subject: Ways Of Stopping Foreclosure [print this page] These days many people are facing financial troubles. You are not alone in your financial worries. If you are behind in your mortgage payments and are facing foreclosure, you may have wondered what you can do to stop it. You may have heard that filing bankruptcy can stop foreclosure.
First, are you sure your house is in foreclosure? Many people are misinformed and believe that as soon as they miss a payment or two, they are in foreclosure. This is not true. There are many options available before you reach that point.
Before considering bankruptcy are you sure you've exhausted all your other options? If you are less than 90 days late on your payments you may be able to refinance. Most lenders will send you to the loan modification department so you can work out a payback plan to erase the arrears. Usually they can put the missed payments at the end of the loan.
Your lender will work with you as much as they can in order for you to keep your house and continue making payments. Understand that it does them no good to have a house just sitting on their books.
If you've already gotten a notice of intent to foreclose, you need to get with an attorney to discuss your options. Filing Chapter 13 bankruptcy can stop foreclosure by creating a stay. A stay means that no collector can take any further action against you in regard to you owing a bill - including your mortgage.
What the stay does is give you time to work out a repayment plan, that includes the mortgage arrears that you owe and present it to the state trustee and your secured creditors. Usually Chapter 13 allows you 3 to 5 years to repay your secured creditors and some unsecured creditors, depending on your financial situation.
Your Chapter 13 repayment plan can include your mortgage arrears, past due payments and other bills. Here's an example using just your mortgage arrears. If you owe $4,000 in arrears and $2,000 in fees, your payment plan will stretch that $6,000 over 3 to 5 years. It is alot easier to pay back $100 a month for 5 years than to try to pay back $6,000 over a couple of months. Once your plan is accepted and the bankruptcy confirmed, you basically have a fresh start. If you are behind on other secured debts, like a car, you might be able to add those arrears in also.
Filing Chapter 13 will be useless if you can't make your current mortgage payments. Filing bankruptcy will do no good if you can't continue to make your payments because once you get behind again your lender will ask to have the stay lifted and your house will be foreclosed on anyway. Bankruptcy will not stop foreclosure if you do not have the income to start back making payments after the bankruptcy.
by: Paula Adams
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