You may be behind on your home payments, and you’re almost at the point where you feel like there is no way out of foreclosure. It’s an overwhelming and terrifying thought for most homeowners. No one wants to face losing their home.
But there are some last-minute strategies you can try before allowing the foreclosure process to begin. It’s important to note that these options are best for the last resort option.
Work with your lender once last time.
The easiest option to stop a foreclosure in its tracks is to pick up the phone and work with your lender. Creditors and banks would instead work with lenders through a repayment plan or another loan before they send your house to auction. If you haven’t worked extensively with your lender beforehand, it’s worth a shot to see if you can come to a new agreement together.
Selling your home
If you are not attached to your home, you could sell it as a way to pay back your debt and stop the foreclosure. For most families, this option isn’t viable since they want to remain in their current residence. But it works well if you’re going to move somewhere else or start fresh in a new place. It’s critical to know that it takes time to list and sell a home, so if your timeline is tight, this could lead to selling at a steep discount or selling to a home buyer company (at a fraction of your home’s value).
Filing for bankruptcy
Finally, you can file for bankruptcy under Chapter 13, which allows you to keep your home and other substantial assets while paying off your debt. It’s a smart move if you have a significant amount of loans or debt that need to be restructured or paid off. The courts will work with you over a specific period to determine the best method for paying off any of your loans, including your mortgage.
These work best when you are in a time crunch. If you have more time to deliberate, work with an advisor or an attorney to see the option that fits your life the best. You do not want to put your house on the market or file for bankruptcy until you exhausted your options.