Avoid These Mistakes If You're at Risk of Foreclosure

Foreclosure is one of the most challenging consequences of financial hardship. It can be frustrating, stressful, and even frightening to face, but you have more power than you might realize at first.

Fortunately, quick action and making the right decisions early on can help you avoid the worst outcomes a foreclosure can bring.

Don’t Ignore Communication from Your Lender

As difficult as it can be to deal with foreclosure, ignoring your lender won’t make your situation any easier. Some people may even erroneously believe that remaining out of touch means that their lenders can’t file for foreclosure, but this simply isn’t the case.

The reality is that staying on top of communication with your lender is one of the best things you can do. In some cases, being open about your financial situation may prompt your lender to offer ways to work with you on resolving your debt.

If your lender chooses to proceed with foreclosure anyway, you will at least have lost no time trying to avoid the situation. You can use this time to prepare a defense to your foreclosure or even file for Chapter 13 bankruptcy.

Don’t Allow Your Property to Fall into Disrepair

Even if you are convinced that you can’t successfully fight foreclosure, you shouldn’t neglect your property. Allowing your home to fall into disrepair or purposely damaging it can rule out an important debt relief option that may be available to you: a short sale.

In a short sale, a mortgage lender agrees to allow a borrower to sell their home for its market value to satisfy the balance on the loan, even if the home sells for less than that amount. Lenders may approve a short sale when they believe they can recover most of their investment because your home is in good shape, but any kind of neglect can adversely affect your chances of this outcome.

Don’t Fall for Foreclosure Rescue Schemes

It’s important to remain skeptical of any solutions to foreclosure that seem too good to be true. Scammers prey on those at risk of foreclosure because they know these may be people who feel desperate to keep their homes or at least be free from the remaining balances on their mortgages.

Anything that promises to stop foreclosure quickly, cheaply, or easily is most likely a scam.

Don’t Disregard Bankruptcy

Bankruptcy may not be as bad as you may have been led to believe. In fact, it can stop an ongoing foreclosure or even prevent it from happening for as long as the bankruptcy case is open. This can give borrowers time to get their affairs in order or discharge overwhelming debt that may be the underlying source of their financial hardship.

Many people have a negative association with bankruptcy, but that may be because they only consider one dimension of it. While it’s true that bankruptcy can disrupt your credit score, it only shows up on your credit report for a maximum of 10 years. After that, it’s like it never even happened!

You can rebuild credit over time, and many lenders are willing to work with people who have a bankruptcy on their credit report.

Don’t Discount the Support a Lawyer Can Offer

You may find it hard to justify the legal expenses that working with a bankruptcy attorney can bring, but the reality is that a dedicated lawyer may be just what you need.

Trying to navigate foreclosure, bankruptcy, and other matters involving your debt can be incredibly challenging on your own. You may not even be aware of many options that are available to you, but an experienced bankruptcy attorney has such knowledge. Not only that, but they also have the skill necessary to help you take advantage of these options in a coordinated, strategic manner.

Contact a Lawyer as Soon as Possible

If you’re at risk of foreclosure, one of the best things you can do right now is to reach out to an experienced attorney. Someone like one of our advocates at Buchalter & Pelphrey Attorneys At Law can provide the legal guidance and services you require to navigate your situation toward the best possible outcome.

If you want to learn more about how we can help, Buchalter & Pelphrey Attorneys At Law offers potential clients a free initial consultation. Reach out to us online now to schedule yours!