Bankruptcy in Florida

When a person files bankruptcy all of their property becomes part of the bankruptcy estate even homestead. So, the debtor cannon sell or mortgage the property because they do not have title. Title has to be returned to them in the bankruptcy. One way for the debtor to get title back from the bankruptcy estate in a Chapter 13 is when the Chapter 13 Plan is filed and it provides that the debtor will keep the subject property or at least does not say that it will be sold or surrendered to a lender; and the court enters an Order Confirming the Plan. After the plan is confirmed, title goes back in to the debtor.

Requirements to insure based on a Chapter 13 Plan: ◦Record a certified copy of the Chapter 13 Plan

◦Record a certified copy of the Order Approving the Plan ◦Record a certified copy of the pertinent pages from the bankruptcy docket showing that there was no appeal of the Order Approving the Plan.

Constructive Abandonment

When a person files bankruptcy all of their property becomes part of the bankruptcy estate even homestead so the debtor cannot sell or mortgage the property because they do not have title. Title has to be returned to them in the bankruptcy. When the bankruptcy is closed and the property is listed on Schedule A and the Bankruptcy Trustee does not sell the property, title vests back in to the debtor when the bankruptcy is closed i.e. terminated. This is known as constructive abandonment.

Requirements to insure based on constructive abandonment: ◦Record a certified copy of Schedule A showing that the subject property was listed.

◦Record a certified copy of the bankruptcy docket showing that the bankruptcy case is closed.

Homestead - Judgments

Filing bankruptcy only removes the personal debt but does not remove a judgment lien from property without a further Order from the bankruptcy court. However, when property is claimed as homestead, the agent may be able to insure over the judgment(s) using WFG's Affidavit of Homestead procedure. Contact Underwriting for the Conditions For Use and the Affidavit of Homestead.

Homestead - Sale Of

When a person files bankruptcy all of their property becomes part of the bankruptcy estate even homestead. After filing bankruptcy, the debtor cannont sell or mortgage the property because the debtor does not have title. Title has to be returned to the debtor in the bankruptcy. One way of returning title to homestead to the debtor within the bankruptcy is to list the property as Exempt on Schedule C of the bankruptcy. Then the creditors and the Trustee have 30 days after the meeting of creditors to object to any exemptions on Schedule C. If they do not object in that 30-day period, title goes back to the debtor so he/she can sell or mortgage the homestead/property.

Requirements To Sell Homestead Property When Owner Files Bankruptcy: ◦Record a certified copy of Schedule C to show that the property was listed as Exempt in the bankruptcy

◦Record a certified copy of the Docket to show that neither the Trustee nor any creditors objected to the claim on Schedule C that the property is exempt from the bankruptcy estate.

Judgments - Property Acquired After Bankruptcy

As long as the debt/judgment is listed on Schedule F in the bankruptcy and the debtor obtains a discharge in the bankruptcy, the judgment would not attach to property acquired after the discharge was entered.

Requirements to insure over the judgment(s): ◦Record certified copy of Schedule F showing the debt/judgment.

◦Record certified copy of the discharge. ◦Record certified copy of the first page of the bankruptcy docket showing that the bankruptcy is closed.

Notice Of Intent To Sell By Trustee

For non-homestead, the bankruptcy trustee can file a Notice of Intent to Sell with negative notice. What that means is, if nobody (creditors or the debtor) file an objection to the sale within the 21-day period from the date that Notice of Intent to Sell was mailed, the Trustee can sell the property without a court order. If the debtor or a creditor object to the Notice of Intent to Sell, then a hearing and a bankruptcy court order would be required.

Requirements to insure a sale by the Trustee: ◦Wait for the 21-day period to expire.

◦Review the current docket to confirm that no objections to the Notice of Sale were filed ◦Record certified copies of the following: ◾1. Notice of Intent to Sell ◾2. Docket evidencing no Objections to the Notice of Intent to Sell were filed during the 21-day period

◦If an objection to the Notice of Intent to Sell is filed, record certified copies of the following: ◾1. Notice of Intent to Sell ◾2. Order Denying the objection and authorizing sale' ◾3. Bankruptcy Docket

Stripping Liens

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