THE RULES FOR FIGHTING FORECLOSURES
                                                            HAVE CHANGED


As a result of the recent decision by the Eleventh Circuit Court
of Appeal,  debtors who has filed bankruptcy to stop a foreclosure
of a residential or commercial property  will have limited options if
they decide to surrender their property.The decision of Failla v Citibank,N.A. prevents a debtor in either a chapter 7 or chapter 13 
from filing a defense in a foreclosure case if they indicate in their 
Chapter 7 Statement of Intention  to "surrender"  the property. Similarly,  debtors by indicating in a Chapter 13 plan their intention
to surrender the property will have the same affect.

The Court's rational was that a  debtor's decision is irrevocable once they have received their discharge. In many cases the lender will sell the debtor's  mortgage to another lender either  during or shortly after the entry of a discharge. The "new" lender will then take several months or longer to initiate or complete an existing foreclosure. The debtor will then  contact an attorney to fight the foreclosure.

Under the Failla  decision, the  former debtor  will not be able to fight the foreclosure as the intent to surrender the property in the prior and separate bankruptcy proceeding is binding on the debtor.
The lender in the foreclosure proceeding,in the event one defends the foreclosure, would be able to re-open the debtor's prior bankruptcy and seek sanctions against the debtor which could include the revocation of their discharge in the bankruptcy.

 Thus, if an individual files and then receives a discharge in a Chapter 7 or 13 bankruptcy and has stated his intention to surrender any real property, the discharge terminates a defendant's rights to 
defend the foreclosure. Thus, it is important to consult an attorney
as to all your options prior to filing bankruptcy,as the Failla decision will limit the right of individuals to fight a foreclosure of a property "surrendered" in a prior  bankruptcy.