Falling behind on your bills can impact your credit. Falling behind on your mortgage can impact your ability to remain a homeowner. Regardless of why you find yourself struggling to make your mortgage payment, your bank will likely only give you so much leeway before they start taking action. Efforts to collect on that debt could include foreclosure on your property.
For those who have fallen behind on their mortgage but who believe they can maintain payments in the future, bankruptcy may help them avoid the loss of their home.
You will need to reaffirm your mortgage during bankruptcy
So long as you file for bankruptcy before the bank actually completes foreclosing on your home, they will have to stop the process during the bankruptcy. You may have the option of renegotiating the terms of your mortgage with your lender.
In some cases, they may be willing to attach the outstanding payments that you missed to the end of the mortgage, allowing you to pay them in the future. Typically, in order to retain your home, you will need to reaffirm your mortgage during the bankruptcy proceedings.
Banks may be willing to work with you regarding adjusting some of the terms on your mortgage to keep you at your home. After all, a foreclosure costs the bank a significant amount of money, and they benefit financially if you remain in the home.
Discussing your situation with an experienced bankruptcy and foreclosure attorney is a good first step. Your attorney can help you determine what options will best preserve your equity in your home and help you reach financial equilibrium.