Getting behind on your mortgage payments can be a scary time. With more foreclosures popping up around the neighborhood, it seems like we all know someone who has been or will be affected by a foreclosure. In many cases, a foreclosure can be avoided if the right steps are taken. In fact, there are several options available for managing mortgage debts.
A loan modification can be a great way to relieve the financial pressure of getting behind on a mortgage debt. They traditionally involve a reduction in interest, monthly payment requirement, a temporary suspension of payments or even a waiver of delinquency fees. However, securing a loan modification is often difficult as most lenders hold strict qualification standards.
For those who may be unable to secure a loan modification there are other options that a lender may approve in order to resolve mortgage debts. Refinancing a loan is one option, although many people may also be disqualified due to poor credit caused by missing payments. A short sale can fend off a foreclosure and is generally open to anyone willing to put effort into the process.
Chapter 13 Bankruptcy
In some cases, people simply cannot afford to repay their mortgage debts, have been unsuccessful in securing a deal with their lender directly or are already received notification of an impending foreclosure. In these cases, filing for bankruptcy may be the best way to resolve debts and keep their home out of foreclosure. A Chapter 13 bankruptcy can immediately halt all foreclosure proceedings and forces the lender into complying with a court approved repayment plan.