If you are trying to make ends meet despite overwhelming credit card debt, unexpected medical expenses or as the result of reduced income, you may be considering bankruptcy. One of the questions most people have is, “Can I keep my house if I file for bankruptcy?” Thanks to the Mortgage Modification Mediation Program (MMM), this is a possibility for many Seminole County residents.

Almost 2,000 people have already filed for bankruptcy in our Florida district this year.  While this number has dropped since 2011, bankruptcy rates tend to be higher in states with natural disasters. According to 24/7 Wall St., baby boomers are also a large percentage of those filing Chapter 7 or Chapter 13.

Chapter 7 vs. Chapter 13

Chapter 7 and Chapter 13 are legal options that can help you get out of debt and bank on your feet financially. They do this in two very different ways.

Chapter 7 is known as “liquidation bankruptcy.” It can help you clear all or some of your debt. Many people who choose this option have little to no disposable income, and usually almost no unexempt assets.

In Chapter 13, you may be able to keep your property and repay the debt, or a portion of the debt, by completing a three or five year repayment plan. It may stop the foreclosure process and collection calls.

Mortgage Modification Mediation

Even with help from Chapter 13 bankruptcy, the repayment plan can strain your budget. This is especially true if you have an underwater mortgage. However, if you qualify for MMM, you may be able to get some breathing room. This program can help you keep your home and negotiate with your lender to reach a modified mortgage agreement if you meet the lender’s criteria.

The process begins when a motion is filed to engage in MMM. It must be done within 90 days of declaring bankruptcy. Your mortgage holder will have 14 days to respond. This process is voluntary for both you and the lender. The court won’t mandate modified mortgage loan terms.

A court-appointed mediator works with the lender and your Florida bankruptcy attorney to reach an agreement. The modifications can include:

  • Reduced interest rate
  • Extending the terms of the loan
  • Lower monthly payments

Once all parties involved agree on the new requirements, the agreement goes before the bankruptcy court for approval. The program doesn’t make sense for everyone, especially if you do not have a source of income. However, if you meet the requirements, you can keep your home and still reduce some of the pressure caused by monthly payments that are no longer feasible.

Florida Bankruptcy Lawyer

At Lewis Roberts, PA, I offer a hands-on approach for my clients, putting my more than 20 years of experience to work for you. If you are not a good fit for the Mortgage Modification Mediation Program, there may be alternatives that meet your needs. During our consultation, I will discuss your options, address your concerns and answer your questions. I keep you informed throughout the process and work to improve your financial situation. Contact me to schedule an appointment or call 407-749-0080 and let’s talk about how I can help.