With high debt, overwhelming medical bills and job loss common in today’s uncertain economy, many people are struggling to pay their mortgage on time. While most homeowners behind on mortgage payments feel as though financial disaster is inevitable, taking immediate action will greatly ease – and may possibly avoid – foreclosure.

A good first step is to meet with a bankruptcy or home loan modification attorney knowledgeable about preventing foreclosure. While home loan modifications are possible, it can be difficult for an individual homeowner to obtain a modification on his or her own. Representation can provide more incentive for a bank to negotiate and provide you with an understanding of all potential options. However, be careful to avoid common fraudulent loan modification practices. Fraudulent loan modification companies may require a large up-front fee, have no actual attorney involved in the process or give a “100 percent” guarantee the company will save your home without providing any actual services. You can check with your state’s bar association to verify you are working with an actual lawyer.

A short sale or deed in lieu of foreclosure may also help a struggling homeowner. According to Bloomberg News, banks are increasingly likely to accept short sales due to the current high volume of foreclosures. A short sale occurs when a bank accepts the sale of a home worth less than its existing mortgage. A deed in lieu of foreclosure occurs when a bank accepts the deed to the property in place of receiving mortgage payments. While these options do not allow you to keep the home, they may provide a quicker and less expensive option to foreclosure and can have a less detrimental effect on your credit score.

Chapter 13 Bankruptcy

One of the surest ways to save your home is through Chapter 13 bankruptcy. This form of bankruptcy protection allows you to gather all debt, not just the mortgage payments, and pay off creditors over a period of three to five years. Certain types of debts may have no interest or reduced interest to lower overall payments. If you are behind on the mortgage, the payments in arrears will be added to mortgage and paid off over the length of the plan – relieving the need to pay off a large chunk of past due mortgage payments in order to keep the home.

In addition, Chapter 13 protection allows the filer to keep cars and other property so long as the filer follows the bankruptcy plan and makes payments on time.

Being assertive and practical may help you avoid foreclosure. Delaying often only makes the situation worse. Contact an experienced bankruptcy attorney to discuss your options.


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Broege, Neumann, Fischer & Shaver, LLC
25 Abe Voorhees Drive
Manasquan, NJ 08736

Phone: 732-722-5763
Toll Free: 877-571-5074
Fax: 732-223-2416
Manasquan Law Office