American Board of Bankruptcy Certification
Tips for Avoiding Foreclosure
Are you having trouble keeping up with your
mortgage payments? Have you received a
notice from your lender asking you to
If you are unable to make your mortgage
1. Don't ignore the problem.
The further behind you become, the
harder it will be to reinstate your loan
and the more likely that you will lose
2. Contact your lender as soon
as you realize that you have a problem.
Lenders do not want your house. They
have options to help borrowers through
difficult financial times.
3. Open and respond to all mail
from your lender.
The first notices you receive will offer
good information about foreclosure
prevention options that can help you
weather financial problems. Later mail
may include important notice of pending
legal action. Your failure to open the
mail will not be an excuse in
4. Know your mortgage rights.
Find your loan documents and read them
so you know what your lender may do if
you can't make your payments. Learn
about the foreclosure laws and
timeframes in your state (as every state
is different) by contacting the State
Government Housing Office.
5. Understand foreclosure
Valuable information about foreclosure
prevention (also called loss mitigation)
options can be found on the internet at
6. Contact a HUD-approved
The U.S. Department of Housing and Urban
Development (HUD) funds free or very low
cost housing counseling nationwide.
Housing counselors can help you
understand the law and your options,
organize your finances and represent you
in negotiations with your lender if you
need this assistance.
Find a HUD-approved housing counselor
near you or call (800) 569-4287 or
TTY (800) 877-8339.
7. Prioritize your spending.
After healthcare, keeping your house
should be your first priority. Review
your finances and see where you can cut
spending in order to make your mortgage
payment. Look for optional
expenses-cable TV, memberships,
entertainment-that you can eliminate.
Delay payments on credit cards and other
"unsecured" debt until you have paid
8. Use your assets.
Do you have assets-a second car,
jewelry, a whole life insurance
policy-that you can sell for cash to
help reinstate your loan? Can anyone in
your household get an extra job to bring
in additional income? Even if these
efforts don't significantly increase
your available cash or your income, they
demonstrate to your lender that you are
willing to make sacrifices to keep your
9. Avoid foreclosure prevention
You don't need to pay fees for
foreclosure prevention help-use that
money to pay the mortgage instead. Many
for-profit companies will contact you
promising to negotiate with your lender.
While these may be legitimate
businesses, they will charge you a hefty
fee (often two or three month's mortgage
payment) for information and services
your lender or a
HUD approved housing counselor will
provide free if you contact them.
10. Don't lose your house to
foreclosure recovery scams!
If any firm claims they can stop your
foreclosure immediately if you sign a
document appointing them to act on your
behalf, you may well be signing over the
title to your property and becoming a
renter in your own home! Never sign a
legal document without reading and
understanding all the terms and getting
professional advice from an attorney, a
trusted real estate professional, or a
HUD approved housing counselor.
Bankruptcy Basics - For Cases Filed on or after October 17, 2005 (pdf)
Basics - For Cases Filed before October 17, 2005 (pdf)
Contact me, Detroit bankruptcy lawyer Walter Metzen today to schedule your free initial consultation. I also offer clients flexible appointment times and same day appointments if necessary. Get in touch with me today to learn how filing bankruptcy may be beneficial for you and your family.
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