No one wants to be foreclosed on, but the state of the economy in the last two decades made it more likely for people to be forced into foreclosure. Fox Business reported that foreclosures are on the rise again. However, there are things that you can do to stop it from happening to you. Try these foreclosure prevention strategies from Saint Cloud Bankruptcy Attorney.
Reinstate Your Loan
One of the fastest and least complicated ways to prevent a foreclosure is to reinstate your loan. Essentially, your goal is to catch up on your mortgage payments by paying the outstanding amount. You may also need to pay a reinstatement fee to the bank as a part of the terms of the agreement.
Reinstating a loan is hard, but it will put a stop to the foreclosure process. The bank can’t foreclose on a house that is current on its mortgage. Contact the lender on your mortgage and ask for the reinstatement quote.
Loan Modification
When times are hard, the bank doesn’t want to take your house back. They would rather have you make payments, even if those payments are smaller. Banks can help you with a loan modification, which changes the terms of your mortgage to make it easier to pay.
In most cases, the amount that you are delinquent on is added to the loan, and the whole thing is re-amortized. You’ll pay less in payments, but the length of the loan will be longer than what you had left on the loan.
This isn’t the best solution since it will extend your mortgage significantly, but it can provide tangible relief by making your payments smaller. However, you are not guaranteed a loan modification if you ask for one. The bank is not obligated to say yes. There are third-party companies that may help with this, but you need to read the contract very carefully. Otherwise, you could end up in a much worse situation than you were in before.
File for Bankruptcy
Filing for bankruptcy can also stop the foreclosure process. When you file, all creditors, including banks, must stop their collection efforts. They have to file a claim with the court to collect on debts that are owed. Thankfully, this includes your mortgage.
Depending on the type of bankruptcy you file, you could end up with a repayment plan that lets you get back above water on your mortgage, which will remove the bank’s need to foreclose.
Bankruptcy Can Be Your Best Option
Bankruptcy may be your best option depending on your financial situation. In the end, you can still have your house and many of your other assets while finding a way to catch up on your mortgage.
Before you consider bankruptcy to deal with your debts, consult with a bankruptcy attorney to make sure it is the right choice. Contact Kain + Henehan by calling (612) 438-8006 or filling out the online form to schedule a free consultation. Once we take a look at your situation, we can help you find the right bankruptcy option to fix your finances.
