How to Postpone or Stop Foreclosure on Your Home

foreclosure house for sale

Going into foreclosure can be incredibly stressful, but thankfully, there are some ways to help you get a hold of your situation. Getting slapped with a Notice of Delinquency doesn’t immediately mean you’ll lose ownership of your home. If you’re facing the possibility of foreclosure, here are some recommended strategies to at least postpone or completely stop foreclosure on your home:

File for bankruptcy

Filing for bankruptcy can postpone foreclosure as well as reduce your outstanding debt. When you file for bankruptcy, an “automatic stay” will be levied on all your property. This will temporarily stop collections and delay foreclosure. There are two kinds of bankruptcy that might choose to file in this situation:

  • Chapter 13 allows you to keep your assets, but you will need to pay back either a portion of or the outstanding total of your debt through a repayment plan.
  • Chapter 7 will rid you of your debt through a trustee appointed by the court. This individual will sell your non-exempt property as a way of paying back creditors.

Both are good options that will postpone the process and allow you a period of respite to think about how to move forward.

Cut down on your expenses

You may still be able to come up with the cash to make your payments by slashing your expenses in half if you haven’t already. This means removing unnecessary expenditures such as a gym membership, food delivery, cable TV, or opting for a cheaper internet or cell phone plan.

Speak with your lender

talking with their agent

Give your lender a call and discuss your possible options. Most lenders will be willing to help you get back on your feet if you’re determined to keep your house and make your payments. Some possible courses of action they may offer you include:

  • Repayment: Your lender can work with you to craft a reasonable repayment plan according to your budget and income. After a while, you can continue making regular payments, increase your payment amount, or even make up late payments when you’re able to.
  • Refinancing: In this scheme, your lender will offer you a new loan to offset the payments that you’ve missed without having it negatively affect your credit. You’ll be assigned a new term and new interest rates.
  • Loan Modification: This process is similar to refinancing, except you won’t get a new loan. Instead, your lender will modify your existing loan to make payments more manageable for you.
  • Forbearance: This involves your lender pausing your mortgage payments for a short period of time. You’ll be paying these deferred payments once you’ve reached the end of the loan.

Try for a short sale

A short sale can be arranged if the price of your home is less than your debt. This means that your lender will allow you to sell the house for less than what you owe on the mortgage.

Deed in lieu of foreclosure

This process requires you to present your lender with a notarized deed to transfer your property to the bank. This will cancel any further foreclosure action but it will negatively affect your credit in the process.

Take time to educate yourself and thoroughly mull over your prospects. There’s plenty of options to explore to either postpone a Notice of Delinquency or stop the foreclosure process altogether.

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