23 Nov Bankruptcy In Florida: Renting Is A Crapshoot.
As a Bankruptcy Attorney in Southwest Florida, I speak with bankruptcy clients who are surrendering their homes in one of the worst housing markets in the United States. Bankruptcy is usually their only option to a void the negative consequences of the foreclosure process.
One of the unfortunate complications of this reality is the state of the rental market. One of the first questions that I ask a future renter is how stable is the homeowner that you will be renting from.
Let’s face it, many individuals in Southwest Florida purchased risky investment homes. I call them the Carlton Sheets wanna-bees. I do not mean this in a negative or mean way. These were the people who purchased a second or third homes with the hope of having their renters pay the mortgage., and usually they were able to purchase the home with No Money Down.
Unfortunately, sometimes the best laid plans sometimes go awry. These were the people who couldn’t wait to talk about the equity in their homes and how much their homes were worth. Now, they have to find other things to talk about. These are the same people who are now renting out their second and third homes for $800.00 to $900.00 per month.
The problem is that the homeowner still has to pay the mortgage , homeowners insurance and the taxes. This is where the problems begin to arise. While the homeowners are now receiving some immediate cashflow, the cashflow is not covering the monthly expenses of the home.
So, where does a distressed homeowner turn when the cashflow does not meet the monthly obligations? That’s right the HELOC (Home Equity Line of Credit) and the credit cards. Recently, a report came out saying that more people are keeping current with their credit cards rather than their mortgages. The article didn’t have much meat to it with regard to the rental market. But, the article was discussed at www.bankruptcylawnetwork.com
So, the lesson to be learned here is simple. If you are going to rent a home until you get back on your feet, be careful and unpack slowly. You may be forced to move again if your landlord doesn’t use the rent money to pay the mortgage, taxes and insurance. Normally, this will become evident when the foreclosure papers are served on the tenant.
Latest posts by Carmen Dellutri, Esq. (see all)
- Chapter 13 Bankruptcy And Home Owners Associations - December 2, 2013
- 5 Reasons Every Small Business Owner Needs To Consult With A Bankruptcy Attorney - October 28, 2013
- Spouses Do Not Need To File Bankruptcy Together - August 28, 2013
- Is Your Homestead Exemption Bulletproof under 11 USC 522(o)? - July 31, 2013
- Can My Chapter 7 Bankruptcy Be Dismissed? - June 28, 2013