Things You'll Need:
- Motivation
- Patience
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Step 1
Contact your mortgage company and attempt to modify your existing loans and set up a workout plan to pay those "in arrears" obligations. If you have been sent a breach letter (usually after three months of delinquent payments), now is the time to really consider your options. You can either make the delinquent payments and write a letter of reason; and submit a copy to your mortgage's loan modification department, main customer service department, and the corporate headquarters, while including all of these recipients as "cc:" in your letter. Or, assume the last resort option to Prevent Foreclosure.
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Step 2
If you've done this process, and you still you haven't had any luck with any negotiations (i.e. payments to push the foreclosure date until you've settled your finances) with your mortgage company or their representing attorney, and a foreclosure date has already been defined, there is not one other solution but to file for a Chapter 13 Bankruptcy. (Ask any attorney, they'll detail a similar response)
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Step 3
A Chapter 13 Bankruptcy attempts to consolidate your rearage of the mortgage, in addition to any unsecured or secured credit, to be paid within a typical time frame of 3 to 5 years (dependent on the situation, laws, State, etc.). Simply meaning, its an approved debt consolidation plan that titles itself as a bankruptcy petition/filing that seeks to decrease your monthly payments. However, before you can petition for Bankruptcy, you'll have to take one credit counseling course in order to receive a certificate of credit counseling.
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Step 4
Credit counseling classes can be taken online; and usually last from roughly about 1 to 2 hours. Customarily, your respective State makes various recommendations for different credit counseling organizations that offer this process. In short, through the online class/procedure, you detail your finances, create goals/budgets, and wait for a 5 to 30 minute telephone interview (dependent on the organization and other legal contributing factors).
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Step 5
Order a fax tax transcript from the IRS of 2 or 3 previous years. They're free if faxed!
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Step 6
Subsequent to this, proceed to speaking with an attorney. If you don't have money, many attorneys will include their fees into your rearage or consolidated plan. However, some may require a court processing fee, which all attorneys must pay to initiate the filing sequence. Most fees are under $500 and vary from State to State.
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Step 7
Fill out the forms your attorney requires. You'll need to do this in order to file for a bankruptcy petition. The above mentioned steps is what your attorney will request of you to complete/do.
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Step 8
Once your attorney receives all of the required documents, a petition to file for bankruptcy is submitted and begins. Wait a day or two, and next thing you know it, you've saved your home/real estate from its foreclosure.
Comments
christenstock said
on 9/9/2009 Thank you, Chef!
ghostwoman said
on 9/6/2009 This is an awesome article on how to prevent foreclosure on a loan.
5 Stars and a recommend. Very well written.