There are various ways to stop a foreclosure on your home. Unfortunately, some may be less realistic based on your situation. The following are some of the ways to stop a foreclosure:
- Chapter 13 bankruptcy: When a typical chapter 13 bankruptcy is filed, the automatic stay immediately goes into effect. The automatic stay acts as an injunction against your creditors and will stop the foreclosure from moving forward. The chapter 13 effectively allows you up to 5 years to pay back what you are behind, made through plan payments administered by a chapter 13 trustee. The key to a chapter 13, is it must be filed before the sale date of the home set by the judge in the county foreclosure case. You should consult with a bankruptcy attorney as soon as you are made aware of the foreclosure so he/she can explain in more detail the chapter 13 bankruptcy process. Cleaveland & Cleaveland, P.L. offers a free consultation to discuss whether a chapter 13 would be a good option for you.
- Cure the arrearage: This option is not usually realistic for most people facing a foreclosure. If you have the available funds to bring the mortgage current, then this may be an option for you. Even if you are working out a cure with the bank, we strongly suggest you make sure a response is filed to the foreclosure lawsuit within the time prescribed so a default is not entered against you. Cleaveland & Cleaveland, P.L. can help you with this if you need legal representation.
- Modify your loan with your mortgage holder: A mortgage modification will typically take the whole balance of your loan (including the arrearages) and create a new loan. After the loan modification is approved, the bank will typically have you on a 3 month trial period to help make sure you will pay the new loan amount. Once the trial period is successful, the modified loan becomes permanent. After that, they should dismiss the foreclosure case filed against you. Since the mortgage modification process takes time, Cleaveland & Cleaveland, P.L. can help you with this if you need legal representation in the foreclosure.
- Refinance with a different lender: Many times, if you have a sufficient amount of equity in your home and your credit score hasn’t dropped too low, another bank may refinance the loan to pay off the current mortgage holder that has filed the foreclosure against you. Once the old loan is paid off in the closing of the new loan, the foreclosure action should be dismissed. This also may take a sufficient amount of time to complete. Cleaveland & Cleaveland, P.L. can help you if you need legal representation in the foreclosure.