Facing foreclosure can feel like an overwhelming and isolating experience. Needless to say, many people often search for one thing: How to stop a foreclosure?
If you find yourself in this situation, it’s essential to understand what foreclosure means and the options available to you.
Foreclosure is the legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments.
The lender may sell or take possession of the property, leading to the loss of your home. Fortunately, there are steps you can take to stop a foreclosure and regain control of your financial situation.
What Is Foreclosure?
Foreclosure is the legal process that occurs when a borrower has not paid the mortgage and has missed several payments.
Upon the mortgage going into foreclosure, the bank has a legal right to take the property and sell it in order to recover the losses occurred.
This whole situation is stressful not only for your credit but also for your prospects for future loans. Being aware of the foreclosure timeline is highly important.
Basically, on average, depending on state regulations and the lender’s policies, a property can be subjected to foreclosure in a period of three to six months following the default.
The more promptly you tackle the first signs, the higher the chance of your problem being solved you will have.
How To Stop A Foreclosure? 3 ULTIMATE Ways You Must Know!
In case you want to discover how to avoid foreclosure, then these 3 practical methods you won’t want to miss are worth considering as they can help you to keep your house and decrease the financial strain.
Negotiate A Repayment Plan
When you want to know how to stop foreclosure, the first thing you can do is to contact your lender and propose a repayment deal.
Most banks are ready to help the borrowers provided that they can prove their sincere intention to solve their financial difficulties.
A repayment plan is a way for you to pay off the unpaid installments while giving you time to settle your monthly contributions.
It is advisable to explain clearly to your lender your financial status and the actions you are ready to execute. In this way, you will be able to fulfill your obligations. Such a partnership can bring goodwill and most likely has the best result in this case.
Request Modification Of Your Loan Terms
A very practical solution to stop a foreclosure can be to request a modification of your loan terms.
This can be done in the following ways:
- Getting a lower interest rate.
- An extension of the period.
- A reduction of the principal amount.
Some kind of a change in the loan agreement that is feasible for you will be your best move. Starting with taking your actual financial situation on paper is a key step.
The main things that you need to include there are your monthly income, your known expenses, and your troubled times.
Many lenders introduce beneficial programs aiming to assist homeowners in tough times, so it is crucial to check their availability.
Consult With A Foreclosure Attorney
For those people who are despairing of what to do next, the right choice might get in touch with a foreclosure attorney who can give them clear guidance and valuable advice.
Legal professionals with a focus on foreclosure are capable of enlightening you about your rights, analysing your case, and devising a plan of action that fits your specific requirements.
Their role can also be to speak with your lender and bargain for the best result on your behalf, to guarantee you that the other party is treating you fairly all the time.
Though hiring a lawyer may mean paying fees, the expected advantages of legal help can completely trump the cost! And yes, it is particularly so in the case of house saving.
Can Bankruptcy Stop A Foreclosure?
So, many people threatened with a legal procedure that can make them lose their houses are asking the question, “Can bankruptcy stop a foreclosure?” The answer is affirmative, but it has a set of advantages and disadvantages corresponding to it.
Bankruptcy can be a life-saving tool at the nick of time. It suspends unpleasant situations that appear during the foreclosure process, giving you ways to save your home. Albeit temporarily, it also gives you time to consider your financial position.
It needs to be clear, however, that bankruptcy is no magic bullet every time. The type of bankruptcy a person files (Chapter 7 or Chapter 13) will decide if he or she is able to keep the home or not.
Among the possible results of Chapter 7 bankruptcy are the situation when you did not manage to pay your house and the property was sold.
However, on the other hand, Chapter 13 bankruptcy would allow you to come up with a plan to pay back without losing your property.
With that said, bankruptcy is not an absolute, foolproof solution. And you should definitely seek the advice of a skilled bankruptcy attorney.
They will be able to guide you through the bankruptcy process and suggest the optimal option for you. And isn’t that the best course of action?
Who Can Help You With Foreclosures In The USA?
In the event of a foreclosure threat/risk in the United States, there’s a way out! You see, there are numerous organizations that you can turn to for help.
These can be the following:
- HUD-approved housing counselors.
- State attorneys general.
- Government agencies like HUD and FHA.
These resources can help you evaluate your options and also assist you in the process.
Moreover, entities like NeighborWorks, the HOPE for Homeownership Hotline, and the National Community Reinvestment Coalition can give you advice and help you out.
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