There is nothing worse than the thought of slipping behind on your mortgage payments. If you're unable to catch up, it could lead to foreclosure at some point in the future.
Before it gets to this, you may want to discuss your options with your lender. For example, they may agree to a loan modification in an attempt to get you up to speed and to help you avoid the same issues in the future.
If this doesn't work, bankruptcy could be the answer you have been searching for.
Here's how bankruptcy can help
If you are facing foreclosure, you can use bankruptcy to receive an automatic stay from the court. This means that creditors must give up on collection attempts immediately. So, even if a foreclosure sale is in place, the law states that it must be put off for the time being.
Since it can take several months for the bankruptcy process to come to an end, you have some time to get back on track.
However, there are situations in which the lender can fight back. Here are the exceptions to the automatic stay:
- If the foreclosure notice has already been filed
- If the lender takes the time to file a motion to lift the stay
Does this mean bankruptcy is the answer?
While it's good to know that bankruptcy can help prevent foreclosure, you shouldn't head down this path until you compare a full list of pros and cons.
For instance, you can use bankruptcy to prevent foreclosure, but you may have reservations about the idea of this remaining on your credit report for a minimum of seven years or leading to a situation in which you lose some of your assets.
If the most important thing to you is saving your home from foreclosure, you should at least consider bankruptcy. Even if you don't end up moving forward, learning more about bankruptcy will help you understand your legal rights and the best way to move forward in the near future.