At times, the pressure to fulfill financial obligations may be overwhelming. In many cases, there is little concern for circumstance when it comes to a mortgage or car payment. Lost jobs, mental health struggles, or family problems, though often devastating, do not cancel upcoming bills. Because of such things, and others, some find themselves facing foreclosure on their homes and repossession of their vehicles. There are however some ways to combat these things when you fall on hard times.
Avoiding Foreclosure
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan by forcing the sale of the asset used as collateral. Of course, this happens when borrowers stop making payments on the loan and can be a tremendously taxing process for homeowners and families. If you find yourself facing foreclosure, there are a couple of things that may be able to help your situation.
Communicate with Your Lender
As soon as you know payments can’t be made, it is important to talk with your lender. Foreclosure is a very costly process and can damage your financial health as well as your ability to purchase another home well into the future. Depending on your situation and your lender, options may include a modified payment program, paused payments through forbearance, and more.
Foreclosure Avoidance Programs
Speaking with a foreclosure counselor can also be useful as they may introduce you to programs that can help you avoid foreclosure. There are, however, a number of foreclosure rescue scams that you can learn about here. For this reason, it is always wise to consult a trusted foreclosure attorney to help you navigate the weighty decisions ahead. To learn more about how we can assist you through the foreclosure process, visit our website.
Avoiding Vehicle Repossession
Like foreclosure, vehicle repossession is when the title owner reclaims the car due to payment delinquency. When payments can’t be made, this is a way for the lender to recuperate their funds. There are some ways this can be combatted.
Again, Communicate With Your Lender
Communication is very important. In many cases, there are steps to be taken that can help one’s situation. After one or more delinquent payments, lenders will likely be less flexible.
Refinance Your Loan
Depending on the situation, an individual’s credit, and current loan terms, one may be able to refinance a loan for a lower monthly payment as well as lower interest.
Reinstate the Loan
This, of course, is an option for those who come into funds sufficient to bring a delinquent loan current in one lump sum. Once the loan is reinstated and overdue fees and expenses paid, the borrower resumes making regular payments on the debt.
Sell Your Car
If you are right-side-up on your vehicle, selling your vehicle to pay off the debt may be the proper avenue.
Surrender the Vehicle Voluntarily
Surrendering your vehicle to the titleholder can be a slightly better option than waiting for it to be reclaimed. It may have lesser credit implications while preserving some degree of good faith with the lender. However, in most cases, you will be left with a huge balance as they usually sell the vehicle for well below the market value.
Is Bankruptcy an Appropriate Option?
When individuals face large debts that they can’t repay, chapter 7 and chapter 13 bankruptcy are options to consider. When bankruptcy is filed, the automatic stay goes into effect. The Automatic Stay is an injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Depending on your filing, debts can be restructured for a more manageable payoff timetable. At Rulon T Burton & Associates, we are experts in chapter 13 and chapter 7 bankruptcy, providing a solution to those who find themselves underwater. If you are facing foreclosure, repossession, and other significant debts that you are unable to repay, contact us today and we can help you figure out a plan.