File Bankruptcy, Defend Foreclosure
Yesterday’s ruling in Correa v. U.S. Bank was fantastic on many levels. One of them, though, was quite subtle, so I want to make a point of highlighting it.
Do you notice, in the opinion, how the court made a point of saying that Ms. Correa had filed bankruptcy? What’s interesting here is that this had ZERO impact on the court’s decision.
You see, Florida homeowners can file bankruptcy, “surrender” the house, and still defend their foreclosure lawsuit. Banks love to argue otherwise, but so long as the homeowner remains on title to the property through the bankruptcy process, nothing stops that homeowner from continuing to defend the foreclosure lawsuit. That means, as Ms. Correa did, that you can, yes, win the suit – even after filing bankruptcy.
So how do you go about making sure you stay on title even upon filing bankruptcy? It’s simple, actually. If you “surrender” the house, and don’t “exempt” it, and the bankruptcy trustee gives some indication that he/she intends to sell title to the property, you amend your bankruptcy filings to keep the house through the bankruptcy. This is totally legal and a perfectly legitimate way to avail oneself of bankruptcy laws, enjoy the benefits of bankruptcy, and still defend your foreclosure lawsuit.
Mark Stopa
www.stayinmyhome.com
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