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Strategies to delay or prevent home foreclosure

When financial hardships strike Louisiana residents, house payments often suffer. Missing mortgage payments will prompt a lender to initiate the foreclosure process after 90 days of delinquency. People in this situation might resolve the problem by working with their lenders or pursuing bankruptcy protection.

Mortgage lenders have a strong interest in avoiding the costly and time-consuming processing of foreclosing on a property. Many lenders will even offer a refinancing deal that could lower monthly payments. Similarly, a loan modification might allow someone to resume and keep up with payments. A repayment plan that provides someone a chance to catch up on payments presents another option. For those who do not expect to ever catch up payments, a short sale might prevent foreclosure. If the lender agrees to settle the loan by selling it for a reduced amount, then the borrower could resolve the debt and avoid a record of foreclosure.

Bankruptcy also has the potential to halt foreclosure and give people a fresh start. A bankruptcy filing produces an automatic stay that prevents creditors from temporarily making attempts to collect payments. When successful, a bankruptcy might discharge some debts and allow a homeowner to resume the payment of a mortgage.

A person considering bankruptcy could talk to an attorney. A legal evaluation could reveal options for debt relief. An attorney might try to negotiate new loan terms, manage the details of a short sale or recommend bankruptcy. With legal representation, a debtor could shift communications with creditors to an attorney. If bankruptcy appears to be an acceptable option, an attorney could prepare the financial disclosures for the court and guide the client through the process of resolving overwhelming debts.

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