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The Florida legislature is making decisions on how to spend the remaining $200 million the state received in foreclosure settlement funds. The money comes from a settlement made with five large banks and was mostly distributed to home owners who were unfairly foreclosed upon while making direct payments or waiting for a modification plan.

There are differences between the senate and house plans, but in general there are plans to upgrade the court system to speed up the forclosureprocess with updated computer systems and retired judges to hear cases, approximately $10 million for legal aid services to assist lower income families facing foreclosure and $40 million for the State Housing Initiative (SHIP).

The funds are part of the $25 billion given to multiple states that experienced fraudulent foreclosure practices. Florida’s share of the fund was $8.4 billion.

In Florida, it is possible to temporarily halt foreclosure when a bankruptcy petition is filed. The homeowner must ultimately be able to afford the mortgage payments, but the process offers time for the owner to arrange ways to pay any past due funds. Also, completing the bankruptcy process may eliminate some unsecured debt, and allow the homeowner to divert the extra money to the mortgage payment. A bankruptcy attorney may be able to help a homeowner decide which chapter of the bankruptcy code best suits their situation. Chapter 7 is commonly used to eliminate all unsecured debt. Chapter 13 is a longer plan that allows the debtor to pay off a portion of his or her debt based on their income over a period of several years.

Source: The Florida Current, “Senate moves closer to House on foreclosure settlement spending,” Gary Rohrer, April 25, 2013