You love your home and you will do whatever you can to stay put, even if you’re having trouble making your mortgage payments.
Unfortunately, your strong feelings alone are not enough to ward off your mortgage lender. If you’re facing foreclosure, it’s imperative to learn more about the many steps you can take to protect your home.
Here are some of the ways to stop foreclosure:
- Bankruptcy. This can be a very effective way to stop the foreclosure process. Once you file, your lender is generally unable to move forward with most collection activities. While this can buy you some time, you still need a plan for saving your home as your bankruptcy case moves forward. What options you will have will vary based on many factors, including whether you file for Chapter 7 bankruptcy or Chapter 13.
- Foreclosure workout. Your lender would likely much rather work something out with you than repossess your home. For this reason, take the time to contact your lender to discuss any options that are available. You may be surprised to find something that suits your financial situation, and that you can move forward with quickly.
- Short sale. With this, the lender agrees for you to sell your home for less than what you actually owe. While it doesn’t do anything to keep you in your home, it does allow you to avoid the foreclosure process (and the long-term impact on your finances).
- Deed in lieu of foreclosure. With this, you sign over the deed of your home to the lender. Although banks are typically reluctant to consider this, depending on your goals and circumstances, it may be something you want to learn more about.
With so many ways to stop foreclosure, many things could impact which would be best for you. As someone in this position, you need to learn about the pros and cons of each strategy, while also considering the impact each will have on your finances and goals (both in the short- and long-term).
Once you have knowledge of your options and an idea of how you want to proceed, you can take the steps necessary to protect your legal rights and, hopefully, remain in your home or fulfill your other home-related goals.