Other Options to Stop Foreclosure
Most people facing foreclosure are most concerned about saving their homes. If your primary goal is to stop foreclosure in order to keep your house, then you'll most likely want to consider refinancing, Chapter 13 bankruptcy or a debt workout. However, if you know that you can't afford to keep your house and you are looking for a way to avoid a deficiency judgment and minimize damage to your credit, other options to stop foreclosure are available.
Facing mortgage foreclosure is scary, and it can be hard to make informed decisions to stop foreclosure when under pressure. Make sure that you understand all of these other options to stop foreclosure, which may include:
- Turning over the Deed in Lieu of Foreclosure;
- Selling the Property; and
- Surrendering the Property in Chapter 7 Bankruptcy.
Learn more about these other options to stop foreclosure, and be sure to carefully consider which is best for you and your family.
Deed in Lieu of Foreclosure May Be an Option to Stop Foreclosure
If you're sure that you can't afford to keep your house, you may be able to reach an agreement with the mortgage holder whereby you simply give it back and stop foreclosure. The mortgage holder would agree to accept the deed as full settlement and cancel the remainder of your debt.
Whether or not this is a good option to stop foreclosure for you depends upon your equity in the house, the amount of outstanding debt, and what other options are available to you. Of course, the mortgage holder won't always be willing to enter into such an agreement, but if there is little likelihood that you'll be able to pay a deficiency judgment, the lender may decide that it's better to avoid the costs of a foreclosure proceeding, stop foreclosure and accept the deed as full settlement.
Sell the Property to Stop Foreclosure!
If you have significant equity in your house, selling it is a good option because it may allow you to stop foreclosure and walk away with money in your pocket. Where equity is limited (or non-existent), it can be difficult to sell the property because of the need to cover the mortgage and the other associated costs of a sale. This is especially true if you're working with a realtor, since you'll have to cover a commission as well.
In some cases, the mortgage holder may agree to a short sale. That means the lender will agree to accept less than the full amount of the mortgage. This allows you to stop foreclosure and avoid a deficiency judgment, while the lender recovers the bulk of the amount due without having to pursue foreclosure proceedings.
Surrender the Property in Chapter 7 Bankruptcy & Stop Foreclosure!
Unlike Chapter 13 bankruptcy, Chapter 7 bankruptcy does not provide a means to save your house from foreclosure. The automatic stay entered in most bankruptcy cases will stop foreclosure proceedings, but the Chapter 7 process does not provide a mechanism by which you can catch up on your past-due payments and keep your home.
However, if you've been unable to work out an alternative and you know that you cannot afford to keep your house, Chapter 7 bankruptcy has some advantages. First, the automatic stay will temporarily stop foreclosure proceedings, giving you time to make necessary arrangements. Second, a Chapter 7 bankruptcy will eliminate most of your unsecured debt (credit card debt, outstanding medical bills, etc.), so that you may be more able to meet your regular living expenses. Finally-and perhaps most importantly-Chapter 7 bankruptcy can eliminate any deficiency judgment, so that you don't end up losing your house and still making payments to the lender.
A Professional Negotiator Can Help You Determine if These Options May Help You Stop Foreclosure!
Ready to learn more about these other options to stop foreclosure?If you’re wondering whether any of these options can help you stop foreclosure, simply fill out the form on this page and a professional negotiator will contact you to discuss your option.