By Jeff Harrington, Times Staff Writer
“Eli Munoz-Soto and Marcial Solorzano held ownership stakes in more than 40 homes that got tangled up in Florida’s epic housing meltdown.
For nearly three years, their cases crawled through bankruptcy court, as they sought modified mortgages with lower payments to avoid foreclosure. Finally, in a hearing this month, their attorneys presented a plan that some of their lenders and other affected parties had agreed to — enough to justify a court-imposed “cramdown” that makes everyone accept the new terms.
“You’ve relieved your debt. You have new lending terms you can now afford,” Judge Catherine Peek McEwen told the two debtors. “So, congratulations!”
One case down, roughly 68,000 to go in the ever-busy U.S. Bankruptcy Court for the Middle District of Florida. Bankruptcy filings in the Tampa Bay area continue to drop from their 2010 peak, falling another 20 percent over the past 12 months to reach levels not seen in four years.
But the plunge in new cases in the bay area has done little to alleviate a backlog that could be months if not years away from returning to normal levels. The longer cases take, the longer until creditors can be paid and debtors can start rebuilding their financial lives.
Moreover, strained courtrooms already operating with smaller staffs because of budget cuts may find the situation worsen if bankruptcy filings rise once more – which is exactly what many observers predict.
“I think we’re going to be in for a huge storm,” said St. Petersburg bankruptcy attorney Charles Moore. “I think we’re in a weird, artificially created low… All of us are asking why (bankruptcy filings) are so low right now. The economy didn’t magically get better over the last two years.””