A Jacksonville representative recently filed a bill in the Florida House that would give lienholders more rights in foreclosure proceedings. The bill proposes legislation that would allow documentation from bankruptcy cases to be considered in home foreclosure actions. A new section of Florida Statute, titled “Actions in Foreclosure,” would be created as a result of the bill.

A lienholder would be able to include any documentation from a bankruptcy case that could show that the defendant planned to surrender the mortgaged property. If a bankruptcy has been discharged, this documentation would indicate that the defendant had relinquished interest in the property and would not defend the foreclosure. The representative explained that a wildcard exemption loophole would be closed by the bill.

Currently, those filing for bankruptcy in federal court have the right to retain certain assets if they agree to surrender their home. With the wildcard exemption, the individual is able to retain $4,000 in assets. The supporter of the bill believes a problem occurs when the foreclosure is later contested in state court. He contends that some homeowners try to rent the property involved in the foreclosure and seeks to eliminate this practice with the proposed legislation. The bill does provide for the ability of the homeowner being foreclosed upon to have legal recourse.

It is uncertain at this time whether this bill that expands lienholders’ rights will be passed in the Florida House. However, many Florida residents still may face bankruptcy and potential home foreclosure. Legal counsel familiar with bankruptcy law can assist those individuals dealing with these complicated issues. An experienced attorney is a valuable partner in taking steps to regain financial stability.

Source: floridapolitics.com, “Florida House bill would close ‘wildcard exemption’ in post-bankruptcy foreclosure cases“, A.G. Gancarski, Jan. 24, 2017