Foreclosures do not automatically stop even if you are working on loan modification with your mortgage company. You may be negotiating in good faith and doing everything your lender asks, only to learn that all the while they were moving forward with the foreclosure sale and time is running out on stopping it. I know this because I hear from panicked homeowners who are told that their modification has not been approved, and their home is a few weeks, days or even hours away from being sold.
If your negotiations fall through, you need to have a back up plan. While you are trying to get your load modified, you should save as much money as possible in case you have to look at other solutions to stop the foreclosure, especially if you are not making your mortgage payments in the process. If you have some money saved up, it can only help you get a more affordable payment so those funds you set aside can make the difference between keeping your house or not.
Bankruptcy might be one of the things you look at to stop foreclosure, and you need to understand how it can affect you. Chapter 13 bankruptcy can give you up to five years to catch up the missed payments. Chapter 7 bankruptcy can wipe out other debts, freeing you up to use your money to pay your mortgage.
Another thing to keep in mind is that if you are having problems with your mortgage, you might also have problems with your other debts. Bankruptcy can make some/all of your unsecured loans, medical bills and credit cards go away and that can free up funds to pay towards your house.
If you are told that your foreclosure has been stopped, you need to get it in writing. Seek the advice of an experienced bankruptcy attorney as soon as you can, just so you know if bankruptcy can help you or not if the modification falls through. It is good to know what bankruptcy can do, and if it is a good option. It makes sense to know all your options while you are making these important decisions so that you can pick the best option for you.
see also:
Many People Keep Their Homes When They File For Bankruptcy by Susanne Robicsek, Charlotte NC Bankruptcy Lawyer
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