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Alternative ways to get out of debt
On behalf of Rubin & Licatesi, P.C. posted in Loan Modification on Friday, January 6, 2017.

You’ve been struggling to pay your mortgage, and as a first-time homebuyer, you didn’t think things would go this way. Sometimes, life gets in the way of making payments, but when it’s always a struggle to cover the bills, it’s time to take action.

One of the things you can do to get out from under the stress of a mortgage is to go through a foreclosure. With a foreclosure, you lose your home. If you’ve received a notice that a foreclosure is looming, it’s not too late to stop the process and look for other ways out of debt. Here are a few possible alternatives.

Use negotiation tactics

Sometimes the solution is as easy as talking to your lender about lowering your monthly payments, extending your loan or giving you a month or two to recover from a financial hardship. Your attorney can help you reach out to your creditor and discuss your situation. It may be possible to lower the amount you owe each month for a period of time or to extend your mortgage to make sure you always have an affordable payment.

Sometimes, the lenders will forgive missed payments and add them onto your mortgage to be paid back at the end of the term, which can help you avoid foreclosure. The important thing to remember is that you have to contact your lender as soon as you can. If you wait, the lender may not be as willing to work with you.

Consider a short sale

Another alternative is to move forward with a short sale. This will still result in you losing your home, but it won’t be as detrimental to your credit. With a short sale, you ask the mortgage lender to forgive the balance of the loan if you sell the home for a fair market price. The lender has to agree to any buyer’s offer, so this process can take a while, and you need to make payments in the meantime.

Opt for bankruptcy

A bankruptcy can also help you protect your home by helping you eliminate debt. A bankruptcy comes in many forms, and one, Chapter 7, liquidates many of your assets to reduce your overall debt load. If you want to keep your home, you may be able to thanks to the bankruptcy’s exemptions.

These are just a few options. Remember that the sooner you take action, the better.

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