Using Bankruptcy to Stop Foreclosure

admin — Thu, 03 Dec 2009 13:49:15 +0000

You lost your job and now you can not afford to pay off your mortgage. This is becoming one of the biggest problems in America. Many homeowners are losing their homes to foreclosure due to the fact that they can not afford to pay back the mortgage that you took out for the home. Now this leaves you sitting and wondering what you can do to keep a roof over your families head. Many homeowners are thinking that bankruptcy can stop foreclosure. It may but at the same time it can hurt more than it helps.
Bankruptcy is a legal action that is designed to help those who get so far into debt they can not possibly pay back any of the creditors. It is not used as a means to help those who ignore debts pay them off. Stopping foreclosure with bankruptcy has been done in the past and you can also stop foreclosure if you have everything you need in place.
After you bankruptcy is discharged the mortgage company can come back on you and continue the foreclosure right where it left off. This is why you need to have a plan in place to pay it off and take care of the back payments or the entire loan amount. Bankruptcy by itself is only a pause button for foreclosure; it will not stop it completely but only slow it down.
There are other ways to stop foreclosure that might seem a bit on the difficult side, but at the same time you will not have a bankruptcy on your credit report. Getting approved for a loan as a means to stop the foreclosure is the best method and it will save your credit rating. There are many loan programs available to the homeowner these days. Some are even backed by the government. This gives you all the leverage you need when trying to find a way to stop foreclosure.
A loan can be a home equity loan, personal loan, or another mortgage if you qualify. Always remember that whatever route you take to pay off your current debts, you have to have the means to keep from falling into the same condition as before. Taking out a loan to pay a loan is not always the best method, but it will stop foreclosure in its tracks. So it might be the only answer to your problems.
The government backed program of loan modification is another great option. This is where you contact the lender to see if you qualify for a loan modification. They can set up a program where you are put on probation for 3 months. If you can show that you will make full payments on time each month, then you can qualify for a loan modification. This is where you can make lower payments each month by adding a few years on at the end of your mortgage. Instead of 30 years it moves to 40. Some homeowners have seen a drop in interest rate to help them be able to afford the payments.

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Using Bankruptcy to Stop Foreclosure