Foreclosure Or Bankruptcy: Which Is Right For You As The Florida Foreclosure Moratorium Expires?

The Oxford dictionary defines a moratorium as a “temporary prohibition of an activity.” Due to the COVID-19 pandemic, both the state of Florida and the federal government issued moratoriums on foreclosures under certain circumstances. Florida’s moratorium expired on October 1, 2020. However, the federal moratorium only recently expired on July 31, 2021, and many homeowners who are still not able to make their mortgage payments are wondering what their next step should be. 

What is the Federal Foreclosure Moratorium?

The federal moratorium on foreclosures affected single-family home mortgages backed by the Federal Housing Authority (FHA). Its purpose was to protect people who were no longer able to afford their mortgage payments due to the COVID-19 pandemic. However, now that it has expired, many homeowners are faced with choosing to go through the foreclosure process or file for bankruptcy.

Foreclosure In Florida

Foreclosure is the process through which a lender that holds a mortgage on a home where the mortgage payments are not being made attempts to recoup the loss they have suffered by obtaining title to the property and reselling it. 

In Florida, foreclosure is a judicial process that can take months to complete. However, it has a detrimental effect on the homeowner’s credit. In some cases, in addition to losing their home, the lender may also claim a “deficiency” judgment against the mortgagor. A deficiency judgment occurs when a foreclosed property is sold to someone other than the lender for an amount that is less than the amount the mortgagor owes. The Lender may then request a judgment against the mortgage holder for the difference between the amount the lender was owed and the amount the property sold for, with some limitations.

Bankruptcy In Florida

There are usually negative connotations associated with bankruptcy. Still, the truth is that it can be an opportunity for someone unable to afford to repay their creditors to seek a fresh start. There are different types of bankruptcy, and the type a debtor should file depends on their end goals. For example, in some situations, bankruptcy may allow a Debtor to keep their home that is already going through foreclosure.  To find out if bankruptcy is the right course of action for you and which type of bankruptcy to consider, you will need to meet with an attorney that understands how this process operates. 

Speak With A Florida Bankruptcy Attorney At Martin Law Firm, P.L.

If the expiration on the foreclosure moratorium has affected you, and you are not sure what your options are at this point, contact the legal team at Martin Law Firm, P.L. With years of experience, our attorneys can provide you with the guidance and resolutions that you need. You may contact us at (239)-323-9820 or via our contact page.