Even though you have worked hard to use money wisely, you’ve found yourself in a serious financial situation. You’ve exhausted your savings, and-despite your best efforts-you can’t seem to get your budget under control. You have too many unexpected expenses like medical bills and repairs, and you’ve fallen behind on other essential bills like your car and house payments.
What do you do now? Your creditors have started to call for the debts you owe them. You may even face foreclosure on your home. And if you lose your home, what will happen to your family at that point?
First, take a moment to calm your nerves. You still have strategies at your disposal that can save your home and give your bank account a little financial relief. Learn more about these strategies below.
- Talk to Your Mortgage Lender and Create a Plan
Sometimes, you can halt foreclosure in its tracks by simply speaking to your lender and creating a new payment plan. However, you must speak to your lender about your financial problems as soon as they appear. If you wait until your lender has to contact you about missed payments, he or she might not feel as willing to work with you. Talk to your mortgage lender early to learn about your options.
If your lender won’t work with you, consider any of the other options on this list.
- Consult With the Attorneys at Wiesner & Frackowiak, LC
Our attorneys use Chapter 13 (and Chapter 11) to block foreclosures. We know this can be a difficult time for you and your family. We want to help you. We will use our experience and knowledge to make a plan with you that will help. You do not have to deal with this situation alone. Contact us today.
- Refinance Your Current Mortgage
In some cases, you can refinance your mortgage to get more reasonable rates and payment schedules. Programs like HAMP, or the Home Affordable Modification Program, even lower your mortgage payment to 31% of your monthly gross income if you qualify. However, if your home now has a significantly lower value, you might struggle to get a traditional or HAMP refinance.
Luckily, even if you don’t qualify for normal refinancing, you can still turn to HARP, or the Home Affordable Refinance Program. This program specifically helps those who have stayed current on their mortgage but are ineligible to refinance using other means because their home’s value has decreased.
- File for Chapter 13 Bankruptcy
If you want an immediate solution to your foreclosure problem (as well as your other debt issues), talk to a bankruptcy lawyer and file for chapter 13 bankruptcy. Chapter 13 bankruptcy allows you to restructure your debts, which means you keep your home and the rest of your assets while you pay off what you owe.
When you file for this type of bankruptcy, you create a plan that allows you to repay your debts over a period of three to five years. You will partially repay some debts and fully repay others, depending on the agreement you and your lawyer make with your creditors.
Even if you file for other kinds of bankruptcy, like chapter 7, the filing process can delay your foreclosure and permit you to find other ways to keep your home. Just keep in mind that bankruptcy of any kind will lower your credit score, so talk to your financial counselor or bankruptcy lawyer and carefully consider your options before choosing bankruptcy.
- Determine If Your Lenders Have Treated You Unfairly-And File a Lawsuit
A lawsuit can halt your foreclosure if you can prove your mortgage lender treated you unfairly or unlawfully. Or, if you owe debts to other unscrupulous creditors, proof of those creditor’s unfair actions may help you negotiate a plan with your mortgage provider. But make sure you consult with your lawyer firstyou’ll need guidance from a legal expert to approach the situation correctly.
Bonus: Watch for Scams
As you search for solutions to your foreclosure problem, beware of companies that promise quick fixes with little effort on your part-just a small fee for the company’s services. Don’t fall for these scams. Foreclosure is a serious problem, and it requires serious fixes. Make sure you go to a federal or legal expert for a solution. Other entities may just take your money and do little or nothing on your behalf.
For more information on bankruptcy, foreclosure, and other financial considerations, check out the rest of our blog.