If you’ve fallen behind on your mortgage, you might be curious how to stop the foreclosure process. Many people end up feeling helpless at the thought of losing the home they’ve worked so hard for. Thankfully, we have the steps you need to learn how to stop foreclosure at the last minute.
Follow our steps and avoid foreclosure today!
File for Bankruptcy
If foreclosure is looming over you and scheduled to occur in the next couple of days, you can halt it right now by simply filing for bankruptcy. Once you file, an automatic stay is in effect. The automatic stay stops a foreclosure because it prohibits your lender from trying to collect the debt. All foreclosure activity must be halted during this time and it is a popular way to stop foreclosure at the last minute.
Your lender might file a motion to be granted relief. Even if the courts grant their request, it will still be delayed for a month or so and you might be able to get your affairs in order.
You will have to determine if Chapter 13 or Chapter 7 bankruptcy is your best option. Here is the breakdown of the two.
Benefits of a Chapter 13 Bankruptcy
Chapter 13 restructures your debt so you can keep your home. You will have to repay them in part or full over a specified time. Most times, you’ll only pay a fraction of the unsecured debts you have. This might even eliminate debts such as underwater second and third mortgages since they are unsecured.
Even if you aren’t able to maintain the payment plan, Chapter 13 bankruptcy will at least buy you a few months before foreclosure.
Benefits of a Chapter 7 Bankruptcy
If the foreclosure process has already begun, Chapter 7 is your only option. While it will not save your house, it will delay the foreclosure long enough for you to live in the home without payments. Then, you can save this money up to use for a rental property.
It’s also a good time to work with your lender for a pathway to stop foreclosure. Once the foreclosure is complete, the Chapter 7 bankruptcy will also eliminate your liability for the debt.
The Risks of Bankruptcy
With all that said, you need to be aware of the risks of using bankruptcy to stop foreclosure at the last minute.
- You won’t be able to file for bankruptcy for a specified amount of time. You might also lose protection against any new collections so you might have wage garnishments.
- Your credit will take a hard hit. If you are able to get credit, you will experience higher interest rates.
Quick Recap – Chapter 13 helps to save your home when you are about to enter the foreclosure process. Chapter 7 helps you when you can no longer make the payments.
Loan Modification
This is a better option before you need to stop foreclosure, but it is possible to achieve at the last minute as well. If your modifications are approved, the foreclosure will stop unless you default on the payments again.
Sue Your Lender
If you have a lender that uses a nonjudicial process of foreclosure outside of the courts, you can file a lawsuit against them. Keep in mind that this is a risky way on how to stop foreclosure at the last minute. First, it’s a costly process. Second, you are the plaintiff in the case against a lender; you’ll be required to show the proof. This means you have to give all the evidence which shows you aren’t at fault.
Here are some ways to prove your case:
- If the lender cannot prove that it is the owner of the promissory note
- When the lender doesn’t act in compliance with the requirements set forth by the state
- If they’ve violated the Homeowner’s Bill of Rights set forth by your state
- When they do not follow the required steps to the foreclosure process. They are determined by state law.
- If they’ve made any other outstanding error
Contact Us to Learn How to Stop Foreclosure
If you are in the Baltimore or Washington, D.C. area, you can contact Integrity Homebuyers and we will help you learn how to stop foreclosure at the last minute. We have the authority to get you out of this mess that you are in and relieve some of your burdens. Let’s discuss your options today! Give us a call at (800) 818-4145 or get a fair cash offer now. We look forward to helping you.
We Buy Houses in Maryland and Washington DC
