In terms of investments, few are as rewarding or as important as home ownership. When a homeowner falls behind on their mortgage payments they are at risk of losing their homes. Sometimes modifications can be worked out between the homeowner and the mortgage company. However, if this option has already been exhausted, or the home owner doesn’t qualify for relief in his way, there are some other steps a person can take to delay or stop the process of foreclosure.
In situations in which the lender is not able to work with the homeowner to come to a solution before the process of foreclosure can begin, one should consider bankruptcy. There are a few options in terms of which bankruptcy to file for. If a person is keen on keeping their house, filing for bankruptcy allows for an automatic stay by the court, which usually prevents creditors from bringing foreclosure any further. This can occur whether a person files for Chapter 7 or Chapter 13, among others.
Bankruptcy is not an automatic ‘get out of jail free card’. It’s possible that despite taking all the proper steps, a person could still lose their house if they are already in the beginning stages of foreclosure. Fast action on behalf of the homeowner could really be the difference maker in whether or not this happens. To ignore the notices about foreclosure can make the outcome worse than it needs to be.
Sometimes financial chaos happens outside of our control. Sometimes people can recover from it, and sometimes the damage has been too severe. However, usually a person wants to keep their house as it’s an investment and a place to live. Bankruptcy may be one way to achieve this.