Foreclosure is a scary term that no one wants to really hear, but if you do get a notice of foreclosure there are ways you can slow it down and postpone things. You might even be able to halt it entirely although this is by no means a guarantee.
There are a lot of variables at play and it will all depend on your own individual circumstances but below I’ve outlined some methods that will at the very least help postpone a foreclosure for at least a little while. So, don’t panic right away if you are facing a foreclosure because there are ways to combat it.
Contact Your Lender/Creditor
OK, many people probably won’t want to do this but trust me it can be a huge help when it comes to a foreclosure postponement. A foreclosure is a time-consuming process so many lenders will want to avoid it when they can and it can end up being a very costly process as well.
So, if you are open in talking with them you might be able to work out a way to postpone the planned foreclosure. There are multiple ways this can be approached and it will really depend on what your lender will agree to.
The most common method is a new payment plan which you and your lender will agree to, you’ll continue to make payments but they will be more in plan with what you can manage. Forbearance is also a possibility in which your mortgage payments are temporarily suspended and the deferred amount will be added on to the end of your loan.
Adjustments can also be made to your loan to make your monthly payments more manageable or your mortgage lender may agree to give you a completely new loan says Alan Bell Mortgages. This is known as refinancing and it can help give you lower monthly repayments.
Filing for Bankruptcy
Filing for bankruptcy isn’t going to be something many people will want to do however it might be able to allow you to avoid foreclosure. Be warned though that filing for bankruptcy will negatively affect your credit rating and can cause further financial issues in the future. Getting a loan in the future will be difficult with a bankruptcy on your record and it will stay there for 10 years in most cases.
Filing for bankruptcy might not save your property either it really depends on whether your equity is exempt. Many mortgage lenders are secured creditors as well which means getting a bankruptcy ruling won’t wipe out the debt however it will halt a foreclosure at least temporarily. And more importantly, it will give you some time to plan for the future and your lender may also be open to working with you to plan your repayments again.
A Short Sale
While a short sale will avoid a foreclosure it is still going to be the last resort for many people since you won’t actually get to keep your home. But there are still some positives to consider for one a short sale will prevent you from having a foreclosure on your record and wipe off the debt.
However, a short sale will not go ahead unless the lender agrees which isn’t always easy because they are effectively agreeing to sell the property for less than its value. The lender will also be in charge of accepting any offers so while it will avoid a foreclosure and possibly give you more time it still isn’t something many people or lenders will really want.
This is going to be another difficult one for many people because few people will ever want to challenge a foreclosure with a lawsuit unless they are sure they have a strong enough case. However, a judge may award you with a preliminary injunction to prevent a foreclosure while the case is being looked at.
If you and your lawyer have a strong enough case to argue against a foreclosure then it could all work out in the end. However, if your case isn’t strong enough to go to court or you end up losing the foreclosure process will continue from where it left off. A lawsuit isn’t generally advised unless your lender hasn’t followed proper protocol in some way.
So, that is a variety of ways you can at the very least help temporarily postpone a foreclosure. I would also strongly advise doing any research you can about your states individual laws when it comes to foreclosures as well. That way you will be able to better keep a look out for a way to postpone the process.