Foreclosure is something that all homeowners fear, no matter how much they make or how expensive their house is. Nearly every homeowner has a mortgage on their home because of housing price inflation, and no one wants to lose their house to a foreclosure. Fortunately, there are things that you can do to protect your home from foreclosure, even if you are behind on your mortgage payments.
Preventing Foreclosure With Bankruptcy
Assuming times are tough and you cannot make your mortgage payments, one of the most effective ways to stop foreclosure is by filing bankruptcy. When you file for bankruptcy, certain assets can be protected from creditors. You won’t be forced to hand them over to creditors or sell them to make debt payments.
Which assets are protected depends on which state you are in and which type of bankruptcy you file. Still, your house and primary vehicle are usually safe from creditors. Even if your house is already in foreclosure, filing for bankruptcy could stop that foreclosure while you work with the court to handle your debts.
If You Can, Reinstate Your Mortgage Loan
When a bank files for foreclosure, your mortgage loan is essentially suspended. The bank isn’t as worried about it being paid because they will repossess the house. However, banks don’t want to do this because it costs a lot of time and money. Instead, they would rather have you pay back what you owe.
That’s why you can ask the bank about the reinstatement payment for your loan. It’s the amount you must pay to get the bank to reactivate your mortgage and stop foreclosure. You must ask the bank about the reinstatement payment and the related paperwork. They will provide you with what you need to make that payment.
Before Foreclosure, Try to Restructure Your Loan
Most banks are likely willing to adjust your mortgage so that you can keep your house. You may be able to work with the bank to restructure the loan so that the payments are more affordable.
Restructuring your mortgage will likely extend the overall life of the loan. However, it can be an effective way to reduce the size of each payment. On top of this, you will also likely need to set up a payment plan as a part of the restructuring. This should get the bank to hold off on a foreclosure.
Foreclosure Prevention is Entirely Possible
It is seldom too late to stop a foreclosure. You just have to know how. Start figuring that out by discussing foreclosure prevention with a qualified bank foreclosure lawyer. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form.
