For many Americans, their home is the most important possession that they own. But as the pandemic continues to rage on throughout the world, many homeowners fear that they will lose their homes because of being unable to keep up with their monthly mortgage payments. In these unprecedented times, facing a foreclosure can be an added layer of stress that can push otherwise stable folks over the edge. Fortunately, there are things that you can do to avoid foreclosure and stave off losing the place that you call home. Here’s more on the options that may be available to you.

Stop Foreclosure By Negotiating With Your Bank

The foreclosure process can cost the bank that holds your mortgage significant time and money. As a result, your mortgage lender would rather you catch up on your payments than them go through the lengthy foreclosure process.

Getting behind on your mortgage payments typically happens as the result of unexpected circumstances. When these situations occur, it is important to immediately notify your mortgage lender. Many banks have programs designed to help you catch up on your payments and avoid going into foreclosure. Still, even if the foreclosure process has started, you may be able to work out an arrangement with your lender that will allow you to sell your home and payoff the remaining balance (e.g. short sale). While this outcome may not be preferred, it may help you avoid the devastating credit hit that a foreclosure can cause.

Stop Foreclosure By Filing For Bankruptcy

Both Chapter 7 and Chapter 13 bankruptcies have mechanisms that may help you avoid foreclosure. Filing for Chapter 7 may give you much-needed time to catch up on your mortgage payments so that you can avoid foreclosure altogether. Filing for Chapter 7 creates an automatic stay (hold) on collection proceedings. What this means is that once you have filed, your bank will not be able to start the foreclosure process yet. The stay is temporary, and your bank may be able to get the stay lifted. As a result, filing for Chapter 7 may simply delay the inevitable.

Chapter 13, on the other hand, may allow you to avoid foreclosure indefinitely. As with Chapter 7, filing for Chapter 13 will create an automatic stay on collection proceedings. However, Chapter 13 allows for a repayment plan of your current debts which may include past-due mortgage payments. If you remain current on your Chapter 13 repayment plan and your mortgage payments, then this may enable you to avoid foreclosure and stay in your home.

It is important to recognize that both Chapter 13 bankruptcy and Chapter 7 bankruptcy carry significant credit implications. While it may keep you in your home, at a minimum, you will be facing a severe hit to your credit that can last up to ten years.

Florida Bankruptcy Lawyers Can Help You

For many of us, our homes are a place of peace and memories. The very thought of having it taken away can be terrifying. If you are facing foreclosure and are looking for guidance on how to keep your home, the attorneys at The Bankruptcy Team are here to help. Our knowledgeable attorneys will do their best to help you avoid foreclosure. Our aim is to put you in a better financial situation no matter the circumstances. To consult with The Bankruptcy Team, PLLC, call or contact us today.