A foreclosure defense lawyer from The Law Offices of Ronald I. Chorches. understands that many homeowners go through periods where finances can become very strained. This can occur because of a job loss, medical condition, divorce, or some other serious life event. Sometimes financial difficulties can just creep up on you because the cost of living continues to rise. Whatever the reason, these difficulties can cause a homeowner to fall behind on their mortgage payments. If they get too far behind, the bank or mortgage company will begin an aggressive campaign for those past due payments, with phone calls and letters. At some point, after so many missed payments, they may even begin a foreclosure action.
If this has happened to you, don’t panic. There may be some options that you have that will help save you from losing your home.
Decision-Making Time
When a homeowner falls a couple of months behind in their payments, most financial institutions will work with the homeowner to come up with some kind of payment plan that will bring them current. The reality is that the last thing the bank wants is your home. Not only is the foreclosure process itself an expense, but then the bank has to go through the process of trying to sell the home in order to recoup their losses.
Some of the options that they may agree to are:
- The homeowner makes up the late payments
- The bank will restructure the loan.
- The bank will issue a forbearance. This is where the bank will pause payments for a couple of months in order to give the homeowner a chance to get caught up.
If a homeowner has fallen significantly behind in their payments and the bank will no longer agree to any of the above options, the first thing the homeowner will need to decide is if they want to save it from being foreclosed.
A foreclosure will lower your credit score by about 300 points. It is also important to realize what a foreclosure means to your future ability to obtain a mortgage in the future.
Other Options
A foreclosure defense lawyer may suggest one of the following options to avoid foreclosure:
- Short sale – The property is sold for less than what is still owed on the mortgage, but the bank agrees to accept that lesser amount.
- Deed in lieu of foreclosure – The homeowner signs the deed over to the bank and owes nothing.
- Filing for Chapter 13 bankruptcy – In a Chapter 13 bankruptcy, the person’s debt is restructured, allowing them to keep their property. As soon as the petition is filed, an automatic stay is issued by the court. This stay ceases all debt collection by creditors, including any foreclosure proceedings the bank had started. A repayment plan is then created that allows the person to repay back debt but at payments they can afford.
Contact a Bankruptcy Law Firm Today
If you are facing foreclosure and unsure what to do, a bankruptcy attorney can evaluate your situation and explain what is the best legal option for you. Call an experienced attorney today for help with your case.