There are many financial issues that may be facing an individual who is considering filing for bankruptcy. However, one of the direst situations is when people are facing the possibility of losing their home. Most people think that once the foreclosure process has begun, that there is little that they can do to stop it. Fortunately, bankruptcy helps save your home and it is an option that, can be effective in potentially avoiding foreclosure and allowing someone to stay in their home.
Working for a Solution
Lenders don’t necessarily look at bankruptcy as a bad thing for their borrowers. They can see that bankruptcy allows a borrower to restructure their debt and get back on track again. Simply allowing a home to go into foreclosure is equivalent to a homeowner walking away from their house and their financial obligations.
The thing to remember is that bankruptcy will automatically stop the foreclosure process. It doesn’t eliminate it, but it can give the filer, the courts and the homeowner’s mortgage lender time to come up with a plan that could potentially help them get back on track financially and save their home. It doesn’t always mean that a person’s home won’t go back into the foreclosure process after the bankruptcy has been completed. However, even if that is the case, there are certain silver linings.
Potential Future Benefits
The first benefit is that it is going to be less damaging to a person’s credit if they try to renegotiate payments or interest rates with the lender through the bankruptcy process. Secondly, because of how this is viewed, even if a person loses their home, it will increase the likelihood of a person getting a home mortgage at a later date because trying to work out the foreclosure process through bankruptcy is less damaging to a person’s credit than receiving a judgment because the homeowner walked away from their home.
It may be a difficult thing to face, and some people may be facing an uphill battle, but it’s worth the challenge. However, saving a home from bankruptcy by restructuring mortgage payments, interest rates and the like is a wonderful option. This not only gives the individual or couple filing for bankruptcy a place they can continue to call home, but it can help filers avoid the significant credit damage that can come from a financial judgment following a successful foreclosure.