Do you ever pause and internalize the meaning and importance of a home? Well, I have, and a home is a haven for every human being. When you are through with education and you are evaluating on the next options, independence comes to mind and all you want is to have a home. Independence can only be attained upon securing a job and a dwelling place you can call your own.
The most common means to actualize your dream is by seeking a mortgage. Unfortunately, things could go south and make mortgage payments a tall order. What do you do now? Do you give up your home that you have invested so much? It is such a devastating ordeal, and due to the love for your home, you will fight to ensure it is not taken away from you. However, the solution is not always in the fight as depicted below.
Bankruptcy and Foreclosure
Failure to make your mortgage payments certainly leads to foreclosure and loss of your home. However, the process does not happen right away. It is only instituted once you, the homeowner, has failed to make payment for several consecutive months. If your finances are at the rock bottom and you have no other options left to salvage your humble abode, then filing for bankruptcy could be the only option at your disposal. Bankruptcy and foreclosure are actions recognized by law as a means to provide cover against the loss of your assets. It serves to bar collectors and creditors from making lawsuits against you or any efforts to collect what you owe them. Nevertheless, is this a permanent solution?
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Is Bankruptcy A Permanent Solution?
Filing for bankruptcy could be an escape route for insolvent homeowners. When aligned to the judge, he or she is bound to issue you with an order for relief. Upon filing, the order is granted automatically. With it comes an automatic stay that refrain’s all your creditors from making collections instantly. But can bankruptcy really stop foreclosure? That is a mind-boggling question for most homeowners.
Bankruptcy, unfortunately, does not halt the foreclosure process. However, it offers a homeowner a grace period by extending the payment duration before your home is ultimately closed. The issued order for relief only postpones foreclosure for a later date, and therefore, bankruptcy is just a temporary solution to foreclosure after which your home is offered for sale.
Alternatives to Bankruptcy and Foreclosure
Despite offering solace in the short haul, bankruptcy and foreclosure take a toll on your credit score. In simple terms, if you have aspirations of ever seeking another mortgage loan, considering other options to avoid foreclosure for your home best suits you.
Deed in Lieu of Foreclosure
Opting to settle for this ensures there is no foreclosure by giving back your home to the lender. All the homeowner is required of is to walk away without his home but with his or her credit score unaffected.
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As a homeowner, you could simply opt to lease your home under tenancy with an open offer of acquiring the property at the end of the lease agreement.
A considerate lender can go an extra mile and revise the terms of the mortgage and make payments friendlier to the homeowner. Before you consider any other option, it is important to try this one first.
When the situation is too bad, the lender can give the homeowner the green light to sell his home for less than what is owed. Consequently, the lender has no choice but to overlook the deficit without any impact on the homeowner’s credit score.
Finding oneself is this situation is not by choice. Hence, while faced with foreclosure, it is prudent to seek the expert services from us or from a reliable real estate investor. We help you in analyzing your current financial state and guide you in choosing the best option since some losses are way better than others.