Falling behind on your bills can lead to major financial problems and harassment from creditors, but it can also lead to a foreclosure on your home. If your lender has started the foreclosure process, you should make a decision quickly as to what you will do about this. Here are several things you should know about this:
Your lender has the right to do this if you miss payments
The first thing to understand is that your lender has the legal right to take back your house if you default on the agreement you made. The only way to stop the process immediately is to pay off the entire past-due balance you owe, and this is probably not a feasible option if you are behind on your payments.
One key thing to understand about the foreclosure process is that it does not happen overnight. Most lenders will not start the process until a borrower is at least two months behind on their payments, and then it takes a lot of time for the process to go through. If you do nothing to stop the foreclosure, the process might take several months or even up to an entire year, and you will get to stay living in the house until the process is complete.
You could stop it by talking to an attorney
The second thing to realize is that there are ways to stop a foreclosure without paying off the entire past-due balance right now. One of the most effective ways to do this is by filing Chapter 13 bankruptcy. This branch of bankruptcy is commonly used for this purpose, and it stops a foreclosure immediately.
In return, you must repay the money you owe according to a repayment plan the bankruptcy court comes up with. The court will give you time to do this, though, and typically a person is given up to five years. If you agree to this and make your payments, you can keep your house. If you miss payments during the Chapter 13 plan, you could still lose your home.
There are pros and cons of using Chapter 13 for this purpose, and you should fully understand what those are before you sign the documents.
If you need help determining what you should do about a foreclosure you are facing, contact a law firm that specializes in legal foreclosure defense to find out your options.