What Options Do You Have When Facing Foreclosure?
Posted on: 26 October 2021
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Owning a house is a big responsibility, and if you fall behind on your payments, your lender can take your house away. Lenders must follow the legal steps of the foreclosure process to take your home from you, and this process does not have overnight. If your lender begins the process, you might have time to stop it. If you face foreclosure, here are some of the options you can use to face it.
Let the Bank Take It
If you do not have a way out of the foreclosure or do not mind losing your home, you can let the bank take your house. If you decide to let the bank have the house, you can stop paying your mortgage payments and move out by the deadline. Your lender will let you know when you must move out. If you lose your house to foreclosure, your credit will suffer, plus you will not get any of the equity from the house that you owned. Avoiding foreclosure is the better choice, and you can do this in several ways.
Work on a Loan Modification
One of the options you can use to stop a foreclosure is a loan modification, and a foreclosure attorney can assist with this option. A loan modification lets you keep your house and your mortgage, but it changes the loan. It might reduce the loan balance to help you owe less, and it might change the interest rate, duration, and payment amount. If you make all your payments after modifying your loan, you will not lose the house.
File for Chapter 13 Bankruptcy
The other option you have is to file for Chapter 13 bankruptcy. Chapter 13 bankruptcy is the bankruptcy option that requires repaying your debt. The good news, though, is that it stops a foreclosure from going through by providing you with more time to repay the money you owe. You will have a repayment plan to follow if you choose to file for Chapter 13, but your lender will not be able to take your house from you if you follow this plan. Chapter 13 might provide other relief to you, too, and you can ask a foreclosure attorney to learn more.
If you want to stop a foreclosure from taking place, you must act swiftly. If you wait too long, it might be too late. You can learn more by visiting a foreclosure attorney in your city.