Losing your home to foreclosure is a terrifying thought in the mind of most homeowners. Usually, no one wants to face foreclosure, but unexpected situations can lead to financial difficulties. It is best to approach your lender to inform them of your difficulties and request loss mitigation options. The most common loss mitigation options include:
The role of loss mitigation is to help you get back on track with your mortgage payments in an easier way. Some lenders are very selective with the form of loss mitigation they offer, make sure to find out from them. However, if none of those options work and you don’t want to lose your home, what do you do?
File for bankruptcy. You can use bankruptcy to stop foreclosure at any point, even if the sale date is in a few hours. If you are worried about the effect of bankruptcy on your credit card, consider the impact of a foreclosure on your credit score. It’s all about perspective. If you file for chapter 13 bankruptcy, you will be able to save your home and get back on track with your mortgage payment. Chapter 13 offers more permanent relief for struggling homeowners compared to other chapters of bankruptcy.
Chapter 7 bankruptcy is also very effective at helping homeowners stop foreclosure, and it can also help you get rid of some loans. However, it would be best if you adequately researched your options before deciding which is best for you. To file for bankruptcy, have a foreclosure or bankruptcy attorney help you with the process. You can also have your attorney look into your financial situation and determine which chapter of bankruptcy is best for you in the long-term.
It is best to take action early to reduce the number of charges you have to pay up later.