Home ownership is an accomplishment in itself. However, it can be difficult for first time home owners to keep up with their mortgage payments. Every years, thousands of borrowers fall behind on their payments due to unforeseen circumstances. If this ever happens to you, there might be a way to save your home through bankruptcy. That being said, it will not work for everyone. And, you should plan on getting your finances in order quickly for everything to go smoothly. To learn more, read on about how bankruptcy can stop your house from being foreclosed.
Analyze Your Financial Situation
Firstly, make an assessment of your current income in relation to your mortgage payments. You might have fallen behind due to one time expenses. Or, you can be falling behind due to a drop in income. In the event that you have enough ongoing income, then you may want to consider trying to keep your house from foreclosing because you can make the payments in the future. However, if you are not going to be able to make the payments later on down the road, then it might be worthwhile to pursue other housing options. Take a realistic analysis of your current and expected financial situation in order to proceed with saving your home during a foreclosure.
Learn About Your Bankruptcy Options
There are multiple types of bankruptcy options for home owners. In order to find out if these options will work to save you home, you should start to meet with various lawyers and professionals to learn more. As noted by David Offen, an experienced bankruptcy attorney in Philadelphia, “There is a lot of misinformation out there on filing bankruptcy.” Borrowers should get accurate information for their area and unique situation. This can only be done by consulting with professionals who can tell you your options to stop your house from getting foreclosed while still creating a positive financial outlook in the future.
File Bankruptcy To Initiate Automatic Stay
With the guidance of an expert, file for bankruptcy to start the process. At this point, the court will issue an Order or Relief. This order includes an “automatic stay” provision. Under the order, any creditors or debt collectors will stop trying to collect their debt. Moreover, if there is a foreclosure in process, it will be stopped. Then, the borrower will get three to four months to sort out their finances until the bankruptcy process is completed.
Reorganize Your Finances For Repayment
Now that you have some time to work things out, you need to work with your bankruptcy lawyer, debt collectors and mortgage lender to create a plan for repayment. This process is critical to getting current on any delinquencies or foreclosure payments in order to keep your home from foreclosing. Once you sit down with the appropriate parties, you will have a much better chance at saving your home. Of course, the deal should be something realistic that makes up for the late or overdue payments. If you end up agreeing to an unrealistic plan, it could hurt you financially further and also end up losing the house altogether.
Stick To Your Reorganization Plan
After reorganizing your debt, you may get relief of other bills, including credit cards, medical bills or unsecured loans. Use this debt relief carefully. If you have unsecured debt that gets lowered dramatically, it is to help you get your house payments and overall finances into proper shape. The savings should towards paying off your past due mortgage payments and then the upcoming ones to stay current. This way, your plan will allow you to keep your home from foreclosure and have very little to none other debts or bills. Most importantly, this reorganization plan will get you back on track to financial stability so you should stay on course throughout the process.
Home owners probably never want to talk about bankruptcy or foreclosure. However, if you do find yourself falling behind with no other options, you may want to consider using bankruptcy to save your home. If you take an objective financial assessment, you can make the decision to explore if bankruptcy is right for you. Otherwise, you might need to let the foreclosure happen. If it might work for you, find a professional in your area that can stop the foreclosure of your home. They will advise you and help file bankruptcy to delay or avoid a foreclosure process. Then, you can restructure your debts and put a plan in place to get back on track.