1. Lienholders in foreclosure proceedings increasingly argue that debtors who surrender property in bankruptcy waive all foreclosure defenses. Ostensibly, in response to this trend the Florida Legislature recently enacted a new bill, Senate Bill 220, which allows a lienholder to file a debtor’s bankruptcy documents in state foreclosure proceedings to create a “rebuttable presumption” that the debtor “waived any defense to the foreclosure action.”
  2. Under this act, for the lienholder to rely on the presumption of waiver, the lienholder must show that the bankruptcy documents filed by the debtor: (1) were filed “under penalty of perjury,” (2) evince the debtor’s intent to surrender the mortgaged property to the lienholder, and (3) have not been withdrawn by the debtor. Additionally, the lienholder must show the debtor’s bankruptcy was finalized by a final order which discharged the debts or confirmed a “repayment plan that provides for the surrender of the property.”
  3. Notably, the presumption of waiver does not preclude the defendant “from raising a defense based upon the lienholder’s action or inaction” subsequent to the filing of the pertinent bankruptcy documents. Although the act provides only a limited window to overcome the presumption of waiver, we anticipate the foreclosure defense bar will find innovative ways to interpret this provision. The act takes effect October 1, 2018.

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