How to Avoid Foreclosure
Nobody wants to lose their home, and thankfully, there are multiple options to avoid it if you’ve been served a notice of foreclosure sale. If you need to stop a foreclosure, here are four ways to do that:
Bankruptcy (Chapter 7 and Chapter 13)
Contrary to some bankruptcy myths, there are times when filing for bankruptcy may be the right solution for an impending foreclosure. When the bankruptcy court approves your petition, it will issue an automatic stay. This effectively stops all creditors and debt collectors from attempting to collect from you during the bankruptcy process. It stops wage garnishments, harassing communications, and foreclosure proceedings.
Borrowers and lenders can negotiate new terms of a mortgage. This can take place, if the lender agrees, whether you are current on your payments, late, in default, have filed for bankruptcy, or are in foreclosure. The modifications could result in lowered interest rates, a lowered principal, or reduced attached fees. The lender could also extend the length of the term or hold monthly payments to a designated percentage of the household income.
This procedure allows you to sell your home even though the proceeds will be less than what you still owe. It is up to the lender as to whether you will still be responsible for the deficit or whether they waive it.
Deed in Lieu of Foreclosure
This is a transaction where the homeowner (the “borrower”) transfers title to the lender, and that lender then cancels the foreclosure.
If you need to stop foreclosure in Louisville KY, and would like to learn more about which option will work best for you, call Attorney Tracy Hirsch at (502) 435-2593. Don’t waste another minute worrying about your home. GSH Law Firm is here to help you!