Perhaps you had a medical emergency or unexpected medicals bills and healthcare costs. Maybe your spouse lost their job, or you had a string of bad luck. For whatever reason, you are struggling to make your mortgage payments. The home you once dreamed of owning could be in jeopardy of not being yours any more thanks to a legal process known as foreclosure. Below we outline tips on how to stop foreclosure on your home and what you do to prevent it.
Tips on How to Stop Foreclosure
Even though it may seem that there are no options other than to let the bank take your home and uproot your life, there are alternatives to foreclosure and ways to get back on your feet. Armed with the knowledge of how foreclosures work and what options are available to them, homeowners can sometimes keep their homes with the assistance of a skilled Atlanta bankruptcy attorney.
Face the Issues
It is tempting for many homeowners to ignore their looming potential foreclosure. They may feel overwhelmed or that there is nothing that can be done. Refusing to deal with the problem is the worst step a homeowner can take when facing a foreclosure. The more time goes on and the more arrears your home loan collects, the fewer options you will have, and the harder it will be to keep your home. Reach out for help when the problems begin or even if you think you are about to have financial difficulties that could prevent you from paying your mortgage as agreed.
Contact Your Lender
One of the best tips for homeowners to follow is to contact their lender when their financial issues first arise or if they suspect they will be facing financial hardship within the next several months. It is at this time that you will have the most options and that your options will be the most favorable. Believe it or not, lenders do not want your house; therefore, they have options available to help most homeowners keep their homes if they want to.
Open the Mail
Pay close attention to any mail or other communications from your mortgage lender. The first several notices you receive are legally required under the Dodd-Frank: Title XIV – Mortgage Reform and Anti-Predatory Lending Act to explain your options and alternatives to foreclosure that they can help you with. This may include:
If any of these options sound like they might be worth pursuing, you should contact your lender. They will have paperwork to be completed to help you apply for different workout programs they may have available to you.
Mortgage lenders often work out repayment plans with their borrowers, depending on how far behind they are in payments, their income, and if their financial situation has improved. Not all homeowners will qualify for a loan modification, but if they do, this changes the terms of their loan, such as the duration, interest rate, and the amount of the payment. With modification, the mortgage arrears are tacked back into the loan. Even if you decide to apply for a modification, it can still be helpful to have an Atlanta attorney on your side to ensure your lender is processing your application in accordance with federal regulations.
A short sale allows you to work with the lender to sell your house for an amount less than what is owed on the loan. You still lose your home, but the lender agrees to take that amount to satisfy what you owe them. Short sales are often good choices for homeowners who can no longer stay in their home but also owe more than what the home is worth.
Reach Out for Help
There are several people and agencies who might be able to help you if you are facing mortgage foreclosure. Reaching out to each one can help you better understand your options to avoid foreclosure and which ones might be the best for your situation. This includes:
- A real estate agent to help determine the value of your home and what you might be able to get for it if you were to sell your home
- An Atlanta bankruptcy attorney who can help you understand how filing for either bankruptcy could help you
- A Housing and Urban Development (HUD) approved housing counselor who through housing counseling can help you understand and apply for the different government programs that might be available to help you and who can help ensure that your lender is following the bankruptcy laws when it comes to the foreclosure process
Watch Your Spending
Your first financial priority should be healthcare, and your second should be keeping your home and stop foreclosure. Now is an ideal time to budget by looking at your income and your expenses. Some homeowners are able to cut their spending in various areas in order to help them better afford their mortgages. Most financial experts and Atlanta bankruptcy lawyers will advise that you stop paying any unsecured debts, such as credit card bills until you are caught up on your mortgage. Not paying debts always puts you in a bind, but keeping your home is generally a higher priority than making credit card payments.
File for Bankruptcy
For some homeowners, filing for bankruptcy might be the financial relief they are looking for and a way to either keep their home or get out of their loan without owing anything further. Once their bankruptcy is filed, the lender has to cease all collection actions, including foreclosure. In some cases, this delay may be enough time for you to get back on your feet and catch up on your mortgage payments. In addition, Chapter 13 bankruptcy may be able to help you keep your home, provided that you can make your regular mortgage payments while you are making payments on your bankruptcy plan. Scheduling a consultation with an experienced Atlanta bankruptcy attorney to discuss the specifics of your situation can help you determine if bankruptcy is a viable option or you, and if so, which type of bankruptcy.
Filing for Chapter 7 bankruptcy is generally for debtors who are unable to afford to stay in their home but can reap the benefits of not owning a mortgage anymore and not having a foreclosure on their credit report. Once the mortgage is discharged with the rest of the debt, the homeowner is no longer personally responsible for their loan.
A Chapter 13 bankruptcy allows homeowners to pay their mortgage arrears over three to five years and to stay in their home if they choose. In this type of bankruptcy, certain debts can be paid over time in a payment plan to a trustee. However, homeowners who select this option will need to stay current on their mortgage and their Chapter 13 payment plan in order to remain in their home and avoid foreclosure in the future.
How to Stop Foreclosure on Your Home with an Atlanta Bankruptcy Lawyer
Our team of legal professionals at the Cornwell Law Firm wants to help you stop legal action and stay in your home, if at all possible. We can review each option with you and help you select the one that best aligns with your needs and goals. Get the fresh start you need and call our office today at 404-476-8644 to schedule your foreclosure prevention consultation with a knowledgeable bankruptcy attorney in Atlanta or fill out our online contact form.