If you have received a notice that your home is going into foreclosure, you need to take action as soon as possible. It is a possibility that you could save your home and continue living in it if you approach the foreclosure in the right way.
One of the best options for someone looking to stop foreclosure is to seek bankruptcy. With the automatic stay, all foreclosure proceedings stop immediately. This stay helps you gain some time to think about how you want to proceed and to adjust your finances to be able to pay your mortgage.
Chapter 7 or 13 bankruptcy could help
Both typical forms of consumer bankruptcy could help you if your home is going into foreclosure. Both come with the automatic stay.
In Chapter 7 bankruptcy, you may be able to discharge many of your unsecured debts and reaffirm the mortgage. Your lender may be willing to negotiate with you or eliminate fees or fines, so you can catch back up on the payments.
Chapter 13 is a little different because you’re expected to continue making payments on your debts. Your lender may allow you to roll past-due payments or fees into the repayment plan, so you can get back in control and begin making your future payments on time.
Of course, there are cases where it may be more beneficial to you to allow your home to go through foreclosure or to attempt to sell it to repay the mortgage. If you owe more on your home than it is worth, a short sale may be an option for you, too.
There are options if your home is entering foreclosure
Even though your home is at risk, there are steps you can take to stop foreclosure and protect your investment. You do need to take quick action, though, because once the home is sold at auction, you will have limited options for getting it back (if any at all).
Get to know your legal options as soon as possible, and remember that there are ways to help you sell or stay in your home and get out of debt.