Most people don’t intentionally take on more debt than they can afford. Unfortunately, unexpected changes in life might make it impossible for you to meet your debt obligations. Those changes often are not the fault of the borrower. A car accident, business shutdown, or other events beyond the borrower’s control might create a sudden financial hardship.
When a financial hardship occurs, Florida’s legal debt solutions enable a consumer to address it and put the matter to rest. There are many types of legal debt solutions that you might consider if you are among those who are having trouble paying off debts. Here’s a closer look at several of the most commonly used debt solutions in Florida.
One of the most common ways to settle your debts is to file for personal bankruptcy. There are many options that Florida bankruptcy laws allow for consumers to file for bankruptcy and eliminate their debts. A bankruptcy does not mean you automatically lose your home, assets, and belongings. An experienced Florida bankruptcy attorney can help you understand the available options and file a well-supported bankruptcy case that will help you get out from under debts that you no longer can afford. If a car accident, job loss, or another significant event affects your ability to pay off your debts, a bankruptcy filing might be the best solution.
Fluctuating housing markets and other factors might make it impossible for you to afford the mortgage on your home or another property. When your mortgage payment is no longer affordable, you might want to consider giving up your home through foreclosure. A foreclosure happens when you default on a loan, and the lender wants to take possession of the collateral. The collateral might be a home, car, or another property that you used to secure the loan. Some forethought and legal counseling could help you minimize the impact of foreclosure so that you can move on with your life.
A short sale is different from foreclosure and is a great tool for helping homeowners, and other property owners get out from under a mortgage debt. A short sale in Florida is an agreement between a mortgage provider and the property owner that enables the owner to sell the property for market value and give the proceeds to the bank. The amount paid will be less than the amount owed on the mortgage, but the mortgage lender agrees to accept it and forgive the remaining debt owed. A short sale is a great way to get out from under a mortgage debt that you no longer can afford while enabling the lender to recoup a significant amount of the debt that it otherwise would not receive.
Another great option for mortgage debt is to modify it instead of foreclosing or undergoing a short sale. A mortgage modification enables the property owner to maintain ownership of the home or another property whose purchase the lender financed. A mortgage modification often enables the borrower to obtain lower monthly payments that are affordable and enable the continued ownership of the property. Banks are often willing to support mortgage modifications so that they stand the best chance of recouping the money loaned plus a significant amount in interest. The repayment period is often extended, and the lending rate might be lowered to make it possible to repay the loan.