Are you worried about losing your home to foreclosure? Are you finding it difficult to communicate effectively with your lender? With each passing day, your situation has the potential to worsen. Fortunately, there are ways to prevent foreclosure and find yourself back on track in the near future.
File for Bankruptcy?
Many people facing foreclosure never consider bankruptcy. There is one primary reason for this: they don’t want to add more financial trouble to their list.
Remember, bankruptcy can actually improve your situation. It doesn’t matter if you file for Chapter 7 or Chapter 13, the court will issue an automatic stay. This means that all creditors, including your mortgage lender, are required by law to cease collection activity. They have no choice but to abide by this request.
In this case, the foreclosure process will come to a halt. Generally speaking, this gives you three to five months to address your situation, if you file for a Chapter 7 Bankruptcy. If you file for a Chapter 13 Bankruptcy, you can get up to 60 months to get caught up on your mortgage arrears.
While a bankruptcy filing is one of the best ways to prevent foreclosure, it is not your only option. Here are some other ideas to consider:
- Challenging the foreclosure in the state courts. If the lender has acted improperly or not acted fairly, then you can contest the foreclosure in the state courts. Pleadings can be filed listing the legal basis why the mortgage company should not be able to foreclose.
- Mortgage modification. With this, your lender agrees to modify your loan so that you can catch up on missed payments and afford to pay in full and on time in the future.
- Short sale. Your bank may allow you to sell your home for less than what you owe. You still have to move out, but you won’t go through the foreclosure process.
- There are additional legal options as well.
We are asked time and time again if there is any way to prevent foreclosure. The information above should help answer this question.
While there may be some benefits of foreclosure, most people look for ways to avoid this. If you want to stop foreclosure dead in its tracks, contact us for professional guidance. We can explain your options and help you formulate a plan to save your home.