Falling behind on your mortgage payments can be a very stressful reality because it could potentially lead to foreclosure of your home. Foreclosure is a legal way for lenders to collect a debt that you owe by going after your personal assets.

If you are filing bankruptcy the chances that you might also be facing possible foreclosure is high. However, I have a few suggestions for some actions you can take to avoid foreclosure from happening.

My first suggestion is to pursue a repayment plan. Often times, lenders will offer this as a choice which allows you to gradually make up for missed payments of your mortgage rather than all at once.

Secondly, you could pursue a short sale of your home. If your situation is that you owe more on your house than it is actually worth, this could be the solution for you. A short sale gives you the option to sell your home for its market value then negotiating with the lender to write off your remaining debt. Something to keep in mind is, a short sale will negatively impact your credit but not as much as a foreclosure would.

Thirdly, you could file for a loan modification. A loan modification means changing the terms of your loan into something more manageable which allows you to avoid foreclosure because you will be faced with payments you can actually afford to make.

Another option is, if your situation is that you are only in a temporary financial setback there is what is called a “forbearance arrangement.” This allows you to, (typically for three to six months), skip or reduce your payments. At the end of arranged amount of time, you will then begin to start making payments.

Lastly, another way that you could lower your payments is by re-amortizing your loan. What this means is you basically reset your loan. All of your missed payments are added back to the original loan and a new one is issued. Your new loan could be higher or lower than the original loan depending on the interest but it is worth considering because it takes the stress of having late/missed payments away.

If you are filing bankruptcy and are facing foreclosure contact the Goldbach Law Group today, we can help!

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