Getting Through Your Divorce and on With Your Life

Getting Through Your Divorce and on With Your Life

Facing Foreclosure? You Might Be Able To Avoid It

Celina Henry

As a homeowner, your blood might run cold at the thought of the bank foreclosing on your house. Unfortunately, that's the reality for over 100,000 homeowners each month in the United States. If you are having difficulty making your mortgage payments, there are ways that you can halt foreclosure proceedings while you pursue other options. Take a look at these methods of potentially avoiding foreclosure.

Loan Modification

Most homeowners who want to stay in their homes should explore the option of having their loans modified. Call the lender and explain your situation. If certain criteria apply, the lender can permanently change the terms of your loan to make it more likely that you'll be able to keep up with your new payments. These criteria include having experienced a loss of income, your ability to make the proposed new payments and what the home is currently worth.

A loan modification will usually extend your mortgage; you'll have another thirtyyears to pay it off, just like you would if you were refinancing a 30-year loan. An attorney can help you go through the documents so you understand what you're signing, but in most cases, is not strictly necessary. Many homeowners can work through this process on their own with their lender.

File for Chapter 13 Bankruptcy

If you have debts in addition to your home that you are having trouble paying off, filing for Chapter 13 bankruptcy can allow you to settle some of the debts, wipe off others, and, most importantly, stop any foreclosure proceedings so you can stay in your home. Chapter 13 requires a payment plan proposal; you will need to show that you will have the income necessary to make payments on your home, any back child support you may owe and back taxes over the next three to five years.

Filing for Chapter 13 stops foreclosure proceedings in its tracks; you also won't have your other debtors contacting you after you file. It requires the services of a bankruptcy attorney. Because the payment plans last up to five years, you'll need to get a judge's permission to take out new loans during that time period. This is a great option for someone who does not intend to take on more debt for several years.

Pursue a Short Sale

If you are not planning on staying in your home, but it's not worth enough to sell and pay back the bank, a short sale is an option that can help you avoid the credit-damaging effects of a foreclosure. A short sale is when a homeowner sells the house for less money than is owed the bank. The money that does come in is handed over to the bank, and the bank agrees to write off the remainder. Although a short sale will show up on your credit report and make it difficult to buy another house for two to three years, it's not as damaging as a foreclosure or a bankruptcy would be.

One caveat is that you do need to show a reason for the bank to accept the short sale. Some acceptable reasons might be that your income has dropped, you have large medical bills or you have recently gotten divorced. Another consideration to keep in mind is that in some cases, you will need to pay taxes on the amount of money that you were short. A real estate or tax attorney can help you navigate these issues.

Avoiding foreclosure is something that you might not have ever considered having to do, but circumstances might have dictated otherwise. Work with a law professional, like Iannello Anderson ,to help you get through these financially (and emotionally) difficult times.


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Getting Through Your Divorce and on With Your Life

Going through a divorce? I know how you might feel – alone, stressed out, and probably even a little sad due to the loss of the life you have always known. Whether you have children or not, you might even feel a little guilty about the break down of your relationship. But I'm here to tell you that a divorce is not the end of the world. In fact, once you get used to the idea and start to move on with your life, you may find just as much, if not more, happiness than you ever had while you were married! Getting through the proceedings of your divorce in a dignified manner is the first step, and hopefully this website will give you the insight, support, and motivation you need to get through the process as painlessly as possible.