If you’re struggling with your finances, losing the house may be your biggest fear, but there are a few steps you can take to protect your home from foreclosure. Here are some tips to help you avoid foreclosure in a difficult situation.
How to Protect Your Home from Foreclosure
- Understand every option: There are a wide range of alternative options to foreclosure, including short-term borrowing solutions that help you make payments, and long-term solutions that help you rework your situation. The right solution will depend on the particulars of your circumstances. Make sure you are aware of every option before committing to one path. You can look at the Federal Reserve’s official Foreclosure Resources for Consumers to help you evaluate the different game plans.
- Research particulars before you involve your lender: Go over your mortgage and take a serious look at your budget to make sure you know your stuff before you talk to your lender. You may also want to talk to a credit counseling agency to help you prepare a plan. A credit counselor can help you understand the process or put together a budget plan for repayment. This will make you more knowledgeable when you start a conversation with your lender.
- Watch out for scams: Unfortunately, there a lot of criminals out there looking to take advantage of people struggling to avoid a home foreclosure. Often these scammers will call pretending to be credit counselors or your lenders. Look at the Federal Trade Commission’s guidelines on Foreclosure Rescue Scams to help protect yourself.
- Commit to a plan: Once you have developed a plan, you need to do everything within your power to stick to it. Do your best to make payments and continue to follow the structure you have set out for yourself.
Finding yourself on the verge of a foreclosure can be one of the most stressful financial situations of your life. Knowing how the process works going in will empower you to make the right decisions and potentially avoid losing your home. Another solution that is often overlooked, but almost always provides relief is bankruptcy. Consider filing personal bankruptcy to help you get a fresh start.
Kevin D. Judd is a DC bankruptcy lawyer who helps his clients find a gateway to financial freedom.