If you are struggling to pay your mortgage loan payments and you believe that foreclosure is in your future, don’t ignore the problem. The quicker you take action, the more likely you are to obtain a positive result. Avoiding foreclosure, even by filing for bankruptcy, can help preserve your ability to rebuild your credit score and even be eligible to purchase another house in the future.
When you first suspect your home is vulnerable to foreclosure, you should consider the following six options:
1. Sell your home. If you can sell your home on your own before it is auctioned off by your lender, you will be allowed to keep whatever equity remains in it. Take steps to make your property appealing, even if it means lowering the price to what you need to pay-off your mortgage loan.
2. Negotiate with your lender. You should explore the option of working out a deal with your mortgage lender. Many lenders are willing to lower your interest rate and/or extend the term of your loan in order to make your payments more manageable.
3. File Chapter 7. If you are having financial troubles in addition to your mortgage loan, filing a Chapter 7 can allow you to eliminate your debt, including the deficiency balance left due after your home is sold in the foreclosure sale. Your filing will also buy your additional time in your home and delay the auction.
4. File Chapter 13. If you want to save your home and you have the ability to make the future mortgage payments in addition to small payments to be applied toward your past due payments, a Chapter 13 repayment plan allows you to get caught-up and emerge from bankruptcy current on your loan.
5. Short sale. If your lender will allow you to sell your home for less than what is owed on it, it is called a short sale. A lender will agree to this in order to avoid the time and expense associated with the foreclosure process. If you decide to pursue a short sale, it is essential that you confirm that the short sale will be in full satisfaction of your debt. Otherwise, the lender may be able to pursue you for the deficiency balance.
6. Foreclosure Defense Options. Consult with an attorney regarding foreclosure defenses options. If you believe you will be facing foreclosure call an experienced foreclosure defense lawyer. There are defenses to foreclosure. You should find out if any of those defenses are available to you.
As soon as you get into trouble making your mortgage payments, you should let us review your individual circumstances and help you determine which strategy is best for you. We can help you understand the tax consequences, if any, of your decision as well as the other pros and cons.
We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..