Steps to Take If You’re Facing Foreclosure

Your house is likely your biggest asset. Not only that, but it is also the place you call home and likely has a lot of sentimental value. For these reasons, it can be extremely terrifying when foreclosure becomes a possibility. This can happen for a multitude of reasons, including medical bills taking precedence, job loss, or just accidentally getting in over your head with too many debts to keep up with. Regardless of why you’re facing foreclosure, you are not necessarily going to lose your home. There are steps you can take to prevent this from happening. However, there is no time to waste and you must act fast.

Understand Where You Are in the Foreclosure Process

First, you need to find out exactly where in the foreclosure process you are. You see, foreclosure is a whole process rather than a singular event. The stages can be viewed as:

• Missed mortgage payments
• Notices from the lender
• Default
• Foreclosure proceedings
• Potential sale of the property

Review all notices you have received and you should be able to determine where in the foreclosure process you are currently at. Generally, the earlier in the process you are, the more options there will be available to you.

Review Your Financial Situation

Next, you need to carefully review your financial situation. This means first determining how much you owe in missed mortgage payments and other debts. You will then want to review all income, expenses, assets, and other debts. You should also consider whether the financial hardship you are experiencing  is temporary or likely to continue. Once you have all of this information, you can easily calculate whether catching up on missed payments is realistically possible. Many people facing foreclosure find that they can catch up on payments by simply making lifestyle changes and sticking to a strict household budget.

Contact Your Mortgage Servicer

You should also reach out to your mortgage servicer as soon as possible. People often view the holder of their mortgage as a faceless boogeyman that wants nothing more than to take their house, but this simply isn’t the case. Many people are surprised to learn that as long as they are forthcoming and honest, their mortgage servicer is often willing to provide them with options regarding missed payments. Such options can include:

• Repayment plans
• Forbearance
• Loan modification

Make sure you keep records of all communication with your mortgage servicer, especially if they offer you one of the above options. If they later claim they made no such offer, you’re going to want proof that they did.

Understand How Other Debts Are Affecting Your Situation

Usually, foreclosure is just a symptom of a larger financial problem. Consider credit cards, medical bills, personal loans, tax debts, and other obligations. Reducing the pressure from other debts may make it easier to address housing costs, so you should discuss options with other lenders as well. The number one mistake people make is trying to address their foreclosure in isolation when it is really a much more broad financial problem they are having. Don’t be embarrassed about your debts getting out of control. It is quite common. In fact, Americans owe $63,500 in debt on average.

Consider Whether Bankruptcy Could Help

One of the most helpful options when it comes to stopping a foreclosure is bankruptcy. The prospect of this often scares most people, but bankruptcy is nothing to fear. It is simply a tool intended to help you fix your financial situation. You should consult a Chapter 13 bankruptcy lawyer to determine whether or not bankruptcy could help you. You see, when you file for Chapter 13 bankruptcy, all collection actions against you are halted, including foreclosure. You then make a court-approved repayment plan that includes all of your debts, including missed mortgage payments. Chapter 13 bankruptcy has saved thousands of homes and is often the best option for homeowners who are facing financial difficulties. Remember, the key is to explore your options before it is too late. Foreclosure is not something to be ignored and you should take action as soon as possible.