Deficiency laws in Florida

we are going to close on march 12 on our 1st of 236 000 they are taking 100,000 and our 2nd with chase for 46.000 they want a deficiency they want us to sign a note to pay back would you sign it and can we file bankrupt and get rid of it? we can't afford to make payments my husbad is on social security and i am the only one working and i don't want my wages garnished we are florida what will ha[ppen under there laws

Hi delores!

Welcome to forums!

You may be able to get rid of the deficient amount if you file bankruptcy. However, I would suggest you to contact a bankruptcy attorney and take his opinion in this regard.

Sussane

hello jim777. i handle the negotiating for a local attorney with foreclosre defense, modifications, and short sale negotiations. i would recommend you try to short sale the property and have the deficiency portion negotiated into the short sale. both lenders can still come after you for deficiency judgments if you stand by and do nothing and you are not a candidate for a deed in lieu of foreclosure because you have two liens on the property. at least with a short sale the deficiency is negotiable.

I also wanted to add that it doesn't matter what state you reside in, they will still come after you. They cannot freeze your assets, however my understanding is that in different states they can garnish your wages. I hope this helps.

We have an investment property in Ocala, Florida and are seeking a Deed in Lieu. B of A is asking for a cash contribution to pay down the balance. We owe $179K & it appraised at $70K. If we make a 5% cash contribution, and they accept our Deed in Lieu, can they still come after us for the deficiency and for how long? 5-7 years??? Can we negotiate with them, if they do get a cash contribution, to not pursue a deficiency? Is there another way to pursue this to get the same result we're seeking? They're suggesting to Short Sale first & Deed in Lieu would be last resort. What do you recommend? Thank you!

Hi Susan and Peter,

If your lender accepts a deed in lieu, then he will forgive the deficient amount. He will not come after you for the balance amount. I would certainly recommend a deed in lieu because, you won't be liable for the deficient amount resulting from the sale. In a short sale, you are liable to pay the balance amount to the lender.

Thanks

Using the short sale process, we had a signed contract for 170k, bank would not approve, they wanted 180K, buyer walked, we did a deed in lieu and was approved, now bank is selling property for 159,900. Why did the bank not approve the short sale then turn around and sell property for less? Which is worse regarding credit reporting, short sale or DIL?

Hi marie!

Welcome to forums!

It is the bank's discretion whether or not they will be ready to sell off the property. A deed in lieu of foreclosure has a greater affect on the credit report compared to a short sale. A deed in lieu of foreclosure will reduce your credit score by 250 points whereas a short sale will reduce your score by 80-100 points.

Feel free to ask if you've further queries.

Sussane