If you are struggling to make ends meet and haven’t been able to pay your mortgage on time, you may have gotten a letter telling you that your home is going to go into foreclosure. If you have missed payments or gotten this letter, it’s time to start taking action to prevent your home from entering into foreclosure and being taken from you.
There are a few different options that may help you avoid foreclosure, but the main one is to seek bankruptcy. Both Chapter 7 and 13 bankruptcy have the potential to stop foreclosure actions immediately, so you have time to negotiate with the lender and to take steps to save your home.
What happens when you choose bankruptcy to stop foreclosure activity?
When you decide to select bankruptcy to help with foreclosure activity, the filing puts a stop to foreclosure actions immediately while the court reviews your case. If you file for bankruptcy, you’ll have more time to negotiate with your lender. For example, you may negotiate with a lender to work out a forbearance agreement, which would move the missed payments to the end of the loan and bring you current. However, this would require the cooperation of the mortgage company.
Alternatively, with a Chapter 13 plan, you may force the lender to let you pay back what is past due over up to five years, so that you don’t have to worry about late fees or missed payments threatening your home any longer.
Are there alternatives to bankruptcy to stop foreclosure?
Yes, you can seek a loan modification or try to complete a short sale with your lender’s approval. Another option is a deed in lieu. With this, your attorney negotiates to have you sign over your deed or title. This effectively cancels your mortgage, but you would give up your home.
There are options to help you save your home or to get out of the debt that owning a home creates. You have different options open to you, so it’s worth going over them with your attorney, so that you can decide if you want to stay in your home, allow it to go through foreclosure, sell it or attempt to negotiate a deed in lieu of foreclosure.