Foreclosure is the legal process where a lender can repossess your home. Once they repossess your home they can then sell it to try to recover some of the debt owed. Once you default on your mortgage payments, your lender has the right to begin the foreclosure process. However, even though the foreclosure process has been initiated, you do still have some options available to try and save your home.
One option for avoiding foreclosure is to seek a one-time interest-free loan from HUD. They will charge a lenders a fee to use its services but you can receive an advance loan in order to make your loan current. In order to qualify, you will have to prove that your current financial situation is solvent and sign a promissory note with your lender stating that you will repay your loan over time. After doing this, your lender will have a lien on your house until your loan is repaid.
You can modify your mortgage with your lender to avoid foreclosure. Your options include extending the length of your mortgage, refinancing your debt or reducing your interest rate. These options will reduce your mortgage payments, helping you avoid foreclosure. You will have to prove to your lender that your net income has been significantly reduced since the time you signed the loan.
You can request a special forbearance from your mortgage lender. This will temporarily reduce or stop your monthly payments while the lender works with you to create a new mortgage repayment plan. You will need to prove a loss of income and/or you are experiencing unexpected rise in monthly expenses. After the special forbearance period your lender will require you to start making higher payments (higher than your original payment amount) for a certain period until your loan is current.
Chapter 13 Bankruptcy
You can also file for Chapter 13 bankruptcy but only do this as a last resort. This type of bankruptcy will allow you to meet with your mortgage lender and your other creditors to work out repayment plans. Once a payment plan is in place, it is very important to make all payments as agreed upon to avoid foreclosure.
Consult a Qualified Bankruptcy Attorney
If you are in pre-foreclosure and your lender will not work with you, contact a bankruptcy attorney. A bankruptcy attorney will have expert knowledge about the foreclosure process in your state and may be able to contact your lender and create some type of repayment plan or solution for your personal situation. Attorney Daniel Stone at Stone Law Firm has been representing bankruptcy and foreclosure clients in the Columbia and Florence, SC areas since 2001. If you need help with foreclosure, bankruptcy or any other financial debt struggles call Stone Law Firm today at 803-407-6565 or submit a consultation request form at http://danielstonelaw.com/consultation.