Headed For Foreclosure? Try These Alternatives First

Law Blog

If you are at risk of having your house foreclosed because of financial difficulty, take a moment to consider your alternatives. Here are some different options you should consider before you face foreclosure.

Have Your Mortgage Modified

If the reason your home is being foreclosed is because your mortgage payments are too high, you should first contact the Canada Mortgage and Housing Corporation (CMHC). They have programs that help to lower your mortgage payment if you qualify based on your family size, income, and the current cost of your mortgage. It is a way to save your home and lower your mortgage payments while your income is at a low level.

File for Bankruptcy

Your next option is to file for bankruptcy. While this might not like seem like a good alternative, ti can help save your house. Chapter 7 and Chapter 13 bankruptcy will help you in different ways. If you file for Chapter 7 bankruptcy, a lot of your debts will be discharged, which should free up some money to start making mortgage payments. Debts like old lines of credit and credit cards will be discharged. With Chapter 13 bankruptcy, you have extra time to catch up on the back payments and you might have other debt payments lowered, so it may be easier to pay for your mortgage.

Sell Your Home

If you don't think you can stay in your home and make the mortgage payments, you might want to sell your home. When you need to get this done fast and foreclosure is a risk, you should hire a real estate lawyer that specializes in these matters. They will not only help you sell your home, but will work out the legal paperwork required if there are issues with the bank. You should be able to pay back the bank for the amount you still owe on your home to avoid owing them even after the house is sold. This is something to think about when you decide how much to sell your house for.

Challenge the Foreclosure

If you believe that there have been legal errors along the way and that is why the bank is threatening to foreclose on your home, you should get an attorney. They will go through your paperwork and help you decide if challenging the foreclosure in court is worth it. If it is, this might save your home from foreclosure and get you back to where you need to be.


3 June 2015