3 to 5 years to bring their mortgage current and in certain situations where there is a second mortgage and no equity in the home to secure it, a way to strip the second mortgage to an unsecured status. This means that if the homeowner successfully completes the Chapter 13 Plan and achieves a discharge, the second mortgage will disappear after the plan period. It would have been repaid at the same level as the home-owner's other unsecured debts. A Chapter 13 Bankruptcy provides homeowners with a real opportunity to gain control of their financial situation.

If you live in Miami-Dade Country or Broward County, Florida and would like to explore the options that are available to you in your current situation, please contact me today for a FREE consultation. My firm is available to assist you and your family in these difficult times.

Best regards,

Matthew Mazur, P.A.

2655 South LeJeune Road, Suite 500

Coral Gables, Florida 33134

http://www.miami-florida-bankruptcy-attorney.com

(305) 779-4805