Rental property and lot underwater - no go for ch13?

[realestatee]

So, I talked to a bankrupcy attorney today. See one of my earlier posts:
We have a rental with 1st and 2nd mortgages and a vacant lot which will balloon in April. Wanted to file ch 13, but atty said that we can't because even if we surrender the property there was a law passed in 2005 that would allow the bank to collect the defficiency through ch 13. Because the bank may not be interested in selling foreclosed properties at the highest price this defficiency may add up to a lot of money. We are underwater about $100,000total for both properties and if they add any fees or other expenses, I guess the total can go up? We make almost $200K/yr, so we do not qualify for ch7.
So, the attorney said that it doesn't make sense for us to file ch 13.. And therefore, all we can do is try to negotiate with the bank. They don't want to negotiate.
CAN THIS BE CORRECT?
ANY FLORIDA ATTORNEYS? I WILL HIRE AN ATTORNEY TO FIGHT THIS if there is a FIGHTING CHANCE!

[newbie2]

I'm at a lost to understand why you were told what you are reporting. Talk to another attorney, something isn't making sense here.

[optimistic1]

From the links that I have read through below, your best bet is to do a short sale, this changes how they treat the deficiency, they will either forgive, or settle the difference but deeply discounted.

Yes they could collect the deficiency judgement, but its no longer secured by anything as you wouldnt be keeping it. The amount of the deficiency they would collect, would be governed by your monthly payment mulitplied by your plan length, and then it would be divided semi-equally amongst all of your creditors, unsecured being last on the list, which would include the deficiency judgement.

If you make 200k a year, I see your payment being very high, unless you have lots of justifiable expenses.

Have they actually run any numbers at all? You might end up paying less per month on your BK13 payment, then continuing paying on the mortgages.

The small amount of research that I have done on your topic, yields interesting points, noted on some local FL attorney blogs. The overall likelihood of a deficiency judgement is low says one blog, and when they do sue and win, they sell the judgement to a collection agency or local law office / collection agency to collect it from you. At which point, you can negotiate to settle the deficiency at a lower amount. Other blogs from attorneys are saying the exact opposite, they sue, win and collect all the time for deficiencies, so who knows.


A quick search yielded some results for you to read.

http://ronwebster.com/content/deficiency-judgments-florida

http://www.alperlaw.com/mortgage_fcdef.html

http://www.avvo.com/legal-answers/definition-of-deficiency-judgment--being-sued-in-f-8148.html

http://southfloridalawblog.com/2009/06/12/what-is-a-deficiency-judgment/

http://www.avvo.com/legal-guides/ugc/deficiency-judgments-after-foreclosure-in-florida

http://www.assetprotectionfl.com/2009/05/first-mortgage-lender-sues-for-deficiency-judgment.html

[realestatee]

Short sale option

Met with realtor today, she had more info than anyone to date. I am glad we didn't just walk away. We can't pay this 15% ridiculous modified mortgage and after 3 months we can tell the bank that we have a realtor and its listed, this protects us from foreclosure for a year. The realtor does all the work on our behalf for short sale, she works with the bank. We will have to provide a letter of hardship, financial statement to show expenses and why we can't pay, tax returns, bank statements, etc. for last 2 months. Still think that Wachovia practices preditory lending and should be sued. Noone should be charged 15% interest on mortgage and least of all people willing to keep the property and pay...