If you receive a foreclosure notice from your mortgage lender, the best thing you can do is make an immediate phone call to better understand your situation.
It’s a common misconception that your lender wants to repossess your home. In all reality, they’d much rather you catch up and continue to make timely payments in the future.
If you’ve slipped behind on your payments and foreclosure is a real possibility, you’ll want to consider all your options for escaping this trouble. Here are some of the many strategies to consider:
- Bankruptcy: With this, you’re able to stop foreclosure in its tracks. Since debt collectors are prohibited by law to pursue collection activities while you are in bankruptcy, you’re buying yourself enough time to figure things out.
- Foreclosure workout: Don’t assume that your lender isn’t on your side. They want what’s best for you, within reason, so contact them to discuss a workout, such as a loan modification.
- Short sale: This is when your lender agrees for you to sell your home for less than what you owe, and then write off the rest. It will still damage your credit report and you won’t get to stay in your home, but it’s better than a foreclosure.
You should never overlook any potential foreclosure defense strategy, as the last thing you want is to lose your home to the bank.
As you learn more about Chapter 13 bankruptcy, including all of the benefits, not just the impact on a potential foreclosure, you may come to find that it’s the best way to solve a variety of financial issues.