In Florida and all other states, when a consumer files a bankruptcy, a legal order called the automatic stay goes into effect. This court order prohibits creditors from taking further collection actions against the debtor unless by permission of the bankruptcy court. This is an effective remedy that saves homes from the entry of foreclosure judgments and even from pending sheriff's sales.
Lower-income Americans in Florida and nationwide are entering a financial downturn due to their inability to keep up with mounting consumer debt. Undramatic earnings growth has stymied their ability to meet steadily growing prices and debt. They are financing more of their spending by taking out new credit and loans. Creditors are squirming also as they view the specter of consumers taking on increasingly unaffordable debt loads. The question on the minds of many nervous creditors is to what extent the bankruptcy boom of earlier years will step in to mediate the expected problems.